text:
    Daniel H. Wickham et al., Resp’ts, v. Maurice Weil et al., App’lts.

      (New York Common Pleas, General Term,

      Filed February 1, 1892.)

    Undertaking—Counterclaim:.
    An action against sureties on an undertaking given on the obtaining of an attachment is an action on contract "within the meaning of subd. 2 of § 501 of the Code of Civil Procedure, in which a liability upon another contract may be interposed as a counterclaim.
    Appeal from order sustaining demurrer to counterclaim. Action against sureties on undertaking for an attachment The counterclaim pleaded was a judgment obtained by defendants against plaintiffs.

      John J. Adams, for resp’ts ; Franklin Bien, for app’lts.
   Pryor, J.

The precise point presented by the appeal was determined by us in Cornell v. Donovan, 14 Daly, 295; 14 St. Rep., 687, and we are concluded by that decision unless, upon consideration, we find the contrary adjudication by the general term of the supreme court, first department, in Furber v. McCarthy, 54 Hun, 435; 27 St. Rep., 294, to be supported by the sounder reason. We do not so find; but, on the contrary, we are of opinion that our own „ ruling is sustained by the obvious intent '.of the Code, as well as by the principles and analogies of the law.

The single question in controversy is, whether an action on an undertaking to obtain an attachment be an action on contract within the purview of subd. 2, § 501 of the Code of Civil Procedure ?

The provisions of the Code allowing counterclaims, like the similar provisions of the English law, are designed to lessen the burdens and to facilitate the operation of remedial justice; and, accordingly, should receive a liberal construction in aid of their beneficent policy. Obviously their aim would be defeated, if the language of the statute be taken to mean only a contract in the strict and technical sense of the term. ’

Three classes of obligations are known in law as contracts ; and are especially so distinguished for the purposes of remedial justice, namely: Express contracts, implied contracts, and constructive contracts. Express contracts are those the terms of which are averred and uttered by the parties. Broom’s Comm., 259. Implied contracts are such as reason and justice dictate, and which the law, therefore, presumes that every man undertakes to perform. • 2 Black. Comm., 443. Constructive contracts arise “ when the law prescribes the rights and liabilities of persons who have not in reality entered into any contract at all, but between whom circumstances make it just that one should have a right, and the other be subject to a liability, similar to the rights and liabilities in cases of express contract.” Danforth, J., in The People v. Speir, 77 N. Y., 144, 150; 1 Addison on Contracts, 55. Whether the latter two classes will be construed as contracts depends upon the nature of the particular case; as, for example, whether it be sought to enforce a penalty or to enlarge a remedy. Hence, while in McCoun v. R. R. Co., 50 N. Y., 176, the court held that an action to recover a statutory penalty was not an action upon a contract within the meaning of § 129 of the former Code, on the other hand, the same court hold, that where an agent converts property of his principal, the latter has his election to sue as for breach of contract or for the conversion ; and if he elects to proceed for a breach of contract, ho may interpose it as a counter- , claim in an action upon contract brought against him by his agent. Coit v. Stewart, 50 N. Y., 17; Andrews v. The Bank, 26 id., 298.

The sole authority adduced by the supreme court to sustain its-contention is McCoun v. R. R. Co., supra; but liability for a statutory penalty wants that essential element of contract here apparent, namely, the express agreement of the defendants.

Nor, with all respect for the ability of the supreme court,, general term, do we perceive in its argument any more substantial support of its decision.

It is said that “ the undertaking is not a contract because it is unilateral; ” but, in the learning of the profession, unilateral engagements are a familiar class of contracts. “Executory contracts are of two kinds, bilateral ■ and unilateral. When the consideration on each side is a promise, the contract is bilateral; a binding promise, the consideration of which is anything else than a promise,, is a unilateral contract.” /LangdellSel. Cas., Contract, 1092-1094.

Then it is objected that “the party for whose benefit the undertaking was given had no volition in the matter,” to which the all sufficient answer is, that the sureties on the undertaking had an option whether to execute, it or not, and that the party for whose benefit it was given emphatically accepts it by seeking to enforce it.

Again it is argued that the undertaking has no consideration to-support it, and that its only obligation arises from the statute. But a manifest consideration of benefit moving to the plaintiff in. the attachment suit was the security for his claim acquired by the attachment, and that the obligation of the undertaking may subsist independently of statute is settled by repeated adjudications. The Concordia, etc., v. Read, 124 N. Y., 189; 35 St. Rep., 222; Carr, etc., v. Sterling, 114 N. Y., 558; 24 St. Rep., 521; Toles v. Adee, 84 N. Y., 222.

Still further it is urged that a defendant in an undertaking on attachment “is not a party to it, and no way consents to it.” But one for whose benefit a contract is made, though not a party to it, may sue upon it, Lawrence v. Fox, 20 N. Y., 268, and, as already stated, he consents to it by seeking to enforce it

Finally, it is intimated by the learned supreme court that an-undertaking on attachment is not a contract because it is imposed. upon the obligor by statute, and consent is an essential element of contractual liability. We have already adverted to the fact that the sureties are not compelled to give the undertaking, and neither, for that matter, is the plaintiff in the attachment suit, for he has an election to give the undertaking or forego the attachment.

Consent undoubtedly is a necessary element of a contractual obligation; but'the consent need not be actual, but may be implied by law against 'even the express volition of the party. Hence, a judgment in invitum'is a contract; and, though obtained for a tort, may be interposed as a counterclaim in an action on contract. Taylor v. Root, 4 Keyes, 335; Badlam v. Springsteen, 41 Hun, 160; Clark v. Story, 29 Barb., 295; Wells v. Henshaw,. 3 Bosw., 625. So, “if one man has obtained money from another through the medium of oppression, imposition, extortion or deceit, or by the commission of a trespass, such money may be recovered back, for the law implies a promise by the wrongdoer to restore it to the rightful owner, although it is obvious that this is the very opposite of his intention.” People v. Speir, 77 N. Y., 150. And such constructive contract is available as a counterclaim in an action on contract. Coit v. Stewart, 50 N. Y., 17. So a statutory penalty is recoverable by action of debt. 2 Greenl. bn Ev., § 279. Indeed any pecuniary liability imposed by statute-is enforceable by action ex contractu, upon the legal implication that a man agrees to pay that which the law makes it his duty to-pay. 5 Am. & Eng. Encyl. of Law, 166-173.

Excepting the case in the supreme court, which we have ventured to criticize, the courts uniformly treat statutory undertakings as imposing contract obligations, Matter of Grove, 20 Abb. N. C., 164; 13 St. Rep., 179, and hence, “bail are sureties with the rights and remedies of sureties in other cases.’’ Toles v. Adee, 84 N. Y., 239.

We adhere to our decision in Cornell v. Donovan, and accordingly the order is reversed, with costs.

Halt, Oh. J., and Bookstayer, J., concur.


source: Caselaw Access Project

author: Bischoff, J.

license: Public Domain

text:
    Virginia W. Baldwin, Resp’t, v. Wilhelmina A. Thibadeau, Impl’d, App’lt.

      (New York Common Pleas, General Term,

      Filed February 1, 1892.)

      1. Lease—Cancellation by summary proceedings.
    The institution of summary proceedings, recovery of final order awarding possession to the landlord and the abandonment of the premises by the tenant, notwithstanding the landlord's notice that she would not enforce the order nor cause the warrant for the delivery of possession to be issued thereunder, cancels the lease and terminates the relation of the-parties^ as landlord and tenant, and except as to past breaches, and in so far asit was expressly agreed that liability thereon should survive its cancellation, each party to the lease is from that time discharged from the further performance of the covenants and conditions on his part.
    • 3. Same—Surviving covenant.
    The tenant, however, remains liable for any deficiency in future rent arising under a provision of the lease to the effect that if the premises became vacant “during the term” the landlord may re-enter and relet them as the agent of the tenant, apply the rents collected to the payment. of rent under the lease, and that the lessees will pay any deficiency; the word “ term” in such case including the period for which the estate was granted.
    Appeal from a judgment in favor of the plaintiff recovered in the district court of the city of New York for the eighth judicial district, in an action to recover the sum of $208.33 agreed to be deposited by the defendants as lessees, pursuant to the terms of a lease in writing and under seal, as additional security for the performance of the covenants on their part, and not as rent.

      Solomon F. Higgins, for resp’t; Winihrop Parker, for app’lt.
   Bischoff, J.

The contention between the parties to this appeal is as to the legal effect of the facts appearing on the trial, which were undisputed and are briefly stated as follows:

Plaintiff and defendants entered into a lease under their hands and seals whereby plaintiff let and rented, and the defendants accepted, the premises 231 West Thirty-eighth street in the city cf New York, for the term of three years, from October 1, 1890, to October 1, 1893, at the yearly rent or sum of $2,500, to be paid in equal monthly instalments in advance. Besides the payment of the rent and Croton water charges, and the surrender of the premises upon the expiration of the term in as good state and condition as reasonable use and wear thereof would permit, the defendants covenanted “that if the said premises, or any part thereof shall become vacant during the said term, the said party of the first part, plaintiff, or her representative, may re-enter the name, either by force or otherwise, without being liable to any prosecution therefor, and re-let the said premises as the agent of the parties of the second part, defendants, and receive the rent thereof, applying the same, first to the payment of such expenses as she may be put to in re-entering, and then to the payment of rent due by these presents; and the balance, if any, to be paid over to the said parties of the second part, who shall remain liable for any deficiencyand further, “ to pay to the party of the first part the sum of $208.33 on the 4th day of October, 1890, as additional security for the performance of ” the covenants of the lessees, “ and not as rent.”

