text:
    The People, Pl’ff, v. William Watson, Def’t.

      (Court of General Sessions, New York County,

      Filed November 12, 1895.)

    Bail—Felony—Insanity.
    Admission to bail in the case of a felony, will, where the defendant pleads present insanity in addition to not guilty, be refused until the determination of the former issue.

      William Watson, alias Bill Yosburgh, was indicted for aiding, assisting, and abetting in the promotio'n of and carrying on of a scheme or device of offering and purporting to offer for sale and distribution counterfeit paper money of the United States (otherwise “ green goods ”), the indictment being as for a second offense. Defendant pleaded not guilty, with a special plea of present insanity, and he now moves to be admitted to bail. Denied.

      Bartow S. Weeks, asst. dist. atty., for the people; WauhopeLynn and Maurice Meyer, for def’t.
   Gíoff, R. (orally).—Owing to the limited time at my disposal since yesterday, I have not had time to reduce to writing my views upon the question submitted in this proceeding. Therefore I will have to express myself orally from the bench.

The right to bail in criminal cases, as in the one presented here, was never recognized in common law. The right to bail in civil cases was always recognized in common law, because there it was a breach of contract, and the bail to be given would be there for breach of contract; but in criminal cases the original principle upon which bail was first founded was embodied in the ancient maxim, “A body for a body,” which in time was rendered equivalent to the bailor or surety offering or pledging himself to pay a certain sum of money upon th.e failure of the person bailed to appear for trial. It was a recognizance to do a certain thing,—to produce the body of the person, or to pay a certain sum of money. The bailor hence became the jailer of the person bailed, into whose custody the prisoner was surrendered, and the bailor was held to be responsible to produce that prisoner at any time during the term of the court at which he was cited to appear. The later statutes and the English law made some changes from the common-law rule, but changes particularly affecting the power of justices of the-peace to admit to bail, and not, in substance, affecting the power of the judges of courts of superior criminal jurisdiction, to wit, the-court of king’s bench and the judges of the assizes. Their discretionary powers, under the common law, remained untouched, even by the statute of Westminster. So that, under the common law and statute law of England, the right to bail in cases of misdemeanor was held to belong to the accused, but the right to bail in cases of felony was never recognized or conc'eded. Indeed, it went so far that in any case judges of courts of superior criminal-jurisdiction exercised discretionary power as to whether they would admit certain persons to bail under any circumstances,— persons whose common fame was bad; persons who were recognized as common thieves; persons they had reason to apprehend, from their reputation, habits, associates, or financial standing, would escape the jurisdiction of the court. In other words, these-judges of the higher courts of criminal jurisdiction exercised that discretion, no matter what the grade of crime was.

The statute law of the state of Few York, practically speaking-embodies the common law and statute law of England, and it is this: that in cases of misdemeanor the right to bail is absolute, but. in cases of felony the fight to bail is one of discretion, to be ex-eraised by the judge of the court having jurisdiction of the case on trial. As this case is presented, the defendant is charged with a felony, and his right to bail on that charge is not absolute, but rests in the discretion of the court, and in further discretion of the court to examine into the question as to probability of this defendant’s appearing for trial, when called; and in testing that probability the court has a right to take into consideration the reputation which he has borne, acknowledged through the lips of his counsel at the bar; the fact that he has been a professional thief for many years, and the common character which surrounds his name. ,

So that we treat the question here as one of discretion, and not one of right.

In addition to that legal phase of the case, another question has been presented by the defendant. He has been brought to the bar on a charge of felony. He has interposed a plea of present insanity. Through the lips of his counsel he has, effect, said to the court: “I am now insane. I am capable of understanding my case, or of consulting with my counsel. Therefore, it is improper that I should be at large. I therefore call upon the court to determine that question, and if determined in the affirmative, as I contend, I must be immured in some place of safety, for the protection of myself as well as for the protection and safety of society.”

That is, in effect, what this defendant says. It is different from a plea of not guilty. It is an affirmation; an affirmative issue interposed by this defendant; an issue which he must maintain and prove; and it being an affirmation made solemnly in court, the court cannot presume that it is not made in good faith, or that it is untrue. The court must rather presume that, when reputable counsel makes that plea and affirmation, it is made in good faith, and that it is true; and therefore the court ordered that issue to be tried upon a day to suit the conveniences! counsel for the defendant and the district attorney,—three days from this date.

Pending the trial of that issue this defendant comes in and asks to be admitted to bail; this defendant who has said, by his plea of present insanity, that he is incapable of understanding what he is doing, or of advising his counsel.

It is incomprehensible to me that a defendant who has made that plea should, in the next breath, say:“ I am now sane. „ I can comprehend what I am doing, and I want to be admitted do bail, in order that I may be examined ns to my sanity, outside the prison walls.” I cannot conceive the logic or reason of that position. A person who claims to be insane, by that plea, places himself under the guardianship of the court. The court, by its inherent power, has the right to control the custody of the person who claims to be insane, if that claim be well founded, and determined by judicial decree. When the conscience of the court is properly informed upon that question, then the court has the power, not only for the protection of the prisoner himself, but for the safety and well-being of society, to immure that person in some place, for safe-keeping and proper treatment. The proceeding pending is a proceeding simply to inform the conscience of the court, through the intervention of a trial jury, and while that proceeding is pending this defendant asks to be admitted to bail.

I have been unable to find any authority in point upon the question, directly determining the question in issue. Counsel for the defendant has cited two cases, which have occurred in the courts of this city, — the Rhinelander Case, and the Field Case. From an examination of those cases, I am satisfied that counsel is somewhat mistaken in his application of them to the case at bar. In the Rhinelander Case a commission of inquiry was instituted, as to the sanity of the defendant. That commission reported a disagreement. Two of the commissioners were in favor of reporting that prisoner was sane, and one commissioner, that he was sane. The court rejected the report of two commissioners and affirmed the report of the single commissioner, that the prisoner was sane; and after the prisoner was thereupon determined sane, and able to go to trial, he was then admitted to bail, because he was determined a sane person.

In the Case of Field, he bad' never pleaded to the indictment. He was not admitted to bail, but on his plea of insanity he was sent to an insane asylum at Buffalo; and it was after the certification from that insane asylum that he was well and cured that he was admitted to bail. So that neither the Rhinelander Case nor the Field Case has any application to this case whatever.

The only other case in America, reported, that would at all have any application is a case reported in the court of appeals in Texas, where it was held that a person accused of crime, and who pleaded not guilty, and who put in the additional plea that he was insane at the time of the commission of the act, notwithstanding the probability that he might be acquitted on tbe ground of insanity, that that plea would not opérate as a cause against his being admitted to bail pending that trial. ■ That case has no application, because this case may be distinguished from it in this way: This defendant pleads present insanity, while the defendant in the Texas case pleaded insanity at the time of the commission of the crime. Therefore the ruling of the court must be without the light of judicial precedent, and must be founded upon reason and the principle involved.

It being discretionary with the court to admit to bail in any case of felony, unless that discretion be abused it must stand as the ruling of the court having jurisdiction to try the case. I refuse to admit this prisoner to bail at this time, for the reason that he -had affirmed to this court that he is insane ; and it would be a most dangerous precedent to establish, to admit a man to bail who says that he is insane, through the lips of counsel, and who, if it should be finally adjudged that he is insane, would have to be immured in a place of safety. It would be, to a great extent, a wrong, not only to this defendant, but a probable and impending danger to the safety of the community ; and, until this issue be tried and determined. I shall not admit this defendant to bail.

A further view may be taken of it, though not the controlling one, that prompts me to render this decision ; and that is that the bond presented is not, in my opinion, of a sufficient character to warrant me in accepting it. I consider that a man whose property is mortgaged so heavily as this man’s property is may place the value of his property at figures away beyond what, in reason, any one would expect it to bring at a forced sale; and his valuation is not, in my opinion, the true valuation of the property. The valuation of property in the city of New York, and in any other place in this state, is what it will bring upon a forced sale, and no more. Any other valuation is a special or fictitious valuation ; and I consider that property located in the place where this man’s property is located, and where such heavy mortgages are upon it, taking the character of the property into consideration, size, dimensions, and location, is not worth anything like what the proposed surety characterizes it as being worth, and that is not of that value.

I would therefore, even on the second ground, refuse to accept this bond, as wholly insufficient; and for that reason the proposed bail is not accepted. On Friday morning, as originally directed by the court, the issue of this defendant’s sanity will be tried.


source: Caselaw Access Project

author: Signor, J.

license: Public Domain

text:
    Rathbon C. Tousley, App’lt, v. Jesse Mowers, Resp’t.

