author: Brady, P. J.:

text:
    THE MARIETTA AND CINCINNATI RAILROAD COMPANY (as reorganized), Appellant, v. ALBERT L. MOWRY and GEORGE H. BEND, Respondents, Impleaded, etc.

      Notice — dll the members of a firm are charged with notice of facts hnown to one partner — when they' are changeable with such notice after the dissolution of the firm.

    In the year 1866, one Samuel B. Keys was a member of the firm of Keys & Brother, of Cincinnati, and also of the firm of Mowry, Keys & Bend, of the city of New York. In the course of that year Keys purchased in behalf of his firm bonds issued by the plaintiff, which were void in his hands and in the hands of his firm, because he being a director of the company- had purchased them for less than their par value, in violation of a statute of the State of Ohio, and because nothing was in fact ever paid to the company for them. Subsequently the firm of Keys & Brother, being indebted to the firm' of Mowry, Keys & Bend on account of stock purchased and advances made by the latter firm, sent to it the said bonds to be held as collateral security for the payment of such debt. In March, 1867, both of the firms being then dissolved and in process of liquidation, an agreement was executed by the two firms, and by each of tbe members thereof, whereby the late firm of Keys & Brother transferred to the late firm of Mowry, Keys & Bend certain stocks and securities, including the said bonds, in satisfaction of a large indebtedness due to the New York firm. On the same day three of tilie members of the late firm of Mowry, Keys & Bend transferred to the fourth member, the defendant Mowry, all their right and title to the said securities, he assuming the liabilities of the said firm and indemnifying his partners individually against them.
    In this action, brought by the company against the members of the New York firm to recover damages for a wrongful conversion of the bonds:

      Held, that as Samuel B. Keys had actual knowledge of the defective title of the firm of Keys & Brother to the bonds, his partners in the New York firm were chargeable with constructive knowledge thereof and acquired no better title to the bonds than their pledgor had.
    That the partners of the said Samuel B. Keys were affected by and chargeable with such constructive knowledge after the dissolution of the firm, and while negotiating for the settlement of the affairs of the two firms and the transfer of the securities of the New York firm to Mowry.
    That the defendants Mowry and Bend, by reason of such constructive knowledge, were liable to the plaintiff for the conversion of the bonds.
    Appeal from a judgment, entered on the report of a referee dismissing the complaint on the merits as against the defendants Mowry and Bend.

      A. J. Vanderjpoel, for the appellant. .

      Wm. Allen Butlqr, for the respondents.
   Brady, P. J.:

The following are the findings of fact by the referee:

The plaintiffs, at the time of the transactions hereinafter mentioned and of the commencement of this action, were a railroad corporation under the laws of the State of Ohio.

In January, 1866, they executed 2,500 bonds of $1,000 each, secured by second mortgage upon their line of railroad, said bonds being payable to bearer and numbered consecutively.

On the 10th of March, 1866, sixty of said bonds numbered eighty to 110 inclusive, were sent from the office of said company at OBillicothe, Ohio, by an officer thereof, to the defendant Samuel B. Keys, at Cincinnati, Ohio. On the 21th day of July, 1866, 140 of said bonds, numbered 638 to TT7, were in like manner sent to said Keys.

These bonds had not yet been issued for value, and no money was paid by said Keys for- them when they were so sent to him.

On or about tüe 28th of June, 1866, Samuel JB. Keys, on behalf of his firm of Keys «& Brother, of Cincinnati, made an arrangement for the. purchase of 200 of said 2,500 bonds at fifty-five cents on the dollar, payable in one year; said arrangement was made in the city .of New York, between said Keys and Noah L. Wilson, Blakely Wilson, Le Grand Lockwood, William Hoag and S. W. Hazeltine, all- said persons being directors of said company, and assembled together at the time the bargain was concluded. The 200 bonds so arranged for were delivered to said Keys by his taking into account- the sixty bonds sent him on the 10th of March, 1866, which had not then been used by him, and by sending to him the 140 bonds above mentioned as sent on the 24th of July,-1866.

At this time said Samuel B. Keys was a director of the plaintiffs’ company, and had been since 1861, and he continued to be a director until 1869; he was also a member of the firm of Keys <fe Brother, bf Cincinnati, which was composed of himself, Richard W. Keys and Edward S. Lea.

From the 1st of April, 1866, said Samuel B. Keys and Richard W. Keys were also members of the firm of Mowry, Keys & Bend, in the city of New York, composed of the defendants herein. This firm was dissolved about the 23d day of February, 1867.

The business of said firms of Keys «fe Brother, and of Mowry, Keys & Bend, was that of dealers in gold, stocks, bonds and other securities.

During 1866 the firm of Keys & Brother, of Cincinnati, transacted business with the firm of Mowry, Keys <fe Bend, in New York, the business consisting in the latter firm of buying and selling gold, stocks, bonds and other securities for the firm of Keys «fe Brother; the account was an active one.; the firm of Keys <& Brother was constantly debtor to the firm of Mowry, Keys «fe Bend, and from time to time sent to said firm bonds, stocks and other securities on pledge or as collateral security for the account.

On the 25th of-July, 1876, Keys «fe Brother, so sent to Mowry, Keys «fe Bend, 140 second mortgage bonds of the plaintiffs ; on the 19th of September, 1866, ten other of said bonds, and in January, 1867, sixty other of said bonds; of said 210 bonds the firm of Mowry, Keys & Bend sold for account of Keyes & Brother fifty-five, leaving on hand at the time of the dissolution of Mowry, Keys & Bend, and in their possession as pledgees, and by way of security as aforesaid, 155 of said bonds, being those described in the ■complaint.

The plaintiff's never received from Samuel B. Keys, nor from his firm of Keys & Brother, nor from the defendants’ firm, any money >on account of said bonds.

The following statute of the State of Ohio was in force during the years 1866, 1867:

Section 1. Be it enacted, etc., that the directors of any railroad company, authorized to borrow money and to execute bonds or promissory notes therefor,- shall be, and they are hereby-authorized to sell, negotiate, mortgage or pledge such bonds or notes, as well as any notes, bonds, scrip or certificates for the payment of money or property which such company may have heretofore received, or shall hereafter receive, as donations or in payment of subscriptions to the capital stock, or for other dues of such company, at such times and in such places either within or without the State, and at such rates and for such prices as in the opinion ,of said directors will best advance the interests of such company; and if such notes or bonds are thus sold at a discount, such sale shall be as valid in every respect, and such securities as binding for the respective amounts thereof, as if they were sold at their par value.

Section 2. No director of any railroad company shall, either directly or indirectly, purchase any shares of the capital stock or any of the bonds,, notes or other securities of any railroad company of which he may b.e a director for less than the par value thereof; and all such stocks, bonds or notes or other securities that may be purchased by any such director, for less than the par value thereof shall be null and void.

On or about the 11th of March, 1867, agreements in writing were executed between the firm of Keys & Brother, in liquidation, and each member thereof, and the firm of Mowry, Keys & Bend, in liquidation, and each member thereof, both of said' firms being then dissolved, by which agreements the said late firm of Keys & Brother transferred to the said late firm of Mowry, Keys & Bend certain stocks and securities which said Mowry, Keys & Bend then held as security, including, specifically, the said 155 bonds, in satisfaction of a large indebtedness from said late firm of Keys & Brother to Mowry, Keys & Bend, and Samuel B. Keys, Richard W. Keys and George H. Bend, as members of said late firm of Mowry, Keys & Bend, transferred to the defendant Albert L. Mowry all their right and title to said securities, he assuming the liabilities of said Mowry, Keys & Bend and indemnifying them individually against the same.

During the year 1867 said Mowry from time to time sold and disposed of the said 155 bonds to purchasers in New York and Baltimore.

Neither the said Mowry nor the said Bend ever had any knowledge of the manner in which Samuel B. Keys had come in possession of said bonds, nor ofi any claim of the plaintiff in respect to the same against him, until after the execution of the said agreements, and after the sale by defendant Mowry of the said bonds, nor until about the time of the commencement of this action.

“I find as matters of law that Samuel B. Keys and the firm of Keys & Brother never acquired any title to the said bonds as against the plaintiffs.

That the firm of Mowry, Keys & Bend did not acquire any title to said bonds by virtue of the delivery of them to said firm as security for the dealings with said firm of the firm of Keys & Brother, being at the time of such delivery chargeable with constructive notice of the want of title of said Keys & Brother.

That, by the settlement of March, 1867, the defendants Albert L. Mowry and George H. Bend became bona fide purchasers for value of said bonds,- and, as between them, the said Mowry became a liona fide purchaser for value of the bonds, and was such when he subsequently sold and disposed of the same.

That the defendants Albert L. Mowry and George H. Bend are entitled to judgment that the complaint be dismissed, with costs.

The appellants took ample exceptions to the findings of the referee, and to his failure and refusal to find certain propositions of fact and law; and the appeal, therefore, is presented in proper form to require the consideration of the point involved. It will be perceived, from the findings of law of .the referee, that he regards the settlement of March, 1867, as an incident by which the defendants Mowry and Bend became Iona fide-purchasers for value, of the bonds, and that Mowry, as between them, became the bona fide purchaser for value, of these bonds, and was such when he subsequently sold and disposed of them. ■ This presents the point in the case, because it is declared substantially by the referee that but for this settlement the plaintiffs would be entitled to recover.”

The learned referee has delivered an opinion, which is as follows:

“ As between Samuel B. Keys and the plaintiffs it seems quite clear that he never derived any title to the bonds in question.

T-Tis position as a director of the company forbade him to take the bonds in the manner disclosed by his own testimony, whether the transaction be judged by general law or by the statute of Ohio.

