author: Van Brunt, P. J. Ingraham, J.

text:
    Thomas W. Reilly et al., Resp’ts, v. John R. Lee, App’lt.

      (Supreme Court, General Term, First Department,

      Filed November 13, 1891.)

    1. Contract—Certificate op engineers in charge.
    Plaintiffs contracted with defendant to do the masonry work on a railroad bridge to the satisfaction and acceptance of engineer or engineers in. charge of the railroad; the contract providing for payment therefor within twenty days after “ said engineer or engineers in charge" should give a certificate that the work was finished, and a final estimate. Held, that the certificate called for was not the final estimate, but a certificate that the work had been completed according to the contract, and that it was required to be given by the engineers in charge of the railroad, and not by one in charge simply of the work on the bridge in question.

      2. Same—Secondary evidence.
    A copy of the final estimate made by the engineer in charge of the bridge work, and shown to be in his handwriting, was introduced in evidence under objection. Notice to produce the original had been served on defendant, but it was not shown that he had received it. Held, that no basis for secondary evidence had been laid, and that the admission of the copy was error.
    Appeal from judgment entered upon the verdict of a jury rendered by direction of the court.

      Artemus B. Smith, for app’lt; L. L. Kellogg, for resp’ts.
   Van Brunt, P. J.

Although various causes of action were set out in the complaint, upon this appeal only the questions involved in the trial of the issues upon the first cause of action and the defendant’s counterclaim are brought up for review.

The complaint alleges that the plaintiffs were co-partners in the firm of Reilly & O’Connor, and that in June, 1889, they entered into a contract with the defendant whereby they agreed to execute, construct and finish all the masonry work required to be done by the said defendant for the bridge to be constructed by the Pennsylvania, Poughkeepsie & Boston Railroad Company across the Lehigh river at or near Slatington, Pa., for which the defendant agreed to make certain payments to them; that they entered upon the performance of this work and carried out said contract in the manner and form in all respects as therein provided. The complaint further alleges that it was provided by the contract that when the work required to be done thereunder should have been completed and the engineer in charge of the work have so certified, and made his estimate of the amount of work performed! thereunder, the defendant should pay to the plaintiffs within twenty days the sum due to these plaintiffs under said contract.

It was then alleged that the work had been fully performed and finished, and the engineer in charge of the work under said contract more than twenty days before the commencement of the action had certified that said work was completed, and had estimated the amount of the work done and money earned and due thereunder; that according to the prices named in said contract, there Was a certain sum due for the work done of which a balance remains unpaid which is sought to be recovered in said first cause ■of action.

The defendant by his answer admitted the contract, denied its performance and denied that the engineer in charge of the work at any time truly or correctly certified that said work was completed, or had truly or correctly estimated the work done or the moneys earned or due thereunder, and alleged that on the contrary thereof the amount of work actually done, and the money ■due or earned thereunder, was much less than the amount which the pretended certificate the plaintiff obtained from some alleged engineer of the railroad company mentioned set forth, and was much less than the total amount claimed in the complaint, and was not in fact greater in amount or value than the sums of money which the defendant had already paid to the plaintiffs therefor.

The plaintiffs to maintain the issues upon their part introduced the contract between themselves and the defendant.

This contract, so far as it is material for the consideration of the questions involved in this appeal, was as follows:

“These articles of agreement, made this 6th day of June, 1889, by and between John R. Lee, of Paterson, Pi. J., party of the first part, and T. Wallace Reilly and O’Connor, party of the second part

“Witnesseth, that the second party, for and in consideration of the covenants, stipulations and agreements hereinafter mentioned, promises and agrees to execute, construct and finish in every respect in the most substantial and workmanlike manner, ■and to the satisfaction and acceptance of the engineer, or engineers, in charge of the Pennsylvania, Poughkeepsie & Boston Railroad Company, all the masonry work required to be done by the first party for the bridge to be constructed by it across the Lehigh river, at or near Slatington, Pennsylvania.”

The second paragraph of said contract is as follows:

Second. The party of the first part shall have the right at any time, in-case the force employed upon such work shall be considered by the engineer, or engineers, in charge of the railroad company as inadequate to complete any portion of the whole of said work within the time herein specified, to employ .and put upon the work such additional force as he or they shall consider requisite.

The fifth and sixth paragraphs of said contract are as follows:

Fifth. It is mutually agreed between the parties hereto that if the second party shall execute any part of such work defectively, then such defective work shall be rebuilt at thé expense of the party of the second part, upon receiving the order from the engineer, or engineers, in charge to that effect

Sixth. And the said first party (in consideration of the fulfillment and performance of all the stipulations contained in this contract to be by said second party fulfilled and performed, and whenever said work shall have been, in the opinion of the said engineer, or engineers, in charge, completely finished in every respect, and performed agreeably to the various stipulations and specifications in this agreement, and said engineer, or engineers, in charge shall have furnished to said first party a certificate to the effect, under his hand, together with his estimates of the ■quantity of the various kinds of work done by the second party under this agreement, which estimate shall be final and conclusive between the parties hereto), will pay to the second party, at the office of the Pennsylvania, Poughkeepsie & Boston Railroad Company, in the city of New York, within twenty days after said certificate and estimate shall have been furnished by the said ■engineer, or engineers, in charge, the sum which may be due under this contract agreeably to such estimate.

Here follow the prices charged.

One of the plaintiffs then testified that twenty or thirty days after the work was finished he asked the defendant if he had his certificate, and that the defendant replied that he had received the final certificate and estimate for the Slatington Bridge, and .that that was the only one he had received. He said he had been doing a good deal of grading and that he could not pay the plaintiffs finally on this work, but would give §2,000 on account, .and would pay the balance very soon, within a week or two, in that neighborhood, or as soon as he got his affairs in shape. He further testified that about the same time he received from the •defendant a statement of account which he produced, in the handwriting of the defendant’s clerk, showing the amount of work ■done on the Slatington Bridge as certified to by the engineer. He further testified that they built the piers and did all the masonry work according to the specifications and under the personal direction of the engineer in charge of the work, Mr. John .Schafer of Newark, N. J., and that he was the engineer for the railroad company. The plaintiff further testified that a Mr. Primrose was the chief engineer of the Pennsylvania, Poughkeepsie & Boston R. R. Co., and also offered in evidence final ■estimates approved by Mr. Primrose as chief engineer.

It was claimed, at the time of the introduction of this evidence, by the defendant’s counsel that this was an estimate and not a final certificate as required by the contract.

The plaintiffs also introduced in evidence a copy of the final ■estimate approved by Mr. Schafer as engineer in charge and delivered to the plaintiffs, which evidence was duly objected to by the defendant, and exception taken to its admission. Mr. ■Schafer testified that at the time he put on the word approved ’’ the entire work as done had been approved by him from time to time during the construction.

The defendant at the close of the plaintiff’s case moved to dismiss the complaint as to the first cause of action upon the ground, that it had not been proved as alleged, and that there was no^ evidence of a final certificate given by the engineer in charge of the Pennsylvania, Poughkeepsie & Boston Railroad by the plaintiffs as the contract required; and that there was no evidence that, any final certificate showing that the whole work had been done-to the satisfaction and acceptance of the engineer or engineers in charge of the railroad company, was given to the plaintiffs or produced by them. The court denied the motion and the defendants excepted.

The defendant, upon his behalf, then introduced evidence tending to show that Mr. Primrose was the engineer in charge of the said railroad’s work of construction; that he was chief engineer,, and that a Mr. Erlandsen had sjDecial charge of the bridges in course of construction ; and that Mr. Schafer had been placed in charge of the Slatington division of the road, as had been testified to by him. This latter item of evidence, however, seems to have-been contradicted by other evidence offered upon the part of the defendant, the chief engineer of the railroad testifying that he ■ had charge of this division, but that there was another assistant who had charge of the masonry of the two bridges, namely, Mr. Erlandsen, who got up the plans of the bridge and had charge of the masonry; that he was there occasionally but was not on the work direct; that Mr. Schafer was there all the time and reported to him; that he went there and overlooked the work probably once a week, and that no other person ¡than himself had charge of the work done in connection with the construction of the road for this company.

The defendant also offered evidence as to the character of the work done by the plaintiffs under the contract, which was excluded as attacking the certificate upon which the plaintiff relied. The defendant, upon his examination, denied having stated to one of the plaintiffs that he had received his final certificate from the railroad company; and further testified that he had never received any certificate from the company, or an acceptance of the work or any part of it

Upon the termination of the evidence the defendant’s counsel .renewed his motion to dismiss the complaint as to the first cause* of action upon substantially the same grounds hereinbefore mentioned, which motion was denied and an exception taken.

The plaintiffs’ counsel asked the court to direct a verdict, which the court granted, to which direction the defendant’s counsel duly excepted.

It is a well established rule that where both parties ask for a direction, although the evidence does not entitle the court to-make a direction, the effect of the request is to submit the question of fact for determination by the court and amounts to a waiver of trial by jury. O'Neill v. James, 43 N. Y., 84; Dillon v. Cockcroft, 90 id., 649; Stratford v. Jones, 97 id., 589; Provost v. McEncroe, 102 id., 650; Kirtz v. Peck, 113 id., 222; 22 St. Rep., 733.

