author: O’Brien, J.

text:
    Nathaniel Jarvis, as Trustee, Resp’t, v. Anna A. Chapin, Exr’x, Impl’d, App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 13, 1891.)

    Foreclosure—Estoppel—Effect of stipulation by second mortgagee THAT PROPERTY BE SOLD UNDER FIRST MORTGAGE.
    The plaintiff had a mortgage on certain lols upon which a prior mortgage existed. The latter was foreclosed and plaintiff, although not made a party, was aware of the foreclosure. 1 hereupon a stipulation was entered into under which all the lots were sold under the first mortgage, although a sale of all was not necessary to satisfy it. Certain of the purchasers objected to the title and nothing has ever been done to compel them to complete their purchases. In an action by plaintiff to foreclose his mortgage, Held, that he was not estopped from so doing by the stipulation, nor bound before foreclosing to attempt to compel said purchasers to take title.
    Appeal from a judgment of foreclosure and sale entered on the report of a referee.

      Robert P. Harlow, for app’lt; Anderson Price, for resp’t.
   O’Brien, J.

The mere statement of the facts of this case without the citation of any authorities, would 'make it reasonably certain that the judgment should be affirmed.

This action was brought to foreclose a mortgage made by Welland P. Chapin to Thomas H. Landon, to secure the sum of $11.000. ' ...”

The mortgage covers real property situated in the city of New York between One Hundred and Fifty-first and One Hundred and Fifty-second streets, and between Eighth and Edgecombe avenues. At the time of the making and record of this mortgage, there was a prior mortgage upon the same property.

An action to foreclose the prior mortgage was commenced about August, 1987, and as incidents thereto due notices of pendency of action were filed in the office of the clerk of the city and county of New York. A judgment in said action directed the sale of the mortgaged premises, or such part thereof as might be sufficient to discharge the said first mortgage debt, together with expenses and costs. The property was sold for enough to pay the first mortgage and left a surplus, the whole of which was subsequently paid to the plaintiff in this action and credited by him upon the bond and mortgage, and after such payment there still remained a balance due to plaintiff, to recover which he commenced this action to foreclose his mortgage.

Although the plaintiff in this action was not a party by name to the record in the action to foreclose "the first mortgage, owing no doubt to the fact that the assignment of the mortgage by Landon to plaintiff was not recorded until the 2d day of May, 1889, he was the real party in interest and his interest was represented by the executor of Landon, deceased. It may be assumed, moreover, that plaintiff had knowledge of the pendency of the action to foreclose the said first mortgage and never made any application to be made a party prior to the decree of foreclosure and sale therein. After the decree had begn made in the action to foreclose the first mortgage a stipulation was entered into by the attorneys by which it was agreed that all the premises should be sold by the referee. Under this stipulation, which was known to plaintiff, the entire mortgaged premises were put up in thirty different parcels and bid in by various purchasers. The purchasers of lots numbered from Í9 to 27, both inclusive, and lots numbers 29 and 30, refused to complete their purchases, and no application has ever been made to the court to compel them to accept title. The ground of their refusal to take title is some paramount claim alleged to exist in favor of plaintiff as an individual. The plaintiff, after successfully prosecuting his claim against the surplus fund, commenced this action to foreclose his mortgage, which covered the same identical property and premises which were covered by the first mortgage already foreclosed and under which the effort was made to sell all the property as stated.

The defense interposed, though overruled by the referee, and still claimed by appellant to be good in law, is that by virtue of the stipulation made in the suit brought to foreclose the prior mortgage, 'to which stipulation the plaintiff was privy, and the benefit of which he has received to the extent of the payment out of the surplus moneys, plaintiff bound himself to pursue his remedy for the collection of his debt by means of that stipulation exclusively, and is therefore estopped from maintaining this action. It is conceded that if the purchasers on the foreclosure of the prior mortgage who refused to complete their purchase were compelled to do so, the surplus would be sufficient to satisfy the plaintiff’s mortgage.