The firm of Keys & Brother stood in no better position than Samuel B. Keys at the time the bonds were sent to New York. There is no evidence that that firm paid anything to Samuel B. Keys for the bonds, nor that they did not get them through him in the course of partnership dealings. In fact, the transaction, as entered upon the books of the company, is a charge directly against Keys & Brothers and not against Samuel B. Keys, though he negotiated the purchase.

Coming then to the dealings between the Cincinnati and New York firms, I think they' were of such a character as made the latter'firm holders for value, but they must, I think, be considered as chargeable with constructive notice, by reason of the membership of Samuel B. Keys in both firms, of the defect in his title.

This point is not free from difficulty. The rule on the subject is thus stated in Bindley:

“Notice to a principal is notice to all his agents and notice to an agent of matters connected with his agency is notice to his principal. Consequently, as a general rule, notice to one partner of any matter relating to the business of tbe firm is notice to all the other members, and if two firms have a common partner,’ notice which is imputable to one of the firms, is imputable to the other also, if it relates to the business of that other. .

“ In conformity with these principles, if a firm claim the benéfit of a transaction entered into by one of its members, it cannot effectually set up its own ignorance of what that member knew, so as to be in a better position than he himself would have been in, had he been dealing on his own account as principal.” (Lind, on Pari^., 304, Eng. ed. of 1873.)

From my examination of the cases, I think this an accurate state ment of the general doctrine. The difficulty, however, lies in determining when the matter, in respect to which the knowledge of one partner is sought to be imputed as notice to all the others, in fact relates to the business of the firm, or when the knowledge of the one firm sought to be imputed to the other in fact relates to the business of that other.

In the present case, the transactions of the New York firm in making advances to the Cincinnati firm were in the line of business of both firms, and if S. B. Keys, individually or through his Cincinnati firm, sent to the New York firm, as collateral, stocks or bonds as to which he knew the Cincinnati firm had no title, that knowledge must, it seems to me, be imputed to the New York firm. Suppose he had not been a member of the Cincinnati firm, that there was no common partner in the two firms, and that, in that position of things, the Cincinnati firm had applied to Mowry, Keys & Bend for an advance on government bonds which S. B. Keys knew were stolen property. Being a member of the firm making the advance, his knowledge would necessarily be imputed to his firm, and the true owner of the bonds could reclaim them, no matter how ignorant the other members were of the facts which vitiated their title. I cannot see that S. B. Keys, being also a member of the firm transmitting the bonds, would strengthen the position of the firm receiving them. The case of Steele v. Stuart (L. R., 2 Eq., 84), is an authority very decidedly in point and supports the views I have stated.

I conclude, accordingly, that plaintiffs would have been entitled to recover had they reclaimed the bonds at any time before the settlements of March, 1867.

At this time, however, the relations between the two firms were dissolved. The bonds, as between Keys & Brother and Mowry, Keys & Bend, were the property of Keys & Brother, and not of Mowry, Keys & Bend, who were simply pledgees of them. Then Keys & Brother transferred them to Mowry & Bend in satisfaction of their indebtedness, and Mowry & Bend released Keys & Brother and every member of that firm.

This made Mowry & Bend holders for value. The rule seems now tó be settled that when one acquires property in good faith from a person having the apparent ownership, but no actual right, a payment of cash at the time is not necessary in order to protect the right of the transferee as against the true owner. It is enough that his position was substantially altered by relying on the apparent title. (Voorhis v. Olmstead, 66 N. Y., 113; Cont. Nat. Bank v. Nat. Bank of Commonwealth, 50 id., 575.)

The only question then is, did this settlement make them holders for value, without notice ?

It is to be considered that Mowry & Bend never had actual notice. The only notice with which they were ever chargeable is constructive or imputed notice. I think they ceased to be chargeable with such notice when the relations between the two firms ceased, and the qualified title ceased to which this imputed notice attached. The parties were no longer partners, and neither could charge the other with new obligations by reason of their previous relations. Nor did the constructive notice with which Mowry & Bend were chargeable, during the existence of the partnership relations between the common members of the two firms, continue after the dissolution,.for this would make constructive notice the same as actual notice.

The rule which charges a principal with his agent’s knowledge is a rule of policy, not of evidence. ’ It does not establish actual knowledge on the part of the principal. 'Actual notice would outlast a termination of the agency; but, in reference to imputed notice which is not actual, the rule is, that when the agent ceases to be agent, the principal is no longer chargeable with his knowledge, though, as to transactions had during the agency, knowledge is imputed to him.

Suppose that, during 1866, Samuel B. Keys had been Mr. Mowry’s agent in, Ohio for the purchase of railroad bonds.

If Mr. Keys had charged him in account with the bonds in question during the existence of such agency, Mr. Mowry would have been chargeable with knowledge of the defect in Keys’ title. But if the agency were terminated, and afterwards Mr. Mowry bought the bonds from Keys, as a principal, for vahmand without notice, the fact that Keys had acquired the bonds wrongfully during the-time covered by tbe agency would not charge Mr. Mowry with notice. This seems to me clear from the reason of the rule. The principal is chargeable with the knowledge of the agent, “ for the reason that the agent is substituted in his place and represents him in the particular transaction.” (Bank of U. S. v. Davis, 2 Hill, 451, 463.)

This cannot be the case where there is no transaction between the principal and agent, or where the transaction, after the agency has ceased, is between the parties as principal and principal.

So, in applying the rule where there are partnership relations, if S. B. Keys had sold the bonds in question directly to Mr. Mowry, individually, at any time in 1866, it could hardly be claimed that the latter would be chargeable with Keys’ knowledge of his own want of title, because they were partners in other transactions. .So, when the partnerships were dissolved, if Keys & Brother had redeemed the bonds, paying their indebtedness to Mowry, Keys & Bend, it would hardly be claimed that a subsequent sale for value by Keys & Brother to Mr. Mowry would charge him with notice of the defect of title of Keyes & Brother by reason of the previous relations of the two firms.

Being satisfied that defendants Mowry & Bend are not liable to the plaintiffs for a conversion of the bonds in question, it is unnecessary that I should examine the point made; that if they are, they are only liable to nominal damages, because of the statute of Ohio, which makes bonds sold to a director void. The result of my consideration of the case is' that the complaint must be dismissed.

It will be perceived that he discusses the question which he himself presents, namely: Did the settlement make the defendants holders for value without notice? He thinks it did because the relations existing between Keys and the others had ceased; and the qualified, title had also ceased to which the notice by imputation attached. He thinks that being no longer partners neither could charge the other with new obligations by reason of their previous relations; and that the constructive notice with which Mowry, Keys & Bend were chargeable, because of the existence -of the copartnership relations between the common members of the two firms, did not continue after the dissolution. For this, he says, would make constructive as well as actual notice. The opinion shows reflection and research in reference to^the question discussed; and while we concur with him in his views generally, and adopt them as a correct exposition of the law of this case, nevertheless it is thought that the legal effect given to the settlement between the parties founded on the instruments to which reference has been made is erroneous. ' There can be no doubt, and the referee so declares, that the firm of Mowiy, Keys & Bend received the bonds with notice of their wrongful taking by Keys & Brother, and they therefore took no better title than S. B. Keys or Keys & Brother; and this doctrine controls the ultimate result, inasmuch as Mowry cannot divest himself in reference to them of his copartnership relation on the facts of this case. This would seem to be well settled.

In Jacand v. French (12 East, 317), Lord Ellenborough, said: “ It is impossible to sever the individuality of the person. * * * If A. & B., partners, receive money to apply to a particular purpose, A. & C. in another partnership, could never be permitted to contravene the receipt of it for that purpose and apply it to another.” (See, also, the case of Powles v. Page, 3 C. B., 16, 30; E. C. L. R. [vol. 54], page 16.)

So in the case of In re Worcester Corn Exchange Company (3 De G., M. & G., 180), in which the directors of the company exceeded their powers in borrowing money. Part of the money advanced had been lent by a bank, one of the partners in which was a shareholder in the company. Held, that as between the company and the bank the latter must be deemed to have had notice of the restricted liability of each shareholder, and therefore had no claim against the company for the advance.’

Lord Oranworth said: Here the bank must be held to have had clear notice of the stipulations of the deed, and of the limited liability of each shareholder, for one of the partners in the bank was a shareholder in the company.”

The case of Steele v. Stuart (L. R., 2 Eq., 84) is one bearing on the question under consideration. In that case it appears that the plaintiff agreed to send bills to the firm of Staig & Stuart, at Kirkcaly, to secure their advances to him. They were to negotiate the bills and apply the surplus to a particular purpose. Subsequently, Staig & Stuart being in want of funds, directed the bills to be remitted, not to themselves but to a firm of bankers, Stuart, Brothers (having a common partner with themselves), in London, as security for advances made to them by Stuart Brothers. Staig & Stuart became bankrupt, and a bill was filed against Stuart Brothers to compel them to account for these bills and apply the proceeds to the purpose for which they were originally given.

The question, as stated by the counsel in the case, was whether a firm consisting of A. & B., can retain moneys which have been appropriated to a particular purpose by a firm consisting of B. & C.; and they contended that the contract between the plaintiff and Staig & Stuart being proved, the knowledge of Stuart Brothers followed from the fact of the common partners, and it was held that Stuart Brothers had notice of the arrangement between the plaintiff and Staig & Stuart, through the fact of a common partner, and that the bills in the hands of Stuart Brothers must be appropriated in equity accordingly.

Sir W. Page Wood, Y. C., said in the course of his opinion: “ It is proved that Stuart Brothers had notice, because one member of their firm and of the firm of Staig & Stuart is the same individual and the notice cannot be separated.”-

There would seem to be no doubt in this case therefore, on these authorities, that by the existence of the common partner the respective firms are chargeable with notice of the want of title in Keys to the bonds in question, and this knowledge must, it would seem, also necessarily attach to each of these persons, in all its legal consequences, as to anything which formed a part of the assets of either of the firms as between the respective members ; and therefore if there was any vice in the title of anything held in the possession of the partners that was' transferred either at the time of the dissolution or upon the settlement of the copartnership affairs, the transfer would carry with it such vice.