      (County Court, Orleans County,

      Filed September, 1895.)

    1. Justice’s court—Judgment—Clerical error.
    Where a justice of the peace enters judgment for defendant for damages, $5.05, costs, thirty five cents, but in the return on appeal from the judgment, it is stated that the amount entered as damages is in reality costs, and the items making up the amount are given, the entry of damages is a mere irregularity or clerical defect, which can be disregarded.
    2. Same—Entry.
    The entry of judgment by a justice of the peace within twenty-four hours after the verdict is an entry “forthwith,” as required by section 3015 of the Code.
    Appeal from a judgment rendered in justice’s court in favor of defendant.

      John 0. Kniclcerbocker, for app’lt; Thomas A. Kirby, for resp’t.
   Signor, J.

Appeal from'judgment entered on a verdict of no "cause of action. Verdict was rendered about 7 p.m., April 22d ; and, as appears from a supplemental return made by the justice, he entered the verdict on his minutes as a verdict of no cause of action, but did not tax the costs until the succeeding day, when he entered the judgment within twenty-four hours from the time it was rendered. The judgment, as entered, is for damages, $5.05 ; costs, thirty-five cents. But in the return it is stated that the amount entered as damages is in reality costs, and the items making up the amount are given. Code, section 3015, provides that, when a verdict is rendered in justice’s court, the justice must forthwith render judgment, and enter it in his docket book. By the return it appears that the judgment was not rendered until the following day. The act of rendering judgment'is judicial; that of entering it in the docket, ministerial. Fish v. Emerson, 44 N. Y. 376. The judicial costs consists, in such a case, in at least fixing the amount of costs,—in determining what costs the justice will allow, and the amount,—and must be indicated by some final action. , Putnam v. Van Allen, 46 Hun, 492. It follows that no judgment was entered until the entry was made the following day in the docket. The entry in the docket (damages, $5.05; costs thirty-five cents), in view of the explanation in the return, seems to be an irregularity or clerical defect, and one of the errors that should be disregarded. Fish v. Emerson, supra.

The remaining question is whether the judgment was rendered within the time allowed by the statute. There seems to be no statutory definition of the term “forthwith.” It has been construed, however, by the court. In Champlin v. Champlin, 2 Edw. Ch. 326,. it was held to mean, when applied to a court rule, within twenty-four hours. In Van Wyck v. Hardy, 39 How. Prac. 399, a summons and complaint were not deposited in the post office till the fourth day after the entry of an order which directed them to be deposited forthwith. The court says :

“When used in a rule of court, it has been held to mean twenty-four hours after the time when the act requested or directed is to be done. No construction has been given to the term when used in a statute. Webster, among other definitions, defines it to mean ‘withofit delay.’ That is a reasonable meaning, and, so understood, it must be left to the decision of the court which is to pass upon the question to determine, under the cirumstances of each case, whether the order, in that respect, has been complied with."

The court holds in that case that a mailing within the four days was a compliance with the order.

Goodrich v. Sullivan, 1 Thomp. & G. 191, is an authority in support of the judgment appealed from. There the judgment was rendered about midnight, and entered by the justice the next morning, and Parker, J., writing the opinion, says :

“Whether the verdict was rendered before or after midnight, the judgment followed the verdict before ‘a single day had gone by,r forthwith, as required by the statute, that is, within twenty-four hours.”

In the case under consideration, the justice certifies in his return that he was tired and worn out with the trial; and, under th^ circumstances of the case and the case and the authorities cited, I must hold that the judgment was entered “forthwith,” within the meaning of that term as used by the Code. The judgment appealed from must therefore be affirmed, with costs.

Judgment affirmed, with costs.


author: Andrews, Oh. J.

text:
    George R. Losey et al., Resp’ts, v. Arthur G. Stanley et al., Infants, etc., et al., App’lts.

      (Court of Appeals,

      Filed November 26, 1895.)

    1. Will—Construction.
    Where a will creates a trust in the real property of which the testatrix dies seized, during the life of her son, for his benefit, with remainder to his children or their descendants living at his death, and in default of such issue to certain other specified devisees, and the son is unmarried at the death of the testatrix, but subsequently marries and has two children,.the first born child takes at its birth a vested estate in remainder m the land devised, subject to open and let in after-born children as they severally come into being, and such vested remainder becomes a fee simple absolute in the children living at the death of their father.

      2. Trusts—Remainders—Estate op trustees.
    The provisions of section 60 of 1 Revised Statutes 729 is limited to the trust estate, and has no application to future legal estates in land covered by the trust, to take effect in possession on the termination of the trust.

      d. Same—Beneficiary appointed as trustee.
    The appointment of the beneficiary as trustee by the court, on the death or resignation of the testamentary trustee, does not extinguish the trust.
    4. Infants’ real estate—Mortgage.
    ' A court of equity, in this state, has no inherent power to direct the sale or mortgage of the real property of infants. Its power in this respect is purely statutory.
    5. Same—Mortgage by trustee.
    The vested interests in remainder of infants, which are not included in a trust estate for life, cannot be included in a mortgage by the trustee under direction of the court by virtue of the proviso added by chap. 257 of 1886 as an amendment to section 65 of the Statute of Uses and Trusts.
    6. Same—Mortgage—Foreclosure.
    An order for the mortgaging of infants’ estates in remainder in property 'can be attacked collaterally in an action to foreclose the mortgage for want of jurisdiction, where the order was made in a proceeding by the trustee of a life estate, who had no power to mortgage such remainders, though a guardian ad litem was appointed for the infants and consented to the order.
    Appeal from a judgment of the general term of the supreme court in the judicial department, entered upon an order which affirmed a judgment in favor of plaintiffs entered upon a decision of the court on trial at special term.
    This action was brought to foreclose a mortgage on certain lands in the city of Rochester, consisting of a tract of about sixteen acres, executed by James W. Stanley as trustee on the 23d day of November, 1888, to George R. Losey and others as security for a note of the mortgagor for the sum of $1,000, signed by him as trustee, and as a continuing security to the extent $3,500 for ' further advances or responsibilities which might be made or incurred by the mortgages for Stanley either personally or as trustee. The mortgage contains a recital that it was made pursuant to an order granted by the supreme court October 22nd, 1888, and that it was given for the benefit “of said estate above described.” Elizabeth J. Stanley, the mother of James W. Stanley, and the grandmother of the infant defendants, died March 20,1871, seized of the premises embraced in the mortgage, and by her will devised and bequeated all her estate, real and personal, to one Martin Briggs upon the following trust, viz.: “ To convert all my personal estate into money and invest the same in safe security, and to take charge of, rent and to receive the income and profits of all my real estate, and, if deemed by him advisable, to sell and convey such real estate and convert the same into money, to be invested in good safe security, and to pay over quarterly in each year to my beloved son, James W. Stanley, during his natural life, the net income of all my said estate, after deducting the expenses and charges of said executor and trustees.” The testatrix by the third item in her will declared that “ after the death of my said son, James W. Stanley, in case he shall leave a child or children born of his body in lawful wedlock, or a descendant of such child or children', then I give, bequeath and devise all my said estate to such child or children of the said James W. ¿Stanley, share and share alike, forever.” There was a gift over a certain specific person in case of the death of James W. Stanley “ without lawful issue him surviving.” The trustee named in. the will accepted the trust and subsequently died December 24, 1883.
    James W. Stanley married after the death of his mother, and there were two children of the marriage living at the death of Briggs, aged respectively about nine and six years, and both are still living and are the infant defendants. After the death of Briggs, and on the 18th of November, 1884, upon the petition of James W. 'Stanley, the beneficiary in the trust, an order was made by the supreme court appointing him trustee in place of Briggs, deceased. The order of appointment recites that the guardian ad litem of the infants consented thereto. On the 22nd day of October, 1888, the order was made which lies at the foundation of the present controversy. It was based on a verified petition of James W. Stanley, dated October 13, 1888. It alleges his appointment as trustee under the will of Elizabeth J. Stanley by the order of November 10, 1884; that the petitioner desires to raise by sale or mortgage of the real estate described, held by him as trustee, the sum of at least $3.500; that in his opinion such sale or mortgage would" be for the best interests of the estate, and that the amount mentioned is “ necessary for the purpose of preserving and improving, said estate.” The reasons why, in his opinion, such sale or mortgage was desirable were stated as follows: “The property is in an unproductive condition, and, at present, is not producing the amount of the taxes assessed upon it. It is indebted for taxes already past due to the amount of upwards of five hundred dollars. There are three dwelling houses on the premises, all of which need repairs, and which, when properly repaired, could be rented, to much greater advantage to the estate. If kept in its present unproductive condition the property will rapidly decrease in value, and would result in great loss to the estate,” and further, “ that there is no property with which said estate can be preserved and improved as aforesaid, unless such petitioner is allowed to malcesuch sale or mortgage.” The petition alleges that the beneficiaries of the trust are the two infant defendants, and the devisees over, and states their respective names and residences, and the ages of the infants. It prays that the petitioner may be authorized, as such trustee, “ pursuant to the statute in such case made and provided,” to sell or mortgage the real estate upon such terms and conditions as to the court shall seem just and proper.
    The record discloses that following the presentation of the petition an order was made October 15, 1888, that notice of the proceedings be given to the infants, returnable October 17,1888, and an affidavit was produced from the files of the court, made by James W. Stanley, the petitioner, of service by him on the day of the date of the order, of a copy of the petition and notice on the infant children and their mother. The record further shows that on the return day of the order (October 17, 1888) the court appointed a guardian ad litem of the two infants to protect their interests in the proceedings.
    On the 22nd day of October, 1888, the court granted the order to mortgage. It recites the filing of the petition of October 13; that due notice of the application had been given to the beneficiaries of the trust; the appointment of a special guardian of the infants ; his report dated October 19, 1888, in favor of the application, and his consent “in all ways to said applicationthe consent of the ulterior devisees to the granting of the order, and that no one appeared in opposition. The order then proceeds: “ It is hereby ordered that leave be and is hereby granted to said James W. Stanley, as such trustee, to sell either at public or private sale in his discretion or mortgage for the amount of $3,500, with lawful interest thereon, the real estate described in said petition as follows,” and then follows a description of the premises. The petition stated in general terms that the petitioner was trustee under the will of Elizabeth J. Stanley, but its contents were not disclosed, and it does not appear that the will was produced on the hearing or that the court was in any way apprised of its contents, or of the interests of the infants thereunder. It does not appear that any evidence was presented to the court of the facts stated in the petition. It would seem that the court in making the order acted upon the petition alone, and the consent of the guardian ad litem without further inquiry. The proposed mortgage was not reported to the court and no order appears to have been made approving it, nor was any bond given for the protection of the interests of the infants. It appears from the findings of the court that the indebtedness of $3,500, for the recovery of which the mortgage was foreclosed, was for money borrowed on notes made by Stanley as trustee subsequent to the execution of the mortgage. The court found that no part of the money alleged in the complaint to have been borrowed by Stanley was used by him for the benefit of the trust estate.
    James W. Stanley died in the year 1890, before the commencement of this action.