Defendants took possession under this lease, and continued in possession until some time in January, 1891, when for default in the payment of the rent which had accrued on January 1, 1891, plaintiff instituted summary proceedings to recover possession of the premises, under the statute for such cases made and provided. These proceedings were not contested, and on January 22, 1891, resulted in a final order awarding such possession to the plaintiff, whose representative, however, at once informed defendants that she did not intend to take possession, nor would she accept it, and that it was not her intention to avail herself of the warrant issuable under the final order awarded, but that she would continue to hold the defendants for all future accruing rent Defendants, notwithstanding this notice, and anticipating the execution of a warrant for the delivery of possession, vacated the premises and offered the keys to plaintiff’s agent, who refused to accept the same. On January 13, 1891, plaintiff brought this action to recover the sum agreed to be paid by defendants as security, and before the trial of this action, and subsequent to the final order in the summary proceedings, defendants paid all the rent in arrears.

Plaintiff, however, contended that notice of her refusal to take or accept possession of the premises and to avail herself of the final order in the summary proceedings operated to defeat defendants’ right of voluntarily complying with its provisions by removal, and that the lease was therefore still subsisting; also, that though it be conceded that defendants’ abandonment of the premises subsequent to the final order in the summary proceedings did have the effect of cancelling the lease 'and terminating-the relation of landlord and tenant, she was, nevertheless, entitled to recover and hold the sum demanded as security for the payment of any deficiency in the rent reserved, which might remain upon her entry and reletting of the premises for defendants’ account, pursuant to their covenant to that effect. This last contention was acceded to by the trial justice, as appears from his-opinion accompanying the record, and plaintiff was awarded, judgment for the sum claimed.

The validity of these contentions is disputed by the appellant, and they present the only questions for our consideration.

This court has held in Gallagher v. Reilly, 16 Daly, 227; 31 St. Rep., 556, and Ash v. Purnell, 16 Daly, 189; 32 St. Rep., 306, that a tenant against whom summary proceedings to recover possession of the demised premises" are instituted may at any time after the service of the precept upon him voluntarily comply with its requirements and anticipate the final order in favor of the landlord and execution of the warrant for delivering of possession to him by removing from the premises, and that if he does so, such, removal will as effectually cancel the lease and end the relation of landlord and tenant as though the warrant had been actually issued as provided in § 2253 of the Code of Civil Procedure. We entertain no doubt of the accuracy of these decisions and reiterate the principles upon which they proceeded. Nor do we countenance the proposition that a landlord may prosecute such summary proceedings to a finality, and at the same time neutralize their effect by notice to the tenant that he will not avail himself of the rights and remedies therein secured. The landlord having effectually declared his intention to claim and recover possession by a solemn invocation of the aid of the courts for that purpose, the tenant should be permitted to elect whether he will voluntarily submit to the landlord’s claim or abide by his notice that he will not enforce the order awarding possession to him. Nothing short-of a withdrawal of the proceedings, however, and notice of it to the tenant before the latter has complied with the precept by removal, should be permitted to have the effect of giving continuity to the lease and the relation of the parties thereto. If the tenant has removed upon receipt of the precept, and before withdrawal of the proceedings and notice of such withdrawal to him, the lease and the relation of the parties as landlord and tenant can be re-hewed or continued only by means of a new agreement. A eon'"trary view would require that the tenant be subjected to a tenure ■even more precarious than that of a tenant at will. The latter is removable only upon a previous notice of at least thirty days, while the former would be in constant jeopardy of ejectment without as much as a moment’s notice.

Our conclusion is, therefore, that the pendency of the summary ■proceedings instituted by the plaintiff, the recovery of the final ■order therein awarding possession to the plaintiff and the abandonment of the premises by the defendant, notwithstanding plaintiff’s notice that she would not enforce the order nor cause the warrant for the delivery of possession to be issued thereunder, cancelled the lease and terminated the relation of the parties as landlord and tenant, and that, except as to past breaches, and in so far as it was expressly agreed that liability thereon should survive its cancellation, each party to the lease was from that time discharged from the further performance of the covenants and conditions on Ms part. Roe v. Conway, 74 N. Y., 201; Johnson v. Oppenheim, 55 Id., 281; Hackett v. Richards, 13 id., 138; Hall v. Gould, id., 127.

Tor the non-payment, therefore, of the sum which the defendants had agreed to deposit as security for the performance of their ■covenants, they continued liable, if any of those covenants survived the cancellation of the' lease or the termination of defendants’ leasehold estate; and this was so with respect to the covenant authorizing plaintiff to enter and relet for defendants’ account if there be a vacancy “during the term.” Hackett v. Richards and Hall v. Gould, supra. Counsel for the defendants insists that as the premises did not become' vacant until after the termination of their leasehold estate by means of summary proceedings to recover possession, there never ■ was a vacancy “during the term,” and,- hence, that plaintiff never obtained authority to relet the premises for the defendants and cannot for that reason charge them with any deficiency in the rent received and accruing subsequent to such termination.

This, however, we believe to imply too narrow an interpreta- ■ lion of what is meant by “term ” as applied to a lease. In its more comprehensive sense the “term” includes not only the actual •duration of the leasehold estate, but also the period for which that •estate is granted. “ The term does not merely signify the time speci- . fled in the lease; it means that, and more; it means the time in the lease, and the interest conveyed by the lease, and the estate vested in thelessee by the possession.” Wood’s Landlord & Tenant, § 65, p. 103. “ The term of a lease is the period granted to the tenant for occupancy and does not include the time previous thereto, though it includes the estate of the tenant in the land during such period.” Gear’s Law of Landlord & Tenant, § 23. “A term signifies not only the limitation of time, or period granted to the lessee, for the occupation of the premises, but it includes also the estate and interest in the land that pass during such period.” Taylor’s Landlord & Tenant, § 16. “ The term is that period which is granted for the lessee or tenant to occupy and have possession of the premises. It is the estate or interest which he has in the land itself by virtue of the lease from the time it vests in possession.” Young v. Dake, 5 N. Y., 463, 467. “See, also, Evans v. Vaughan, 6 D. & R. (King’s Bench), 349; 4 B. & C. (King’s Bench), 261. As it appears that the period for which the lease was granted had not expired at the time of the termination of defendants’ léase■hold estate by means of the summary proceedings to recover possession we are constrained to hold under the above definition of the “ term ” of a lease that a vacancy contemplated by the parties did occur, and that the defendants are liable for any deficiency in the rent covenanted to be paid by them, remaining after the application of the rent received from a reletting of the premises by the plaintiff .for thoir account, for which the plaintiff is entitled to retain the sum agreed to be deposited as security, and that judgment therefor in her favor was rightfully •awarded.

The judgment appealed from should be affirmed, with costs.

Bookstaver, J., concurs.


author: Bookstaver, J.

text:
    Edward H. Friedrick et al., Resp’ts, v. Lawrence C. Perkinson, App’lt.

      (New York Common Pleas, General Term,

      Filed February 1, 1892.)

    1. Master and servant—Master not liable for goods sold on unauthorized ORDERS OF SERVANTS. "
    Mechanics and tradesmen cannot recover for work done or goods obtained by servants unless authorized by the master, and are bound at their peril to ascertain whether there is such authority in the servant.
    3. Same—Waiver.
    The mere fact that a party personally orders work or goods is not a waiver of a prior, notice not to do work or furnish goods for him except upon his written order, because such notice contemplates orders made by third persons and not by him.
    Appeal from a judgment rendered .in the district court of the «city of New York for the ninth judicial district.

      William Watson, for app’lt; A. MacDonald, for resp’ts.
   Bookstaver, J.

The plaintiffs were harness makers, and the action is brought to recover a balance claimed to be due them for making and repairing harness for the defendant from September '20, 1890, to May 4, 1891. The whole amount of the bill was $120.65 and defendant paid on account $100, admitted owing a bill of $14.10, which he had before tendered and which he paid into court at the commencement of the action; so that the only .amount in dispute upon the trial was $6.55 and the action was •defended more on principle than for the amount involved.

Along in November or December, 1890, the plaintiffs rendered a bill to defendant for work done and for repairs made, etc., which included a number of items the defendant had not ordered. He at first refused to pay for these items, and afterwards said that he would pay the bill then presented, but would pay no more bills like it, and notified plaintiffs not to make any repairs for him on his harness without a written order from him, and if they did,, he would not recognize it or pay for the work. ,,

On the trial it was conceded by the plaintiffs that the work subsequently done by them and which the defendant refused to-pay w,as done upon verbal orders from persons other than the defendant. There is not a scintilla of evidence in the case that, these items, amounting to $6.55, were ever ordered by the defendant in person or by any one authorized by him. They received their orders from stablemen, defendant’s coachman, or Mr.. Hendricks, the livery-stable keeper. Mr. Hendricks testified that, he had received no orders from the defendant to have the work done; and there was no authority shown as to either the stablemen or the coachman to order work. And defendant testified that he knew nothing about the work ever having been done.until the bill was rendered.