In the case at bar neither party having requested the court to go to the jury, the questions of fact if any were submitted to the court, and its decision is final if there was evidence to support the direction given. And therefore no claim of error can be founded upon the failure of the court to submit any question to the jury, and if it were not for the error committed in the admission of Exhibit H. in evidence over the objection of the defendant, we think there would have been, no ground whatever for disturbing the j udgment.

But the admission of this paper under the circumstances developed by the evidence seems to have been clear error. Mr. Eeilly, one of the plaintiffs, testified that he received a paper from Mr. Schafer when they had completed this work. A paper is handed to witness and he states that it is a copy of a paper he received, and said paper is marked Exhibit H. for identification. When Schafer is upon the stand Exhibit H. is handed to him and he testifies that the paper is in his handwriting, and that it is a copy of the final estimate and the quantities such as was given by him to Mr. Eeilly, the plaintiff; and that it was made after the work had been accepted and approved by him.

The plaintiffs’ counsel offered this paper in evidence and notwithstanding the defendant’s objection that the original should be produced and had not been accounted for, the court received the paper in evidence. We think this was error. It is true that a notice to produce has been given by the plaintiffs to the defendant. But there is no evidence that any such paper had ever been received by the defendant, the testimony of Schafer being that the paper was given to Eeilly, and the testimony of Eeilly being that he received the original from Schafer; and there is no evidence that it was ever given to the defendant. Consequently the notice to the defendant to produce could form no basis for the introduction of this copy in evidence.

The introduction of this paper cannot be said to have been harmless to the defendant, inasmuch as it would seem that the court may have directed a verdict because the making out of the paper of which Ex. H. was a copy was a compliance with the requirements of the contract in reference to the certificate to be furnished by the engineer or engineers in charge in respect to the completion of the work. In fact the whole decision of the court below may have been based upon this copy of a paper the original of which was unaccounted for.

This error, as far as the final result of this appeal is concerned, renders it unnecessary to consider the question as to whether the certificate by Schafer is the certificate called for by the contract. But as passing over this question upon this appeal might lead the trial court upon a new trial to an erroneous* conclusion as to the views of the court upon this point, it is proper that we should present one or two considerations which lead us to the conclusion that Schafer’s certificate, even if the original had been produced, would not have been a compliance with the requirements of the contract.

We think that the recital by which the contract is commenced indicates clearly who is meant by the engineer or engineers in charge as the phrase is used in the sixth clause of the contract, which clause relates, among other things, to the final certificate.

The contract commences as follows: “ The articles of agreement * * * witnesseth that the second party ” (the plaintiffs,) “ for and in consideration of the covenants, stipulations and agreements hereinafter mentioned, promises and agrees to execute, construct and finish in every respect in the most substantial and workmanlike manner, and to the satisfaction and acceptance of the engineer or engineers in charge of the Pennsylvania, Poughkeepsie & Boston Railroad Company, all the masonry work required to be done by the first party (the defendant), etc,,” clearly showing that it was the intention of the parties that the work should be done to the satisfaction and acceptance of the engineer in charge of the railroad company; and the object of making the contract in this form is apparent because the work was being done for the railroad company, the plaintiffs being sub-contractors, and the question of the defendant being entitled to pay from his principal depended upon the acceptance by the railroad company of the work done by him.

That by “ engineers in charge ” the engineer or engineers in charge of the railroad was meant is also evidenced by the second clause of the contract, whereby the defendant was given the right at any time, in case the force employed upon the work mentioned in the contract should be considered by the engineer in charge of the railroad as inadequate to complete any portion of the whole of said work within the time specified, to employ such additional force as he or they should consider requisite.

Thus it would seem that the engineer in charge of the railroad company was the one who was to direct the method of the doing of this work, and it is to- his satisfaction and acceptance that the work is to be done. Therefore when in the sixth clause the final certificate is spoken of and the work is there required to be done to the satisfaction of said engineer or engineers in charge, it evidently refers to the engineer or engineers in charge of the railroad company, they being the only engineers which had been theretofore mentioned.

This seems to be the clear meaning of the contract, and as Mr. Schafer was not the engineer in charge of the railroad company, his certificate even if given was not a compliance with the contract.

The judgment should be reversed and a new trial ordered, with costs to appellant to abide the event.

Ingraham, J.

I concur with the presiding justice that Primrose, who was the engineer in charge of the road and who was to determine when the plaintiffs had performed their contract was the engineer who -was to give the certificate which was a condition precedent to the right of the plaintiffs to recover. But I think there was no evidence to justify the court in finding that the certificate required by the contract had ever in fact been given.

The contract plainly contemplated a certificate that the work that plaintiffs agreed to perform had been “ completely finished in every respect and performed agreeably to the various stipulations and specifications in this agreement ” and that to entitle plaintiffs to recover they must show that such acertificate had been given by the engineer in charge of the railroad to defendant

That certificate was distinct from either the provisional estimate or the final estimate as to the amount of work done. The estimate simply stated the amount of work done. The certificate that was required was that the work had been performed according to the contract

Ho such certificate was offered in evidence and the only evidence that can be said to relate to it is the statement of the plaintiff “ That the time I saw Mr. Lee he stated that he had this certificate; the work had been finished more than twenty days.”

What this certificate was to which the witness alluded does not appear. Lee denies having made any such statement and the testimony of witnesses called by -defendant make it clear that no certificate of Primrose had ever been given and that as matter of fact the work had not been completed according to the contract.

The finding of the jury that a certificate as required by the contract had been given would I think have been clearly against the weight of evidence.

I think that upon all the evidence it appears that plaintiff never complied with his contract, neither in doing the work that he had agreed to do or obtaining the certificate of the engineer of the road that the work had been completely finished and performed agreeably to the stipulations and specifications in the agreement, and the obtaining of such a certificate was a condition precedent to the plaintiffs’ right to recover.

I also concur with the presiding justice that it was error to admit the paper Exhibit “H” in evidence and that the judgment should be reversed.

Daniels, J., concurs.


source: Caselaw Access Project

author: Daniels, J.

license: Public Domain

text:
    In the Matter of the Judicial Settlement of John L. Hobson, Adm’r.

      (Supreme Court, General Term, First Department,

      Filed November 13, 1891.)

    1. Executors and administrators—Liability to account for trust FUND.
    The father of the administrator created a trust for the benefit of his wife for her life and for his own benefit in case he survived her, which included a bond and mortgage payable to her. After the death of the wife the trust was established in an action brought by the father against this administrator. After the death of the father, appellant was appointed administrator with the will annexed of his mother, the petition therefor stating the bond and mortgage as an asset, and he collected the mortgage, partly distributed the money and accounted, when he was directed to pay the money to a trustee. On motion to amend the account, Held, that he was authorized by the form of the security to take possession of and discharge it, and having done so he was accountable as administrator therefor under the decree of a surrogate having jurisdiction over the administration of the estate.
    2. Same—Support of infants.
    An administrator is not entitled to credit for moneys paid by him to the mother of infant beneficiaries, unless it is made to appear that such moneys were expended for the support, education and maintenance of the infants. It is not sufficient that it was used for the support of the infants and their mother.
    Appeal from the decree of the surrogate of the county of New York settling the accounts of the administrator, and from an order denying a motion to amend the account stated or presented by him for settlement.

      Frank W. Arnold and Thomas Moore, for app’lts; Howard R. Bayne and Anson Maltby, for resp’ts.
   Daniels, J.

The controversy, as it was presented to and decided by the surrogate, related to the liability of John L. Hob-son, as administrator with the will annexed of Sarah M. Hobson, deceased, to account for the amount of a bond and mortgage payable to her and collected by him after his appointment as administrator of her estate. The debt, as it was first created, seems to have been the property of George G. Hobson, the husband of Sarah M. Hobson, who were the parents of the administrator, John L. Hobson.

On the 19th of May, 1866, George G. Hobson created a' trust for the benefit of his wife during her life, and for his own benefit during his life in case of his survivorship. And a bond and mortgage executed by Austin, Falk & Company, on or about the 1st of May, 1866, to Sarah M. Hobson, was made a part of the capital "of this trust That mortgage was satisfied and another taken in its place payable in the same manner. And this second mortgage was also discharged upon the retirement of George W. Falk from the firm whose members executed the mortgage, and another mortgage was taken in its place, executed by the remaining members of the same firm. This last mortgage was dated on or about the 18th of November, 1874, and, together with the bond accompanying it, was in like manner payable to Sarah M. Hobson. She died, after enjoying the income of the trust as she was entitled to do so by the instrument creating it, on the 28th of July, 1875, nominating her husband as the executor of her will.