      Joseph W. Taylor, for app’lt; William F. Cogswell, for resp’ts.
   Andrews, Oh. J.

— This appeal presents a question of broader interest than attaches merely to the pecuniary rights of the parties to the litigation. It involves a consideration of the power of the supreme court in dealing with the real property of minors, and the extent of its jurisdiction in directing a sale or mortgage of their property. By the will of Elizabeth J. Stanley a trust was created in the real property of which she died seized, during the life of her son, James W. Stanley, for his benefit, with remainder to his children or their descendants living at his death, and in default of such issue to certain other specified devisees. James W. Stanley was unmarried at the death of his mother and the remaindev to his children was contingent until the birth of issue. He subsequently married and there were two children of the marriage (the infant defendants) who were living when the mortgage in question was executed. ■ Under the will, the first born child of James W. Stanley took at its birth a vested estate in remainder in the land devised, subject to open and let in afterborn children as they severally came into being, and such vested remainder became a fee simple absolute in the children living at the death of their father. 1 Rev. St. 723, § 13; Moore v. Little, 41 N. Y. 66; Williamson v. Berry, 8 How. (U. S.) 495. The estate in the children of James W. Stanley was- a legal estate. The estate of the trustee was for the life of James W. Stanley and terminable at his death. The will created two distinct legal estates in the devised property;, viz., an estate in the trustee for the life of the beneficiary, with the right of possession and to receive the rents and profits during the continuance of the trust, and an estate in remainder which became vested on the birth of children as before stated. The trustee had no power over the estate in remainder except such as may have been given him by the will. He could not sell or incumber it or in any way by his own act alter or affect -the interests of the remainder unless authorized by the will. The provision of the Statute of Uses and Trusts (1 Rev. St. 729, § 60), declaring that every valid express trust shall vest the whole-estate in the trustees, is by settled construction limited to the trust estate, and has no application to future legal estates in lands covered by the trust, to take effect in possession of the termination of the trust. The trustee in the present case had an estate for the life of James W. Stanley, and it was this estate and this only which vested in the trustee. Stevenson v. Leslie, 70 N. Y. 512. The will of Elizabeth J. Stanley conferred on her executor and trustee a power to sell the real estate devised, if deemed by him advisable so to do for the purpose of investment of the proceeds. It gave him no power to sell the lands for the payment of debts, or for any other than the specified purpose. It conferred no power to mortgage, and it is not claimed nor could it be reasonably contended that the mortgage in question can be sustained as an exercise of the power of sale contained in the will. Albany Fire Ins. Co. v. Bay, 40 N. Y. 9 ; Bloomer v. Waldron, 3 Hill, 361; Rogers v. Rogers, 111 N. Y. 228; 19 St. Rep. 94. When, therefore, the application for leave to mortgage the premises in question was made to the court by James W. Stanley, October 15, 1888, the infant defendants were vested with a legal estate in the remainder in the premises, and the trustee had no power under the w'ill to sell or otherwise affect or incumber their estate for the purposes specified in the application. We shall pass without comment the question urged upon us, that the appointment of James W. Stanley, the sole beneficiary of the trust, as the trustee, was unauthorized and void. We entertain some doubt whether a trust is void in its inception where the instrument creating the trust appoints the sole beneficiary the trustee, but we have no doubt that the appointment of the beneficiary as trustee by the court, on the death or resignation of the testamentary trustee, does not extinguish the trust. The incornpatability of the two relations united in -the same person is evident. Whether a trust so constituted in the first instance may not be sustained, leaving it to the •court to substitute a competent trustee, will need consideration when the question directly arises. Rogers v. Rogers, supra; Woodward v. James, 115 N. Y. 346; 26 St. Rep. 147.

We come to the main question, and that is whether the court, either by virtue of an inherent or statutory power, could, upon the application made in this case, authorize James W. Stanley to bind the estate of the infant remaindermen by mortgage. That the supreme court, acting as a court of equity, possesses an inherent jurisdiction for some purposes over the persons and estates, real and personal, of minors, cannot, we think, be successfully controverted. The origin of the jurisdiction of the court of chancery in England over the persons and estates of infants is involved in some obscurity. The better opinion seems to be that it grew out of the transfer by the Crown to the chancellor of the supervision theretofore exercised by the king as parens patrios over persons who, by reason of non-age, were incapable of acting for themselves, (See 2 Sto. Eq. Jur. § 1327, et seg.) The chancellor intervened for the protection of minors and their property, and the precedents are numerous where the chancellor authorized the application of their property for their education and maintenance, and, at times when the interests of the infants seemed imperatively to require it, permitted even the capita] of a fund belonging to the infants to be anticipated or broken in upon for such or similar purposes. Harvey v. Harvey, 2 P. Wms. 21; Saunders v. Vautier, 4 Beav. 114; Rocke v. Rocke, 9 id. 66; In re Bostwick, 4 Jo. Ch. 99. But this power of management and disposition exercised by the chancellor (if not always so) came to be regarded as extending only to the personal estate of infants and to the income of their real property. It did not extend to the binding of the inheritance. The question came before Lord Hardwioke in Taylor v. Phillips, 1 Ves. 229, and he said: “There'is no instance in this court binding the ir.heritence of an infant by any discretionary act of the court. As to personal things, as in the composition of debts, it has been done ; but never as to the inheritance ; for that would be taking on the court a legislative authority, doing that which is properly the subject of a private bill.” And in Russel v. Russel, 1 Molloy, 525 the lord chancellor of Ireland said: “I have no authority to bind an infant’s legal estate. This was decided long ago by Lord Hardwioke in Taylor v. Phillips. The chancellor has never since attempted to deal with the legal inheritance of infants without the aid of Parliament.” The subject of the inherent jurisdiction of equity over the estates of infants was considered by Nelson, J., in his dissenting opinion in Williamson v. Berry, supra, which, upon this point, has been frequently referred to with approval. Speaking of the powers of management and control over the property of infants vested in courts of chancery, he says: “ They relate to their personal and the income of their real estate, the court having no power to direct the sale of the latter for their maintenance and education; that' power rests with the legislature.” The doctrine has been frequently declared in this state that a court of equity has no inherent power to direct the sale or mortgage of the real property of infants, and that its power in this respect is purely statutory. Rodgers v. Dill, 6 Hill, 415 ; Baker v. Lorillard, 4 N. Y. 257; Forman v. Marsh, 11 id. 544; Horton v. McCoy, 47 id. 26; Jenkins v. Fahey, 73 id. 355, 361. The obiter remarks of ‘ Ch. Kent on this subject in Matter of Salisbury (3 Jo. Ch. 348), and in Hedges v. Riker, 5 Jo. Ch. 163, are contrary to the general current of authority. The text books are explicit in stating the modern doctrine on.the subject, Pom. Eq. Jur. § 1309; Bispham’s Eq. § 549. The question .of the inherent power of a court of equity to order a sale of an infant’s real property, upon the theory of a supposed benefit to him, is quite distinct from its acknowledged power in the enforcement and protection- of trusts and from the power of courts in the exercise of their ordinary jurisdiction to establish or enforce rights of property between parties to a litigation, whether infants or adults.