Appellants contend that plaintiff is bound to pursue his remedy in the surplus proceedings and compel such purchasers to complete their bargains. In other words it is claimed that plaintiff is estopped from maintaining this action by the judgment sale and stipulation in the former action.

All the questions urged upon this appeal relating to exceptions to the referee’s rulings and the latter’s refusal to agree to appellant’s claim centre around this question as to whether this defense interposed is valid in law. The defense has at least the merit of novelty, and in its support appellant invokes the principles which underlie the doctrine of estoppels both legal and equitable and the principles which relate to the power of the court to determine the rights of all the parties to a foreclosure suit in a single action. It is difficult however to follow the appellant in his effort to make applicable the principles of law invoked.

Stripped of all verbiage the question at issue is reduced to a narrow and apparently very simple one. The plaintiff has a mortgage on property upon which a prior mortgage exists; the latter is foreclosed in an action to which the plaintiff personally or by privy is made a party; it is agreed therein for the benefit of all the parties in interest, that instead of selling sufficient of the property only to satisfy the first mortgage, that the entire premises should be sold in different parcels so as to realize sufficient not only to pay the first mortgage, but the second mortgage of the plaintiff and any other claims that might exist against the-property.

The benefit of the stipulation and the intention of the parties, was frustrated by the failure to take title of the purchasers who-had bid at the sale.

As to so much of the property as was sold and the title thereto-in the purchasers perfected, all rights of the plaintiff and the subsequent incumbrancers who were made parties to the suit were-cut off and foreclosed. As to the balance of the property, which was simply exposed for sale and bid off by persons who refused to complete their purchase, the plaintiff’s mortgage lien still remains, and no principle, legal or equitable, should or can prevent his proceeding to enforce such lien in a proper action, such as he-has here brought.

It is idle to insist that it was plaintiff’s duty to proceed in the former suit, in which he was a defendant, and compel the bidders to complete their purchases, and thus raise sufficient to pay his claim. That duty devolved either upon the plaintiff in the-prior foreclosure suit or upon the owner of the equity of redemption, and while the plaintiff here might have taken upon himself that labor, he was not so compelled, either by force of the judgment itself or the stipulation upon which so much stress has been laid. He could with perfect propriety elect to follow this method of collecting money, which is admitted to be justly due-him upon his mortgage. We have examined the case and exceptions on appeal, and find no reason for disturbing the conclusions or judgment of the referee.

The judgment should, therefore, be affirmed, with costs and disbursements.

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


source: Caselaw Access Project

author: Van Brunt, P. J.

license: Public Domain

text:
    Anna M. Hoch et al., Resp’ts, v. The Manhattan R. Co. et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed March 13, 1891.)

    Basement—An abandonment acted upon becomes an ibbeyocable. license.
    In an action for trespass by defendants upon easements appurtenant to-the premises of plaintiffs, it appeared that the premises were conveyi d after the construction of defendants railroad to plaintiffs’ grantor, “in the condition in which the same now are,” and the court also found that defendants’ railroad was constructed, maintained and operated under some estate, license or authority derived from plaintiffs’ predecessor in the title. Held, that such finding amounted to an abandonment by the owner of the-easement; and that such abandonment having been acted upon by the defendants, it became as to them an irrevocable license.
    Appeal from judgment of special term awarding injunction and damages.

      B. Tolles, for app’lts; E. W. Tyler, for resp’ts.
   Van Brunt, P. J.

This action was begun in 1888, by John C. Hoch, to recover past damages and to obtain an injunction as to the property 133 South Fifth avenue, upon the ground of the trespass of the defendants upon the easements appurtenant thereto.

It appeared from the evidence in the case that Hoch purchased the premises in question in December, 1883, his grantors conveying’ the premises in the condition in which the same now are; and the court found that the defendants’ railroad was constructed, maintained and operated by virtue of some estate, license or authority derived from the plaintiff’s predecessor in title.