But he did not prove the will, but continued to receive the proceeds of the trust until he died, on the 14th of February, 1882. During his lifetime, and in 1878, he brought an action to establish the trust, making his'son JohnL. Hobson one of the parties. And a judgment was recovered in that action to that effect. And in that judgment the mortgage is mentioned as one of the items of the trust. As a matter of fact, therefore, this mortgage belonged' to the trust estate as a part of its capital. But after the decease of his father, and on the 14th of July, 1882, John L. Hobson applied to the surrogate for letters of administration with the will annexed on the estate of his mother, Sarah M. Hobson, stating its value to be the amohnt of this mortgage. Letters in that form were issued to him, the will at that time having been probated, and his bond was fixed at the sum of $30,000. And the Fidelity & Casualty Company, in the city of New York, one of the appellants from the surrogate’s decree, became the surety in this bond. After becoming in this manner qualified as the "administrator of the estate with the will annexed, he received a large number of securities, including this bond and mortgage for $15,-000, and gave a receipt for them, describing himself as the administrator of the estate of S. M. Hobson, deceased. An appraisement of the estate was also made at his instance, in which this bond and mortgage was the property appraised as the estate of the deceased testatrix. And this administrator with the will annexed has in that capacity received the money secured by the mortgage and discharged it as satisfied. And in October, 1884, he applied to the surrogate for the settlement of his accounts, charging himself in his application with the amount of this mortgage and the interest he had received upon it, and then crediting himself with certain payments made by him, leaving a balance, as he stated it, of $6,104.95 in his hands yet to be distributed. His petition and accounts were verified in the usual manner, affirming the accuracy of the statements contained in them. It appeared upon the hearing before the referee appointed by the surrogate, and whose conclusions were substantially confirmed by the surrogate, that he had made certain disbursements in his capacity of administrator, and also paid to two of the legatees entitled to share in the distribution of the estate after the expiration of the trust under the terms of the wills to which it was subjected further sums of money, leaving a balance in his hands of the sum of $7,587.37. And that balance he was ordered by the decree within thirty days to pay over, with interest, to a substantial trustee who had been appointed to take charge of the trust estate in that capacity.

In November, 1882, John L. Hobson, the administrator, applied for his own appointment ak trustee of the trust estate. And an order was made, with the consent of parties interested in the trust, appointing him such trustee on giving a bond in the sum of $10,000. But in point of' fact the bond given by him upon that appointment was in the sum only of $5,000. And from the evidence in the case, as well as the conclusion of the referee before whom it was taken, which was adopted by the surrogate, it did not appear that John L. Hobson, as administrator, had ever made any transfer, either directly or indirectly, of this bond and mortgage, or of the moneys received upon it, to himself as trustee under this appointment. And in the absence of that proof and his continued action as administrator, the presumption was warranted that he still continued to hold the proceeds of the mortgage in the capacity in which he had received the security itself, which was that of administrator with the will annexed. Matter of Hood, 104 N. Y., 103; 5 St. Rep., 501.

Exceptions have been taken to the decree of the surrogate holding the administrator, who also appealed from the decree, and afterwards deceased, and the public administrator of the city of New York was made a party to the action in his place, so far as it held the administrator with the will annexed liable to account for this bond and mortgage and the disposition of its proceeds, and to the direction contained in the decree to pay over the residue to the substituted trustee of the trust estate. And in support of these objections it has been contended, as the bond and mortgage formed a part of the trust estate, it could not be collected and administered upon by the administrator of Mrs. Hobson with the* will annexed. But it is quite clear from the form in which the bond and mortgage were taken, that he, as the administrator of the estate with the will annexed, was entitled to collect this indebtedness. The contract authorized him, as the administrator of the estate,, to receive the money and discharge the security. Caulkins v. Bolton, 31 Hun, 458 ; 98 N. Y., 511; Schluter v. Bowery, etc., B'k, 117 N. Y., 125 ; 26 St. Rep., 922.

He not only received the security by virtue of his appointment, as the administrator of the estate, but he also collected' the moneys upon it.and disbursed them, so far as they were paid out, in that capacity, and throughout his entire management of the estate acted in that manner and not in any sense as a trustee of this trust. And after having received the security and collected and retained the money upon it in that capacity, he was liable to account for it under his obligations of administrator of this estate.

A similar question of liability was considered in De Valengin’s Administrators v. Duffy, 14 Peters, 282, where moneys had been collected by the administrator of an estate which belonged to-another party, and, in point of fact, formed no part of the assets of the estate. And it was there objected that the party accountable could not be called to account for such money in the capacity or under the liability of an administrator.

. But it was said in the opinion of the chief justice that: “ Upon a full consideration of the nature and of the various decisions on the subject, we are of opinion that whatever property or money is lawfully recovered or received by the executor or administrator after the death of his testator, or intestate, in virtue of his representative character, he holds as assets of the estate, and he is liable therefor in such representative character to the party who has a good title thereto. In our judgment, this upon principle must be the true doctrine.” Id., 290. And it was further added: “We do not mean to say that the principal may not in such cases resort, to the administrator in his personal character and charge him de bonis propriis with the amount thus received. We think he may take either course at his election. But that whenever an executor or administrator in his representative character lawfully received money or property, he may be compelled to respond to. the party entitled in that character, and shall not be permitted to throw it off after he has received the money in order to defeat, the plaintiff’s action.” Id., 291.

This is a direct authority, supporting not only the jurisdiction, but the correctness of the surrogate’s decree, so far as it depended upon the liability of this administrator to account for these-moneys in that capacity.

And the cases of Graham v. Van Duzer, 2 Redf., 322 ; Calyer v. Calyer, 4 id., 305, and Perkins v. Perkins, 46 N. H., 110, support the conclusions in this manner declared by the court. And- so-also, but not so fully, do the cases of Wells v. Wallace, 2 Redf., 58; Matter of Collyer, 4 Dem., 24, and Du Bois v. Brown, 1 id., 317.

Other authorities have been relied upon and brought to the attention of the court in support of the appeal, which have been cited as in conflict with the surrogate’s decree. But they do not appear to be so upon an examination of them. For in Shumway v. Cooper, 16 Barb., 556, where the jurisdiction of the surrogate was considered as to the disposition of the proceeds of the sale of infants’ lands, it did not appear that the personal representative-had received those proceeds in his character as such, and they consequently became no part of the assets of the estate in his hands.

The same is true of the case of Vulte v. Martin, 44 How., 18, where the proceeds were received by the party as a trustee, which, of course, excluded the jurisdiction of the surrogate over their disposition. In Anderson v. Thomson, 38 Hun, 394, the funds, collected were held in trust, and the personal representative was-in no sense entitled to receive and mingle them as assets with the-estate. The same thing is also true of Levy's Estate, 1 Tucker, 148, where the disposition of the rents of real estate came up for consideration. And as they were disposed of by the statute relating to the descent of real estate, it was rightly held that the administratrix had no legal right to receive them. The matter of Calyer v. Calyer, 4 Redf., 305, is similar in its effect. For the moneys there in controversy neither formed any part of the assets of the estate, nor were they collected or received under any obligation entitling the personal representative to interfere with them. Matter of Collyer, 4 Dem., 24, was a proposal to bring the personal representative to an account for trust funds on deposit in a savings bank. There was clearly no such, liability on his part, and no jurisdiction over the subject-matter vested in the surrogate. And no case has been cited or discovered where the administrator of the estate was entitled, by the contract passing into his possession by virtue of his appointment, to collect a sum of money, which was afterwards received by him in his representative capacity, and so managed and accounted for, in which it has been held that he should be relieved from such accounting, or exonerated from liability, for the moneys acquired by him in that manner. But where the administrator is authorized by the contract itself, as he was by the form of these securities, to take possession of them and collect the money as administrator, there he has been held accountable after receiving it in that capacity under the decree of surrogate having jurisdiction over the administration of the estates, of deceased persons. And there seems to be no valid reason for making this case an exception to the operation and effect of that-principle. The Code of Civil Pro., by sub. 3 of § 2472, has vested in the surrogate jurisdiction to direct and control the conduct and settle the accounts of executors, administrators and testamentary trustees. And that seems literally to include the case of this administrator. For he not only became the administrator of this estate, but his appointment was apparently upon the basis that this bond and mortgage was an asset of the estate.

It was received by" him as such and he collected it in that capacity, and "made a deposit of the amount collected to his credit as administrator, and distributed the moneys disbursed by him as the administrator of this estate. And when that had been accomplished, he applied for the settlement of the accounts, including this as the asset of the estate, in the same capacity. There seems to be no substantial reason,, therefore, for doubting his liability as administrator created in this manner, or for doubting the jurisdiction of the surrogate over the case as it was presented to him for his decision.

It was proved by the evidence that the sum of $1,108, and perhaps more than that, was paid over by the administrator to Mrs. Florence Hobson, who is the mother of Florence and Georgiana Hobson. They were entitled, as the daughters of a deceased son •of the testatrix, to participate in the distribution and division of the trust estate. Their father was deceased, and this money was paid over to their mother, with whom they resided. And it would undoubtedly have been allowed, in whole or in part, by way of credit to the administrator in the settlement of his accounts, if it had been made to appear that the money was devoted to the support, maintenance and education of these two infant children. But that, as a matter of fact, was not established upon the hearing before the referee, or the surrogate. But the most that was made to ■appear was that the money was expended by Mrs. Hobson in the support of herself and these two infant children. What amount was expended for their benefit was not made to appear. And neither the referee nor the surrogate had any means of determining what proportion of the money had been devoted to the benefit •of these two infant children. In the absence of that proof it may be assumed that it was mainly appropriated by Mrs. Hobson for her own support and maintenance, leaving but a small part of it •devoted to the necessities of these children. And the surrogate, •consequently, had no evidence before him by which it could be declared or held that any specific part of this money had been devoted to the benefit of the' infants. Mrs. Hobson was not their •guardian. And it was incumbent upon the administrator, after he had paid the money over to her, to prove the amount that had been used in the support and maintenance of the infants, to entitle him to credit for those payments. That he failed to do, and for that failure this credit was properly rejected by the surrogate.