It is elementary law that in order to bind a person he must be-a party to the contract either express or implied, or that the contract must be made or the obligation incurred by some one having authority from the party to be bound. The plaintiffs attempted to show a waiver of the notice, because the defendant himself,, after giving it, had personally ordered certain work to be done by the plaintiffs. This was no waiver, because the notice given to, them contemplated orders made by third parties and not by the defendant personally. The testimony shows that plaintiffs were-.in the habit of going around from stable to stable getting orders from employees, of rendering bills tojthe stables and not to the parties to whom the harness belonged, probably depending upon no questions being asked as to the correctness of the bills by. those boarding horses at the stables. Every one keeping horses and carriages, and oven every householder, knows the amount o£ petty annoyance which has been occasioned by the unauthorized!, orders of servants, and the amount of trifling dishonesty such-practices have caused, and the temptation to unfaithfulness put in; the way of servants by such 'tradesmen. The sooner this practice-is stopped, the better for the morals of the community. It is time that mechanics and tradesmen understood that they cannot recover for work done or goods obtained by servants, unless authorized by the master, and that they are bound at their peril to, know whether there is such authority in the servant or not before-they can recover. The strict enforcement of the principles of law. applicable to such cases will tend strongly to increase the honesty and fidelity of servants.

The learned judge who tried this case is uniformly painstaking;- and careful, but must in this instance have overlooked the proof of want of authority.

The. judgment should, therefore, be reversed, with costs to the,appellant

Bischoff, J., concurs


author: Putnam, J.

text:
    In the Matter of the Application of a Majority of the Trustees of The Schuyler Steam Tow Boat Co. for its Dissolution.

      (Supreme Court, Special Term, Albany County,

      Filed January 15, 1892.)

    Injunction—State court may restrain proceedings in federal court AGAINST PROPERTY OF CORPORATION AFTER APPOINTMENT OF RECEIVER.
    Upon the appointment of a receiver in an action to dissolve a corporation, the receiver at once becomes vested with the title to the property of the corporation, and it is from that time deemed in the custody of the court, and such court may enjoin creditors from proceeding further in actions commenced by them against such property, even though such actions are in the federal court in admiralty.
    This is an application arising on the return of an order to show cause to restrain certain litigants from further prosecuting libels which have been filed in the United States district court for the eastern district of New York. The petition shows that on the 31st day of July, 1891, Frank D. Sturges was appointed temporary receiver of Schuyler’s Steam Tow Boat Company under § 2423 of the Code, and that the order so appointing him was entered * and filed on the following day. And that on the 4th day of August, 1891, the receiver’s bond was duly filed. Subsequent to the filing of the order, but before the filing of the receiver’s bond, one Michael Moran filed libels against the boats constituting the property of the company aforesaid. That subsequently and after the filing of the receiver’s bond a large number of other libels were filed.

      James W. Eaton, for receiver; McCarthy & Eerier, for The Lehigh Valley Coal Company and others; Carpenter & Mosher„ for M. Moran and others; John A. Anderson, for the libellants for seamen’s wages.
   Putnam, J.

It is settled by the court of appeals in a similar case; Matter of the Christian Jensen Co., 40 St. Rep., 621, that the filing of the original petition and entry of the order thereon, appointing Frank D. Sturges receiver of the Schuyler Steam Towing Company at once vested the title of the property of said corporation in said receiver. He could not act until the giving of his bond, but on filing such bond his title related back to the date of his appointment The court held in the case cited that- after the filing of the petition and entry of the order the title of the property being in the receiver, it was in the custody of the law, and the court had the power to prevent any interference with it in any action, and its dissipation or removal by writ of replevin or attachment See also Gluck & Becker on Receivers, § 45, note; Matter of John Berry, 26 Barb., 55; Smith v. The New York Consolidated Stage Co., 18 Abb. Pr., 420; Atlas Bank v. Nahant Bank, 23 Pick., 480; Matter of Mallory, 18 St. Rep., 499.

In the Jensen case, supra, the court sustained an order restraining the defendant from proceeding in replevin or attachment levied upon the property after the filing of the petition and entry of the order appointing a receiver, but before the filing of his boRd.

There is no dispute about the facts of this case. It is conceded that the petition was filed, and that an order appointing a receiver was granted before any of the libels were filed; and hence, when said libels were in fact filed,-the title of the property in question was in the receiver as an officer of the court. The property was in the constructive possession of the court. Hence, if the property in question had been seized under a process issued from a state court by the defendant, no question would arise as to the power of this court to restrain the defendants from further proceeding.

Can this court also restrain defendants from proceeding in the federal court ?

I shall be unable to discuss the very many authorities to which I have been cited, but I have examined and considered most of them. I have finally reached the conclusion that this court, having, through its receiver, taken possession of the property in question before the libels of the defendants were filed in the "United States court, can protect the property so in its possession as against process issued from the federal court as well as from a state court. I think this power is conferred upon this court by § 2423 of the Civil Code. Matter of The Christian Jensen Co., supra. That section confers upon the supreme court in this proceeding the same power that exists in a court of equity to restrain parties from proceeding in other courts, state or national.

It is true that the supreme court of the state, probably, cannot stay proceedings in the federal courts, but it may stay parties in any action in the federal courts from proceeding, at least before judgment therein. See Dinsmore v. Neresheimer, 32 Hun, 206; Dehon v. Foster, 4 Allen, 550; Atty.-Gen. v. Insurance Co., 77 N. Y., 272-277; Vail v. Knapp, 49 Barb., 308-309; Claflin & Co. v. Hamlin, 62 How., 284; Note to § 111, High on Injunctions, p. 92; Barry v. Brune, 71 N. Y., 261; People v. Erie R. R. Co., 36 How., 132.

The above cases establish the doctrine laid down in Dehon v. Foster, supra, in which case the courtremarked: “ The authority of this court, as a court of chancery, upon a proper case being made, to restrain persons within its jurisdiction from prosecuting suits either in the courts of this state, or of other states, or foreign countries, is clear and indisputable. In the execution of this power courts of equity proceed, not upon any claim of right to interfere with or control the course of proceedings in other tribunals, or to prevent them from adjudicating upon the rights of parties when drawn in controversy, and duly presented for their determination. But the jurisdiction is founded on the clear authority vested in courts of equity over persons within the limits of their jurisdiction, and amenable to process, to restrain them from doing acts which will work an injury to others and are, therefore, contrary to equity and good conscience. As the decree of the court in such cases is pointed solely at the party, and does not extend to the tribunal where the suit or proceeding is pending, it is wholly immaterial that the party is prosecuting his action in the courts of a foreign state or country.”

The granting of an injunction as asked for by the moving

party does not at all conflict with the doctrine as laid down in such cases as that of Riggs v. Johnson County, 6 Wall., 196, and kindred cases. Because:

1st. The injunction asked for herein is not to be directed to the federal court, but to a party to an action therein, to prevent him as a creditor of the Schuyler Steam Towing Company from interfering with the property in the constructive possession of the state court through its receiver and which that court so obtained possession of before the defendants’ libels were filed. And:

2d. Because the state court had obtained jurisdiction; obtained title to the property before defendants’ libels were filed. The doctrine is well established in both state and federal courts, as a general rule, that the court which first obtained jurisdiction will retain it to the end.

See Riggs v. Johnson County, 6 Wall., 196; Rio Grande R. R. Co. v. Gomila, 132 U. S., 485; Wallace v. McConnell, 13 Peters, 136-151; Taylor v. Taintor, 16 Wall., 370; Taylor v. Carryl, 20 How., U. S., 583; Hagan v. Lucas, 10 Peters, 400; Beaston v. Bank, 12 id., 102; Wiswall v. Sampson, 14 How., U. S, 52; Williams v. Benedict, 8 id., 109.

In my judgment it makes no difference as to the right of the receiver to hold the property in question that he had not taken actual possession at the time the libels were filed. Under the doctrine settled in the Christian Jensen case, supra, when the libels were filed and the property attached thereunder the receiver had the actual title. The property was then in the constructive possession of the court.