Past damages and injunction were also sought for the premises, No. 104 W. Third street, also purchased by the plaintiff in December, 1887. The plaintiff tore down an old building which was upon the premises, and in May, 1888, began the erection of a five story tenement house which was completed by the first of November, 1888. His grantor, Margaret D. Griswold, had commenced an action against the defendant to recover the permanent depreciation caused to these premises by the railroad; and her deed contained a reservation of any rights or action at law or in equity for damages caused by the railroad prior to or during her ownership of said premises.

Hoch having died during the progress of the action, the present plaintiffs individually and as executrices and trustees under the will of Hoch were by order substituted as plaintiffs and the action revived.

The court held as to both pieces of property that the plaintiffs were entitled to recover for past damage and also assessed a sum upon the payment of which the defendants should be entitled to a conveyance of the easements and to avoid the injunction, in default of which it was decided the plaintiffs were entitled to.

The first question presented is that there can be no recovery of past damages and an injunction as to 133 South Fifth avenue, the court having found that the erection of the defendants’ railroad was duly licensed and authorized by the then owner of said premises.

This point we think is well taken. It appears by the conveyance to Hoch that the said premises were conveyed in the condition in which they then were, with the railroad constructed and the easements appropriated. Such a deed conveys every easement appurtenant to the premises conveyed which the grantor owned or was entitled to recover: as easements always follow the principal estate. Hilliard on Eeal Property, 3d ed., vol. 2, p. 556; Huttemeier v. Albro, 18 N. Y., 48 ; Hills v. Miller, 3 Paige, 254. Consequently if nothing had been done by the original plaintiff’s predecessor to affect his claim to such easement it clearly passed with the conveyance to him as appurtenant to the estate conveyed. But the court having found that the defendant’s railroad was constructed, maintained and operated by virtue of some estate, license or authority derived from the original plaintiff’s predecessor in title, there appears to have been an abandonment of such easement by the owner of the title for the purposes of the construction of the defendants’ railroad.

And that the right to an easement may be lost and extinguished by abandonment is held in the case of Snell v. Levitt, 110 N. Y., 695 ; 18 N. Y. State Rep., 611, in which the principle is laid down that while an easement acquired by grant cannot be lost by mere non-user for any length of time, it may be extinguished by abandonment; and non-user for a period of twenty years under circumstances showing an intention to surrender the easement is sufficient to extingush it. And the further principle is laid down that where the abandonment has been acted upon by the owner of the servient tenement so that it would work harm to him if the easement were thereafter asserted, such action will operate to extinguish it.

' In the case at bar, it having been found that the defendants' railroad was constructed by virtue of a license from the original plaintiff’s predecessor in title so far as it affected these easements, it was clearly an abandoment by the owner of such easements which have been acted upon by the defendants; and was, therefore, a license which was irrevocable.

It is true that in the case of Wiseman v. Lucksinger, 84 N. Y., 38, it was held that a right of drainage through the lands of another is an easement which, if created by parol license, may be revoked at any time although a valuable consideration be paid therefor. But that decision was clearly based upon the principle that such an easement required for its enjoyment an interest in the lands which could not be conferred by parol license and could only be granted by deed or conveyance in writing. The defendants are not seeking by reason of this license to establish fray interest in lands. All that they claim is that so far as is necessary for the operation of their railroad there has been an abandonment of the easement appurtenant to the premises in question by the then owner thereof and that they have acted upon the same.

Under these circumstances it seems to be clear that the right of revocation does not exist.

It may be true that error was committed in admitting the evidence tending to interpret the language of the deed given of the premises in question, but a further reference to this point is not deemed necessary in view of the conclusion to which we have come upon the question already discussed.

The claim that the defendants’ railroad is located on the central strip of South Fifth avenue, and that no rights of the plaintiffs are interfered with, cannot be sustained in view of the recent decisions of the court of appeals as to the rights of abutting owners upon side streets. The claim that the reservation in the deed in respect to the West Third street property precluded the plaintiff from maintaining this action as to these premises cannot be sustained. Although the parties may have agreed that the permanent damages might be considered in the action brought by the previous owner, yet the court having refused to submit any such question to the jury and no such question having been submitted to them, it is difficult to see how anybody’s rights were precluded by a verdict in an action upon an issue which the record shows the court never submitted to the jury.