Having reached the conclusion that the order made in the case has no support in the inherent jurisdiction of the court over the estate of the infant defendants, it remains to consider whether it can be sustained under any statutory authority. The legislature possesses whatever power as parens patrios was in England lodged in the sovereign over the estates of infants, consistent with constitutional limitations. From the origin of the state government the legislature has enacted statutes conferring upon courts in certain cases and under careful restrictions the power to order the sale or mortgage of the real property of infants for their benefit. The petition presented to the court in this case asked that the order be granted “ pursuant to the statute in such cases made and provided,” but no specific statute was referred to. On the argument at the bar the only statutory authority relied upon to sustain the order was the sixty-fifth section of the Statute of Uses and Trusts, as amended by chapter 257 of the Laws of 1885. The. original section declared that: “When the trust shall be expressed in the instrument creating the estate, every sale, conveyance or other act of the trustee in contravention of the trust shall be absolutely void." This was plainly a provision for the protection of the trust estate against destruction or impairment by the unauthorized act of the trustee. The estate to which the section refers is the trust estate, that is, the estate held under the trust. It did not in the nature of things comprehend legal estates in remainder in the same land taking effect on the termination of the trust. It needed no statute to protect remaindermen as against any sale or conveyance by the trustee. It perhaps added nothing to the protection of the cestui que trust beyond that given by the common law. But it was a statutory expression of a rule which would challenge the attention of the trustee and of persons dealing with him in respect to the trust. But the material point is, that the legislature, in enacting the section,- was dealing with transactions by the trustee in respect to the trust estate. The trust estate, in a case like the present, was the estate for the life of the beneficiary named. An attempted sale or conveyance by the trustee of the estates in remainder would, doubtless, be ineffectual, but this would be so for the reason that the trustee would have no estate in remainder to sell or convey, and not because such sale or conveyance would be in contravention of the trust. The estates in remainder would be outside of and not within the trust. The amendment of 1886 relaxed somewhat the stringency of the original section. It added a proviso giving power to the supreme court to authorize any trustee to “ mortgage or sell any such real estate whenever it shall appear to the satisfaction of said court or a judge thereof that it is for the best interest of the said estate so to do, and that it is necessary and for the benefit of the estate to raise by mortgage thereon or by a sale thereof funds for the purpose of preserving or improving such estate.” But the amendment in no wise vested in the court a compulsory power to order the sale or mortgage of estates outside of the trust. It makes no reference to infants or persons incapable of acting for themselves, and if the construction claimed could be sustained it would authorize the court to order the sale or mortgage of the estate in remainder of adults without their consent, for the purposes specified, which would be plainly unconstitutional. Powers v. Bergen, 6 N. Y. 358 ; Brevoort v. Grace, 53 id. 245. The scope and purpose of the section and the amendment is plain. It was to vest in the court the power to order a sale or mortgage, which, under the section as it originally stood,- it might not possess, when necessary to preserve and improve the trust estate, and this purpose is emphasized by the circumstance that notice of the application is required by the final clause of the amendment to be given only to the beneficiaries of the trust. It is claimed that the case of Morris, 63 Hun, 619, which was affirmed in this court without opinion, 133 N. Y. 693, is adverse to the construction here given to the section as amended. The principal question argued in that case seems to have been whether certain assessments for local improvements were to be borne by the trust estate alone or should be apportioned- between the trust estate and the estate in the remainder. The opinion in the general term did not refer to the question here considered. If that case .shouldseem in any aspect to conflict with the construction we now place upon the statute we think it ought not to be followed. It would be most dangerous to establish a construction of the statute of 1886, which would make it possible to deprive infants of their inheritance by hurried and informal proceedings, such as were taken in this case, and that too on the application of a party hostile in interest, and who by the general rule of law was bound to pay the ordinary taxes and improvements upon the property.

This decision does not leave the court without power upon the application by or in behalf of infants whose property is in danger of being lost by the failure of duty of a life tenant to pay taxes or make improvements, or for other reason, to intervene for’ their protection. The provisions of the Code (sec. 2348 et seg.) for the sale of mortgage of the real estate of infants are ample for such contingencies. They are in the main transcripts from the Revised Statutes. But proceedings under these sections are hedged about by safeguards, preventing inconsiderate action by courts, and by requiring security, protect infants against the dishonesty of those who undertake to represent them. The court has on repeated occasions declared proceedings instituted under these provisions to be void, when not taken in conformity to the statute, Ellwood v. Northrup, 106 N. Y. 172; 8 St. Rep. 687; In re Valentine, 72 N. Y. 184; Battell v. Torrey, 65 id. 294. There is no pretense that this is a proceeding under the general statute for the sale or mortgage of the real estate of infants. It conformed to none of its requirements. The consent of the guardian ad litem of the infant defendants to the granting of the order does not conclude ■ them. Ellwood v. Northrup, supra. The court had no jurisdiction to grant the order, and it is open in this proceeding to collateral attack for want of jurisdiction. Risley v. Phenix Bank, 83 N. Y. 318; Williamson v. Berry, supra. The plaintiffs may as a consequence of our decision lose their money. But they'were chargeable with notice of the statements in the petition and of the legal interests of the children in the land. Pitcher v. Carter, 4 Sand. Ch. 1, 20. The infants on the other hand have had no benefit from the money advanced to their father, and they should not lose their inheritance unless it has become bound in accordance with law.

The judgment below should be reversed and a new .trial granted.

All concur (Finch, J., in result), except Gray, J., not voting, and Haight, J., not sitting. Judgment reversed.


author: Andrews, OtVj.

text:
    Baptist M. Corner et al., Resp’ts, v. Alexander Mackey, Appl’t.

      (Court of Appeals,

      Filed November 26, 1895.)