This case differs from those cited by the defendants, where conflicts have arisen between marshals and sheriffs under execution or attachments, in which those authorities held that the officer who first takes actúa? possession will hold the property. In those cases the title of the property was in the debtor. The sheriffs or marshal having the execution or attachment did not acquire title to the property until' the seizure by him, and hence the one first seizing held it. But in this case, by the"order of the supreme court, the title at once vested, in the receiver before its seizure by the marshal. When the marshal undertook to take the property it was in the legal custody of the court Without attempting to discuss the various cases cited by the defendants, I think them different from this in the regard above mentioned. In any event I feel bound by the holding of the court of appeals in the Jensen case. There a petition was filed and an order appointing a receiver entered on the 10th in the morning, and in the afternoon of the same day the property was replevined and attached, and afterwards the receiver filed his bond. Of course the receiver had not taken actual possession when the attachment was levied. Yet the court of appeals sustained an order enjoining the defendant from proceeding under his attachment and replevin, holding that the order when entered “ was effectual to appoint the receiver, and, the moment he was appointed he became an officer of the court, and from that time the property of the corporation was in custodia legis, and the court had the power to protect and preserve it." * * * “ It therefore follows that when this property was attached and replevined on the 11th day of March, the title was in the receiver, and the property was in the custody of the law, and the court had power to prevent any interference with it in any action, and its dissipation and removal by writ of replevin or attachment” See also Beach on Receivers, §§ 200-201; Wilson v. Allen, 6 Barb., 542, 545, 546; Storm v. Waddell, 2 Sand. Ch., 494.

The latter case holds that the order appointing the receiver in itself is equivalent to an actual levy on the property.

I think it is the general doctrine that an order being made to appoint a receiver, on his filing the bond required by the order his title relates back to the day of the entry thereof. In Maryland a different doctrine prevails, and hence the case of Farmers' Bank v. Beaston, 7 Gill & Johnson, 428, cited by the defendants, does not apply.

The doctrine so laid down in the Jensen case and other cases above cited, that the title vested in the receiver on entering the order, and from that time the property was in the custody of the court and it had power to prevent any interference with such property in any action, means an action in the federal as well as one in a state court. The title being vested in the receiver on the entry of the order, and hence in the hands of the court, may not be interferred with afterwards by any creditor in any court, state or national.

I am unable to perceive that the case of Varnum v. Hart, 119 N. Y., 101; 28 St Rep., 262, has any bearing upon this. There the sheriff had seized the property and had it in his possession before the appointment of a receiver. In Walling v. Miller, although the levy was before the appointment of a receiver before the sale, the receiver had. obtained actual possessipn, and the court held that such sale, the property being in the actual possession of the receiver, was irregular and void. The same doctrine was held in Wiswall v. Sampson, 14 How., U. S., 52. These cases do not bear on a case like this,'where the appointment of the receiver and his actual title was prior to any levy.

The receiver not having taken actual possession of the property at the time it was seized by defendants, it may be that they are not guilty of any contempt. Defendants were not bound to know that the order in this case appointing a receiver had been granted. It is not conceded that at the time the libels were filed and the property seized the defendants had knowledge that such property was in the custody of the supreme court of the state. In the absence of such knowledge it is not probable that there could be any contempt. I do not think that the case of the Albany City Bank v. Schermerhorn, 9 Paige, 372, aids the defendants. There the question was as to the contempt of the party proceeded against, and the case does not seem to bear on the question involved here. ' In that case the court held that where a receiver appointed in a creditor suit is entitled to the personal property of the defendant and the rents and profits of his real estate, if the defendant neglects to make an assignment so as to give the receiver a legal title to the property, the court upon a bill filed by the receiver will protect his rights against ■sheriffs and others who have seized upon the property to prevent his obtaining possession thereof. In other words, secure to the receiver the possession of the property. Such is the object of the motion. t

Without further comment upon the various cases cited by counsel, I think that the holding of the courts in the cases cited determine that on granting the order appointing the receiver in this proceeding and the entry of said order, the receiver at once became vested with the title of the property of the corporation, and such property from that time being deemed in the custody of this ■court, such court may and should protect it, and may and should. enjoin defendants from proceeding further in the actions commenced by them as against the said property. And this notwithstanding the defendants are proceeding by filing libels in the federal court in admiralty. See Taylor v. Carryl, 20 How., U. S., 583, 584, 599.

The motion heretofore made by the receiver in the federal court and the order granted thereon is not an estoppel, especially as the court did not assume to pass upon the merits of the application.

The chattel mortgage upon the property, inasmuch as the mortgagee does not elect to take possession by foreclosure, leaves an equity of redemption in the corporation which passed to the receiver and which he can protect. Randall v. Dunbar, 14 W. Dig., 332; West v. Crary, 47 N. Y., 423; Porter v. Parmley, 52 id., 188.

On the whole, I think the motion should be granted. As the matter is of much importance, the receiver should submit the proposed order to counsel for defendants before the same is sent to me for my signature.


author: Gray, J.

text:
    Fred. H. Mead, Individually and as Adm’r, Resp’t, v. Wilber D. Maben et al., Individually and as Ex’rs, App’lts.

      (Court of Appeals,

      Filed March 1, 1892.)

    1. Will—Construction.
    The rule that a devise to one or more persons absolutely and. in case of death without issue to survivors refers to a death in the life-time of the testator, and that the prior legatee surviving testator takes absolutely, must yield if, upon consulting the provisions of the will, the court, can find warrant for importing into the language used by the testator the natural and ordinary significance showing that he intended the death to mean a death occurring at any time.
    .3. Same.
    The will provided that if any of testator’s children, except one daughter, should die without leaving child or Children or heirs of the body, the share ■of the one so dying should go equally to the of,her children, "but in the manner and subject to the like limitations as the specific bequests to each ■of them as has been hereinbefore provided and given." As to the share of the excepted daughter it had been provided that on her death without leaving a will her share was to be divided among the other children. Sdd„
      that the restriction applied to a death occurring at any time, and the purpose of the will was to prevent a sharing of the testator’s estate by others than, his children or their issue.
    3. Same—Equitable conversion.
    The directions of the will empowering testator’s executors to sell his real estate and divide his estate into seven equal parts, each child mentioned by name to have one share, effected an equitable conversion of the realty into personalty as of the time of testator’s death.
    Appeal from judgment of the supreme court, general term,, third department, reversing decree of surrogate construing will and distributing estate in accordance with such construction.

      Emory A. Chase, for app’lts; E. Countryman, for resp’t.

       Reversing 38 St. Rep., 304.

   Gray, J.

Upon the accounting of these executors the question arose as to the distribution of the share in the testator’s estate which was given by his will to a daughter, since deceased. It is claimed, on the one hand, by her administrator, and, on the other, by the other children of the testator. This daughter, in dying, left her surviving a husband, but no 'issue. Turning to the testator’s will for a determination of this question, We find, in the first three clauses, that he made certain important bequests. In the fourth clause he gave the rest of his property to his executors, to be disposed of as thereinafter provided. The fifth clause-gave them a discretionary power of sale as to the realty and directed them to make a division of the whole estate into seven-equal parts. To each one of his seven children was given one of such parts and, until the sale of the realty, its income was to bopaid over to them in the same proportions. Then follow clauses which are quoted in their entirety:

Sixth. If my said daughter Diademia shall die without leaving-her will, all the share and interest remaining hereby given to her shall be equally divided among my other children.
Seventh. If my son Jonathan shall die without having left his-will, then .1 direct my executors, if they shall deem it proper and expedient, that they may give to any child or children of my son Jonathan the whole or.any part of the share remaining herein given him; otherwise such remaining share or interest shall be equally divided between my other children.
“Eighth. If any of my children except Diademia shall die without leaving surviving child or children or heirs of the body, then the share or portion of my estate so given to such deceased child shall go equally to my other children, but in the manner and subject to the like limitations as the specific bequests to each, of them as has been hereinbefore provided and given.”

The seven children survived their father; who died within a: few days of the execution of his will. Of his children but two-were unmarried; namely Diademia, who was forty years old and is referred to in the sixth clause, and Abigail, who subsequently-married, and died childless. It is her husband who now^ claims-that she took an absolute interest in her father’s estate, which was not divested by her death without issue.

The justices of the general term below, upon whose concurrence in opinion a decision by the surrogate adverse to the claim of Abigail’s administrator was reversed, deemed themselves bound. by the rule that where a testamentary gift is simply to one or more persons and in case of the death of any one of them, without, issue, to survivors, the death referred to means a death in the life time of the testator and the prior' legatee surviving the testator takes absolutely. 2 Jarm. on Wills, 752. They concede that if there was any provision which would qualify the effect of that general rule upon such language in a testamentary gift, it should be considered and an apparent contrary intention should be sustained. But, as they regarded the testamentary provisions, there-was nothing to prevent the application of that general rule of construction and, hence, they held that the death referred tó in the eighth clause was that which should occur in the testator’s, life-time and that as Abigail' survived, she took an indefeasible-estate. We think the appeal should prevail and that there are sufficient indications in this will of the testator’s intending the-death of his children under the eighth clause to be a death occurring at any time. The eighth clause of this will is notsubstitutionary merely. The scheme of the will and the context seem to indicate, strongly, a distinct purpose to prevent a sharing in the testator’s estate by others than his children, or their issue. In all the authorities which are referred to upon the subject of .the application of the-general rule above referred to, the courts, as-indeed does Mr. Jarman, upon the authority of whom the courts have more or less relied, assume that the context of the will is silent and that the instrument contains nothing indicating an intention which interferes with the application of this.rule, Vanderzee v. Slingerland, 103 N. Y., 47; 2 St. Rep., 732.