The parties stood after this trial precisely as though there had been no attempt to include permanent damages as part of the recovery in the action.

Various exceptions to the admissibility of evidence were taken which it is not necessary to discuss in view of the conclusion at which we have arrived in reference to the South Fifth avenue property. '

We think for the errors adverted to in respect, to that property the judgment should be reversed and a new trial ordered, with costs to the appellant to abide the event.

Daniels and Brady, JJ., concur.


text:
    Frank Phelps, Resp’t, v. The Mayor, etc., of New York, App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 13, 1891.)

    Lease—Waiver by ehtry of lessee of repairs promised to be made BY LESSOR.
    The defendant leased to plaintiff certain wharfage rights upon a pier and one-half of a bulkhead with a privilege of one renewal, which latter the plaintiff obtained. The lease and the renewal both contained a clause by which the defendants agreed to make such repairs to the property as the board of dock commissioners should consider necessary to put it in condition for service; and further, both parties agreed that no claim that the property was not in a suitable condition when the term began should be made; the plaintiff further agreed to keep the property in repair and that if, on notice from the dock commissioners, he did not do so, defendants might at his expense. It was admitted by stipulation that the premises were not in proper condition when the term begun and that plaintiff had been at large expense to repair them. The court also found that the board of dock commissioners required certain repairs at the beginning of the second term. In an action for the expense of repairs, Held, that the matter of repairs was made dependent upon the action of the dock commissioners and that as it was not shown that they had required repairs at the beginning of the first term, the plaintiff, in view of his covenant to repair and that no claim should be made that the property was not in suitable condition when rented, could not recover; that plaintiff should have refused to enter.
    Appeal from judgment entered upon trial by the court without pry.

      Sidney J. Cowen, for app’lt; Thos. Rochfort and Abram Kling, for resp’t.
   Van Brunt, P. J.

This action was brought seeking the reformation of a lease under seal, executed by the defendant to the plaintiff, and for damages.

The court having held that no cause of action for reformation was made out, but that a case might exist for damages, directed the same to be heard at circuit.

Thereupon by stipulation, the facts having been agreed upon between the parties in reference to the subject .of damages, the case was re-submitted and the learned judge rendered judgment in favor of the plaintiff.

There was no oral testimony taken, and the findings of the court were necessarily based upon the documentary evidence and stipulations presented to it

It appeared from the evidence that on the 30th of April, 1881, the defendant leased the rights of wharfage upon pier No. 40, East River, and one-half of the bulkhead easterly to the plaintiff for a term commencing May 1, 1882, and ending May 1, 1887, for the annual rental of $9,000, and in said lease or grant covenanted with the plaintiff for a renewal of the lease for five years commencing May 1, 1887, at the option of the plaintiff and upon the same terms and conditions, save that the rent for the renewal term was to-be $11,000 instead of $9,000, and that the lease or grant for such renewal term should contain no covenant for another renewal.

The plaintiff duly availed himself of this option, and on the 16th of May, 1887, a renewal lease dated May 1, 1887, was executed. Both of said leases contained the following clauses:

“And the parties of the first part promise and agree that they will, prior to the commencement of the aforesaid term of years, or as soon after such commencement as shall be found practicable, make such repairs to the above-described wharf property as the said board of commissioners may consider necessary to put such wharf property in a suitable condition for service during the aforesaid term. And the parties hereto promise, agree and understand that no claim that the said wharf property is not, or was not at the time of the commencement of said term, in a suitable condition for the uses and purposes hereinbefore mentioned, shall or will, at any time, be made or allowed.
“ And the said party of the second part does further covenant, promise and agree that he will at all times during said term, except as hereinbefore agreed, put, keep and maintain all the said wharf property, and every part thereof and the structures thereon, in good and sufficient repair and condition, and will well and sufficiently dredge, and keep dredged, the slip or slips adjacent thereto; and that all such repairs, rebuilding and dredging during said term shall be made and done at the sole cost, charge and expense of the said party of the second part. And in case the said party of the second part shall make default therein, and shall neglect or refuse to make such repairs, or do such dredging, for the space of ten days after notice so to do shall have been given by the said department of docks, or any proper officer, agent or employe thereof, or of said parties of the first part, then this grant and everything herein contained shall be forfeited, and the party of the second part will pay to the parties of the first part such damages as they may have sustained; or at their or its option, the said parties of the first part, or the said department, may make such repairs, or do such dredging, and the full cost and expense thereof shall and will be paid on demand by the said party of the second part to the said parties of the first part.”