    1. Appeal—Court op appeals.
    Where the evidence is notrin the record, the only questions which can be considered arise upon exceptions to the conclusions of law of the referee, following his findings of fact. In such case, the plaintiff is not entitled to any presumption in support of the judgment, that facts other than those stated in the referee’s report were shown, and the defendant must accept any inference fairly deducible from the facts found which tend to support the conclusions of law, and cannot question such inferences, though not indisputable, and though the facts found were capable of diverse interpretations.
    2. Novation—Original firm and successor.
    A person, to whom a firm renders annual accounts in which the balance is carried forward from year to year, and at the time of its dissolution, renders a final account, which is accepted without objection, and to whom its successor continues the rendition of annual accounts, carrying forward the balance shown by the final account of the old firm, cannot, by re-opening the accounts between himself and the old'firm, obtain credit on the account of the new firm for the errors and overcharges in the old account, unless by force of some contract or substitution, whereby the new firm has obligated itself to such person to assume and pay whatever liability the old firm was under to him.
    3. Novation—Application.
    The principle of novation of debts has no application to a case, where the new firm has not taken upon itself the liability of the old firm to th<j alleged creditor beyond, at most, the indebtedness entered on the books, the creditor has not discharged the original debtor and accepted the new firm as his debtor for such excess.
    Appeal from judgment of the general term of the supreme court in the first judicial department, entered upon an order which affirmed a judgment in favor of plaintiffs entered upon the report of a referee.
    This action was brought upon an alleged account stated. The answer, while admitting the co-partnership of plaintiffs as alleged, denied that any account had been stated between the parties, but admitted that an account had been rendered by the plaintiffs upon the day upon which it was alleged the account had been stated showing the balance claimed, and alleging that defendant had not then the means of ascertaining whether the same was correct or not; and he denied that he ever assented to the correctness thereof. The answer further sets up various defenses and counterclaims by which the defendant claimed to surcharge the said account stated for errors in respect to interest, and demanded an accounting, claiming a large balance to be due. To the counterclaim reply was duly interposed.
    The issues thus raised having been referred to a referee to bear and determine after the trial, the referee reported in favor of the plaintiffs for an amount much below that which was claimed in the complaint; and from the judgment thereupon entered, this appeal is taken by the defendant.
    The referee finds that on the 6th of November, 1868, an agreement was entered into between the firm of Dowley, Cornet's & Co. on the one part, and the defendant Alexander Mackey and one Mulleron the other part, providing for a business adventure, in which both parties should be interested, Dowley, Corners & Co. to furnish the refinery therein mentioned, and capital sufficient for working the same, and the def endant and Muller to furnish the patents and entire time and services; all outlay of money connected with the property and the working thereof to be borne by the business, except in the case of additions in the shape of entirely new improvements; the interest on a mortgage of $20,000 then on the premises to be borne by the business, and no rent or commissions upon purchases or sales to be charged unless actually paid out; and profits and losses to be divided or borne at the end of each year in the proportion of two-thirds to or by Dowley, Corners & Co., and one-third to or by the defendant hnd Muller. The agreement was to continue in force for three years from its date, at the end of which time Dowley, Corners & Co. were to have the privilege of extending it to the expiration of the patents, or for a shorter period by increasing the interest of defendant and Muller to four-tenth of the profits.
    At the time of the execution of this contract, the refinery was being carried on under a previous arrangement between the same parties. It was continued for the period of three years, ending the sixth day of November, eighteen hundred and seventy-one. It was further continued thereafter with no definite extension or new contract. But in fact, from and after the first day of January, eighteen hundred and seventy-two the share of the defendant in profits and losses was increased one-sixth to one-fifth.
    In 1875 the firm of Dowley, Corners & Co. was dissolved, and a new firm known as Corner Brothers & Co., consisting of the plaintiffs in this action, was thereupon organized, and succeeded the general assets, business and liabilities of Dowley, Corners & Co. The members- of the old firm who were not members of the new firm retired and were settled with on the footing of the books and accounts as then existed. Dp to the time of such succession in 1875, Dowley, Corners & Co., and from the time of their succession Corners Brothers & Co., had rendered two statements to the defendant on or about the first day of January in each year. The one was a summary of the refinery business for the previous year and exhibited the balance of profit and loss and the share therein of each of the parties. The other was a detailed personal account of the defendant with the firm for the same previous year and included his share of the profit and loss from the refinery account and exhibited the balance to his credit or debit on such first day of January.
    These personal accounts were continuous, carrying forward the balance from each year to the succeeding year. Both sets were regularly received and retained by the defendant without objection.
    After the said succession of plaintiffs the refinery business was continued by the former in conjunction with the defendant, and for a part of the time with Muller upon the same footing and without any new definite arrangement between them and the defendant or Muller until on or about the 15th day of October, eighteen hundred and eighty, when it was finally discontinued in accordance with notice to that effect given by Corner Brothers & Go., to the defendant. No objection to the discontinuance was then made by the defendant who, on the contrary, had expressed his opinion of the inadvisability of proceeding without substantial alterations and improvements of machinery.
    In making up the several refinery accounts interest was reckoned not only upon the mortgage, but also upon what were known as the working and improvement accounts, and was charged or credited to the business and became an element of profit or loss stated for the apportionment between the parties interested in the business at the end of each year. No part of the interest upon the working or improvement accounts was paid or received by eithbr Dowley, Corners & Co. or their successors, the plaintiffs, the same being computed in their favor or against them, as the case might be.
    The plaintiff of the mortgage of $20,000 mentioned was paid off in installments. No part of such principal was ever' charged to the business or in anywise paid by the defendant; nor does it appear that interest was ever fully realized by the plaintiffs upon this principal.
    There was. no effort on the part of the plaintiffs or their predecessors to mislead the defendant respecting the character or method of the accounts nor to withhold from him access to books or other means of information in regard thereto. He had- mislaid his duplicate of the original contract, but did not seek to otherwise inform or remind himself of his rights thereunder. At the same time he was not an expert accountant, and his main reliance was upon the accuracy of the plaintiffs and their predecessors.
    In the foregoing statement of the findings of fact of the referee, it has not been considered necessary to refer to figures, because the question involved upon this appeal does not relate to amounts but to the principles upon which the referee has based his conclusions of law.
    As conclusions of law the referee found (1) Under the contract interest was not chargeable to the business on the working account nor on the improvement account, although in this last particular there may be room for doubt inasmuch as the contract failed 'to make it the duty of either of the parties to supply improvements not chargeable to expense account. But interest was at all times chargeable to the business upon the twenty thousand dollars represented by the mortgage, and without regard to payments of principal thereof by Dowley, Corners & Co., or by the plaintiffs.
    (2) That the discontinuance of the business by the plaintiffs in the year eighteen hundred and eighty was without fault on their part such as to subject them to liability to the defendant for either penalty or damages. Moreover, the action of the defendant preliminary to and concurrent with the discontinuance left him no right of subsequent complaint.
    (3) That in view of the receipt by the defendant of the series of accounts rendered to him by Dowley, Corners & Co., and the same absence of objection by him thereto and of the dissolution of the firm and the succession to the same by the plaintiff’s firm of Cornors Brothers & Co., with material changes in membership and proportionate rights, and without notice that the accounts were in anywise unacceptable to the defendant, it would be inequitable to permit the defendant to now impeach these accounts for the purpose of charging the plaintiffs with a balance to defendant’s credit at the time of the succession larger or other than the balance then appearing in his favor by the accounts so therefore rendered to him.
    And further, that the sums charged by the plaintiffs upon the working and improvement account were erroneously charged, and that notwithstanding the great delay of the defendant in objecting thereto, nevertheless correction of the errors can now properly be made for the period since the 1st of January, 1875, that bieng the date when the plaintiffs succeeded to the firm Dowley, Corners & Co.

      Msek Goioan, for app’lt; W. M. Bosebault, for resp’ts.
   Andrews, OtVj.

This evidence is not in the record, and the only questions which can be considered arise upon exceptions to the conclusions of law of the referee, following his findings of fact. The plaintiffs on the one hand are not entitled to any presumption in support of the judgment, that facts were shown other than those stated in the referee’s report, and on the other hand the defendant must accept any inference fairly deducible from the facts found which tend to support the conclusions of law, and cannot question such inferences, although not indisputable, and although the facts found were capable of divefse interpretation. Rochester Lamp Co. v. Stiles, 135 N. Y. 209 ; 47 St. Rep. 842. The principal question relates to the claim on the part of the defendant that in making-up the account between himself and the firm of Corner Brothers- & Co. (the plaintiffs), he was entitled to be credited with the-amount of the interest on capital used in the business, erroneously charged in the accounts of the former firm of Dowley, Corners & Co., to the extent that said charges diminished the profits to which he was entitled in the business of that firm. The-referee found that the firm of Dowley, Corners & Co. was dissolved in 1875. The plaintiffs organized the new firm of Corner Brothers & Co., three of the partners in the firm retiring, and the three remaining partners uniting with two others of the plaintiffs, not members of the old firm, in'organizing the new one. Unless the-new firm, by an agreement between itself and'the defendant upon sufficient consideration, assumed whatever liability the firm of Dowley, Corners & Co. might be under to the defendant at the date of its dissolution, it is plain that the new firm could not be compelled, in making up its accounts with the defendant in respect to the business of the new firm, to credit him, utmost, anything more than $2,866.09, the sum appearing to his credit on the book's of the former firm. The account between the plaintiffs and the defendant was adjusted by the referee on the theory that the defendant was entitled to a credit for the amount, and the plaintiffs are not in, a position to question the correctness of the decision to this-item, even if a doubt might be raised in respect to it. After the-organization of the new firm in 1875 the refinery business was continued, as the refei’ee finds, by the new firm and the defendant and Muller, upon the same footing, though without, any new definite-arrangement, as theretofore between them and the old firm.