The rule must yield if, upon consulting the' other provisions of a will, we can find a warrant for importing into the language used by the testator the natural and an ordinary significance. It cannot be denied that the ordinary import of the words, “ if any of my children shall die,” is that of a death of any of them at any time; and there are evidences in this will that not only such was the probable intention of the testator, but that to give a different construction to the language would be to thwart an apparent and a natural purpose of keeping his estate from the possession of' strangers in blood.

There was effected, under the directions in the fifth clause of this will, an equitable conversion of the realty into personalty, as of the time of testator’s death. That it was intended that each child should take his or her share as of that time seems evident from the gift of the income arising, intermediate the time of the testator’s death and the sale by the executor of the realty. While, however, each child took a vested interest in the seventh part of the estate , upon the testator’s death, subsequent clauses of the will annexed conditions to their ownership, which provided for-the distribution of the shares so given, either, as in the cases of Diademia and of Jonathan, should they die intestate; or, as in the cases of the other children, and including Jonathan, too, should die without issue. It is in the con•sideration of these clauses that we find the circumstances which compel us to give to the testator’s words in the eighth clause the broader meaning of a provision for the case of a death of a child at any time. In the sixth clause, when he provides that if “Diademia shall die without leaving her will,” all her share and interest remaining shall be equally divided among my other children, he obviously contemplates her death after him. Her right to will, and the direction to divide the “ share or interest remaining,” sufficiently indicate that understanding. So when, in the seventh clause, he provides that if “ Jonathan shall die without having left his will,” the executors have the discretionary power to give “ the whole or any part of the share remaining ” to any of his children; or “ otherwise ”. are to divide “ such remaining share ” equally among testator’s other children, it is a clear indication of a testamentary purpose to be effectuated in the case of •Jonathan’s death intestate after the testator.

When then, in the eighth clause, we find the provision that “if any of my children, except Diademia, shall die” without issue, the share so given to such deceased child shall go equally to my other children, the testator must be deemed to have used the words “ shall die,” in the same association of ideas as he had just previously used them ; namely, of the child’s death after him and while in possession of his or her share ; and with the intention of providing for the event of a child dying without leaving children to take the share. This idea is enforced by the exception of Diademia from the operation of the testamentary direction in this clause. - In her case, a woman forty years of age and unmarried, she was given the right to dispose by will of her share; a right and favor greater than were conferred upon the other children ; for even Jonathan was not excepted in the eighth clause. In the seventh clause, which related to him, his right to will the share was only in the event of his leaving issue. The eighth clause placed him in the same category with the children, other than Diademia, in the event of his leaving no issue him surviving. The words “ shall die,” in this eighth clause, should be read, not only in connection with an association of ideas, dominant at the time by natural sequence, in the testator’s mind, but as well in the light of an evident and contemplated purpose to prevent at any time, by reason of the death of a child, before as well as after testator, the passing of his property into any hands save into those of a child or descendants, except in the one peculiar case of the daughter Diademia, who was permitted to will away the share which came to her and whose marriage and possibility of issue were not considered. That this eighth clause covers the case of a death either before or after the testator’s seems plain, too, because it makes the gift over, if a child shall die without issue, “ in the manner and subject to the like limitations as_ the specific bequests to each of them as has been hereinbefore provided and given.” The expression may, perhaps, not be very happy; but, nevertheless, of necessity, it must have a reference to a disposition by the testator upon, or at the time of his death, as to the nature of the interest which should vest in each child and be held, by him or her after his death and until he or she shall ■die.

We agree with the learned justice who dissented at the general term, in thinking that, in this case, the intention of the testator is better carried into effect by following the literal meaning of the language of his eighth clause, than artificial rule? of construction. Where the testator’s intention is concealed and context is silent, ■and circumstances are wanting to aid us, the application of such a general rule is proper enough and safe; but, where the courts ■can make out the testator’s probable intention, and it can be carried into effect without violating any rule of law, or statute, no general rule may rise above it.

The judgment of the general term should be reversed, and the decree of the surrogate should be affirmed, with costs.

All concur, except Maynard, J., absent.


author: Andrews, J.

text:
    In the Matter of the Estate of Cornelia M. Stewart, Dec’d.

      (Court of Appeals,

      Filed March 1, 1892.)

    1. Collateral inheritance tax—Law 1885, chap. 483.
    Where a will confers power upon the executor to distribute a fund among such of certain persons named and in such proportions as he deems best, the amounts appropriated under such power are subject to taxation under the act of 1885, chap. 483. The appointees take their interests under and by virtue of the will, and not in a legal sense under the instrument by which the executor declares his decision as to the division of the fund.
    •3. Same—Laws 1885, chap. 483, § 2.
    Section 2 of the act of 1885, prescribing in terms the time when an appraisal shall be made, etc., has no relation to a power given to a trustee to distribute a fund among such of certain persons named as he deem.es best.
    . '3. Same—Section 18—Contingent interests.
    Contingent interests given by a will, which after the death of the testator are converted by the happening of the event upon which they are limited into actual vested estates, may then be appraised and taxed under the provisions of § 13 of the act of 1885.
    •4. Same—Interest.
    Section 5, chap. 488, Laws 1885, provides for the rate of interest upon the tax, and governs that question. The instituting of proceedings during the eighteen months for the revocation of the will, does not suspend the running of the interest at the reduced rate fixed by said section during such legal proceedings.
    Appeal from order of the supreme court, general term, first ■department, reversing decree of surrogate assessing collateral inheritance tax.

      S. W. Rosendale, att’y-gen’l, for People; Horace Russell, for resp’t.

       Reversing 41 St. Rep., 144.

   Andrews, J.

This appeal involves a question under the law ■for the taxation of collateral inheritance, passed June 10, 1885.

By the will of Cornelia M. Stewart, who died October 26, 1886, the testatrix gave one-half of her residuary estate to Henry Hilvton in trust, to apply in his discretion such portion thereof as he might deem expedient to the erection and endowment of a seminary of learning for women, and the erection of buildings and institutions connected with the Memorial Cathedral Church of Garden City, Long Island, with power to appoint any part of the trust estate which in his opinion would not be needed or required for the purposes of the trust among any of the legatees named in the will. The will was admitted to probate November 13, 1886. The surrogate on motion of the executors April 25, 1887, assessed and fixed the collateral inheritance tax upon the legacies given in Mrs. Stewart’s will, which tax was paid, and on like motion appointed an appraiser “ to appraise for the purpose of said tax the clear market value at the time of the death of the decedent of the property which passed by the residuary clause of the will.” No appraisal was made under the clause in the order until after the exercise of the power of appointment by the trustee.

This power was exercised for the first time on the 16th day of January, 1890, three years and more after the death of the testatrix. There were nineteen legatees in the will, including three half sisters of the testatrix. The other legatees were nephews, nieces and grandnieces. The trustees after applying a portion of the trust estate to the purposes of the Cathedral, on the day mentioned (January 16, 1890), appointed the balance of the trust, fund, amounting to more than two million dollars, among ten of the nineteen legatees, one-tenth of which (being the sum of $248,-540.16, was appointed to Charles J. Clinch, a nephew of the testatrix. On the 19th of February, 1890, the appraiser appointed under the order of April 25, 1887, filed his report, by which he appraised the value of the portion of the¡¡ trust fund received by Charles J. Clinch at the sum named and decided that it was subject to a tax of $12,427. The question is whether the sum so received by Charles J. Clinch under the power of appointment is-taxable under the law of 1885. The law was amended in 188T and again in 1889.

The question is the same as if these amendments had not been made, and it will avoid complication to treat the subject as if the-statute of 1885 was alone applicable to the case and had remained unaltered. The contention that the sum received by Charles J. Clinch under the power of appointment is not taxable is placed upon two propositions, first, that until the power of appointment was actually exercised, Charles J. Clinch had at most a mere possibility that he might share in the distribution, and had no estate vested or contingent in the fund, and that this possibility or chance' was incapable of any valuation at the decedent’s death, as he' might receive something or nothing, depending on the will of the donee of the power;, and, second, that the statute contemplates the taxation of such interests only as are capable of valuation at the death of the decedent, and provides no method for taxing an uncertain and contingent interest which may never vest in possession.. It is doubtless true that Charles J. Clinch, at the death of Mrs. Stewart, took no legal interest in the trust fund given to Hilton. The will, while it designated the class of persons for whose benefit the power of appointment should be exercised, nevertheless ■conferred upon the trustee the power to select any one or more of the class as the objects of the power. The trustee could appoint the whole property to one or more of the sisters, or to one or more -of the nephews. He could exclude any one or more of the legatees from any share in the distribution. When he had appropriated such part of the fund as he deemed requisite for the purposes of the school and the cathedral, he was bound to appoint the remainder among individuals of the class, and the performance of this duty might be compelled if he had refused to exercise the power, but the court could not control his discretion in the selection of the beneficiaries. Delaney v. McCormack 88 N. Y., 174. Unless the power had been exercised no one of the class could maintain that he was entitled to any part of the fund. It is very clear then that there was no basis for fixing a tax at the death of Mrs. Stewart on the mere possibility which Charles J. Clinch had that the power of appointment might be exercised in his favor. If authority were needed for so plain a proposition, the case In re Cager, 111 N. Y., 344; 19 St. Rep., 497, is ample to sustain it.