This rule is evolved from several adjudications in our own courts affecting the relation of copartners each to the other, and the continuance of that relation after the dissolution of the firm for purposes connected with the joint property. In the case of Van Keuren v. Parmelee (2 Oomst., 523), the general powers of a partner after the dissolution of a firm were discussed by Bronson, J., who said, among other things: “ Each partner, when acting within the scope of the partnership, is deemed to be the authorized agent of all his fellows,” and that “the authority is presumed from the nature and necessity of the case; for without it, third persons would not be safe in dealing with one of the associates, and the business of the partnership could not be carried on with success.” It was said, it is true, that the agency continued no longer than the necessity for it existed, and for most purposes the necessity ceases with the termination of the partnership, but further, “ when that is dissolved, there is no longer any gi-ound for presuming an agency, except as to such things as are indispensable in winding up of the concerns of the company. If there be no agreement to the contrary, it may bd presumed that each partner still has authority to dispose of the partnership' property, to collect, adjust and pay debts,- and give proper acquittances.” In Robbins v. Fuller (24 N. Y., 570), Denio, J., after stating the powers of the partners during the continuance of the partnership, said: But the dissolution of the firm, though it annulled the powers of the'respective partners for many purposes, and particularly as to the contracting of debts, and the creating of obligations against the copartnership, did not put an end to their authority to administer the assets in accordance with the rights and interests of the parties interested in them, and with the intention of the partnership enterprise. For this purpose the partnership is considered as continuing.” .

In Murray v. Mumford (6 Cow., 441), the court said: “A dissolution of a partnership does not, I apprehend, ipso facto, destroy the joint tenancy of the partners in the partnership property and create a tenancy in common. . They are still partners for the purpose of settling the partnership concerns, and until that is effected. For .thaj; purpose the partnership may be said still to continue with all the incidents belonging to that relation.”

The same doctrine was substantially asserted in Ex parte Hall (17 Ves., 62).

In Butchart v. Dresser (4 De G., M. & G., 542), it was declared by Turner, L. J., that the general law was clear that a partnership, although dissolved, coritinued for the purpose of - winding up its affairs. He said: “Each partner has after, and notwithstanding the dissolution, full authority to receive and pay money on account of the partnership, and has the sariae authority to deal with the property of the partnership for partnership purposes as he had during the continuance of the partnership.” This must,” he said, necessarily be so.”

The instruments of March 11,1867, grew out of the copartnership relations. One of them was a release by Keys & Brother, as a copartnership, to Mowry, Keys & Bend, as a firm, of the bonds, •together with other property, and the other was a release or transfer by S. B. Keyes to Mowry & Bend of all interest in the copartnership assets of Mowry, Keys & Bend. And, as stated by the learned counsel for the appellants, at the very instant of time when these instruments were being executed and delivered, Mowry & Bend were copartners with Keys as to these bonds and chargeable with notice of the ownership of the plaintiffs. Mowry was, therefore, as also substantially said by the counsel for the appellants, at the very time of taking the bonds, under notice that they did not belong-to the person who was endeavoring to convey them to him, but belonged to another, and he therefore took no title at that time and never acquired any thereafter. The position of. the defendants is one to which the observation of Lord Ellenborodgii applies. It is impossible to sever the individuality of the person and to say that, although Mowry & Bend had knowledge of the vice in the title in Keys to the bonds as copartners, yet, when they ceased to bq copartners of Keys, they ceased to have knowledge. If it were otherwise, the individual, as a partner, would be severed from the individual as such, and the notice chargeable to him as a copartner would have no existence in him as an individual where the partnership relation was terminated. The learned counsel for the respondent thinks that the case of Duncomb v. The New York, Housatonic and Western Railroad Company (84 N. Y., 190), is an authority for the proposition that a disability, arising from the peculiar relations sustained by one party to another and growing out of such relations solely by operation of law, terminates when the relation ceases. An examination of that case leads to the conclusion that it has no applicability’ here, and for the reason that the transaction, considered in regard to a Mr. Rucker, who was the president of a company, and who in that capacity might be charged with notice, took place after lie ceased to be president, and appears to have been an independent transaction after such presidency had expired. The court said: “ It was error to reject the bonds held by Rucker, as the assignee of the Loan and Indemnity Company, and those which he received as a pledge from the Bessemer Company. The transactions relating to these bonds occurred after he had ceased to be an officer of the railroad company, and when he occupied toward it no relation of trust or confidence which could on any theory expose his action to scrutiny or criticism. He dealt, therefore, like any other stranger, and is entitled to’ prove such of these bonds as he holds as pledgee and can produce for that purpose, and receive the dividends thereon to the amount of the debts, respectively, which the bonds were pledged to secure.” It may be further said that it was held that the loan to which the pledge related was, under the charter of the company, valid and capable of being enforced. An examination of the cases cited by the ■ counsel for the respondent, to the effect that the plaintiffs were estopped from setting up any claim to the bonds in consequence of their having paid the interest due upon them, does not sustain the proposition. It is not regarded as sound, therefore, in its application to this case. The action was brought within the time limited by law, and the company, save by the payment of interest, did no act indicating that they regarded the sale of the bonds as. authorized and legal. .This led to no damage to the defendants, and was in no way capable of. being regarded as constituting the element of fraud in any possible aspect in which it might be viewed. The doctrine of estoppel does not, therefore, apply.

For these reasons, the judgment should be reversed and a new trial ordered, with costs to abide the event.

Daniels, J., concurred.

Present — Brady, P. J., Daniels and Barker, JJ.

Judgment reversed, new trial ordered, costs to abide event.


source: Caselaw Access Project

author: Brady, P. J.; .

license: Public Domain

text:
    JOSEPH BLUMENTHAL, Appellant, v. ROBERT J. ANDERSON and Others, Dependants. WILLIAM K. HALL and CHARLES BLANDY, Judgment Creditors and Respondents.

      Judgment — how far apa/rty to the action is concluded by it — right of one who has been discharged in bankruptcy to home judgments against him canceled— Code of Civil Procedure, sea. 1368.
    An action having been commenced, by the plaintiff, to set aside a conveyance alleged to be fraudulent and to compel the specific performance of a contract, a judgment for costs was recovered therein by the defendants in July, 1876, which was subsequently increased by the sum of $750 allowed to the defendants for the damages occasioned by a temporary injunction granted upon the plaintiff’s application. Subsequently a controversy having arisen between the defendants and their attorneys, who claimed to have a lien upon the judgment for the value of the services rendered by them, an action was brought by the attorneys in the Court of Common Pleas, in 1877, against the plaintiff and defendants, to have their lien determined and established, and to compel an assignment of the judgment to them, no personal claim being made against the plaintiff. In April, 1880, a judgment was entered therein declaring that the former judgment was still in force and unpaid and that the attorneys had a lien theréon to an amount stated. Prior to that time and in January, 1880, the plaintiff had been discharged in bankruptcy.
    Upon an application made by him, under section 1368 of the Code of Civil Procedure, to have the judgment discharged and canceled of record:

      Held, that he was not estopped by the judgment recovered in the Court of Common Pleas from so doing. That that judgment only made it his duty to pay whatever was due thereon to the attorneys and not'to the defendants, and it did not in any way affect or revive his liability upon the first judgment.
    Appeal from an order made at Special Term, denying a motion to cancel and discharge a judgment.

      J. M. Smith, for the appellant.

      Chas. Blando/, for the respondents.
   Brady, P. J.; .

It appears from the papers submitted upon this appeal that this action was commenced in January, 1875, for the purpose of setting aside a conveyance alleged to be fraudulent and to compel tbe specific performance of a contract. The defendants employed Messrs. Hall & Blandy, the present respondents, to appear for them and defend the action.

In July, 1876, a judgment appears to have been entered in favor of the defendants against the plaintiff, dismissing the complaint, and for $3,126.80 costs alone. This sum was further augmented by an award for damages to the defendants of $750, granted because of the injunction which, on plaintiff’s application, had been issued herein, and seems to have been regarded as the value of Messrs. Hall & Blandy’s services in reference to the injunction.

It further appears that negotiations for a settlement took place, and that Messrs. Hall & Blandy notified the defendant Robert J. Anderson, of a lien upon the judgment, and in writing stated their position in regard to it.

It also appears that Robert J. Anders,on denied the lien and forbid any settlement by Blumenthal, the plaintiff, except with him personally; whereupon Messrs. Hall & Blandy gave written notice of their lien to the plaintiff and notified him not to settle with any persons other than themselves, and also gave similar notice to the plaintiff’s attorneys.

It also appears that in July, 1877, in a conference with the plaintiff’s attorneys, it was suggested that the claim of Messrs. Hall & Blandy should either be settled or a motion made to ascertain the extent of their lien, which suggestion the plaintiff’s attorney took under advisement. In August following an order seems to have been obtained to show cause why the lien should not be determined, and on the hearing* upon that order it appears that Judge Yan Brunt expressed the opinion that Messrs. Hall & Blandy must proceed by action to enforce their lien, whereupon the motion was withdrawn by consent.

These gentlemen then commenced an action in the Court of Common Pleas, against the plaintiff and defendants herein, to determine and enforce their lien upon the judgment and award.

It also appears that in September a motion was made to confirm the report of the referee appointed to ascertain the defendants’ damages, by reason of the injunction, to which damages reference has already been made, on which occasion the plaintiff’s attorney produced a release of the judgment and award for damages, executed by the defendant; ^hereupon an adjournment took place to enable. Messrs. Hall & Blandy to inquire into the facts, and produce proof to the court that such release, if executed, was fraudulent and void as to them.