It appears from the stipulation that both parties claim and admit that the said premises mentioned in said lease were not in a suitable condition for service at the commencement of said term, commencing May 1, 1887, and that such claim was made at the time of the execution of said lease, and has ever since been made; and that the plaintiff, from May 1, 1882, to May 1, 1887, put, kept and maintained said pier and premises, and every part thereof, in good and sufficient repair and condition; that prior to May 1, 1887, the pier and bulkhead were old, and by that time, notwithstanding the said repairs that plaintiff had put upon them, said premises were not in suitable condition for service for the second five years, and that since May 1,1887, the plaintiff has expended the reasonable sum of $12,500 for repairs, by which said wharf was placed in a suitable condition for service.

The court also found that at the time of the execution of the second lease the board of commissioners at the head of and governing the department of docks considered it necessary that certain repairs should be made to said premises to put the same in ■suitable condition for service.

This action was brought to recover the amount expended by the plaintiff in putting the pier in suitable condition for service ; .and the learned judge below seemb to have founded his conclusion as to the plaintiff’s right to recover upon the ground that the dock commissioners had decided that the repairs made by the plaintiff were necessary to put the pier in suitable condition for service, and that the defendants had refused to make the same.

There is no question but that it v<as the intention and understanding of the parties that the dock commissioners should determine what was necessary to put the wharf property in suitable condition for service during the term, and that except so far as they have acted no claim that the same was not at the time of the commencement of the term in suitable condition for use could be made or allowed.

This is certainly the'language of the contract The lessee, undoubtedly, if the premises were in an untenantable condition when they were tendered to him under his lease would have a right to refuse to take possession. But after he had taken possession then, under the clauses of the lease in question, no claim could be made "that the premises were untenantable unless the dock commissioners so decided.

If the dock commissioners determined that certain repairs were necessary to put the wharf property in suitable condition for ser■vice at the commencement of the term, then clearly the defendants were bound to make such repairs and the plaintiff could recover whatever damage he might sustain by reason of the failure "to make such repairs. But beyond that no claim for repairs could be made because the lease contained the express covenant that the tenant should keep and maintain the property and the structures thereon in good and sufficient repair and condition, and that all repairs, rebuilding, etc., done during the term should be at the ■sole cost, charge and expense of the lessee.

Now in the case at bar there is no evidence whatever, as far as we have been able to ascertain, of any determination upon the part of the dock commissioners that any repairs were necessary to put the premises in a suitable condition for service.

It may be claimed that this is contrary to the admission contained in the stipulation in which it is stated that both parties •claim and admit that said premises were not in a suitable condition for service at the commencement of the second term. Exactly what is meant by this stipulation it is not entirely easy to determine. But there is no admission of any action upon the part of the dock commissioners upon this point. In respect to the second lease it might very well be argued that the provision as to repairs prior to the commencement of the term or as soon after such commencement as shall be found practicable is entirely inconsistent with the covenant upon the part of the lessee contained in the original lease that he will keep the said wharf property and every part thereof and the structures thereon in good and sufficient repair and condition and that all such repairs, rebuilding, etc., during said term shall be made and done at his sole cost, charge and expense. And although it has been admitted upon this record that the plaintiff did, during the first term, keep and maintain the premises and every part thereof in good and sufficient repair and condition, such admission seems to be inconsistent with the further admission that on the 1st of May, 1887, notwithstanding such repairs, the wharves were not in a suitable condition for service; the second admission being predicated however upon upon the fact that the pier and bulkhead were old.