It appeared in the course of the proceeding that the administrator had delivered the sum of $1,256.78 to his counsel for safe keeping, and that this had been reduced by disbursements made in the payment of referee’s and stenographer’s fees to the sum of $642. So far as the balance still remains, the right to have it applied as a credit to the administrator is not denied. But it has not been formally paid over, it seems, to the trustee ; and whenever that payment shall be made, to that extent the amount will be deducted from the decree. And there seems to be no good reason for denying the administrator the right to credit for the balance of this sum of money, inasmuch as the money has been’ used to defray the necessary expenses of the accounting. To that extent the decree should be modified, as it does not appear by the statement oí the credits contained in it that these disbursements have been allowed to the administrator. But in no other respect does it appear that the decree should be subjected to any change or modification. For as the large balance still remaining has been illegally disposed of by the administrator, as he seems to have known by reason of his being a party to the suit brought for the construction and establishment of the trust, that these moneys belonged to the trust estate in point of fact and should have been paid over as such by him, he was rightfully deprived of his commissions and charged with the costs and allowances made by the ■decree.

The action of the surrogate in denying the motion to amend or change the account was entirely proper, for the administrator had deliberately presented it in the form in which it was verified by -him. And all" the facts touching his liability to account for these •moneys as administrator were as fully and clearly before the court ns they would have been if this amendment had been permitted. And no injustice, therefore, was caused to the administrator by the denial of the motion. The order of the Surrogate disposing of that motion should be affirmed, with ten dollars costs, and such disbursements as may have been expended on account of it in the appeal, and the decree of the surrogate should be so far modified as to include the deduction of this sum of $1,256.78 upon the payment to the trustee of the balance remaining of $642. And, •as so modified, the decree should be affirmed, without costs of the •appeal.

Lambert, J., concurs.


author: Dykman, J.

text:
    John J. Campbell, Resp’t, v. William Ernest, App’lt.

      (Supreme Court, General Term, Second Department,

      Filed December 14, 1891.)

    Injunction—Affidavit.
    An affidavit stating that a debtor has property which he might dispose of, and desires to dispose of to meet his expenses in sickness, is not sufficient to authorize an injunction restraining him from interfering with such property until the further order of the court.
    Appeal from so much of an order as granted an injunction.
    August 10,1891, John J. Campbell procured an order at special term, Hon. Joseph F. Barnard, presiding, granting leave to bring an action on a judgment, and containing an injunction in the following words: “ And in the mean time, and until the determination of the said action, the said defendant be and he is hereby forbidden to transfer or make any disposition of the property belonging to him, not exempt by law from execution, or in any manner to interfere therewith, until further order in the premises.”
    The affidavits showed “ that defendant had become vested with ,a certain interest in real property descended to him as heir at law of his father, which interest is at the present time in litigation in an action in partition to determine the same, and deponent desires to secure the payment of said judgment out of the share of said defendant in such real property.” That an injunction is necessary for the reason that the defendant might defeat the purposes of this motion, and avoid the payment of any judgment that might be obtained.
    By affidavit defendant set up that he had no other property, was sick with consumption, unable to work, and had a family, and that it would be a great hardship and affliction to restrain him from the use of his property, or to make an order which would prevent him from applying it to his necessities.

      Esmond & Ward, for app’lt; Strahan & McClung, for resp’t.
   Dykman, J.

This is an appeal from an order which gave leave to the plaintiff to bring an action against the defendant upon a judgment, and restrained the defendant from making any transfer or disposition of his property until further order in the premises, and it follows from the terms of the order that if the court never makes a further order in the premises the defendant can never sell any property belonging to him not exempt from execution, whether the plaintiff succeeds in this action or does noL

Independently of this criticism, however, we think the injunction was improvidently made, and that no case was presented to the court which justified its issuance.

There is no charge that the defendant threatens or is about to remove or dispose of his property with intent to defraud the plaintiff or any other creditor, or that he is about to sell or dispose of the same in any way.

The affidavit upon which the order was made alleges that the defendant has become vested with an interest in real property by descent from his father, and that the plaintiff • desires to secure payment of his judgment out of the share of the defendant such real property.

No charge is made that the defendant intends to do anything in violation of the rights of the plaintiff, and there is no case made which justifies the seizure of the property of the defendant

A rule which would uphold this order would justify the issuance of an injunction in every action on contract at the time of its commencement if the plaintiff could make an affidavit that the defendant was the owner of property.

The portion of the order appealed from which restrains the defendant from disposing of his property should be reversed, with ten dollars costs and disbursements.

Pratt, J., concurs; Barnard, P. J., not sitting.


author: Ingraham, J. Van Brunt, P. J.

text:
    Thomas H. Thorn et al., Resp’ts, v. James H. Sutherland et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed November 13, 1891.)

    1. Assignment for creditors—Retransfer by assignee.
    A retransfer of the assets by an assignee for creditors to the assignors, although all the debts are not paid, is valid until disaffirmed by the creditors, and if not so disaffirmed is sufficient to vest the title of the property in the assignors.
    2. Conversion—Trade fixtures—Charge.
    Plaintiffs removed from certain premises, leaving thereon certain trade fixtures. S., the owner of the land, leased the same, with the fixtures, to W., who on demand refused to allow plaintiffs to remove them. On a former appeal it was held that if the plaintiffs left the fixtures on the premises in pursuance of an agreement that they could subsequently remove them, they remained their property. The question as to the existence of such agreement was submitted to the jury, and in answer to a question by them the court replied that if they found for plaintiffs it must be against both defendants. Held, no error; that S., by leasing the land with the fixtures, was gudty of conversion, and W. was also guilty of conversion in refusing delivery on demand.
    Appeal from judgment in favor of plaintiffs on verdict of a jury.

      S. B. Brownell, for app’lts; Robert A. B. Dayton, for resp’ts.
   Ingraham, J.

The sole issue raised by the pleadings in this •case was as to the ownership of the property to recover for the conversion of which this action is brought, and the only defense in the answer of the defendant is" that the defendant and not the plaintiffs was the owner of such property.

This appears from an inspection of the pleadings and was expressly decided by the court of appeals when this case was before that court on the appeal from a judgment entered in favor of the defendant, 123 N. Y., 240 ; 33 St. Rep., 408, where Ruger, Ch. J., delivering the opinion of the court, says : “ We have been unable to see that the defendant has at all sustained the only material allegation of his answer, viz.: that he at any time became the owner of the fixtures, and no attempt was made by him to prove that fact.”

The plaintiff testified without contradiction that the property in controversy was placed upon the leased premises by the plaintiffs, who were tenants under a lease made to them by the defendant Sutherland, and that as such property as between landlord and tenant did not become fixtures, the plaintiffs were entitled to remove the same during the continuance of the term demised by the lease, and the only defense to the action was that the term demised had terminated by the surrender of the premises to the landlord without a removal of the property and thereby the plaintiffs lost their right to remove the same and it became the property of the defendant as the owner of the real estate.

The plaintiff further testified that prior to the surrender of the possession of the premises to the landlord, “ I saw Mr. Sutherland; he asked me if I would be willing to have the property remain there and sell it to whoever they sold the property to; I told him I was perfectly willing to do that as the appraisers’ figures were too low. We left the premises under an agreement,” and this testimony was corroborated by the evidence of a Mr. Todd who was the attorney for the plaintiffs, and who testified that he had a conversation with Mr. Sutherland to the same effect.

This testimony was denied by Sutherland, and further evidence was given tending to show that the agreement mentioned was not made.

It was settled by the court of appeals on the former appeal that leaving the property on the premises after the expiration of their term, under such circumstances, did not work a forfeiture of its ownership, and thus the sole question to be determined in this case was a question of fact for the jury as to whether or not the property was left on the premises under the agreement testified to by the plaintiffs, and that question having been submitted to the jury, and they having found by their verdict in favor of the plaintiffs must have found that the agreement in question was made.

Considerable testimony was taken in the case that appears to have been immaterial upon this issue, but it is clear that the admission of such testimony did not injure the defendants, and it was mostly received at the request of defendants to prove other defenses which were not alleged in the answer, and which had they been alleged would not have been available to defeat plaintiffs’ causes of action.

Great stress was laid by the defendants at the trial upon the fact that at the time of the reconveyance by the assignee for the benefit of creditors of plaintiffs all of plaintiffs’ debts had not been paid or satisfied, but we think that was entirely immaterial

The transfer of the property by the assignee for the benefit of creditors to plaintiffs was valid until disaffirmed by plaintiffs’ creditors, and as it never was disaffirmed by them, and as it appeared that all the creditors have been paid, the transfer was sufficient to vest the title of the property in the plaintiffs.

There were many exceptions taken to the rulings of the court upon the admission and rejection of testimony, but none of the testimony that bore upon the only issue in the case seems to have been erroneously admitted, and all of the testimony offered by defendants and excluded was clearly immaterial upon such issue.

The admissions of the declarations and agreements made by Mr. Spear were proper at the time they were admitted, because the plaintiff testified that defendant Sutherland asked him to call and see Mr. Spear; that Mr. Spear was his attorney, and that subsequently Mr. Spear did act for defendant This was denied by both Spear and Sutherland, but under the circumstances the admission of the testimony was not error.

We have examined the other exceptions to the admission and rejection of testimony, but no error seems to have been committed that requires a reversal of the judgment

The only other exceptions that require notice is the exception to the answer of the court to the question of the jury, and the exception to a refusal to charge a request by plaintiff after such question had been answered.