In the same month an order was granted to show cause why the release and satisfaction-piece should not be set aside, and Messrs. Hall Blandy have leave to issue execution, the result of which was, that the satisfaction-piece was vacated and set aside, and the clerk of this court directed to take and remove the same from the files of his office, and mark the docket of the judgment in his office as restored to full force, leaving it as though no certificate of satisfaction has been filed. In April, 1880, in the action brought by Messrs. Hall & Blandy, against the plaintiff and defendants, judgment was entered for the sum of $5,400 and costs, adjudging among other things that the judgment against Blumenthal of $3,126.80, and to which reference has already been made, remained in full force and wholly unpaid, and that a lien thereon, to the extent of $5,400, existed in favor of the plaintiffs, and that they were entitled to enforce the collection of the same and the' award, and apply the same towards the payment pf their judgment rendered in their favor in the action commenced by them.

It appears further, that in the meantime, and in January, 1880, Blumenthal was discharged in bankruptcy from all debts existing On the 31st of August, 1878, on which day the petition for adjudication was filed by him.

It further appears that in March, 1882, an order was granted to the plaintiff Blumenthal, to show cause, .founded upon his proceedings in bankruptcy, why the judgment against him should not be canceled and discharged, which application after the hearing was denied; from which decision this appeal is taken.

The right of Messrs. Hall & Blandy rested wholly in the judgment against Blumenthal, and to the extent of the judgment and award^ grew out of services rendered in the action in which the judgment was obtained. It was an attorney’s lien, which the courts have always taken great pleasure in protecting against any fraudulent assault. The action brought by them in the Common, Pleas for the purpose of determining the lien and enforcing it, was one in which no personal claim was made against Blumenthal. The nineteenth paragraph of the complaint being as follows:

“.-That the defendant Blumenthal has'or claims an interest in said judgment of $3,126.80, and in said award of $750.” No personal claim is made against him. “And the prayer was that the plaintiffs should have judgment against the defendants.Robert J\, M.'A. and Mary Anderson, and that they should be decreed to have a lien on the judgment and on the award to the extent of $6,000 ; and that the Andersons be decreed to assign the plaintiffs the judgment and .the award already mentioned. The decree substantially grants the prayer of the plaintiffs’ complaint, the defendant Blumenthal making no defense in the action.

The learned justice presiding in the court below, in deciding the motion against the plaintiffs, referred to the case of Dewey v. Moyer (72 N. Y., 75), and which he seems to have regarded as controlling, because of the judgment rendered in the Court of Common Pleas in reference to the lien of Messrs. Hall & Blandy. He said that, without expressing any opinion as to the other questions, he did not see how he could grant the motion as long as that judgment remained in force. In the case mentioned it was held that where a bankrupt, subsequent to his discharge, confesses judgment upon an old debt, the debt was a good consideration for the judgment, and the latter was not affected by the discharge. The ,learned justice was mistaken, however, in regarding that case and this as parallel to each other. They are not. The object of the action in the Court of Common Pleas was not to obtain a new money judgment against Blumenthal, ‘ the judgment-debtor. As we have seen, no personal claim was made against him. Its object was to determine a contest as to the existence of a lien in favor of the plaintiffs upon the judgment against him, a matter in which Blumenthal could have no interest, unless he were compelled to make further payments by reason of his attempt by any combination to defraud the owners of the lien but of their claim or any portion of it.

No case has been cited and none found in which it has been held that the interest of a lienor in a judgment can be maintained notwithstanding the judgment' itself has been discharged by the operation of the bankrupt act. It is true that it has been declared that wbpre a person may avail himself of his discharge 'as a defense to an action and does not do so, any relief founded upon it would be denied. (See Monroe v. Upton, 50 N. Y., 593.) But, as already suggested, in this case no personal demand was made against the plaintiff Blumenthal. He was only a formal party to the action, and as no personal demand was made against him it was not necessary for him to interpose his discharge. That action, as has already been shown, related to a lien upon the judgment itself, the result of which could not in any way enlarge the responsibilities of the judgment-debtor.

The appellant having obtained his discharge in bankruptcy, and which it must be assumed was legally accomplished (Ocecm Nat. Bk. v. Olcott, 46 N. Y., 12), and having, upon proper notice to all the parties interested, made application under section 1268 of the Code of Civil Procedure for his discharge, which section provides that at any time after two years have elapsed since the bankrupt was discharged from his debts pursuant to the acts of Congress relating to bankruptcy, he may apply, and upon proof of his discharge to the court in which a judgment was rendered against him, for an order directing the judgment to be canceled and discharged of record, sought the proper tribunal, namely, this court in which the judgment from which he asks to be relieved was rendered. The learned respondents seem to think that the judgment of the Common Pleas is res . adjudicata, that the plaintiff has not been discharged from the payment of that judgment, because it was rendered subsequent to the discharge in bankruptcy. But this is a mistake. The judgment in the Court of Common Pleas only declared the existence of their lien and. that as to them the judgment herein had not been paid, but was in full force.

This judgment was a proper one considering the parties before the court. Mr. Blumenthal, as already suggested, was a formal party, but one, against whom no claim having been made cannot be regarded as having been interested in the result, and his rights cannot therefore in any way be looked upon as having been passed upon. The judgment is in no respect res adjudicata, except so far as it declares the existence of the lien of Messrs. Hall & Blandy upon the judgment. In other words, if the plaintiff Blumenthal had not been discharged in bankruptcy the decree of the Court of " Common Pleas would, make it necessary for him to pay the judgment against him to Messrs. Hall & Blandy, and to reject any .claims that might be interposed by the Andersons; and this is the effect of it.

A careful consideration of this case leads to the conclusion that the order appealed from was erroneously made and must be reversed.

Daniels, J., concurred. •

Present — Brady, P. J., and Daniels, J.

Order reversed.


author: Daniels, J.:

text:
    ADELIA HENNESSEY, Appellant, v. THE MANHATTAN FIRE INSURANCE COMPANY OF NEW YORK, Respondent.

      Policy ofimu/rance — construction of a clause requiring property to remain prescribed limits — provision against a transfer or change in the title — when it does not apply to a chattel mortgage.

    The defendant issued a policy insuring a tug boat belonging to the plaintiff against loss by fire, “ in port and while engaged in towing or other service in the waters of Hudson river, Long Island sound, Atlantic ocean, New York bay and harbor, and waters tributary to either, not to go further east -than Montauk Point nor further south than Barnegat.” There was no provision in the policy declaring that it should be void or cease to operate as an insurance while the tug was within the limits prescribed by it, because it had at other times passed beyond them in the course of its navigation.

      Held, that the fact that the tug had gone further east than Montauk Point did not relieve the defendant from liability for a loss occurring after the tug had returned to and while she was within the limits prescribed by the policy.
    The policy provided that “ if the property be sold or transferred, or any change take place in title or possession, whether by legal process and judicial decree, or voluntary transfer or conveyance,” it should be void. field, that this provision only referred to a complete change or transfer of the title from one person to another, and that the policy was not avoided by the giving of a chattel mortgage upon the property.
    ■ Appeal from a judgment, entered on the dismissal of the plaintiff’s complaint at the circuit.

      FranJc D. Sturges, for the appellant.

      WilUam Allen Butler, for the respondent.
   Daniels, J.:

The action was brought upon a policy of insurance issued by the defendant on the 30tli of September, 1872, whereby it insured Andrew Hennessey against loss by fire to the amount of $5,000 on the tug boat William A. Hennessey, etc. This policy was renewed by the defendant’s certificates, issued for that purpose, in September, 1873, and September, 1874, and during the period included in the last renewal, the insurance, with the consent of the defendant, was assigned to the plaintiff, she having become the owner of the property insured. When the last renewal expired, on the 28th of September, 1875, no further certificate of that nature was issued by the defendant until the fourth of November following. On that day it received payment of the premium and issued a certificate declaring the policy in force for one year from the 28th of September, 1875. By the terms of the insurance, it was agreed that the company should not be liable by virtue of the policy, or any renewal thereof, until the premium therefor should be actually paid. There was, therefore, no insurance by means of this policy upon the property from the 28th of September, 1875, to the 4th of November following. ^ But, as the property itself was not destroyed by fire until the 11th of November, 1875, this circumstance is entitled to no controlling influence in the case.

The policy was only against the risk by fire, and it was declared in it that the defendant insured the tug “ in port, and while engaged in towing or other service in the waters of the Hudson river, Long Island sound, Atlantic ocean, New York bay and harbor, and waters tributary to either, not to go further east than Montauk Point nor further south than Barnegat.” On the twenty-seventh or twenty-eighth of October, the tug started from New York to go to Portland, and she appears to have passed Montauk Point, going east, on the-thirtieth of the month.. She returned from Portland and arrived at the city of New York on the seventh of November, but at what particular time she left Portland or passed Montauk Point on her return to the city of New York did not distinctly nor clearly appear in the ease. Where she was, whether east or west of the Point, on the 4th of November, 1875, when the policy itself was renewed and continued as an insurance, cannot with any certainty be deduced from the evidence. It cannot surely be said that the tug was east of the Point on the 4th of November, 1875, when the last certificate of renewal was issued, and for that reason it could not be certainly inferred that she was not literally within the terms and protection of the policy by being 'west of the Point on that day. The court at the trial, however, concluded that she must have been east of the Point, on account of the time probably required to proceed from there to the city of New York, and that the plaintiff, therefore, ;was deprived of all right to recover under the terms of the policy. But, as the evidence was presented, whether the tug was east or west of the Point was probably a proper subject for the investigation and decision of the jury, and should have been submitted to them by the judge presiding at the trial.