The possibility, however, became a certainty when on the 16th •day of January, 1890, the donee of the power of appointment exercised it in favor of members of the class mentioned in the will, and set apart to Clinch the tenth part of the trust fund. To the extent of such application Clinch became vested as of that date with an interest in the estate of Mrs. Stewárt. If the $248,540.16 received by him under the power had been given to him directly by the will, it would unquestionably have been subject to taxation. It is claimed to be exempt in the actual situation because the legislature failed to provide a method for the taxation of interests acquired under the circumstances of this case.

The subjects of taxation under the act of 1885 are declared and defined in the first section. They include: “ All property which .shall pass by will or by the intestate law of this state from any person who may die seized or possessed of the same * * * to any person or persons, or to a body politic or corporate, in trust or otherwise, • or by reason whereof any person or body politic or corporate shall- become beneficially entitled in possession or expectancy to any property, or to the income thereof, other than to and for the use of father, mother, husband, wife, children, brother and sister, and lineal descendants born in lawful wedlock, and the wife and widow of á son and husband of a daughter, and the societies, corporations and institutions now exempted by law from taxation.” The tax imposed is five dollars on every hundred dollars “of the clear market value of such property.”

Looking at this section alone it would seem to be clear that the property which passed to Clinch under the power of appointment was taxable. The tax imposed by the. act is in form a tax on property passing by a will, or under the statutes of descents or distribution. The tax is imposed on all such property, except such as passes to persons or corporations within the clause of exception. Estates in possession or expectancy, gifts of the corpus -or of the income, and estates in trust are alike embraced within the comprehensive words of the section. The obvious inteht of the legislature was to impose a tax on every interest, immediate or future, derived under a testator or intestate, not embraced in the exception. ¡No collateral inheritance was excepted in terms, and the object and spirit of the act are alike opposed to any exemption of such interest from the operation of the section. Whether the section embraces in its scope property transferred to collateral relatives of the testatrix under the power of appointment depends-upon the consideration whether within the language the property so appointed passed “by will.” of, the testatrix to the appointees,, or whether they became entitled thereto “ by reason ” of the will. If the will was the source of their title then they took under the will, or by reason of the will, and their interests are brought within the words'of the section.

The nature of estates passing under powers of appointment is-well settled. “An estate ” (says Chancellor. Kent, 4 Kent’s Com., 338), “ created by the execution of the power, takes effect in the same manner as if it had been created tby he deed -which raised the power. The party who takes under the execution of a power takes under the authority and under the grantor of the power, whether it applies to real or personal property, in like manner as-if the power and the instrument creating the power had been incorporated in one instrument.”

Where the donee of the power has the right of selection, the interest appointed vests in the appointee at the time of the appointment, but his title relates to and is acquired under the instrument creating the power. Jackson v. Davenport, 20 Johns., 537; Sugden on Powers, Vol. 2, p. 22. We think there can be no reasonable doubt that the appointees under the power of appointment took the interests under and by virtue of the will, and not in a legal sense under the instrument of January 16, 1890, in execution of the power.

But it is insisted that assuming that the interest which was vested in Clinch by the exercise of the power of appointment is taxable within the true meaning of § 1 of the act of 1885, nevertheless the legislature in its scheme for assessing and collecting taxes imposed by the act has failed to provide any method for valuing or taxing contingent or uncertain interests not capable of valuation and assessment immediately on the death of the decedent. Before considering this contention the rule by which the court should be guided in the construction of the statute may properly be adverted to.- Where the question is whether a certain subject of taxation is embraced within the act, and brought within the power of taxation, it was held in The Matter of Enston, 113 N. Y., 174; 22 St. Rep., 569, that the statute should be strictly construed .in favor of the citizen, since it assumed to impose a special burden upon particular property and persons, and was not in any proper sense a general tax. The question there was whether a certain subject was taxable under the provisions of the first section. Where a particular subject is within the scope of that section and exemption from taxation is claimed on the ground that the legislature has not provided proper machinery for accomplishing the legislative purpose in the particular instance, a. liberal rather than a strict construction should be applied, and if by fair and reasonable construction of its provisions the purpose of the statute can be carried out, that interpretation ought to be given, to effectuate the legislative intent

There are two sections in the act of 1885 which prescribe the-procedure for fixing the valuation and assessing property subject to taxation. These are §§ 2 and 13. Section 2 relates to a special class of cases, viz.: cases where property is devised or bequeathed for life or a term of years to a person whose interest is exempted from the payment of any tax, with remainder over to collaterals, or strangers in blood. In these cases the section prescribes that-the (entire) property passing under such a devise or bequest shall be appraised “ immediately after the death of the decedent at what.. was the fair market value thereof at the time of the death of the decedent,” and after deducting the value of the estate for life or years, that the tax prescribed by the act on the remainder “ shall be immediately due and payable.” Provision is made that the-party beneficially interested in the property chargeable with the tax may give a bond to pay the tax when he may come into the actual possession and enjoyment.

This section contains the only provision to be found in the act-prescribing in terms the time when an appraisal shall be made, or which directs that the value of the subject of the tax shall relate-to “the death of the decedent.” This section obviously has no-relation to the case how in question.

Hilton was not an exempt person within the first section. ■ He took under the will of Mrs. Stewart no estate for life or years, nor was there any bequest or devise of any remainder in the trust property. Section two has reference to a specified class of cases-only, in which the case now in question is not included. The section primarily relates to certain legal vested estates for life or years, and remainders limited thereon, when the value of both estates can be determined at the death of the testator. We must look elsewhere to ascertain how the property is to be valued and the tax determined in the numerous other cases arising on wills not embraced in the class specified in § 2.

Section 13 is a general section prescribing the method of apprasing and valuing property subject to the payment of a tax under the act By that section the surrogate is authorized to appoint an appraiser of such property “ as often and whenever occasion requires,” who, at a time and place appointed, of which notice is to be given", shall “ appraise the same at its fair market value,” and make his report, from which the surrogate shall “ forthwith assess and fix the then cash value of all estates, annuities and life estates, or terms of years, growing out of said-estate, and the tax to which the same is liable.” It is to be noticed that this section does not,, as does the second section, require the valuation to be made immediately upon the death of the decedent ; on the contrary, it contains the significant words that an appraiser may be appointed “ as often as and whenever occasion, may require.”

Nor does § 13 prescribe that the property appraised thereunder shall be appraised “ at what was the fair market value thereof at the time of the death of the decedent,” as is required in the cases falling under the second section. Under § 13 the appraiser is to appraise the property “ at its fair market value,” and the surrogate, on the coming in of the report, is to assess and fix the “ then ■cash value” of all estates, etc., upon which the tax is chargeable There are no limiting words, such as are found in § 2. Section 13 is the section which in the great majority of cases governs, since the cases arising under § 2 form but a small proportion of the cases within the provisions of wills.

The contention on the part of the appointees under the power is that the scheme -of -the statute only contemplates cases where the interests created are capable of valuation at the death of the testator. This would exclude all future contingent' interests in real or personal property created by will. Such an intention certainly was not in the mind of the legislature, and we are asked to exclude this large number of cases from the operation of the act upon a construction which imports into the 13th section the limitation contained in § 2. The claim of the appointees under the power must be allowed if the statute provides no scheme for the taxation of contingent and uncertain interests, although such interests may bo within the purview of the first section.

It is not enough for the legislature to declare that such interests are taxable. If no mode is provided for assessing and collecting the tax, the law is imperfect and cannot, as to such interests, be •executed. But we think that the 13th section does include cases like the present, and that contingent interests given by a will, which, after the death of the testator, are converted, by the happening of the event upon which they are limited, into actual vested estates, may then be appraised and taxed under the provisions of § 13. It is true that § 4 seems to contemplate that all taxes are ascertainable at the death of the decedent, since it declares that “ they shall be due and payable ” at that time, and provides for charging interest thereon from “ the time the tax accrued.” We think the implication from this section ought not to overbear the intention of the legislature, indicated in § 1, to subject all interests derived under wills to taxation, except those within the exception, nor prevent such a construction of § 13 as will bring the present case .within its purview. We are therefore of opinion that the interest in question was taxable.

• Another question is made. The respondent Clinch received Tinder the will of Mrs. Stewart a legacy of $1,498,288.32, upon which was imposed a tax of $74,914.42, which tax was, by the decree of the surrogate, made to bear interest at six per cent from April 25, 1888, a date eighteen months after the death of the testatrix. Intermediate the death of the testatrix and the expiration of the eighteen months, proceedings were instituted for the revocation of the probate of the will, which were not terminated until January 16, 1890. Section 2650 of the Code suspends action by an executor after he has been served with a citation upon a petition to revoke probate until a decree is made in the proceeding, except for the preservation of the property, the collection and payment of debts, and acts expressly authorized by the surrogate upon notice to the petitioner. It is claimed that interest should not be charged during this period. But we think the 5th section of the act is an answer to this claim. It was the later statute, and it enacts that a modified rate of interest shall be charged where, “ by reason of claims made upon the estate, necessary litigation, or other unavoidable cause of delay, the estate of the decedent ” cannot be settled, etc. The delay in this case was in consequence of litigation. The legislature provided for cases like this by reducing the rate of interest during such delay. The •courts cannot interfere. There is no room for construction.