It seems to us in the condition of the proofs, that, the new lease not having been executed until after the commencement of the term therein mentioned, in the absence of any decision upon the part of the dock commissioners that any repairs were necessary to put the premises in a condition suitable for service, the only cause left to the plaintiff was to refuse to take the lease or to enter into possession of the premises and pay the rent, having no claim for want of repair.

We think, therefore, that the judgment was erroneous and that the same should be reversed and a new trial ordered, with costs to the appellant to abide the event.

Daniels, J., concurs.


author: Daniels, J.

text:
    George Law et al., Ex’rs, Resp’ts, v. Josephine May et al., App'lts.

      (Supreme Court, General Term, First Department,

      Filed March 13, 1891.)

    Will—What is carried by residuary clause.
    A genera] residuary clause, in a will, will carry every interest, unless such, interest is manifestly excluded. The intention to include all is presumed and the intention to exclude must appear from other parts of the will. This rule appl'es equally to real and personal property.
    Appeal from a judgment entered on the report of a referee.

      Osborn E. Bright, for app’lts; John M. Scribner and Wm. B. Dall, for resp’ts.
   Daniels, J.

This action was brought to obtain a settlement of the plaintiffs’ accounts as executors, and the construction of so much of the will of George Law, deceased, as relates to the disposition of the capital of a trust created for the benefit of his son Samuel, who is now also deceased. So much of the judgment as includes the accounts is free from objection. _ And the appeal brings up for review no more than that part of it which adjudges that the United States bonds of the par value of $225,000, which were reserved and set apart to provide for the annuity for the testator’s son Samuel, or the proceeds thereof, including the interest thereon since the decease of the beneficiary, shall be distributed, transferred and paid over by the plaintiffs, “Two-eighths thereof (less plaintiffs’ commissions), absolutely to the plaintiff, George Law, for his individual use and benefit, and that the other six-eighths thereof be distributed by the plaintiffs under the ninth, tenth, eleventh and twelfth clauses of the testator’s last will and testament, to be held by the plaintiffs as part of the residuary estate which they hold in trust pursuant to said ninth, tenth, eleventh and twelfth clauses of said will.”

The objection taken by the defendants who have appealed to this direction is, that the remaining six-eighths of the bonds, after delivering two-eighths to the plaintiff George Law, should be equally divided between them, as the next of kin of the testator, they being his three daughters. Their right to this division or distribution depends upon the question whether the testator died intestate, as to this part of the estate, after the decease of his son Samuel. The referee has decided that he did not, but that this remainder in the bonds formed part of the residuary estate, to be devoted to the extent of six-eighths to the trusts created by the will for the benefit of the daughters during their respective lives. And whether this is the construction which should be given to the will is the point on which the decision of the appeal must depend.

The first part of the will, after directing the payment of debts and funeral expenses, was devoted to provisions for the benefit of his widow. Among these were the creation of a life estate for her in his residence, or other property to be obtained at her instance in lieu thereof, and in his farm and buildings in Washington county. He also directed his executors to invest so much of his estate for her benefit as would produce the income of $25,000 a year, and to pay the same to her in quarterly payments during her life. And at the time of her decease the property devised to her for life, and the investment to raise the yearly sum of $25,000 for her, was directed to form a-part of the testator’s residuary estate, and to be disposed of as such.

After giving these directions, and adding that they should be accepted in lieu of dower, the provisions were then added for the benefit of this deceased son Samuel, which were followed by the final directions for the division of the residue of his estate. Of this, two-eighths have been given to his son, George Law, one of the plaintiffs, and two-eighths in trust for life for each of his daughters, subject to an annuity in favor of Anna, the daughter of his daughter Sarah, and a similar annuity in favor of the son of his daughter Sarah. An annuity was also provided for out of that part of the estate which was devoted to the creation of a trust in two-eighths of the remainder for the benefit of his daughter Anna,payable to her husband during his life. These directions are important so far as they indicate the intention of the testator to have been to provide for the division in this manner of the entire residue of the estate after the termination of the life estates created for the benefit of his widow and of his son Samuel. And they do furnish evidence of that intention, for no disposition was directed as to any part óf his estate in favor of any other persons until after the decease of his daughters, when the share of the person dying has been directed to be given to her issue then living, and, if there shall be no such issue, then to the testator’s children then living, and the issue of any one dying without leaving issue, in equal portions, the issue to take the share of the parent, and no • more. His intention by these directions appears to have been to provide only for the members of his own family and their children, disposing of, in that manner, his entire estate.