After the jury had retired to consider their verdict, they came into court and asked the following question:

“ Can we find against one of the defendants, or are we bound if we do find for plaintiffs to find against both defendants or one separately, to which the court answered: “ If you find for plaintiff it must be as against both defendants.”

This was an action for conversion, and taken literally this answer would be erroneous, but I think it must be considered in connection with the former charge to the-jury and the sole question that the jury were to pass upon.

The liability of the two defendants was not joint and several, but upon the pleadings as they stand the only question as to the liability of either of the defendants was as to the ownership of the property. By refusing to deliver the property to the plaintiffs on demand, if plaintiff’s testimony was true, both of the defendants were guilty of a conversion, but as to the defendant Sutherland he was also guilty of a conversion when he leased the plaintiffs’ property to the defendant Winter. Winter, however, was liable for a conversion when he retained possession of the plaintiffs’ property after plaintiff demanded its return to him. The leasing of the property by Sutherland to Winter was conceded. The possession of the property by Winter was conceded. The demand made on Winter by the plaintiff for its return and his refusal is also conceded by the pleadings, so that both Sutherland and Winter were liable for a conversion of the property if plaintiffs were its owners, and taking this answer and the question of the jury in connection with the rest of the charge, it is clear that what the court meant to say was that on the evidence and the issue presented to them if one defendant was liable for a conversion the other defendant was also liable, and this charge was clearly correct.

The property belonged to plaintiffs; Winter, who had received it from Sutherland, was bound to return it to plaintiffs on demand, and in case of his failure to do so he was liable for a conversion. It was no answer to that claim that he had leased the property from defendant Sutherland without knowledge of plaintiffs’ ownership and good faith. The property in controversy has not the attribute of negotiability so that a purchaser or lessee for value could hold it against its true owner.

We think, therefore, that as matter of law the liability of both defendants rests upon the ability of the plaintiffs to show a good title to the property, and the jury having found by their verdict that plaintiffs - were the owners thereof, the plaintiffs were entitled to a verdict.

What has been said in regard to the last exception applies to the refusal of the court to charge that if defendant Winter leased the premises with these trade fixtures on them without notice of any claim of the plaintiffs, the jury may find a verdict for the defendant Winter.

The right of the plaintiffs did not depend upon any agreement between Sutherland and Winter, but on plaintiffs’ ownership of the property.

The defendants did not insist upon the trial that no evidence should be admitted except as it bore upon the sole issue to be determined and none of the objections to the admission of testimony was based upon the ground that it was immaterial to such issue, and on the whole case we are of the opinion that no error was committed to the injury of the defendants which requires us to reverse, the judgment.

The judgment should therefore be affirmed, with costs.

Van Brunt, P. J.

Under the' decision of the court of appeals upon the previous appeal in this case I think that this judgment must be affirmed.

Daniels, J., concurs.


author: Ingraham, J.

text:
    John R. Drake, App’lt, v. Herbert L. Satterlee, Rec’r, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed November 13, 1891.)

    1. Pleading—Demubber.
    Where the answer does not set up the facts as separate defenses, but denies plaintiff’s right to the fund in question and alleges that defendant as receiver is entitled thereto, a demurrer to “ each and every defense consisting of new matter in the answer and the counterclaim therein ” is too indefinite to present any question to the court under § 494 of the Code.
    2. Same—Counterclaim.
    Where a defendant who has been brought in as a claimant of the fund in question makes no affirmative claim against the plaintiff, but asks that the fund be awarded to him, this does not constitute a counter-claim within § 501.
    3. Same—Judgment on demurrer.
    The court on overruling a demurrer to an answer is not authorized to include in the judgment a provision granting leave to apply for an order making other persons parties defendant.
    Appeal from interlocutory judgment overruling demurrer to answer.

      Joseph A. Thompson, for app’lt; Henry W. Harden, for resp’t.
   Ingraham, J.

By the amendment to the complaint this action became an action in equity to determine the ownership of a fund in court, the plaintiff claiming it as assignee of one Sherman, and the defendant as receiver of said Sherman, plaintiff also alleging that the appointment of defendant was void, and defendant alleging that the assignment to plaintiff was void and made with intent' to hinder, delay and defraud creditors.

The answer does not set up the facts as separate defenses, but denies the right of plaintiff to the fund and alleges that defendant, as such receiver, is entitled to the fund. The plaintiff demurs to “ each and every defense consisting of new matter in said answer” and also to “ the counterclaim contained in said amended answer,” specifying several objections thereto.

The grounds upon which a plaintiff is allowed to demur to answer are specified in §§ 494 and 495 of the Code. By § 494 of the Code it is provided that a plaintiff may demur to a defense consisting of new matter contained in the answer on the ground that it is insufficient in law upon the face thereof.

The demurrer here interposed repeats the words used in this section without designating any specific defense which it is claimed is insufficient.

After an examination of the answer we are not at all sure that there is any “ defense consisting of new matter” therein contained.

. The complaint alleges the fact of defendant’s appointment as receiver; it alleges the making of the contract under which both parties claim, the payment of the money into court, and most of the answer consists of allegations in relation to facts alleged in the complaint.

It is possible that the allegations as to the order entered on the motions which are claimed by defendant to be res adjudicata upon the issues in this action could be treated as a defense consisting •of new matter, but it is not expressly pleaded as a separate defense, and is not separately numbered.

The plaintiff, if he had desired to have this question raised, ■could have applied to the court to compel defendant to make his answer more definite and certain, or to separately state and number his defenses, and could then have demurred to each specific •defense which “ was insufficient in law upon its face.”

We think that in the present state of the pleadings the demurrer is not sufficiently definite to present any question to the ■court for its determination.

It is true that in some cases a demurrer to each and every defense contained in the answer has been upheld as in effect a demurrer to each specific defense, Kennagh v. McGolgan, 21 St. Rep., 326, but in such cases the pleading demurred to in some way plainly indicated the defenses which the defendant relied on to defeat plaintiff’s cause of action, and the demurrer thus definitely specified the defenses which the plaintiff wished to challenge.

We agree therefore with the court below that the demurrer was too indefinite to present any question as to the defenses contained in the answer.

Plaintiff also demurs to the counterclaim set up in the answer upon several grounds, but one of which are authorized by the Code, § 495.

A demurrer to a counterclaim on the ground that there is a defect of parties is not allowed by the section.

The demurrer that the counterclaim does not state facts sufficient to constitute a cause of action cannot be sustained.

Plaintiff to recover must depend upon the validity of the assignment from Sherman. If that assignment is void as to the defendant he has a right to allege the facts to show that such assignment is void as an equitable defense, and so defeat plaintiff’s -cause of action. He has also a right to allege that such assignment being void, the fund belongs to him. This he does by showing that he has been duly appointed receiver of the property of the plaintiff’s assignor, to whom the money was under the contract payable, and as such representing Sherman’s creditors.

We do not think, however, the answer contained a counterclaim within § 501 of the Code

The defendant was made defendant as a claimant to a fund in court. He asks no affirmative relief as against the plaintiff. What he does ask is that the fund which is the subject of the controversy be awarded to him. If the plaintiff is not entitled to the fund, it can make no difference to him whether it is awarded to the defendant or not, and the right of the plaintiff to recover depends upon his ability to prove the allegations of the complaint which are denied by the answer. The facts upon which defendant relies to establish his right to the fund do not tend to diminish or defeat the plaintiff’s recovery.

We do not think, therefore, that the demurrer is sufficiently definite to raise any question as to the defenses set up in the answer, and as no counterclaim is alleged upon which defendant, demands an affirmative judgment, no question was presented by the demurrer.

The interlocutory judgment entered on the decision of the-court overruling the demurrer allowed the plaintiff to withdraw demurrer and reply to the amended answer, and then provides that in case plaintiff shall withdraw such demurrer that, the defendant shall have leave to apply to the court for an order making such other persons parties defendants as may be necessary for a full determination of the issues herein, and may amend his answer.

We think this provision of the interlocutory judgment unauthorized on the trial of the issue of law raised by the- demurrer; the decision must either sustain or overrule the demurrer, and by § 497 of the Code the court is given power in its discretion' to-allow the party in fault to plead anew or answer upon such terms, as are just.

Whether or not other persons should be made parties to the action should be determined upon an application to the court at. special term,' when, upon a presentation of the facts, the parties-could have an opportunity to be heard and the question determined.

The hearing on the demurrer was a trial of the issue of law raised by the pleadings, and it was only that issue of law that could there be determined.

We think, therefore, that the interlocutory judgment appealed from should be modified, by striking out all after the provision for final judgment, and as so modified affirmed, without coats in this court, with leave to the plaintiffs to withdraw the demurrer, on payment of the costs in the court below.

Van Brunt, P. J., and Daniels, J., concur.


author: Lambert, J.

text:
    Sarah E. Mellen, Resp’t, v. William C. Banning, Ex’r, et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed November 13, 1891.)