But it is not necessary to place the determination of this case upon this narrow and somewhat critical inquiry, for the terms of the policy do not require to be so strictly construed as to exclude the plaintiff’s right to indemnity for the loss, .even though the tug was in fact east of the Point at the time when the last certificate was taken, for there is nothing in it declaring that it should be void or cease to operate as an insurance while the tug was within the limits prescribed by it, because it might at other times transcend* these limits in the course of its navigation, as they were mentioned in the policy. Contracts of this nature require to be reasonably construed in favor of the assured, and when language is employed which may be understood in more senses than one, it is to be construed as declaratory of the sense in which the-insurer had reason to believe it was understood by the assured. (Dilleber v. Home Ins. Co., 69 N. Y., 257, 263.)

It has, therefore, been said that courts will not be astute to find ways to work a forfeiture of a contract of insurance; rather, they will strive to uphold it and will construe conditions and provisions in a policy strongly against an underwriter and will incline to uphold the agreement. (McMaster v. Ins. Co. of North America, 55 N. Y., 222, 232.)

As the waters in which this tug was at liberty to be navigated, were designated and described by the the terms of the policy, they would naturally create the understanding that while she was within such waters she would be protected by the insurance, and when she was further east, or further south, than the points mentioned, that the policy would, for the time being, cease to operate. The language made use of was in substance and effect, that while she should be engaged in towing, or other service, in those waters, that she should be protected against the risk of fire by the policy. And no intimation was anywhere given that the insurance so created should absolutely cease because she passed beyond either of the points mentioned, as the restrictions, if she returned again in safety within the prescribed limits. Under the circumstances appearing, the ordinary effect and understanding of the language would be that the insurance created by the policy would merely be' suspended, while the prescribed limits were transcended, and that it would still be complete and effectual as an insurance during the year, while the tug was afterwards in port, or engaged in navigating the waters specified in the policy. That is the reasonable import of the clause, and if it had been intended that a departure beyond such waters should produce an absolute forfeiture of the policy, fair dealing required that the assured should have been so informed by some terms, having that effect, inserted in it. But nothing of that character was stated in the policy. And the company consequently should not be relieved from liability for the loss, as long as it happened within the waters included in the policy, and when a proper certificate for its renewal had been issued and still .continued in force. A point of a similar nature was considered in Williams v. Insurance Company (30 Ohio, 317), where it was held that the insured was entitled ‘to recover under a policy conferring permission to navigate the Ohio and Mississippi rivers below Cairo, as the loss occurred upon those waters, although the boat, during the period of the insurance, had passed beyond, in its navigation, the waters so described. A similar decision was made in Greenleaf v. Insurance Company (37 Mo., 25).

The principle of these ’ cases is directly applicable to the point now under consideration, and as • it is entirely consistent with the terms employed in this policy, they must be regarded as not only apposite, but as actually controlling over this case.

It appeared during the trial that a mortgage had been given upon the tug by the plaintiff, although it was not produced, neither was any particular statement made of its terms. And it has been urged in support of the dimissal of tbe complaint, that this fact preeluded the plaintiff from maintaining any claim for indemnity under the policy.

The clause relied upon for that purpose provided that “ if the property be sold or transferred, or any change take place in title or possession, whether by legal process and judicial decree, or voluntary transfer or conveyance,” the policy should be void. This clause has been so framed, howéver, as to create a forfeiture only in the event of the title being changed from one person to another, for there was in fact no change of the possession. The language made use of requires this construction, for it is confined to a sale or transfer of the property, or change in the title by legal process, judicial decree or voluntary transfer or conveyance.

Each of these are apt legal phrases and indicate nothing less than a complete change or transfer in the title to the property. And that they were intended to be so understood is further evident from the. clause declaring that “ when property has been sold and delivered, or otherwise disposed of, so that all interest or liability on the part of the assured herein named has ceased, the insurance of such property shall immediately terminate,” for it is only in the event of such a sale or disposition that this result was declared or contemplated. For that, but for nothing less than that, was the termination of the insurance declared, and a chattel mortgage given upon the tug did not make such a disposition of it, and could not reasonably be included within either of the preceding phrases combined in the formation of the provision declaring the changes in the title which should forfeit the insurance, 'for it was not a sale or transfer-of the property, neither was it a change in the title by legal process, judicial decree, voluntary transfer or conveyance. The mortgagor, notwithstanding the mortgage, still continued for all ordinary purposes the owner of the property, subject to the right of the mortgagee to resort to it only for the purpose of obtaining satisfaction of the mortgage debt. This was the view taken of the effect of such an instrument in Van Deusen v. Charter Oak Insurance Company (1 Robt., 55). The point was considered also in Conover v. Mutual Insurance Company (1 Comst., 290), where it was held that a mortgage upon the property was not an alienation by sale or otherwise, and did not therefore defeat the insurance.

The authorities relied upon in support of this point fall very far short of sustaining it, for in Edmands v. Mutual Safety Insurance Company (1 Allen, 311) all alienations and alterations in the ownership were included in the restraint, and in Abbott v. Hampden Insurance Company (30 Me., 414) the title to the property had been in form conveyed, subject only to the condition that the grantee should pay a fixed sum annually to one of the grantors during life. The deed therefore conveyed a complete title, defeasible only by the failure to perform the condition.

Riley v. Delafield (7 Johns., 522) proceeded upon the absence of an insurable interest, and Columbian Insurance Company v. Lawrence (2 Pet., 25) in no manner presented the point now under examination. Indeed, no authority has been found which would justify a ruling that the simple mortgage of the tug, possession stül continuing as it did in the grantor, would produce a forfeiture of this insurance under the terms made use of for that purpose in the policy.

Knowledge ©f the existence of this mortgage does not appear to have been a material circumstance for the defendant to have known at the time when this last certificate was issued, for, notwithstanding the existence of the mortgage, the assured did still remain the entire, unconditional and sole owner of the property, and it in no manner' increased the risk of the company. As the evidence presented the case, the complaint should not have been dismissed, but the plaintiff should have been permitted to recover for the loss appearing to have been sustained. The judgment should be reversed and a new trial ordered, with costs to abide the event.

Brady, J., concurred.

Present — Brady, P. J., and Daniels, J.

Judgment reversed, new trial ordered, costs to abide event.


text:
    JEMIMA PAYNE, as Executrix, etc., of WILLIAM PAYNE, Deceased, Respondent, v. GEORGE MOORE SMITH, as Assignee, etc., Appellant, Impleaded, etc.

      Deed — delivery of, in escrow — right of a partner to increase the firm liabilities after the execution of a general assignment— liability of a general assignee.

    One Bunn executed a mortgage upon certain real estate owned by him, to secure the payment of his individual bond. Thereafter, and on March 34, 1879, he executed a deed of the land to himself and one Lyons, his partner, with whom he was, at the time of the purchase of the property, engaged in carrying on business. By this deed, the payment of the bond and mortgage was assumed by the grantees. The defed was left with the attorney of the grantees, upon the agreement that he was to hold it in escrow, and that it was not to be considered as delivered until he had been notified by . one or both of the grantees, and that, upon his recording it, in pursuance of such a notice, it was to be deemed delivered. On June 9,1880, the firm made a general assignment for the benefit of their creditors. Upon the same day, and some three or four hours after the execution of the assignment, the attorney, in pursuance of a verbal notice received from Lyons, recorded the deed. In an action to foreclose the mortgage, it was sought to recover a judgment against the assignee for any deficiency that might arise upon the sale.

      Meld, that one of the partners could not, after the making of a general assignment, prejudice the rights of the firm creditors by accepting the deed and thereby increasing the liabilities of the firm.-
    That even if such acceptance of the deed were valid, it would only create a personal liability upon the grantees and would not impose any liability upon the assignee or authorize the entry of a judgment for deficiency against him.
    Appeal from so much of a judgment, recovered on a trial at the Special Term, as adjudges the appellant liable, as assignee, to pay any deficiency that may remain unpaid upon the judgment after the application of the proceeds of the sale of the mortgaged property.

      Albert Mathews, for the appellant.

      G.M. Speir, Jr., and J. O. (A Connor, Jr., for the respondent.
   Daniels, J.:

The action was prosecuted for the foreclosure of a mortgage made to secure the bond of Charles H. Bunn, one of the defendants. This bond was executed solely by the mortgagor. After its delivery to the testator a deed was made by the mortgagor to himself and Frank Lyons, who were, at the time of the purchase of the property, copartners in business, and so continued until the time of the execution of a general assignment for the benefit of their creditors to George M. Smith, the appellant. By this deed the payment of the bond and mortgage was in terms assumed by the grantees, but their liability was resisted on the ground that the deed itself never had been delivered, or in any other manner made operative as to the grantees. This deed was drawn by the witness, George W. McAdam, acting as the attorney for the parties to it; and after it had been subscribed and acknowledged it was left in his hands without being actually delivered to either of the grantees. His final relation of the arrangement was that the parties agreed “ that a deed should be. execiited; the time was not fixed definitely; that it should be left in my possession in escrow, not to be regarded as delivered to the firm, nor to be delivered to the firm, until I got notice from both of them to record it. On receiving that notification, and on the record of the instrument, it was to be deemed delivered.” He further testified that it remained in his possession from the time of its execution on the 24th of March, 1879, until the day of its record; that it was retained by him and deposited in his safe. In May, 1879, the grantees entered into a written agreement concerning the deed, and after reciting that it had been sealed, signed and acknowledged, but not delivered, agreed that it should be delivered to McAdam in escrow, but not to operate as a conveyance, nor be delivered by McAdam, until he was notified by one of the members of the firm in writing, and he was thereupon to record it and deliver it to either member of the firm on demand; and from the' time of such record the deed was to be in all respects regarded as fully executed, delivered and operative. But if no such election was made by either of such parties within two years and nine months, McAdam was to destroy the deed; in which event it was to be void and of no effect whatever. The deed remained in this condition until the 9th of June, 1880. On that day the partners made a general assignment for the benefit of their creditors; and about three or four hours after that had been delivered McAdam was verbally directed by Lyons to record the deed, and he did so.