By the seventh paragraph of his will he provided:

“After fully providing and raising all sums necessary to satisfy the foregoing gifts, devises and bequests to my wife, I direct my executors to apply to the use and benefit of my son Samuel during his natural life, for his support and maintenance, ten thousand dollars per annum, to be computed from the date of my decease; or so much of said sum as may, in their judgment, be necessary for that purpose; and I direct my executors to invest so much of iny estate as may be necessary to raise the aforesaid sum of ten thousand dollars; it being my wish and desire that my executors shall have discretion as to how much of said ten thousand dollars shall be applied to the use and benefit of my said son Samuel; and that any surplus which may remain unapplied during any one year of said sum of ten thousand dollars shall be retained by my executors to meet any possible deficiency which may arise in any subséquent year.
“ The above provisions in favor of my said son Samuel are made, and shall be accepted, in full satisfaction of all interest he may at any time have in my estate, either as my heir or next of kin, or otherwise ; it being my wish that under no circumstances shall he take or have any other share or interest therein than that which is given by this clause of my will.”

• And this contains further evidence that his intention was that his estate should be completely disposed of by his will. For if that had not been his intention, he would not have declared the trust in favor of his son Samuel to be “ in full satisfaction of all interest he may at any time have in my estate, either as my heir, next of kin, or otherwise, it being my wish that under no circumstances shall he take, or have any other share, or interest therein than that which is given him by this clause of my will.” If he , had intended, or expected, to die intestate as to the part of his estate in this manner devoted to the trust for the benefit of Samuel, then he could not deprive him of his ultimate share in that part of the estate, and this direction would have been nugatory. But its significance of the intention to include all his estate is further advanced by the additional declaration concerning the final vesting of the property appropriated for the benefit of his daughters and their issue which the testator declared should be “ by excluding and excepting, however, my said son Samuel, who shall have no share or part therein.” These directions disclose the evident intention to have been that the, estate should be wholly disposed of and divided under the provisions of the will. And they harmonize completely with the general direction concerning what should be done with the remainders left by the decease of the widow and of this son. They are, "After the satisfaction of the provisions hereinbefore made for .my wife, and son Samuel, my executors shall divide the residue of my estate into eight equal parts, and for this purpose shall'convert into personalty all of my estate not then so converted; and two of said parts I give, devise and bequeath to my son George, his heirs and assigns forever.”

And they are the only directions given for the disposition of the residue of the estate. And that this residue was intended to include all of his estate not otherwise disposed of is evident from the fact that it was to comprehend such parts as were given and devoted to the life estate, and the trust for his widow .for life, all of which was declared to be part of the residue, to be disposed of as was afterwards directed. This disposition was to take place after the satisfaction of the provisions made for the widow and the testator’s son Samuel.

So much of the estate as was devoted to those objects was then combined together with all the residue in one mass, and the same disposition was to be made of the entirety. It was the residue previously mentioned, which was not to consist solely of the property devised and bequeathed for the benefit of the widow for life, but that property was after her decease, as it has been significantly declared, to form a part of the residuary estate. To form which residue it was to be added to the other property of the testator, which included the remainder of what was required to supply the income for the support of his son Samuel. For after satisfying these directions for the benefit of the widow and the son, then all the estate remaining was directed to be divided, two-eighths to his son George and the residue in trust for his daughters. All the residue of the estate was directed to be divided. There was no exception whatever from the completeness of that direction. But it was to divide the residue, which included all the residue, into eight equal parts. What was in this manner to be accomplished was the division of all the estate, including the remainders in the property devoted to the creation of the two life estates for the widow and the son Samuel among the other children of the testator.