    Parties—Heirs op grantor where deed is attacked.
    Plaintiff's husband, who became vested with real estate under a will, conveyed the same to .plaintiff. In an action to have the power of sale in the will declared void and restraining the executor from selling thereunder, the defendants alleged that the conveyance to plaintiff was void for fraud. Meld, that as the children of the plaintiff would succeed to> the title and interest of their father in case this defense was successful, they were necessary and proper parties to the action.
    Appeal from an order denying the motion to strike out the names of certain infant defendants from the summons and complaint in the action as being neither necessary nor proper parties to the action, and for other relief.
    The plaintiff brings this action as the alleged owner of 5-16 interest in the real estate devised by the fifth paragraph of the will of Abner Mellen, Sr., and asks to have the power of sale in the eighth paragraph of that will declared void, and also asks for an in junction restraining the exercise of the power of sale by the sole surviving executor, the defendant Banning.

      Henry Dailey, Jr., for pl’ff; Albert J. Ackert, for guardian ad litem; George Hill, for Banning, ex’r; William C. Trull, for the other def’ts.
   Lambert, J.

It may be assumed in disposing of this appeal that by the fifth clause of the will of Abner Mellen, deceased, one undivided one-fourth of the lands owned by the deceased at the time of his death vested in Abner Mellen, Jr., and by the death of Ellen Mellen intestate he became seized of one undivided one-sixteenth thereof, so that at the time of mating the conveyance to the plaintiff he was the owner of five-sixteenths of the lands devised by the fifth clause of the will of his father, Abner Mellen, deceased.

November 5, 1888, Abner Mellen, by an instrument alleged to be sufficient in form for the purpose, conveyed the five-sixteenths of said lands to his wife, the plaintiff, and thereafter, and on November 30, 1888, she commenced an action for a partition thereof; all of the parties to this action except the infants were made defendants. The defendants in that action, except her husband Abner Mellen, Jr., asserted by allegations contained in answer served in said action that the deed of conveyance from Abner, Jr., to his wife, the plaintiff, was void for fraud, and in this action again allege that the conveyance of the interest and title of Abner, Jr., to the plaintiff was made and accepted with a fraudulent intent, and for a like purpose. If the defendants should succeed upon this issue in either case, then the infant defendants would succeed to the title and interest of their father, the grantor, in which event it must be conceded they would be necessary parties to this action. The motion was properly disposed of at special term, and the decision is affirmed, with ten dollars costs and disbursements of the respondents.

Daniels, J., concurs.


author: Van Brunt, P. J.

text:
    Adolph Luthy, App’lt, v. James Regan, Resp’t

      (Supreme Court, General Term, First Department,

      Filed November 13, 1891.)

    Landlord and tenant — Wren transfer of title does not affect RELATION.
    Defendant recovered in an action against the plaintiff for damages to premises during his tenancy. In that action he testified that he was the owner of the premises, but it was afterwards discovered that he had conveyed them to his wife. No change of possession had taken place, but he had continued to collect the rents as before. Held, that this furnished no ground to vacate the judgment, as the relation between the parties was not changed, and the change of title could have been discovered by due diligence.
    Appeal from a judgment at special term dismissing the complaint, with costs, and vacating injunction granted herein pendente lite.

    The action is brought to restrain defendant from disposing of or enforcing a district court judgment and for damages, on the ground that newly discovered evidence has come to the knowledge of the plaintiff since the judgment was rendered by the district, court

      W. K. Hall, for app’lt; Earley & Prendergast, for resp’t.
   Van Brunt, P. J.

The plaintiff was a tenant of the defendant of certain premises in the city of New York, from year to year,, until the 1st of May, 1890. In May, 1890, the defendant sued the plaintiff in the ninth district court to recover damages which had been sustained by the premises occupied by the plaintiff during his tenancy. 'The pleadings were oral. The complaint was. for damages to the respondent’s house while in the possession and. occupation of the appellant. The answer was a general denial,, and the case was tried before a jury, and resulted in a verdict in favor of the respondent. Prom this judgment the appellant appealed to the general term of the court of common pleas.

Subsequently, the appellant brought this action for the purpose-of having the district court judgment vacated and for damages,, upon the ground of newly discovered evidence.

It appeared upon the trial of this action, in response to a question of his counsel whether he was the owner of the premises, the-respondent answered yes, whereas on the 28th of January, 1890, by deed duly recorded, he had conveyed the premises to his wife. This fact, which the appellant ascertained since the trial, is the ground upon which he claims to succeed in the action in this-court.

It appeared that no change in the possession occurred at or after the time of the delivery of the deed, the respondent continuing in. possession and collecting the rents as before.

Upon this state of facts the court below held that the action was not maintainable, and from the judgment thereupon entered this appeal is taken.

It seems to us there was no error in the disposition of the-case by the court below. No matter where the legal title to the premises in question might be, the defendant was in possession of the premises, acting as landlord, and receiving the rents, the wife making no claim whatever thereto.

The respondent, therefore, continued to be the lessor of the appellant, and the relation between them was in no respect changed.

If, however, the question as to the person in whom the legal, title was vested had been material in the district court action, it was one of the issues involved in that action and the appellant was bound to use due diligence in ascertaining whether or not the respondent was the owner of those premises. The deed from the respondent to his wife was upon record, and if ordinary diligence had been used for the purpose of ascertaining where the legal right was, it might easily have been ascertained. But it is extremely doubtful whether that was a question of any importance in the district court case, in view of the relations of the parties and of the fact that the' respondent was in-possession and exercising acts of ownership presumably with the knowledge and assent of the wife.

The judgment should be affirmed, with costs.

Daniels, J., concurs.


text:
    Annie M. Bausch, Resp’t, v. Charles D. Ingersoll, App’lt.

      (Supreme Court, General Term, First Department,

      Filed November 13, 1891.)

    Pleading—Amendment—Teems.
    Where a proposed amended answer consists, not of allegations of facts, hut of inferences from facts which are not alleged, the terms imposed on granting leave to amend will not he disturbed by the appellate court.
    Appeal from order allowing defendant to amend his answer on payment of costs of the action and motion, the amended answer to be served in one day, and the case to be tried when reached, unless adjourned on motion of plaintiff.
    Action for breach of promise. The proposed amended answer admitted the making of the contract, and alleged that “ plaintiff conducted herself, in speech and in act, in manner inconsistent with the continuance of the engagement of marriage between them,” and that “ plaintiff deceived this defendant in her representations and conduct; and that, by reason of the aforesaid acts, conduct and deceptions of the plaintiff, the defendant was justified in considering, and did consider, the engagement of marriage as cancelled and annulled.”

      J. E. Weld, for app’lt; R. Robertson, for resp’t
   Van Brunt, P. J.

This appeal is taken by the defendant because of the severity of the terms upon which leave to serve an amended answer was granted.

Upon an examination of the amended pleading it would seem that the greatest error was committed in granting leave that it should be served at all; the additional allegations contained therein (if they may be termed allegations) being allegations of inferences only, and not of facts such as tended to constitute a defense, or might be taken into consideration in mitigation of damages.

It is undoubtedly true that evidence should not be set out in the pleadings, and that only the facts claimed to be established by evidence should be contained in the averments thereof. But in the answer at bar, as has already been stated, no facts are alleged so far as the proposed amendment is concerned, but only inferences which the defendant draws from facts which he does not allege, and it is therefore impossible to determine whether those inferences are well founded or not.

We are of opinion therefore that the order should be affirmed, with ten dollars costs and disbursements.

Barrett and Ingraham, JJ., concur.


text:
    Humphrey H. Leavitt et al., Resp’ts, v. John L. Dodge, App’lt.

      (Supreme Court, General Term, First Department,

      Filed November 13, 1891.)

    1.- Trial—Direction of verdict—Exception.
    An exception to the direction of a verdict is not waived by a subsequent request to submit propositions to the jury to be. considered in reaching that verdict.
    2. Same.
    Where the right of a party depends upon the testimony of an interested witness, the court has no authority to direct a verdict in his favor.
    3. Pleading—Pasties.
    Where the complaint alleges that the plaintiffs have" succeeded to the rights of other persons originally interested in the claim, the defendant on taking issue upon such allegation may set up in the answer a defect of parties plaintiff by not joining such other persons, as the defect did not appear on the face of the complaint.
    4. Attorneys—Settlement oe disputed claim.
    On a claim being made by plaintiffs’ firm for services rendered to a receiver appointed in supplementary proceedings instituted on a judgment recovered by defendant, the latter claimed that they were rendered under an agreement that the fee was to be contingent and paid from the moneys received. A settlement was made by which the bill for services to the receiver was to stand to be paid out of moneys to be paid defendant out of the estate in the hands of the receiver. Reid, that the settlement of the disputed claim was a good consideration for the agreement to restrict the demand to the moneys in the receiver’s hands; that plaintiffs could only look to the receiver for their compensation, and could make no personal claim against the defendant so long as he did not obstruct or prevent resort to the receiver.
    5. Same.
    Defendant received a check from the receiver, but upon objection of plaintiffs returned it to the receiver. Reid, that this did not deprive plaintiffs of their remedy against the receiver and thus make defendant liable.
    Appeal from a judgment recovered on the verdict of a jury, and from an order denying a motion for a new trial.