The conclusion is that the order of the general term, so far as it reverses the decree of the surrogate, should be reversed, and that the decree of the surrogate should in all things be affirmed.

All concur, except Maynard, J., not sitting.


author: Finch, J.

text:
    William D. Taber, Resp’t, v. The Board of Supervisors of Erie Co., App’lt.

      (Court of Appeals,

      Filed March 1, 1892.)

    1. Bounties—Laws 1864, chaps. 8, 72, 390 ; Laws 1865, chap. 29.
    Plaintiff’s assignors furnished substitutes under the call of July, 1864, and the excess of the service performed by them was credited to the quota of the county under the call of December, 1864. Held, that plaintiff as assignee could not recover the bounties paid by his assignors out of the sum paid by the state to the county under chap. 29, Laws 1865, as that act was intended to cover substitutes actually applied upon the December quota as assigned between that date and the later passage of the law.
    '3. Same.
    The state boun'y authorized by chap. 29, Laws 1865, was payable only to volunteers who were necessary to fill the quota as assigned by the. National officers and actually existing with its demand for men instead of credits, and to such volunteers as should enlist under future calls.
    -3. Same.
    ‘ The payment by the state to the county was a reimbursement to the latter and not bounties to individuals.
    Appeal from judgment of the supreme court, general term, fifth department, affirming judgment for plaintiff, entered upon verdict directed by the court.

      William B. Hoyt and James M. Humphrey, for app’lt; Frederic Almy and M G. Sprague, for resp’t

       Reversing 38 St. Rep., 285.

   Finch, J.

The facts of this case take us back to the days of the Civil War, and the period not far from its close when the armies in the field were maintained in their full and efficient strength by the help of the conscription. Before the act of 1865 (chap. 29), the construction and effect of which is involved in this controversy, the supply of men for the ranks was largely ¡procured by a system of local bounties. Towns, cities and counlies incurred heavy liabilities in the process, and bidding against, each other raised the price necessary to be paid. As a result great inequalities occurred. One locality would furnish its men,, in number or years of service, in excess of its proper share,., while another would reach merely to the level of its duty or fall: somewhat below it. ' These local bounties in the main rested upon the local taxation, and were fed by the proceeds of bonds or other obligations chargeable as debts upon the taxable property of the locality. If there were subscriptions or gifts by individuals, these were few and slight compared with the corporate contributions'which in the end rested upon the taxpayers of the district in the ordinary and just proportion as between themselves. But the irregularities of men furnished to the ¡Nation involved also an inequality of financial burdens as between different, localities, some bearing more than their true share and others, less.

The legislation of 1864 fully recognized and validates and seeks-to regulate this system of local bounties, and both describes the-manner in which the funds were usually raised and the debts-therefor incurred, and makes those debts the valid obligations of the municipalities which had created them. Laws of 1864, chaps. 8, 72, 390. In July of that year the emergencies of the struggle-led to a call by the president for 500,000 men, which had two important characteristics. If not met as had previously, been done-by the enlistment of volunteers, it was to be met by a conscription. Behind it stood the shadow of a draft compelling performance of the citizen’s duty where no other resource remained. But-with that compulsory measure in view, equality between localities,, exact fairness in the distribution of the dreaded and unwelcome-burden became an inexorable necessity, and not for one moment, to be neglected or disregarded; and so the officers, whose duty it. " was to distribute the total demanded among the districts in due proportion to their enrollment of men liable to military duty, were also required to credit and apply upon that quota, ascertained upon the basis of the enrollment, any excess beyond its due share which had been furnished previously by a particular district. The quota of a locality under this call was its due proportion of the 500,000 men, but could be reduced by existing credits as well as by new enlistments. A previous excess in the military supply could be used to fill and satisfy the demand as well as new and actual volunteers. The determination of that excess necessarily took into account the years of service. A soldier enlisted for a term of three years was equal to three serving only for one year each, and, since the call of July could be filled by men enlisting for but one year, equality between localities required a consideration of the years of service supplied, and the rule of computation took account of those years. The resultant excess was applied* upon and served to fill the quota as founded upon the enrollment..

The result, however, was a disappointment to the national au? thorities. Instead of 500,000 men the call yielded only about half that number, the balance being exhausted by credits due to localities and allowed to apply upon their respective quotas. As-a consequence on the 19th of December following the President made a further call for 300,000 men. Hot, as before, that number made up of men and credits, but that number of actual men. Hothing could apply upon and reduce that call except new men mustered into the service. Ho credits and no excess could lessen it, but it was still possible in assigning quotas as between localities unequally performing their duty to have respect to an existing excess standing to the credit of a district; and, since a conscription stood behind this call also, the quotas were assigned taking such credits into account. ■ The quota of a district which had provided an excess was thus a less number of men than the bare basis of the enrollment would require, while that of a district in arrears of its duty was greater; but in each case the quota .as assigned was a fixed number to be filled only by men and upon which no credits could apply.

The difference between the two calls, therefore, was that the .quota under the first could be filled or reduced by credits for a prior excess, but the quota' under the second could not be so filled or reduced ; the one could be satisfied with credits and men; the •other only with men. The December quota of the Thirtieth Congressional district was fixed by the competent national authorities at 2194 men. That quota thus assigned, after all equitable considerations had been allowed their force, was a fixed demand ¡upon which nothing could apply but men thereafter enlisted and mustered into the service. How it was reached was one thing; how it could, be filled was another and different thing.

With this state of facts before it, existing in greater or less degree in every locality, the legislature passed the act of 1865. The quota of the state had been assigned and was fixed and known, to be filled only with men, and from which all questions of excess or credit had been eliminated. The corresponding quotas of districts had also been assigned and were known and understood, •and only enlisted men actually entering the service could reduce or affect them.

When, therefore, the legislature spoke of the quota of the state, or the quota of certain of its divisions, it meant and could only mean the quota which had been fixed and assigned by the national authorities and not some other imagined or ambiguous number. And when it referred to the quota, state or local, under the -call .of December 19, 1864, it meant not only the fixed and assigned number, but that number of actual men to be placed in .the field. The act is entitled, among other specifications,- “An act to provide for filling the quota of meh required from this state for the army and navy of the United States,” and its first section, provides: “ Eor the purpose of filling the quota of men required dor the army and navy of the United States from this stat.e under '*he last call of the president, dated December 19, 1864, and also under any future call or calls which may be made during the present war, a state'bounty shall be paid to volunteers furnished from this state as in this act provided.” Considering that section by itself and standing alone, it can have but one meaning. To £11 the assigned and existing quota of the state with men actually mustered into the service and any future calls during the war; the-state took upon itself the burden of paying bounties, and forbade-the further action of the municipalities in that direction. The-aim was twofold; to stop the competition of localities, and to-spread the burden of taxation equally over the taxable property of' the state instead of leaving it to be borne in unequal proportions, by separate districts. But the new process had to begin somewhere, at some specific and definite point, and so it began with the quota already ascertained and assigned under the December-call, and extended thence forward, but not backward. That this is so is made very plain by the terms of the next section, which show also the purpose to equalize the taxation necessary to support bounties. That section begins with a provision - in" these words: “Such bounty shall be paid to so many volunteers furnished from the several towns and cities of this state as shall- be-necessary to fill the quota of said towns ■ and cities respectively, fixed by the authorities of the government of the United States-, uncler said call or calls.”'

This language makes it quite plain that the state bounty authorized was payable only to volunteers who were necessary to-fill the quota as assigned by the national officers and actually existing with its demand for men instead of credits, and to such volunteers as should enlist under future calls. And so the provision; was followed by conditions that the described volunteers should be actually accepted and mustered into service and applied upon and in reduction of the assigned quota. The meaning thus definitely' attached to a quota under the December call for men must be retained through the remainder of the act, unless plainly modified, by later and qualifying expressions.

But while the bounties to be given were to begin with those;who should fill the assigned December quota, the policy of equalizing the burden of taxation by spreading it in just proportion over the property of the state required that the local taxation, supporting the previously paid local bounties should in some manner be equalized and absorbed in the broader scheme; and this-was accomplished, not by giving bounties back of-the assigned December quota to any one, but by reimbursing to the localities, their previous expenditure for local bounties, so far as that had produced since December 19, 1864, actual men to apply upon the-assigned quota, and so far also as that assigned quota in a particular locality had been lessened and relieved by a consideration of' previously existing excess standing fairly to the credit.of the district. The process thus was wholly one of reimbursement, to a. limited extent, of local bounties, which had accomplished, or should accomplish, either of the two specified results, but no-bounties were given or authorized to enlisted men back of the-assigned or existing quota of December 19, and the act gives no-indication of any such purpose.