There were losses in place of profits in the business of the new firm, and, under the agreement of November, 1868, under which the parties acted, the defendant was bound to bear one-fifth of such losses. He now in effect seeks, by re-opening the accounts between himself and the old firm, to obtain credit on the account with the-new firm for the errors and overcharges in the old account. He cannot be permitted to do this unless by force of some contract, or substitution, whereby the new firm obligated itself to the defendant to assume and pay whatever liability the old firm was under to h'im. No such obligation or substitution is shown by the facts found. • The accounts rendered by the old firm on the first, day of January of each year up to January 1, 1875 (immediately, preceding the dissolution), although retained without objection, could be impeached by him for fraud or mistake. Lockwood v. Thorne, 18 N. Y. 285. When the new firm was organized he then, had, and still has, unless he has released the old firm, or the statute has barred him, a right of action against the old firm for any profits not accounted for up to its dissolution. The new firm entered into no obligation to the defendant, express or implied, to assume such liability. It entered into no such obligation with the old firm. The finding is that the new firm succeeded to the “general assets, business and liabilities of Dowley, Corners & Co.,” and that the members of the old firm, who went out of the business, “were settled with on the footing of the books and accounts as they then existed.” The fair inference from these findings is that the new firm assumed the liabilities of Dowley, Corners & Co., appearing on the books and accounts of that firm and settled with the retiring partners on the basis that the liabilities were such as were shown thereby. Even if by the agreement with the old firm the new firm assumed its liabilities without limitation, the agreement would not inure to the benefit of the defendant, or give him a right of action thereon. Wheaton v. Rice, 97 N. Y. 296; Serviss v. McDonnell, 107 id. 260; 12 St. Rep. 485. As between the two firms it is plain that the old firm could not, under the arrangement with the new firm, have maintained an action against the latter to recover a sum which they might have been obliged to pay the defendant, or had paid him, on a correction of the accounts.

The principle of novation of debts has no application. The new firm had not taken upon itself, the liability of the old firm to the defendant beyond, at most, the indebtedness entered on the books, nor had the defendant, upon the facts found, discharged the original debtor and accepted the' new firm as his debtor for such excess. Shaw v. McGregory, 105 Mass. 96; Caswell v. Fellows, 110 id. 52. The conclusion of the general term, that the account between the new firm and the defendant did not draw into it any liability of the old firm to the defendant beyond the sum appearing on the final account rendered by that firm January 1, 1875, is supported by the facts found. We do not rest our affirmance on this point on the doctrine of equitable estoppel. We should have some difficulty in placing our affirmance on this ground. But on the ground that there was no contract liability, and that the finding that the new partners continued business on the same footing as the original partners to the contract, can only mean that the terms of the original contract were to govern the relations of the parties thereafter in conducting the new business, the decision should be upheld. We agree with the general term in its disposition of the question of the charge to the business of the new firm of a sum equal to the interest on the mortgage of $20,000. The reasons are fully stated in the opinion of the general term, and it is unnecessary to repeat them.

We think that the judgment is right, and it should, therefore,, be affirmed.

All concur.

Judgment affirmed.


author: Finch, J.

text:
    Frank E. Parshley, App’lt, v. The Third Methodist Episcopal Church in the City of Brooklyn, Resp’t.

      (Court of Appeals,

      Filed November 26, 1895.)

    1. Religious cobfobation—Contbact—Ratification.
    Where, in an action by an attorney against an incorporated Methodist Episcopal Church for services rendered and expenses incurred in prosecuting before a church tribunal its pastor and securing his suspension from the ministry, it appeared that the board of trustees, acting officially, never employed the attorney or authorized his expenditures,the fact that the board subsequently agreed to pay another attorney for services gratuitously performed with the understanding between him and the board as individuals that the surn so paid was to be paid on plaintiff's claim, fails to establish a ratification by the church of such unauthorized employment.

      2. Same.
    Nor does the fact that the board authorized a committee, with advice of counsel, -to. investigate the claim, and determine whether any sum was legally due and ordered it paid if found due, and that such committee, without the advice of counsel, allowed the claim, which action was rejected by the board, make out such ratification.
    3. Same.
    Nor does the fact that a board consisting of the trustees, stewards, class leaders, etc., by resolution recognized plaintiff’s services as in the interest of the church and recommended contributions for payment of his claim, amount to such ratification.
    4. Same.
    Nor does the fact that the resolution of the board for the removal of such pastor from the parsonage recites his suspension from the ministry upon the charges presented against him, constitute a ratification.
    Appeal from order of the general term, of the city court of Brooklyn, which reversed a judgment in favor of plaintiff entered upon the report of a referee and granted a new trial.
    This action was brought to recover the value of services alleged to have been rendered to defendant by plaintiff, and also the amount of expenditures incurred by him in prosecuting the pastor of the defendant church upon charges of immorality, and securing his suspension from the performance of his ministerial duties.

      Isaac H. Maynard, for app’lt; George G. Reynolds, for resp’t.
   Finch, J.

It is not at all certain that the trustee of the church, having charge of its temporalities and representing it in its corporate character, have a legal right to contract a debt for the purpose of prosecuting before a church tribunal a preacher charged with immorality. But, waiving any consideration of that question, and assuming for the sake of the argument that such power exists, it still seems to me quite certain that the general term were right in holding that the corporate body never became bound or liable for the debt.

There is no room for dispute about the fact that the trustees .acting officially never employed the plaintiff or authorized his expenditure. A minority of the board, acting only as individuals and promising merely individual and voluntary aid, alone set the plaintiff in motion. The trial court so found and planted its award of judgment wholly upon the ground of ratification, and it is upon that question that the courts below differed and to which our attention is required.

Two main and principal facts are relied on by the appellant, both of which have some peculiar features. There came a time when the plaintiff was pressing for his pay, and the church corporation was about to sell its property to the bridge company. Counsel was, of course, employed to conduct the negotiations and manage the proper transfer of title. That counsel was Judge Groo, who promised to act without compensation or, at least, without charge for his time and services. Nevertheless, the trustees passed a resolution to pay him, first five thousand, and later six thousand dollars, for his services and expenses as counsel. That was the corporate action on its face, and there was no other. But behind it stood the motive for it and the explanation of it. Between the trustees, acting individually and not in their corporate character, and their counsel there was an understanding that the money voted' to Groo should be by him applied to the discharge of plaintiffs’ claim, and thirty-five hundred dollars of it was in fact so applied. Obviously, there was here an attempt to do indirectly what it was supposed could not be done directly, and the indirect action was not at all and not intended to be. of a corporate character. That was carefully avoided and meant to be avoided, and as the result of what was done the plaintiff acquired, not a legal right against the corporation, but a moral right against Judge Groo, founded on the latter’s good faith. The caucus action of the individual trustees was clearly personal and non-official. Sanders v. Frank St. Methodist Church, 114 N. Y. 620. As such it did not and was not intended to bind the church. It recognized, not a legal obligation of the church corporation, but a moral duty of its members which they sought to perform through the agency and operation of an entirely different legal obligation. The very form and manner of the transaction assumed-that the plaintiff had no legal claim against the corporation; that it had no right to pay him, and that it was only by an artifice, and through the liberality of Judge Groo, that the moral duty of reimbursing the plaintiff could be performed. The trustees had sought to obtain funds for him through voluntary subscriptions. They had recognized that no corporate moneys were available for that purpose, and failing to secure a voluntary contribution resorted to the questionable measure of paying the corporate funds to Judge Groo as a counsel fee, leaving him, out of what had become his own money, to do justice to the moral claim of the plaintiff. Whatever else may be said about the transaction it is very certain that it did not amount to a ratification of the acts of individuals and a corporate assumption of their obligations.

But a further step was taken. The plaintiff continued to press for reimbursement out of the corporate treasury, evidently insisting.that he had a legal claim against the church, and in 1892 the board of trustees passed two resolutions. One of them appointed a committee to examine the claim and agree upon the sum, if any, to be paid, but providing that the committee should confer with and act'under the advice of” the attorney of the board. The second resolution authorized the president and treasurer of the board to pay plaintiff the sum, if any, found due by. such committee. These resolutions admitted nothing, acknowledged nothing. They left the question of the corporate liability open to the decision of the committee, acting under', the advice of counsel. There was a legal question to be determined arising upon and out of the facts, the answer to which would settle the doubt about liability and indicate what was the corporate duty. To meet that emergency the committee were authorized to act only after a conference with and under the advice of the counsel of the board. This was a vital and essential condition of the committee’s authority, without obedience to which they had no power to act at all. They disregarded that condition, completely ignored the counsel, neither sought nor took his advice, and made a report in favor of allowing plaintiff’s claim. The board, however, refused to accept the report, as not made in accordance with the condition imposed. Here, again, I am unable to see proof of a ratification. The act of the committee never became the act of the board. There was no original authority conferred upon them to act independently of the advice of counsel, and their unauthorized action was rejected and not confirmed by the board. It is suggested that the resolutions admit the liability but question only the amount. I cannot so read them. They call for an investigation, guided by counsel, as to whether any sum is due at all, and do not admit an obligation for some amount.