      R. Burnham Moffat, for app’lt; Charles W. Brooke, for resp’ts.
   Daniels, J.

The action was brought by the plaintiffs to re- ' cover the sum of $448.56, and interest thereon, upon a settlement, or stated account, made on or about the 6th of January 1888. The plaintiffs, together with Harry M. Peters, James A. Turnbull and Henry S. Whitaker, were copartners in business at the time when this settlement took place. And it was alleged in the complaint to have been made between the defendant and this firm, and that the plaintiffs, upon a dissolution of the firm, which afterwards took place, had succeeded to all its rights, title and interest in this demand. A claim was also made for services afterwards performed for the defendant in the course of legal proceedings, but for which the court at the trial held the plaintiffs were not entitled to recover. But upon the close of the proof a verdict was directed in their favor for this balance, together with interest from the 6th of January, 1888. And the defendant excepted to this direction. And reliance is placed upon that exception to sustain the appeal taken from the judgment and order. It has, however, been insisted on behalf of the plaintiffs that the defendant is not in a position to maintain this exception even though the case was one which should have been submitted to the jury. For after the court had decided to direct a verdict in favor of the plaintiffs, the counsel for the defendant requested the court to charge certain propositions to the jury to be observed by them in the consideration of their verdict. But there was no request made on behalf of the defendant to direct a verdict in his favor, and consequently no waiver of the exception taken to the decision of the court to direct a verdict against him. The case is not one where each party requested the court to direct • a verdict, and thereby presented it as involving only legal prepositions, but it is a case in which the court decided in substance that there was no question of fact to be submitted to the jury, and that a verdict should be directed in favor of the plaintiffs. And the exception taken to the decision presents the-question whether the case was or was not one upon which a verdict could in this manner be directed by the court. Sheffer v. Harmon, 20 St. Rep., 792; Citroen v. Adam, 24 id.. 263.

By the answer of the defendant, the allegation that the plaintiffs had succeeded to the right, title and interest of the firm to this balance was put in issue by a denial. And it was further averred that Harry M. Peters, Henry S. Whitaker and James W, Turnbull should have been joined as plaintiffs in the action. And this was a matter of fact which could be set up as a defense-by the answer, for the reason that it did not appear upon the face-of the complaint that there was any defect of parties plaintiff as the action had been' brought. It did appear that these persons-were members of the firm at the time when the settlement took place. But it was alleged that the plaintiffs had succeeded to-their interests in the demand, and for that reason the complaint showed no defect of parties within subd. 6, § 488 of the Code of Civil Procedure. And this objection was regularly taken by answer.

Whether the plaintiffs had succeeded to the interest of the firm' in this demand depended wholly upon the testimony of Edwin R.. Leavitt, one of the plaintiffs. But he did not testify that any agreement had been made between the plaintiffs and either of these other members of the firm by which they relinquished their interest in the demand to the plaintiffs. But the utmost that his evidence tended to establish was that they had gone out of the business and left it in the hands and under the control of the plaintiffs. The position was also taken that by art 9 of the partnership agreement the plaintiffs were entitled to maintain the action for the recovery of this balance, for the reason that it was for legal services which they had performed during the existence of the firm. But this article does not appear to be capable of so extended a construction as to include this balance. For the utmost which is done by it is to provide that each of the parties in the firm should retain for himself, or themselves exclusively, any and all business that he or they had, or might have, and that none of the other parties were to have or be entitled to any share whatever in the profits of such business, or to have anything to do-with the manage ment" thereof.

This demand was not within this section of the articles. For the business out of which the balance arose'was not the business which the plaintiffs had or afterwards acquired, but it was the business of the firm itself, secured through the action of Mr. Peters, one of its other members. Whether the plaintiffs were entitled to maintain the action therefore depended upon the acquisition of their right or interest as successors of the other members of the firm after its dissolution. And that, in the most favorable view for the plaintiffs, depended upon the inference to be drawn from and supported by the facts stated by this witness. It was accordingly a question for the jury to consider and decide, and not for the court. And it was error for the judge under this state of the evidence obtained from a party to direct a verdict in favor of the plaintiffs. Kavanagh v. Wilson, 70 N. Y., 177; Honegger v. Wettstein, 94 id., 252, 261; Cleveland v. New Jersey Steamboat Co., 25 St. Rep., 666.

These authorities abundantly sustain the proposition that where the right of the party depends upon the testimony of an inested witness, the court has no authority to direct a verdict in favor of that party.

It further appeared by the evidence of this witness .that the services for which this balance was claimed and the verdict was directed were rendered for a receiver in supplementary proceedings under a judgment recovered by the defendant. The amount of their services was not denied, but it was claimed by the defendant that they had been rendered under an arrangement with Mr. Peters, one of the members of the firm, upon a contingent fee to be satisfied out of the proceeds of the litigation. This was denied by the plaintiffs. And the settlement, which was made on the 6th of January, was for the adjustment of this controversy. That there, was a dispute appears from the testimony given by this witness. And its existence is also conceded in the letter written by Leavitt and Whitaker to the defendant on the 9th of January, 1889, in which it is stated that the defendant disputed the claim to the surprise of the plaintiffs, “ upon the ground that Mr. Peters, our then partner, had represented to you at the outset of the litigation that it would be taken upon a contingent fee basis. ” And it was one of the objects of the settlement which was made to adjust and determine this dispute. And it was adjusted between the firm and the defendant by the agreement that this claim of the plaintiffs was to be satisfied out of the proceeds obtained by the receiver in the course of his proceedings.

In the paper subscribed by the firm it was stated that the firm had, “Beceived this day from Mr. John L. Dodge, check for $245,38 as per settlement of bill this date. Bill against receiver to stand and be paid according to letter of December 30, 1887, to Mr. Dodge, and the. said check to be in full settlement of the rest of said bill.” And the letter in this manner referred to expresses with equal, if not greater, clearness that the plaintiffs’ demand for this balance was restricted to their ability to have it satisfied out of the moneys which should be obtained" by the receiver. On this subject it is stated in the letter that “We will allow the bill for services rendered the receiver to stand to be paid out of any moneys that may hereafter be paid you on your claims out of the estate in the hands of the present receiver, and upon that contingency, and we will accept the difference, $404.38. This, in fact, cuts down our bill total to nearly one-half, leaving the rest of our work to be paid for upon contingency of collection, which we certainly never anticipated.”

The settlement of the controverted question whether the defendant was personally liable to the firm, or its right to compensation for these services depended upon the contingency in this manner referred to, formed a good consideration in law for this restriction of the demand to the moneys which should pass into the hands of the receiver. For the settlement or compromise of a disputed claim is a good consideration for an agreement entered into upon the basis of its adjustment. Wehrum v. Kuhn, 61 N. Y., 623 ; Feeter v. Weber, 78 id., 334, 337.

And it was also so considered and held in Babcock v. Hawkins, 23 Vt., 561. And the agreement which in this manner was entered into between the firm and the defendant excluded the right to resort to him personally for the payment of this indebtedness. For the only inference which the receipt and the letter in their statements sustain is that the right of the firm to recover this balance was intended to be restricted to the moneys passing under the control of the receiver from which that payment could be made. And the remedy was thereby restricted to the receiver as long as the defendant aid not afterwards obstruct or prevent its enforcement. Morehouse v. Second Nat. Bk., 98 N. Y., 503.

It was the case of an agreement accepted by the firm in satisfaction and adjustment of the preceding controversy. And the remedy for its enforcement was that which was in this manner prescribed by its terms. Babcock v. Hawkins, supra.

It did appear by the evidence that the defendant had received a check from the receiver for the sum of $349, as a dividend declared by him. And it was proposed by the defendant to withhold this check from the plaintiffs and to make a different disposition of it. But upon the plaintiffs making a claim against the check to the receiver, the defendant returned it to him and thereby restored his control over the disposition of this fund.

The court, in its charge to the jury, considered this to be an unauthorized act of the defendant, rendering him liable for the balance declared by the settlement. But if the act had been unauthorized by which the check was returned to the receiver instead of being delivered to the plaintiffs, it did not justify the direction of a verdict in their favor for nearly one hundred dollars exceeding the amount mentioned in the check. But it appeared by the evidence of the defendant himself that the check was returned to enable the receiver to control the disposition of this dividend. Xo claim was made to it by the defendant, and he testified that he had no interest in it beyond seeing that it was paid to the right party. And if that was the motive by which he was actuated, he interposed no obstacle or resistance in the way of the plaintiffs’ right to this dividend, and did not prevent them from receiving the money for which the check had been drawn. By its restoration to the receiver they were placed at liberty to enforce their •claim, against him to this extent under the settlement which had been made. They lost nothing and were deprived of no right to .secure the payment of their demand in the manner in which that had been provided for by the settlement And the court could not certainly, on account of the action of the defendant relating to this check, direct a verdict against him for the balance which it was agreed should be satisfied out of the moneys obtained by the receiver. The case in all its points as they were presented by the evidence was one for the jury, and not for a direction of a verdict by the court. The exception taken to that direction should, therefore, be sustained, and the judgment and order reversed and a new trial directed, with costs to the defendant to abide the event

Lambert, J., concurs.


author: Learned, P. J.

text:
    Isaac McConihe, App’lt, v. George M. Derby et al., Resp’ts.

      (Supreme Court, General Term, Third Department,

      Filed November 30, 1891.)

    1. Fraudulent conveyance—Vendor dealing with property as his own.
    A father,whose sons were threatened with insolvency, took from them a bill of sale of personal property upon an agreement that they were to remain in possession, dispose of the property, and pay their creditors other than the father. Meld, that the bill of sale was fraudulent as to creditors.
    2. Same—Fraudulent vendee liable for property disposed of by him.
    Where as between vendor and vendee, there was no change of possession when the bill of sale was executed, and subsequently the vendee takes possession under said bill, and sells the property, he is liable to that extent to other creditors of the vendors. The vendee has not rescinded the sale, nor returned the property to the vendors.
    Appeal from judgment in favor of defendants.