We are prepared now to consider the sixth section of "the act, upon which the plaintiff relies, and it begins thus: “A bounty to the amount hereinbefore provided shall be paid to any person who-has furnished or who shall furnish an acceptable substitute to apply on the quota under the call of December 19,1864.” Stopping at that point we see that the state bounty previously given to volunteers whose actual enlistment applies upon and aids to fill the existing assigned quota is extended also to person's who become such volunteers by proxy, that is, who at their own expense put in a substitute whose enlistment applies upon and' helps to fill the assigned quota demanded in men by the nation from the state. The section- then proceeds: “which substitute shall have been accepted by the authorities of the United States and credited to the town, city or county in-which said person shall be enrolled and which substitute shall go to reduce the quota in such town or county.” That is to say, the substitute must not only apply upon the quota of the state as assigned under the specified call, but he must also be credited upon the assigned quota of the principal’s district of enrollment and go to reduce that assigned quota by so far serving to fill it. It seems to me that' such is the proper and necessary import of the language. The plaintiff’s construction finds its only support in the expression “ go to reduce the quota in such town, city or county,” and to make it available two things are needed. We must treat the word quota, not as the statute has previously treated it, as meaning the actual assigned quota, but as referring to an undefined proportion preceding the assignment and resting primarily upon the enrollment; and then as Daniels, J., said in-the Woodward case, we. must change the word “ and ” to “ or ” and make it read that the bounty was payable to principals whose substitutes were to “ apply on ” the quota under the December call or went to reduce it; that is, who either lessened its number after it was made by being applied upon it or lessened its number before it was made without being applied upon it at all Clearly the same man could not stand in both of the assumed positions, and so “and ” was changed to “or ” to meet the difficulty. We may make such a change where it is necessary to a correct interpretation, but not where the meaning is otherwise clear. The provision meant and was intended to mean that the substitute. should be not only furnished “ to apply on the quota,” but should be both credited to the locality and actually applied upon the quota; as the words are, “go to reduce it.”

Those words, we should Observe, were not used in the fourth section, in which the legislature described the case of an excess which lessened in advance the figures of an assigned quota. The language was, “ shall have operated to relieve in whole or in part said town, city or coupty from furnishing men under the call.” That is a fitting and unambiguous expression, and very different from the phrase “go to reduce it,” used in connection with a definite' and assigned quota. We find the same expression in a letter of the provost marshal general (Ex. 23), where he says, “the quotas assigned under the call of December 19th, 1864, must not be reduced except by actual enlistments in the army, navy and marine corps since the 19th ultimo.” That was the only mode of reduction allowed, and when about one month later the act of 1865 used the same expression with reference to a substitute it meant the same thing, and so bounties were due under the law only to such principals as furnished substitutes whose enlistments applied upon the assigned quotas of men and went to reduce such quotas by so far actually filling them.

I am not impressed by the argument that the reimbursement given to localities for an excess which operated to relieve them in the December assignment of quotas ought to extend to individuals whose substitutes affected pro rata the same relief. The cases are widely different. The individuals either owed military service or they did not If they did, what they paid for a substitute simply performed their own duty by'proxy and the state owed them nothing. No equity of theirs called for reimbursement; while the taxation of localities, when replaced by a general taxation for bounty purposes, did call for some scheme which, to a' limited degree, would equalize the burden. There was no past equity due to principals who' acted as they chose and in their own interests, and when, by the act of 1865, bounties were given for substitutes actually reducing the assigned quotas, it did so on the theory that the principal was the volunteer, and what was given was the bounty thenceforward paid by the state to all alike. If the principal who, before December, 1864, had furnished a substitute was not enrolled as liable to military duty, a fact true of some of plaintiff’s assignors, his action was wholly voluntary, a patriotic gift to the necessities of the state, which neither asked nor called for reimbursement, and which would be and ought to be left where the giver meant it should, to the credit of his worthy and honorable purpose.

Nor is there force in the suggestion that the words of § 6, “ who has furnished, or shall furnish, an acceptable substitute,” indicate a retrospective as well as a future operation. "The act of 1865 was passed in February, and intended to cover substitutes actually applied upon the December quota as assigned between its date and the later passage of the law. The words have their full effect without relating back to an excess created before December. And the construction of the plaintiff would involve the injustice on the part of the legislature of providing for a bounty to principals whose substitutes aided to create an excess, while giving none whatever to.a volunteer for three years, two years of whose enlistment would be credited as part of the same excess. The answer made that such volunteers, in general, received large local bounties while the principal received none is met by the consideration that the enrolled principal got just what he bargained for, which was immunity from the draft.

Upon this construction it follows that the state at the time of the settlement with Erie county owed nothing to the assignors of the plaintiff, and that they were not entitled to the bounties which they here seek to recover. That conclusion ought to be fatal to the plaintiff’s cause of action, but is claimed not to be upon the ground that a part of the money equal to the bounties was paid by the state to the county for the use of the assignors, and the latter cannot question the validity of the payment or the plaintiff’s right to receive it. Such a doctrine in a proper and fitting case might find authority in its support, but has no just application to the present controversy. Gen. Marvin had no authority to make such a payment. His 'power was measured by the act of 1865, and • he could only bind the state in accordance with its terms. If he undertook at all to pay the money of the state for the use of the assignors whom the state did not owe and in contravention of his authority, he did not bind his principal by the unlawful and unauthorized act, and it cannot be said that the state paid the money for the use of plaintiffs assignors.

The doctrine rests upon a conscious, voluntary and intended act by an alleged debtor, and cannot be founded upon an unauthorized misappropriation of its money by its agent. In every such case it is possible to say that the debtor waived his defense and admitted his liability, and the receiver of the money for the use of the creditor cannot retract or question the' admission, but must perform his agency or trust. But here the state waived nothing, and admitted nothing, through the act of the agent in excess of his known authority. But General Marvin did nothing of the kind. He and Mr. Young both agree in saying that a reimbursement to the- county, and not bounties to individuals, was the purpose of the settlement, and that fact appears in spite of the rigid rulings of the court confining the witnesses quite too closely to specific memories of definite transactions. The plaintiff relies wholly upon the inference drawn from the details of the settlement, and his most potent factor was the claim that the state owed the bounties, and as debtor paid them. With the disappearance of that fact, the inference sought to be drawn must give place to the contrary one, that the parties were not violating the law, but acting in conformity with its terms, and so long as what they did admits of that construction we are bound to adopt it.

The papers used on the settlement, so far as I have been able to identify them, do not establish the plaintiff’s theory, and will not justify the inference that both parties were seeking to violate the law for the benefit of persons not making claims in their own behalf, and having no lights or interests involved. The affidavit of Mr. Young -was made upon a blank printed for -the statement of more than one person, and using the plural instead of the singular number. The proper changes were made except in one instance, and correcting that, the affidavit is entirely consistent with a claim in behalf of the county for reimbursement under the 4th section of the act. That' it does not say in terms that local bounties were paid by the county, but simply that they were paid, was the omission of the state agent in drawing the paper, who undoubtedly had no such distinction in his mind.

The second paper was the certificate of the provost marshal of the district showing that the excess of years which went to relieve and lessen the December call was 3,736 ; and was a document also needed for a settlement under the fourth section. The next paper shows by wards and towns the localities of the excess of years as above stated, and has this note at the end: “ To .bo used only for obtaining reimbursement of bounty from the state jof Hew York.” The next paper is a receipt signed by Mr. Young “for Bounty Committee, Erie County.” It is headed “Roll of recruits and substitutes,” contains but a single name, and is followed by Young’s receipt for $482,200, “ being in full for bounties to the above named recruits for 2408 years of excess on call July 18, 1864, and one three years man at $600, credited to the state of New York on the call of December 19, 1865.” We do not know with any certainty what list was referred to, but assuming it to have been the muster rolls covering the substitutes furnished by plaintiff’s assignors,. it is still evident that the receipt was for a reimbursement of local bounties claimed to have been paid by the county and constituting excess under § 4. The brevity of the statement does not alter the inference to be drawn from it as a settlement made in accordance with the law of 1865. Another paper present was headed : Statement of the number of men to whom bounties were paid by the county of Erie from September 1, 1864, to January 1, 1865,” showing a total of over $600,000; and another a statement of credits from July 18 down to December 31, 1864. Assuming that all these papers, which may have been used on the settlement, were so used, though the fact is open to some degree of doubt, it is yet obvious that they are in all respects consistent with a claim made on the one side and admitted on the other for reimbursement of the county, and do not at all show or even tend to show, keeping in view the true construction of the act of 1865, a payment by Gen. Marvin for the use of plaintiff’s assignors. And since the agent of the state had no authority to make any such payment and the county none to receive it, the only admissible inference is that the parties acted in accordance with the law and not in violation of it. If the county claimed or received too much, or took reimbursement for what it had not paid, that excess should justly go back to the state, and not to the profit of men having no concern or interest in the fund.

I have not omitted to take into account certain resolutions of the Erie supervisors and reports of the bounty committee indicating that individuals had equities against the county which were not denied, but more or less recognized. Those facts do not alter the nature and character of the settlement between the state and the county. That stands as it was made, and as it must stand under the act of 1865.

These views are decisive of the case, and show that there is no ' tenable ground upon which the action can rest

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

All concur.