There were some minor facts pressed upon our attention as involving a ratification. One of them was the resolution of the official board of 1888. That board consisted of thé trustees, the stewards, the class leaders, the Sunday school teachers, and the local preachers. It had its place and its duties in the Methodist order and discipline, but did not- represent and could not legally bind the corporation." What it did was to say that the plaintiff acted “in the interest of the church,” and to recommend a voluntary contribution to defray the expenses. The word “ church ” was here used in its broad and moral sense, as covering the Methodist church generally in its religious character and aggregation, and not as meaning the particular corporation. It is “ the ” church, and “ the M. E. church,” and not the specific corporate defendant; and the recommendation is to contribute to the expenses, and not to the defendant to enable it to pay.

Our attention is drawn also to the resolution for the removal of Millen from the parsonage, which recites his suspension from the ministry upon the charges presented against him, and the argument is that the defendant took the benefit of plaintiff’s services, and so must pay for them. Yery little need be said 'about that. The rule only applies where the party is free to take them or not. Here the defendant did not take them at all, and simply sought to remove a tenant holding over without right.

The order of the general term should be affirmed and judgment absolute be rendered for the defendant, with costs.

All concur, except Peckhah and Gray, JJ., dissenting. Ordered accordingly.


author: Bartlett, J.

text:
    Joseph C. Wilson, App’lt, v. Margaret A. Marion et al., Resp’ts.

      (Court of Appeals,

      Filed November 26, 1895.)

    1. Assignment for creditors—Void.
    As between the parties, a general assignment, fraudulent as to creditors, is valid, and is voidable only at the suit of a creditor who seeks to have it declared fraudulent and void as to him.
    2. Same—Assignee.
    A general assignee is competent to deal with the assets of the estate under an assignment fraudulent and void upon its face, and, if he pays money to bona fide creditors of the assignor, he will b§ protected, provided he does it in good faith and before any other creditor has obtained a lien upon the money.
    8. Same—Purchaser.
    In such case, a sale of the real estate by the general assignee must stand as to a creditor unless he can show that the grantee is not a purchaser for a valuable consideration without notice.
    4. Same—Valuable consideration without notice.
    Such grantee is a purchaser for a valuable consideration without notice, within the meaning of section 5 of 2 R. S. 137, where prior to the sale he has not read or examined the assignment, and pays a fair price for the property and where, at the time of the purchase and the payment of the purchase money by him, he has no actual knowledge of any fact relating to any fraud in the assignment or of any fraudulent intent on the part of the assignor and does not obtain actual knowledge of any such fact or intent until after he receives the deed from the assignee.
    8. Same—Constructive notice.
    The fact that the purchase is made at a general assignee’s sale, does not charge the purchaser with constructive notice of the fraudulent intent of the assignor.
    Appeal from so much of a judgment of the general term of the supreme court in the fifth judicial department, entered upon an order, as affirmed a judgment in favor of defendant Fahy, dismissing the complaint upon the merits as to him, entered upon the report of a referee.

      P. M French, for app’lt; -Edward F. Wellington, for resp’ts.
   Bartlett, J.

The plaintiff in this action seeks to set aside as fraudulent the general assignment made by the defendants Marion & Oo. to defendant Kinney for the benefit of their creditors, together with certain conveyances of real estate made by the assignee to the defendant Patrick Fahy, the latter having bid in the property at public sale.

The referee has found, as conclusions of law, that the assignment is fraudulent and void on its face as against the plaintiff ; that defendant Fahy purchased the land described in the complaint in good faith, and for a valuable consideration, and has good title thereto as against the plaintiff, and the complaint as to him should be dismissed.

The general assignment was executed January 31st, 1887, and was declared by this court, at the January term, 1892, fraudulent and void upon its face as to the plaintiffs then attacking it on the ground that it devoted a part of the partnership property to the payment of individual debts. Booss v. Marion, 120 N. Y. 536; 42 St. Rep. 265.

About four months after this court handed down its decision this action was commenced.

The referee finds that the plaintiff in this action in July, 1889, signed a request to the assignee to appeal from the judgment of the supreme court in the Botiss action, with knowledge of the facts constituting the fraud for which 'the assignment was set aside, but held that it did not constitute an estoppel or election of remedies so as to preclude him from maintaining this action.

As the assignee has not appealed and the defendant Fahy is responding to the plaintiff’s appeal we do not deem it necessary to pass upon this question, as we have reached the conclusion that so much of the judgment below as the plaintiff has appealed from must be affirmed.

The plaintiff urges substantially two reasons in support of his contention, that the conveyance of the real estate made by the assignee to the defendant Fahy were fraudulent and void and should be set aside. As to the first point, plaintiff argues that the general assignment being void on its face, the trustees had no right to sell and the purchaser Fahy received no title as against the plaintiff, who is a creditor.

The counsel for the plaintiff misapprehends the force and meaning of the fact that a general assignment is fraudulent and void on its face. It has been frequently held that, as between the parties, a general assignment, fraudulent as to creditors, is valid, and is only voidable at the suit of a creditor who seeks to have it declared fraudulent and void as ■ to him. Knower v. C. N. Bank, 124 N. Y. 559, 560; 37 St. Rep. 89.

The plaintiff in this action was in no way benefited by the final judgment in the Booss action save as it made his attack upon the assignment if he concluded to make it, easy and effectual. It was still incumbent upon plaintiff, if he wished to obtain a lien upon the assigned property in the hands of the assignee, to recover his judgment at law, secure the'return of the execution unsatisfied, and begin his action in equity to set aside the general assignment.

The lien thus secured would be enforced when final judgment was rendered in his favor.

The present action is precisely such a one as we have described and wholly inconsistent with plaintiff’s contention that the assignment being void upon its face no title vested in the assignee. The plaintiff has recovered a judgment which declares the general assignment to be fraudulent and void on its face as to him.

A general assignee is competent to deal with the assets of the-estate under an assignment fraudulent and void upon its face and if he pays money to bona fide creditors of the assignor he will be protected, provided he does it in good faith and before any other creditor has obtained a lien upon the money. Nat. B. & D. Bank v. Hubbell, 117 N. Y. 397 ; 27 St. Rep. 396.

This is for the reason that he is only doing what the assignor might have done had no assignment been executed; in other words the assignment is valid as between the parties.

It, therefore follows in the case at bar that the sale of the real estate to defendant Fahy by the general assignee must stand as to plaintiff, unless he can show that Fahy was not a purchaser for a valuable consideration without notice.

As to his second point plaintiff insists that he is hindered, delayed and defrauded by the general- assignment within the meaning of the statute concerning fraudulent conveyances (2 R S. 137, § 1), and that defendant Fahy is a purchaser of the real estate with previous notice of the fraudulent intent of the assignor and of the fraud rendering void the title of the assignee. 2 R. S. 137, § 5.

The last section cited reads as follows, viz.:.

“ § 5. The provisions of this chapter shall not be construed in any manner, to affect or impair the title of a purchaser for a valuable consideration, unless it shall appear that such purchaser had previous notice of the fraudulent intent of his immediate grantor, or of the fraud rendering void the title of such grantor.”

In order to establish that defendant Fahy is not within the protection of this section the plaintiff points out the fact that the deed from the assignee to Fahy refers to the general assignment, and by its terms Fahy assumed and agreed to pay as part of the purchase price an individual debt of the defendant James Marion, to wit, a bond and mortgage given by him to the Rochester Savings Bank in 1883 for five thousand dollars.

The plaintiff argues from these facts that as the assignment was fraudulent and void upon its face, the defendant was put upon his notice, and that all the facts to advise him of the fraud were contained in the assignment.

The undisputed facts and the findings of the referee show that the public sale of the real estate took place on the 9th day of March, 1887, and that later in the day after F-ahy had made his purchase and paid therefor, but before he received the deed, he was informed that the Booss action had been commenced to set aside the assignment on the ground that it was fraudulent and void as to the plaintiffs in that action.

The referee finds that at the time of the purchase of Fahy and of the payment of the purchase money by him, he had no actual knowledge of any fact relating to any fraud in the assignment or of any fraudulent intent on the part of the assignors, and that he did not obtain actual knowledge of any such fact or intent until after he received the deed from the assignee.

It is also found that a fair price was paid for the property.

It was admitted upon the trial that prior to the sale of the real estate Fahy had not read or examined the assignment or schedules of Marion & Oo.