The evidence given upon the trial did not establish the fact that McAdam was the agent of the grantees, authorized to receive a delivery of the deed for them. He was simply their attorney, and it was left in his hands as a mere depositary, only to take effect when they, or either of them, should afterwards direct him to-cause it to be recorded. In this respect the case very essentially differed from those of Worrall v. Munn (1 Seld., 229), and Cooks v. Barker (49 N. Y., 107). For in each of those the deed was delivered tó a person sustaining the relation of agent to the grantee named in it, while in the present case the individual with whom the deed remained was not otherwise authorized to act for the parties or either of them, than to draw the deed, retain it in his possession and place it upon the record when that might be directed according to the terms of either of the agreements. But this very clearly did not include the authority to accept or receive an actual delivery the deed for either of them. He could, therefore, lawfully receive and hold it as a stranger to the transaction, without the fact of its detention by him being attended with any other or different effect than that stipulated for by the-parties. (James v. Vanderheyden, 1 Paige, 385.) The partners, therefore, did not become liable under the clause providing for the-assuming of the payment of the mortgage by them, down to and including the time of the execution of their general assignment. Up to the time of the occurrence of that event, the mortgage' debt was solely and exclusively the individual obligation of the mortgagor. And after that, neither' of the partners had any authority to increase the liability of the firm by directing a record to be made of the desed, for the execution and delivery of the general assignment necessarily worked a dissolution of the firm.

The fact that the property may have been purchased by the mortgagor, intending that it should be for the firm, would not render his copartner liable for the payment of the mortgage debt, for the obligation to pay it was created by a bond executed under seal by the mortgagor, and the liability for the payment of the debt could not be extended so as to include his copartner by proof of the fact that the purchase of the land was intended to be for the benefit of the firm. (Briggs v. Partridge, 64 N. Y., 357; Williams v. Gillies, 75 id., 197.)

But even if McAdam had been the agent of the grantees in the deed, so that a deposit of it with him would have operated as a delivery of it to them, or it should be held that the record made of it under the authority of the notice given to him after the assignment was a legal delivery of it, in neither event would the effect of the transaction be greater than to impose upon the grantees themselves in the deed a liability for the payment of the mortgage-debt. That was the clear intent as well as the express design of the terms made use of in the instrument itself, and it accordingly could not be extended so as to include or create any liability on the general assignee for the payment of this debt.

He entered into no covenant or stipulation of that character, and, consequently, there was no foundation for any liability on his part to make this payment other or different from that of a mere indebtedness included within the terms of the assignment. The mortgage debt was not secured by any obligation or evidence of debt existing against the assignee, and for that reason he could not properly be made a party to the action for the foreclosure of the mortgage, further than that might be necessary to subject any possible interest he might have as assignee in the mortgaged property, to the judgment recovered in the action. (3 R. S. [6th ed.], 198, § 98.) His only possible connection with the demand would be to provide for its payment, so far as that might lawfully be done, by including it as a mere debt provided for by the terms-of the assignment, and that in no manner rendered him liable for the payment of the deficiency in the judgment. The extent of his duty, in any view, under the assignment, was to provide for this debt with the others in the ordinary course of the administration of his trust, and it was no part of the action for the foreclosure of this mortgage, to-subordinate that administration to its determination. If the deed did become operative upon the grantees, then they and they alone were the persons who were obligated by its terms-for .the payment of the mortgage .debt, and upon that theory they were adjudged liable for the deficiency which might remain after the-application of the proceeds of the mortgaged property to its payment, and they have not complained of that determination. But whether it was delivered or not, the general assignee could not be included in this liability, for he was not a party to the deed, and in no manner whatever, either by it, or by the terms of the general assignment, assumed the payment of the mortgage debt. And the fact that the assignee took possession of the land as a part of the assigned estate, cannot legally extend his liability under the assignment. That might very well have been done, even though the land, as it probably did, continued to be the property of the mortgagor, but if it did not, merely taking possession of it under the authority of the assignment would not subject him to any liability beyond that provided for by the assignment for the payment of the debt.

So far as the judgment charged th,e general assignee with the payment, as such assignee, of the deficiency, it was not authorized.

This portion of the direction given should,. therefore, be reversed, with costs of the appeal to the assignee, and the. residue of the judgment should be affirmed.

The other action between the same parties seems to depend upon a similar state of facts, and a like direction must be given for the correction of the judgment in that case.

Brady, J., concurred; Barker, J., concurred in the result.

Judgment modified, as directed in opinion. •


text:
    THE IRVING NATIONAL BANK OF NEW YORK, Appellant, v. J. L. ADAMS, Respondent.

      Evidence — admission of additional record evidence on appeal — not allowed to procure a reversal of the decision below.

    Where a matter of record has been imperfectly made to appear upon th« hearing, and the determination has proceeded upon such evidence, and an appeal has been taken, it is allowable for the purpose of sustaining the proceedings to produce complete record evidence, on the hearing of the appeal, to supply the defect, but it cannot be done for the purpose of producing a reversal of the ■decision appealed from.
    Motion for leave to retain in the printed case, upon an appeal from the order made by this General Term, certain papers showing the proceedings in bankruptcy before the United States District Court for the District of Louisiana, and extending from page forty-one to fifty-one of the ease.

      G. A. Seixas, for the motion.

      Charles M. Marsh, opposed.
   Daniels, J.:

The papers desired to be retained as a part of the case were stated to have been presented to the court upon the arguments which took place before the General Term, but they were not used upon the motion resulting in the order from which the appeal was taken. The affidavits of Mr. Luidsey show that he first received them after the hearing of the motion before Mr. Justice Babrett. And the case, as it was made up, upon which the argument was made before the General Term, setting forth the papers upon the hearing of the motion, did not contain those now desired to be added. For that reason, although they may have been presented with the case upon the argument at the General Term, they could not be considered, for the court was bound to hear and decide the appeal taken from the order upon the papers before the Special Term at the time when the motion was there heard and decided. Where a matter of record has been imperfectly made to appear upon the hearing, and the determination has proceeded upon such evidence, then in affirmance of the proceeding, complete record evidence may be received on the hearing of the appeal, to supply the defect, but that is not permitted to be done for the purpose of producing a reversal of the decision from which the appeal has been taken. (Stilwell v. Carpenter, 62 N. Y., 639.)

Under this rule the General Term could not properly consider the records of the Louisiana Bankrupt Court as a portion of the papers before it on the hearing and decision of the appeal taken from the order, and it follows that they should not constitute any portion of the papers upon the appeal taken from the ordér made by the General Term.

A reargument of the appeal before the General Term would be of no advantage to the party appealing. For if the case should be again heard it must necessarily be upon the papers which were before the Special Term on the hearing and decision of the motion. The motion which is now being made must accordingly be denied.

Davis, P. J., and Bradt, J., concurred.

Motion denied.


text:
    FRANK C. THOMAS, Plaintiff, v. THE MAYOR, ALDERMEN AND COMMONALTY OF THE CITY OF NEW YORK, Defendant.

      Contributory negligence — when the question should be submitted to the jury.

    This action was brought by the plaintiff to recover damages sustained from injuries occasioned by his slipping and falling upon ice which had accumulated upon one of the sidewalks in the city of New York. It appeared that on the Saturday preceding the accident he had been in the same locality, and upon discovering the ice had crossed to the other side of the street, deeming it dangerous to pass over it. The accident happened on the next Tuesday, but the plaintiff testified that the sidewalk was then crowded and that he did not notice the ice or see it until after he fell.

      Held, that the question of the plaintiff’s contributory negligence should have been submitted to the jury, and that the court erred in nonsuiting the plaintiff.
    Motion by the plaintiff for a new trial upon exceptions, ordered to be heard in the first instance at the General Term, after a non-suit directed at the circuit.

      Henry Appel, Jr., and Jacob A. Gross, for the plaintiff.

      David J. Dean and Thomas P. Wickes, for the defendant.
   Daniels, J.:

The plaintiff, while passing along the northerly sidewalk of Grand street, in the city of New York, fell upon ice which had there accumulated, rendering its use critical as well as dangerous. By his fall he broke his thigh, and to recover the damages sustained by his injury, brought this action against the city. The court at the trial, deeming him to have been in fault for attempting to cross the ice, dismissed his complaint, to which an exception was taken by his counsel. It appeared by the evidence that he had reached the same locality on Saturday, the 13th of January, 1877, and then discovering the ice, crossed to the south side of the street to avoid it, for the reason that he deemed it to be dangerous. The accident happened on the Tuesday following, but on that occasion he testified that the sidewalk was crowded and he did not notice the ice or see it, until after he fell. This testimony was not contradicted, and it was because it was deemed tb render his conduct negligent that his complaint was dismissed. It is undoubtedly the law that the plaintiff in an action of this nature must appear to be free from fault before he can have any right to maintain it, and if he attempts to cross a body of ice of this nature when he himself understands it to be dangerous to do so, and an accident is caused by the attempt, no action for redress can be sustained by him. (Wilson v. City of Charlestown, 8 Allen, 137; Durkin v. Troy, 61 Barb., 437 ; City of Quincy v. Barker, 81 Ill., 300; Schaffler v. Sandusky, 33 Ohio, 246.) And the conduct of the plaintiff precisely accorded with this principle when his mind was upon the subject of this body of ice. But that was not the case at the time when this injury appears to have been produced, for then the walk was crowded, and that would be a circumstance tending to divert the attention of the party from the existence of the ice, although it had been observed by him on the preceding Saturday. He was not necessarily obliged so to impress his recollection as to keep this fact before it at the peril of being chargeable with negligence for not remembering it upon the occasion in controversy. The law does not require that extreme degree of mental vigilance of persons making use of a public sidewalk. Their thoughts may be employed upon subjects of interest or importance to themselves, or wholly diverted by observations directed to other persons making the same use of the walk, without being necessarily held to be negligent. That was considered to be a reasonable application of the law in Driscoll v. Mayor, etc. (11 Hun, 101); and a case very similar to the one now before the court was determined to be proper for the consideration of a jury in Darling v. Mayor, etc. (18 id., 340). A similar view was adopted in Evans v. City of Utica (69 N. Y., 166), where a party endeavoring to pass over accumulated ice in the night-time, of which he had been informed, was held not to be necessarily negligent by reason of that circumstance. As the evidence appeared in this case, the jury might infer from the facts as they were related, if that was believed to be truthful, that the plaintiff was not careless or negligent in attempting to cross this ice, although he had previously seen it and then concluded it to be dangerous. Whether he was so or not would depend upon the credit which might be reasonably given to his evidence. If the jury should believe that his attention was diverted from the danger of this locality by the crowd upon the sidewalk, or by any other circumstance, or mental condition, not involving a failure to observe ordinary care, he would not be precluded from maintaining his action simply because this place appeared to him to be dangerous on the Saturday before, and he on that day crossed the street for the purpose of avoiding it. Whether he was careless or not was a fact depending upon the correct conclusion to be drawn from the evidence, and it was the province of the jury to determine whether the evidence was true and what conclusion would be justified from the facts. (Stackus v. N. Y. Central, etc., 79 N. Y., 464.) As the case was made to appear the complaint should not have been dismissed. The nonsuit should be set aside and a new trial ordered, with costs to abide the event.

Brady, P. J., and Barker, J., concurred.

Judgment reversed, new trial ordered, costs to abide event.


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    ANDREW J. BATES and Others, Respondents, v. SAMUEL PLONSKY and Others, Appellants.

      Attachment of chattels — right of the attaching creditor to bring an action to home prior liens declared fraudulent android.

    Where property capable of manual delivery has been levied upon by a sheriff under a warrant of attachment, the attaching creditor may maintain an action' to have a prior assignment executed by the debtor and an execution issued upon judgments confessed by him declared fraudulent and void, and to have the priority of the lien acquired by him under the attachment established.
    Appeal from an order made at Special Term continuing an injunction.

      Otto Tlorwitz, for the appellants.

      Bl/ummstiel <& Hirseh, for the respondents.
   Daniels, J.:

The action has been brought to secure the priority of the plaintiff’s right under attachments issued against the defendant, Samuel Plonsky, over an assignment executed by him for the benefit of his creditors, and over executions issued upon judgments confessed by him in favor of others of the defendants. The attachments issued on behalf and for the plaintiffs were levied upon the stock in trade of boots, shoes and fixtures of the debtor, and the executions upon the confessed judgments were also levied upon the same property. These judgments, as well as the general assignment, are alleged to have been made and entered with the intent to hinder, delay or .defraud the creditors of the debtor, and for that reason the plaintiffs claim priority over the general assignee and the creditors in the judgments confessed, although their attachments were after-wards, in point of time, levied upon the property. Whether such an action can be maintained by them under these circumstances is the point upon which the appeal has been placed in the argument. It is entirely clear that no such suit could be maintained for the vindication and establishment of the rights of the attaching creditors, if the property seized under the attachments had not been of a tangible nature. (Smith v. Longmire, 24 Hun, 257.) This disability results from the circumstance that such property, after having been assigned or transferred, even though that may have been done fraudulently, cannot be made subject to an attachment as long as such transfer remains in force. But, where the property is not of that character, but is capable of being taken into the manual possession of the sheriff, there this disability does not exist.

Notwithstanding the fraudulent transfer, such property may still, be seized by virtue of the attachment; and the propriety of the seizure may be sustained when that is brought in question by showing that the transfer itself was fraudulent and inoperative as against creditors. This right to assail such a disposition of the. debtor’s property results from the fact that the creditor is entitled to have it seized by virtue of his attachment, and after that to maintain the propriety of such a seizure of it. The Code has provided that the levy may be made upon property capable of manual delivery by taking the same into the sheriff’s actual custody. (Code Civ. Pro., § 649, sub. 2.) This provision is so general in its character as to include no exception, and consequently property, the title to which may have been fraudulently transferred, may be made the subject of the seizure the same as though the title to it remained unquestionably in the debtor.

To render such a seizure. entirely effectual, the creditor may show in vindication of it, that while the title to the property had been in form transferred, that it was done to defraud creditors, .and in that manner annul and aVoid it. (Thurber v. Blanck, 50 N. Y., 80; Frost v. Mott, 34 id., 253.) This case has been brought within this principle, for the complaint shows an actual attachment of the property, and that it was all property which could be taken' into the manual possession of the officer. Upon the basis of the lien created in that manner, no good reason seems to stand in the way of an action of this nature, brought to establish the right of the attaching creditors to appropriate it through the instrumentality of the attachments, to the payment of any judgments they may recover in the action; and that really is all that is intended to be accomplished by the present suit. The injunction extends no further than to protect the creditors’ rights during the pendency of the action, in case they shall ultimately appear to be entitled to this relief.

For it simply, in the meantime, restrains the payment of any of the proceeds of the property of the debtor to the defendants, or either of them, upon the executions issued to collect the judgments confessed by the debtor, and it included only the property seized by virtue of the plaintiff’s attachments. Even this restraint is more formal than real, for the reason that the .direction given to the sheriff requiring him to. deposit with the chamberlain the amount of such proceeds, subject to the final determination of this action, would practically accomplish the same result.

And such an order as that would very much, as a matter of course, have been made, upon a mere motion, where a contest of this nature existed, as to the right to the proceeds, between the several parties proceeding against the property. The appeals taken from the order cannot be sustained, but it should be affirmed, with ten dollars costs, besides the disbursements.

JBrady, P. J., and Barker, J., concurred.

Order affirmed, with ten dollars costs and disbursements.


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    GEORGE W. MASON, Respondent, v. THE MAYOR, ALDERMEN AND COMMONALTY OF THE CITY OF NEW YORK, Appellant.

      Attendant, upon Marine Court — appointment of — 1870, chap. 882 and chap. 582 — right to receive a larger salary than is paid and received — when the right to sue for it is barred by the statute of limitations.

    The plaintiff was appointed an attendant upon the Marine Court by the comptroller of the city of New York on the 31st day of May, 1870. The comptroller acted under section 9 of chapter 382 of 1870, but that act had been impliedly repealed by chapter 582 of 1870, which conferred the power of appointment upon the court itself. The plaintiff claimed that although his appointment was void, yet as he had acted as an attendant with the assent of the court that was equivalent to an appointment by the court, and that he was therefore entitled to the salary fixed by the resolution of the board of supervisors, which took effect on June 1, 1870.

      Held, that as the latter act only authorized thecourt to select such attendants as the board of supervisors might authorize to be appointed, and as no resolution authorizing the court to make such appointments had been shown to have been passed after the passage of chapter 582 of 1870, the plaintiff’s claim could not be sustained.
    The plaintiff claimed to recover the difference between the monthly sum of $100 paid to him from June 1, 1870, to December 1, 1871, and the monthly sum of $125 for the said months, he claiming that the latter sum was the salary which he was entitled to receive as an attendant upon the Marine Court. He testified that when the monthly payments were made to him he protested against receiving only $100 a month and claimed $125.

      Held, that the plaintiff’s right of action, for the additional amount which he claimed, accrued at the times that each of the said payments was made, and that as this action was not brought until June 21,1880, it was barred by the statute of limitations.
    Appeal from a judgment in favor of the plaintiff, entered on a verdict directed by the court.

      I). J. Deem, for tbe appellant.

      John G. Tomlinson and Thomas O. E. Eodesme, for the respondent.
   Daniels, J.:

Ry tbe verdict which was rendered, the plaintiff was awarded tbe difference between tbe monthly sum of $100 paid to him from the 1st of June, 1870, until the 1st of December, 1871, and the monthly sum of $125 for said months. He was an attendant during that time upon the Marine Court, and the verdict in his favor was directed under the effect of a resolution of the Board of Supervisors, which took effect upon the 1st of June, 1870, declaring the salary of an attendant upon the Marine Court to be the sum of $1,500 per annum.

He was appointed such attendant on the 31st of May, 1870, by the comptroller of the city of New York. This appointment was made under the authority of section 9, chapter 382 of the Laws of 1870. But before this appointment, by chapter 582 of the Laws of the same year, this provision of chapter 382 was repealed by implication. Bor, by the later act, the power to appoint the attendants for the Marine Court was vested in the court itself. (Chap. 582, Laws of 1870, § 3.) And the effect of this change was necessarily to render the appointment by the comptroller to be without authority. But as the plaintiff was allowed to serve in the capacity of an attendant upon the court from the 1st of May, 1870, to the 1st of December, 1871, with the apparent assent of the court itself, it has. been urged that this was equivalent to an appointment by the court, under the authority of Brennan v. The Mayor (62 N. Y., 365). And such would be the effect of this circumstance were it not for the fact, that the act conferring the power of appointment upon the court, in terms restricted its exercise to the selection of such attendants as the Board of Supervisors might, from time to time, by resolution, authorize to be so appointed. No resolution of this nature was shown to have been adopted by the Board of Supervisors after the passage of chapter 582 of the Laws of 1870, oy during the time for which the verdict was allowed to be recovered. And in that respect this case differs veiy essentially from that case, and also from that of Wines v. The Mayor (9 Hun, 659; affirmed, 70 N. Y., 613).. Bor it was made to appear in the latter that his appointment was authorized by a proper resolution of the Board of Supervisors.