      Riley & Conway, for app’lt; Beckwith, Barnard & Wheeler (W. L. Pattison, of counsel for Charles C. Derby; G. H. Beckwith, of counsel for George M. Derby), for resp’ts.
   Learned, P. J.

This is an appeal by the plaintiff from a judgment in favor of the defendants. The action was brought by a judgment creditor to set aside a bill of sale of personal property as fraudulent and void. The case came on for trial at a circuit court, and a jury was impanneled. The court submitted to the jury the question whether the bill of sale was made with intent to defraud creditors. The jury answered in the negative, and the court adopted the finding, and found other facts.

Charles and Frank Derby were carrying on a hotel on the 10th of July, 1886, and were in possesssion of goods and chattels, consisting generally of the hotel furniture, table articles, liquors, cigars, provisions,' horses and wagons, worth about $1,400. They owed the plaintiff about $252, and their father, George M. Derby, about $400; and he was their endorser for about $1,000. At this time they were threatened with insolvency, and they executed to their father a bill of sale of all the said goods and chattels, and gave him a mortgage on real estate for $500.

At the time of executing said bill of sale it was agreed between George M. and said Charles and Frank that they, Charles and Frank, should remain in possession and management of said property and sell and dispose of it at their pleasure, and continue the hotel business, and from the avails of sales and profits of the hotel business that they should pay on their indebtedness other than such as they owed said George M. The said Charles and Frank did continue in possession of, this present property, handling it as part of the hotel business down to the time of the auction sale, in October, and sold to whom they chose any part of it This was with consent of George M.

George M. took the bill of sale as security, and because he was afraid his sons could not pull through, as he states. He made no-assertion of ownership until the time of the auction sale.

On August 6, 1886, Frank sold out to Charles, and Charles continued the business until the auction sale.

On the 6th of October, 1886, George M. took possession of the property, or such of it as remained, and caused it, or the principal part of it, to be sold at the auction. According to the testimony of Charles, everything was sold at auction sale except the whiskey, the cigars and the horse. . In one part of his testimony he says also that the pool table was not sold at the auction. But evidently George M. took possession of everything which remained. The whiskey was rolled over to Mr. Stackpole’s store on storage after the auction, and some of it was afterwards taken from that place by Charles.

The plaintiff recovered a judgment against Charles and Frank January 22, 1888, for the aforesaid indebtedness, existing at the time of the bill of sale, and issued execution thereon, which was returned unsatisfied June 9, 1888.

We suppose the principle is settled that where, at the time of the execution of a chattel mortgage, it is agreed between the parties that the mortgagor may go on and sell the stock and use the proceeds generally in his business, the transaction is fraudulent in law as against creditors of the mortgagor. Southard v. Benner, 72 N. Y., 424. And such an agreement may be inferred from the acts of the mortgagor in selling the property and applying the avails to his use with knowledge of the mortgagee. Potts v. Hart, 99 N. Y., 168. It is true, as held in Brackett v. Harvey, 91 N. Y., 214, that an agreement that the mortgagor may sell the property and apply the avails on the mortgage debt is valid. But that was not the agreement in this case. It was not understood that the avails of the goods sold should be applied on George M. Derby’s debt. If that had been the agreement, then such avails would have been deemed to have been received by the mortgagee and would be applied on his debt, although they were not actually paid over to him. Conkling v. Shelley, 28 N. Y., 360, and Brackett v. Harvey, ut supra.

But where the agreement is that the mortgagors shall go on with their business, selling as they choose and paying debts as they choose, there plainly the transaction is a fraud on creditors. And in this case there is the additional fact that there was no change of possession, but Charles and Frank continued to manage and control the business as before.

In this case the defendants claim that the bill of sale was valid because the agreement was that the vendors should sell the property in their ordinary business and pay debts other than that of the vendors. But that agreement cannot be upheld. If the agreement had been that the avails of sales were to be applied on the debt of George M., then every sale would have reduced his debt so much, whether he had received the avails or not Conkling v. Shelley, ut supra. But not so as to other creditors. They had not made the vendors their agents to sell the property, and this bill of sale prevented these creditors from collecting their debtá out of the property. In fact it was a complete scheme to permit Charles and Frank to do business without payiug their debts and to put their property where no creditor could reach it; whether or not the parties understood its effect.

Defendants claim that plaintiff cannot recover because he did not show that some of the property or its proceeds was in the possession of George M. when plaintiff recovered judgment. They rely on the principle that when there has been a sale, fraudulent as to creditors, the vendee may return to the vendor the property, and thus escape any liability thereafter. Cramer v. Blood, 57 Barb., 155. The case of Murphy v. Briggs, 89 N. Y., 446, turns largely on the recording statute.

There may be cases where this principle and others analogous will apply. For instance, if a general assignment for the benefit of creditors is declared fraudulent, the assignee would be credited for payments made by him prior to the action in which the fraud is declared.

But the present case is quite different. Here there was no change of possession. The bill of sale is, therefore, presumed frau dulen t. On the facts proven it must be held th at that presumption was not overcome. 2 E. S., m. p., 136, § 5; Southard v. Benner, ut supra. The creditors include all persons who are creditors at any time while the goods were in the assignor’s possession. Section 6. But such creditors cannot bring an action to set aside the bill of sale until after judgment and execution. Therefore this plaintiff is a defrauded creditor and may pursue this property. George M. Derby was a party to the fraud. He has never relinquished the rights he claimed to get by the bill of sale. He has never rescinded that bill of sale or surrendered to the vendors his rights under it. He took possession of the residue of the property by virtue of such bill of sale, and sold part of it by the same authority. He applied the avails on his own debt owing from Charles and Frank or in payment of money borrowed by him and lent to them. He cannot be permitted to retain the benefit of his illegal transaction. Stimson v. Wrigley, 86 N.Y., 339; Dutcher v. Swartwood, 15 Hun, 34; Goold v. Maheady, 38 id., 294; Murtha v. Curley, 90 N. Y., 372; Loos v. Wilkinson, 113 id., 485; 23 St. Rep., 282.

There are some articles which it is said that Charles and Frank ■did not own because they were purchased conditionally and had not been paid for, and it is stated that these were taken by the persons who sold them. If this is so, of course George M. would not be liable for these.

But as to all the property of Charles and Frank of which George .M. took possession about the time of the auction sale we think he is liable and should account, whether he has sold the same or ■not.

Judgment reversed, new trial granted, costs to abide event

Landon and Mayham, JJ., concur. ^


text:
    Constance B. Price, App’lt, v. DeWitt C. Holman et al., Resp’ts.

      (Supreme Court, General Term, Third Department,

      Filed November 30, 1891.)

    Dismissal of complaint—Second trial.
    . Upon the trial of a cause at circuit the complaint was dismissed upon the merits. At general term the judgment was reversed and a new trial granted. Upon a second trial the evidence, largely documentary, was substantially the same as upon the first trial, but the court again dismissed the complaint. Held, error.
    Appeal from judgment entered upon a dismissal of the complaint at circuit.

      Lansing & Cantwell (James Lansing, of counsel), for app’lt; A. D. Wait, for resp’ts.
   Learned, P. J.

This litigation in its two actions has been •often before the courts. The first, commenced in 1873, under the title- of Price v. Brown, was decided in this court January, 1884, affirmed 98 N. Y , 388. “

In .that case and in the second a motion to pay money into court was made and granted, which was, in certain material respects, reversed in this court November, 1885, reported in mem., 38 Hun, 641, and the appeal from the reversal to the court of appeals was ■decided March 6, 1886.

This second action, commenced in 1883, was tried in March, 1887, before the special term without a jury, and the complaint was dismissed on the merits. On appeal the judgment was reversed, and a new trial granted, costs to abide the event, July 3, 1888. 17 St. Rep., 572. It came on to be tried again in June, 1890. The case was tried, so far as we see, upon the same evidence as before. The learned justice who tried it says, in his ■opinion: “ The case as submitted on this trial is substantially the •same as on the former trial. The respondent’s brief admits this.” But the learned justice dismissed the complaint on the merits. He says “ that the general term did not see in this case, as then presented, room to sustain the plaintiff’s claim.” If this were so the general term would not have granted a new trial. Ho question as to the exclusion of evidence, and no disputed .question of fact were before them. Indeed the facts were almost entirely -documentary. We cannot unnderstand, therefore, when the •general term reversed a dismissal of the complaint on the merits and granted a new trial how it could be thought that the opinion of that court “ assumed,” as is said by the learned justice, “ that, further proof and investigation might yet develop a state of facts that would render the estate thus liable.” If the facts proved on the former trial did not show the defendants to be liable, then the’ dismissal of the complaint on that trial was right and would have been affirmed. It was reversed because it was erroneous. And as the same evidence was produced on the second trial, the dismissal of the complaint on that trial was erroneous also.

We do not propose to discuss the merits of the case again when we have once decided the matter. We simply refer to the* former decision. If the defendants consider that erroneous, they have the remedy of appeal.

Judgment reversed, new trial granted, costs to abide the event..

Landon and Mayham, JJ., concur.