These facts and findings would seem to place the defendant Fahy within the protection of the statute, as he paid a valuable consideration and had no actual notice of the fraudulent intent.

Tó meet this situation the plaintiff insists that as Fahey purchased at a general assignee’s sale he is subject to the rule of constructive notice to the effect that if the purchaser has not actual notice of the fraudulent intent with wdiich the land has been conveyed to his vendor, yet, if the circumstances were such as would have put a prudent man upon his inquiry which, if prosecuted diligently, would have disclosed the fraud, he cannot be deemed a bona fide purchaser in good faith.

This court has held, Parker v. Connor, 93 N. Y. 118, in reference to a sale' of personal property, that it was necessary to show actual knowledge or belief, or at least actual suspicion in the vendee that the sale was being made with intent, on the part of vendor, to defraud his creditors.

Judge Rapallo said (page 125): “We have not been referred to any cáse where the doctrine of constructive notice has been applied so as to charge a purchaser of land, who has paid a valuable consideration and was, in fact, innocent of any guilty knowledge, with notice that his grantor made the conveyance with intent to defraud creditors at large, having no special lien or equity.”

After distinguishing the cases of Baker v. Bliss, 30 N. Y. 70, and Reed v. Gannon, 50 N. Y. 345, Judge Rapallo lays down the rule that there is no duty of active vigilance cast upon the purchaser for the benefit of creditors of the vendor which should require him to suspect and investigate the motives of the vendor.

In construing the section already quoted from the statute concerning fraudulent conveyances (2 R. S. 137, § 5) this court laid down a rule which has been repeatedly followed. Stearns v. Gage, 79 N. Y. 107.

Judge Miller, after quoting the statute, says: “ This plainly means that actual notice shall be given of the fraudulent intent or knowledge of the circumstances which are equivalent to such notice. Circumstances to put the purchaser on inquiry where full value has been paid are not sufficient.” Judge Miller then states that a purchaser for a valuable consideration, without previous notice, is not chargeable with constructive notice of the fraudulent intent of his grantor.

This case was approved and followed by this court in a very recent case. Jacobs v. Morrison, 136 N. Y. 105; 49 St. Rep. 183.

We think the defendant Fahy is clearly purchaser of the real estate in question for a valuable consideration, and without notice of the fraudulent intent of the assignors in making the general assignment.'

So much of the judgment below as is appealed from by the plaintiff should be affirmed, with costs.

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

Judgment affirmed.


author: Haight, J.

text:
    Charles J. Close, Resp’t, v. Richard K. Noye, App’lt.

      (Court of Appeals,

      Filed December 3, 1895.)

    1. Corporations—Manufacturing—Leasehold.
    Leasehold premises, necessary for the business of a manufacturing corporation, and used as a factory, is properly within the meaning of chapter 333 of 1853.
    2. Same—Stockholder—Liability.
    The exemption, from personal liability created by section 10, chapter 40 of 1848, formerly conferred by chapter. 333 of 1853, extends to the lessor of a building which is required by the corporation for a manufactory, where his stock was issued’to him, prior to the repeal of said acts, under an agreement made upon his consenting to an assignment of the lease of the building to the corporation, to_ accept such stock in lieu of cash for the rent to accrue during the first year thereafter.
    8. Statutes—Repeal.
    The right of exemption was not affected by the subsequent repeal of the acts of 1848 and 1853" by chapter 564 of 1890, but was protected by the saving clause contained in section 71 of that act.
    Appeal from judgment of the general term of the superior court of the city of Buffalo, entered, upon an order, which affirmed a judgment in favor of plaintiff entered upon a decision of the court on trial without a jury.

      D. NI MoNaughtan and F. M. Inglehart, for app’lt; Simon Fhischmann, for resp’t.
   Haight, J.

The American Bit Brace Company was a corporation organized under the Manufacturing Act of 1848 and the amendments thereto, and commenced business on or about January 1, 1888. Its capital stock was $50,000, divided into 500 shares of $100 each. $47,500 of the stock was paid in cash. The remaining $2,500 of the stock was not paid in, and no certificate has ever been filed showing full payment of the capital stock. In 1892 the corporation became indebted to the plaintiff upon promissory notes in the sum of $10,000, upon which a judgment was entered in the superior court of Buffalo and an execution issued thereon against the property of the corporation, which has been returned unsatisfied. The defendant was the owner of sixteen shares of the capital stock of the corporation which was issued ,to him at various times between the first day of March, 1888, and the 8th day of March, 1889. This action was brought to recover of the defendant the indebtedness of the corporation to the amount of the stock held by him.

The Laws of 1848, chapter 40, section 10, provide that, .“All the stockholders of every company incorporated under this act shall be severally individually liable to the creditors of the company in which they are stockholders, to an amount equal to the amount of stock held by them respectively for all debts and contracts made by such company, until the whole amount of capital stock fixed and limited by such company shall have been paid in, and a certificate thereof shall have been made and recorded,” etc. This act was amended by the Laws of 1853, chapter 333, by providing that, “ The trustees of such company may purchase mines, manufactories and other property necessary for their business, and issue stock to the amount of the value thereof in payment therefor ; and the stock so issued shall be declared" and taken to be full stock and not liable to any further calls; neither shall the holders thereof be liable for any further payments under the provisions of the tenth section of said act.” Under this amendment it has been held that a person, to whom stock has been issued for a manufactory, or other property purchased by a corporation, is not liable to the creditors of the company because of a failure on the part of the president and trustees 'to file the certificate requred by section 10 above referred, to; that as to such stock the. holders thereof are exempt from the provisions of the act. Brown v. Smith, 13 Hun, 408 ; affirmed in this court upon the opinion of the general term, 80 N. Y. 650. See, also, Rowell v. Lambert, 66 Hun, 4; 49 St. Rep. 197.

The defendant claims exemption from liability under the act of 1853. The question is thus presented as to whether the stock issued to him was in payment for a manufactory or other property necessary for the business of the corporation. He requested the trial court to find that it was,■ but this was declined, and an exception was taken. The evidence bearing upon the question is brief and is without substantial controversy. The defendant had leased to one White the premises in question for the annual rental of $1,500. The corporation required these premises for its manufactory. Arrangements were thereupon entered into by which White assigned the defendant’s lease to the corporation, with his consent, he agreeing to accept, daring the-, first year, the capital stock of the company for rent in lieu of cash. This arrangement was carried out and the defendant, in this manner became the owner of the sixteen shares of stock referred to. The leasehold premises were necessary for the business of the corporation. It was a manufactory, and, we think, “ property,” within the meaning of the statute. A lease of lands is a chattel real. 1 R. S. 722, § 5; Putnam v. Westcott, 19 John. 72 ; Bigelow v. Finch, 17 Barb. 394.

The trial court appears to have been of the opinion that even if the stock was issued to the defendant for property purchased by the company necessary for its use, and that he was exempt from liability for the debts of the company under the existing statutes, that he is now made liable under the Stock Corporation Law of 1890, chapter 564. In this view we differ from the learned trial judge. In the law of 1890 the exemption clause of 1853 is omitted, and that act, - together with that of 1848, is repealed. But there was a saving clause incorporated in the act. It is as follows: “(Sec. 71.) The repeal.of a law, or any part of it, specified in the annexed schedule, shall not affect or impair any act done or right accruing, accrued or acquired, * * * under or by virtue of any law so repealed, but the same may be asserted, enforced, prosecuted or inflicted as fully and to the same extent, as if such law had not been repealed.” Section 24 of chapter 563 of the Laws of 1890, known as the General Corporation Law, has recently received the attention -of this court in the case of Cameron v. The New York and Mount Vernon Water Co., 133 N. Y. 336; 45 St. Rep. 212. It was then held that proceedings that had been theretofore taken to consolidate several companies under chapter 960 of the Laws of 1867, as amended, etc., were not affected by the repeal of the acts undér which the proceedings were instituted; that the agreement to consolidate represented a right accuing, or in process of enforcement, and was protected by the saving clause, which is identical in language with that provided for in section 71 of the Stock Corporation Law. This case sustains the appellant’s contention. He became the owner of the stock under circumstances which then relieved him from personal liability for the debts of the company. He was exempt from the provisions of section ten of the act of 1848. This was a right which he had acquired and which had accrued, and he consequently is saved from the operation of the Stock Corporation Law of 1890.

In 1892 the Stock Corporation Law was further amended, but under the view taken by us with reference to the saving clause in the act of 1890, it becomes unnecessary to consider the effect of the last amendment.

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

All concur.

Judgment reversed.