The scheme embodied in the act was that the supervisors should provide by their resolution for the number of attendants who might afterwards be appointed, and then it was for the court itself to make the appointments. The adoption of the resolution was necessarily. a circumstance required to precede tbe exercise of tbe appointing power by the court. And, as no resolution appears to have been adopted under whose authority the court could lawfully appoint the plaintiff as an attendant, the present case cannot be controlled by that of Brennan v. The Mayor (supra).

As the facts were made to appear, the plaintiff performed his services solely and wholly under'the authority of the appointment made by the comptroller, and that conferred upon him no legal right to the position, or to the difference in the compensation allowed by the verdict, for it was only as to the persons who might lawfully be selected as attendants under the authority of chapter 582 of the Laws of 1870 that the supervisors, had the power of fixing the rates of compensation. (Id., § 3.)

The resolution of the supervisors, advancing the compensation of attendants upon the Marine Court from $1,200 to $1,500, was consequently inapplicable to the plaintiff’s case, for he did not enter upon his employment under the authority provided for by the statute, and the consequence is that the supervisors had no power to increase his compensation. This point was considered in Moser v. The Mayor, etc. (21 Hun, 163), when that case was first before the General Term, and it was then held that this state of facts would not warrant a recovery.

It appeared by the evidence of the plaintiff upon the trial that he was paid his monthly salary by the , comptroller, at the rate of $1,200 a year, for the time during which he was engaged in the performance of his services as an attendant upon the Marine Court; that, when such payments were made to him, he protested against receiving only $100 per month, and stated-that he understood his wages were $1,500 a year, or $125 per month. At the times of these respective payments, he stated that he also claimed $125 per month, and that such was the fact as to each payment down to the time when the last of them was made to him. This action was not . commenced until the 21st of June, 1880, and because of that circumstance it was insisted that the right to maintain it had been barred by the statute of limitations. "What transpired at the time when the respective monthly payments were made was substantially a demand from the comptroller of the additional twenty-five dollars for each month during the time the plaintiff attended the Marine Court. These several claims, if any'demand whatever was necessary for the purpose, matured the plaintiff’s right of action. If he was entitled to the money, the .right to recover it accrued when these demands were made. No authority has been cited requiring anything more formal than that which is stated to have taken place, and in this respect the case differs from those of Fisher v. The Mayor (67 N. Y., 73), and Taylor v. The Mayor (Id., 88). But, even upon the facts in those cases, such a claim of the amount insisted upon would probably have been sufficient to comply with what the statute had required. If the plaintiff was entitled to receive the additional monthly sum of twenty-five dollars, nothing further could have been required from him than the performance of the services appearing to have been rendered ^,nd the claims of payment appearing to have been made. That*certainly, with the claims repeatedly made thatfhese additional amounts should be paid to him, dispensed with everything that might by any possibility be further required to entitle him to the money. By the terms of the statute (3 R. S. [6th ed.], 477, § 91) applicable to such a claim, an action for its recovery was required to be brought within six years after the right to the money had accrued. This action was not so brought, and for that, as well as the reasons previously assigned, the plaintiff is not entitled to maintain it.

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

Davis, P. J., concurred.

Present — Davis, P. J., Daniels and Dwight, JJ.

Judgment reversed, new trial ordered, costs to abide event.


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    JOSEPH P. BICKERTON, as Administrator, etc., of ELIZABETH JAQUES, Deceased, Plaintiff, v. DAVID JAQUES and THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, Defendants.

      Policy of insurance taken out by a brother far the benefit of his sister — right of tJm brother to surrender it and talce out another afte/r her death.

    Henry R. Jaques procured a policy of insurance upon his life for $2,000, payable upon his death to his sister Elizabeth. She died during his lifetime. Thereafter he surrendered the policy and took out another one for the same amount, payable upon his death to his nephew David. He always retained the policies in his own possession, paid the premiums falling due upon the first one, and allowed' the dividends declared upon the second to be applied to the payment of the premiums accruing upon it. His sister had lived with him, taking care of his household and family for many years prior to her death, and was entirely dependent upon him for her support and maintenance.

      Held, that the rights of the insured over the policy depended upon what his intentions were when he obtained the insurance, as such intentions could be gathered from the attending circumstances. .
    That in this case he had power to surrender the policy upon the death of his sister without the consent of her representatives, and that the nephew and not the representatives of the sister was entitled to receive the amount payable under ‘ the second policy.
    Controversy submitted upon an agreed state of facts without an action, under section 1279 of the Code of Civil Procedure.

      F. G. Salmon, for the plaintiff.

      William H. Hagama/n and Charles D. Jacot, for the defendants.
   Daniels, J.:

The controversy between the parties relates to the right to insurance money payable under a policy of insurance issued by the Mutual Life Insurance Company of New York to Henry H. Jaques, payable,to his nephew, David Jaques, the piincipal. defendant in this proceeding. Be'fore this policy was issued Henry H. Jaques obtained a policy from the same company for the sum of $2,000, payable by its terms upon the death of Henry H. Jaques to Elizabeth Jaques, his sister. She died during his lifetime, and after her death he surrendered this policy, and in place of it received the other payable on the occurrence of the 'same event, but to his nephew. His right to make such a surrender is denied by the plaintiff as the administrator of the sister, to whom the first policy was made payable on the death of Henry H. Jaques. And if the administrator is right in that position, it follows that he is entitled to recover in this proceeding. But if he is not, then judgment must be ordered in favor of the defendant David Jaques, to whom the second policy has become payable by the decease of the person on whose life it was issued. No decisive authority has been found in favor of the position taken by the plaintiff, the cases affecting the right of the person obtaining the policy to surrender it and .receive another payable in a different manner in lieu of it, having generally arisen under the terms of the statute made for the benefit of the widow and children. These cases are not applicable to # the present controversy, because the language of the statute is not broad enough to include it. Its disposition is therefore dependent upon the legal principles necessarily applicable to such a transaction. And according to them'it should be governed by tjie intention of the person obtaining the insurance, so far as that is capable of being gathered from the attending circumstances. That he did not intend to place the insurance irrevocably beyond his own control, is manifested with reasonable clearness by the fact that he always retained the possession of the policy himself, and he, and not his sister, paid all the premiums which were paid upon it. And after such payments were made, the insurance was kept up by the dividends which had been declared and credited to it under the rules and regulations of the company. In addition to these circumstances, the person to whom the first policy was made payable, was the sister of Henry H. Jaques, by whom it had been obtained. She had lived with him, taking care of his household and family for many years prior to her own decease, and she was entirely dependent upon him for her support and maintenance. It is reasonably plain from these facts that his intention in procuring the policy was to provide for her after the time of his own' decease, and when, by reason of that event, he would be incapable of affording her any further assistance. This was probably the sole and only intention by which he was actuated in procuring the insurance, and from that it must necessarily follow that her right to it was designed to be contingent upon her surviving him. That is the only fair and rational construction to be placed upon the transaction. It embodied a provision for her support, when by his decease he would be unable to provide it, and the occurrence of her death before his own defeated the object and purpose by which he had been actuated in taking out the insurance.

Her administrator had no special claim upon his bounty, neither did any of her next of kin, and no reason therefore can be discovered for the existence of any disposition on his part to provide for them, in case she herself failed to become entitled to the money. His primary and substantial purpose was to secure the means of sustaining his sister after his own decease, and as that purpose was defeated, he was left at liberty to deal with the insurance as he himself deemed to be proper. Subject to the benefit and interest to be secured by it to his sister after his own decease it was his property. The premiums had been paid upon it by him, and, as it could not be used as he intended it should when he obtained it, and during the time he made these payments upon it, he had the authority to give it another and different direction.

This point was considered in Clark v. Durand (12 Wis., 223), where it was held, that as much as this was certainly within the authority over it of the person obtaining the policy. And that case was approvingly followed in Kerman v. Howard (23 Wis., 108). In Games v. Connant Insurance Company (50 Mo., 44), the court went still further in its decision than is now required to sustain the defendant’s title to the insurance moneys. For there the policy had been taken out by the husband for the benefit of his wife and her legal representatives. Its terms in this respect being equally as broad as those included in the policy issued for the benefit of this deceased sister. The wife of the party died before he did, and upon his marrying again he procured the insurance to be changed so as to confine its benefits to a subsequent wife, and that was held to be within the authority he had over the policy'. Without such a change it might be inferred from the omission to make it that the person holding the policy intended to,continue it for the benefit of the personal representatives of the individual in whose name it should be made payable. And that was practically what was decided in Hutson v. Merrifield (51 Ind., 24). These

16 authorities are decidedly against the plaintiff’s claim, and with the intention that probably actuated the person who procured the insurance, and the control' over it resulting from that intention after the decease of his sister, warrant the conclusion that he was empowered to surrender the policy as he did and take out the other in favor of his nephew. And the fact that the latter had no particular claim upon him will not interfere with or affect the transaction as it was finally consummated (Olmsted v. Keyes, 85 N. Y., 593, 598), for the assured had the right to take out the policy as he did and make it payable, as long as he chose to do so, to the contesting defendant in this proceeding. Other cases have been referred to as incidentally affecting or indicating the propriety of a different disposition of this controversy, but they contain no principle whose application would require a different disposition of the case to be made. The plaintiff is not entitled to judgment for any part of the moneys in controversy, but the right of David Jaques to them has become complete by the decease of his uncle, through whose acts and payments the fund in.dispute has been created. Judgment should therefore be ordered for him in the case.

Beady, P. J., concurred.

Present — Beady, P. J., and Daniels, J.

Judgment ordered for defendant, David Jacques.