And this construction of the will is supported by the rule maintained by the authorities bearing upon the subject. And that is that the general residuary clause, and this was such a clause, will carry “ every real interest, whether known or unknown, immediate or remote, unless . it is manifestly excl udcd. The intention to include is presumed, and an intention to exclude must appear from other parts of the will, or the residuary devisee will take.” Floyd v. Carow, 88 N. Y., 568. And it applies equally to personal as to real property. Matter of L' Hommedieu, 32 Hun, 10; Kerr v. Dougherty, 79 N. Y. 328 ; Gilman v. Redding ton, 24 id., 9; Riker v. Cornwell, 113 id., 115; 22 N. Y. State Rep., 151; Matter of Crossman, 113 N. Y., 503; 23 N. Y. State Rep., 259; Matter of Bonnet, 113 N. Y., 522; 23 N. Y. State Rep., 268. There was not only no intention disclosed in any part of the will to exclude this part of the estate from the residue mentioned in it, but the intention was manifested that it should be included and distributed under the directions which were given.

It has been objected that this construction will create an unlawful suspension of the power of alienation or absolute ownership. But it can by no possibility be attended with that result Por each trust will terminate'with the life of the daughter entitled to its-benefit. At that time the share devoted to the trust will become - absolutely vested in her, or their issue, or her surviving brother and sisters. And the extent of the interest of Mr. Wright, the husband of the testator’s daughter Anna, will be thereafter that only of an annuitant, which he will be empowered at any time to extinguish or release.

The judgment for these reasons and those of the referee seems-to be right, and it should be affirmed, with costs to be paid by the executors out of the income of the estate.

Van Brunt, P. 3., concurs.


text:
    John Wheeler, as Assignee, Resp’t, v. Theodore Timpson, App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 13, 1891.)

    Pabtnebship—Agbebment not within the foweb on a fabtneb.
    An agreement of a customer of a firm of stock brokers, made with B., one of its members, that the firm would accept the individual puts of B. in liquidation of any stock transaction for which the customer could produce such puts, is not an agreement within the scope of the partnership business and is merely the individual contract of the person making it.
    Appeal from judgment entered on report of referee.

      E. C. Boardman, for app’lt; Jno. Notman, for resp’t.
   Van Brunt, P. J.

This action was brought to recover an alleged balance claimed to be due from the defendant to the late firm of O. M. Bogart & Co., whereof the plaintiff is the assignee.

The claim of the defendant before the referee was'that he had been dealing with the firm of O. M. Bogart & Co. for many years prior to its failure; that he had ordered them to purchase stocks for him during these years and that in a great number of instances the stocks had been purchased under an agreement between himself and the firm that they would accept in settlement the individual puts of O. M. Bogart, senior, who was a member of the firm, in liquidation of any stock transaction for which he could produce such puts, and that in the present action he was entitled to be credited with the amount fixed by such puts on three different transactions, while, in fact, he was refused such credit and was credited only with the amount which the stocks referred to in such puts realized upon a sale under the rules of the Hew York Stock Exchange.

It was claimed upon the part of the plaintiff that the puts were the individual puts of 0. M. Bogart, senior, and that the firm had nothing whatever to do with them and was not bound thereby except so far as such puts may have been accepted by the firm.

The plaintiff claimed over $13,000, with interest from May, 1884. Upon the trial it appeared that defendant was entitled to a credit of over $9,000 relating to a transaction which took place on the 8th of May, 1884, prior to the assignment, which, however, was not entered in the books of the firm until afterwards.

It appears from the evidence that just prior to the failure of O. M. Bogart & Co. the defendant presented to the firm a put for 100 shares of Lake Shore. The clerk to whom such put was presented failed to report it to the bookkeeper on the day when it was presented. Subsequently, upon the attention of the clerk being called by the bookkeeper to the transaction, he stated that the put had been presented on the 8th of May and had been accepted by the firm, but that he had omitted to report it. Thereupon the bookkeeper entered it as an omitted entry as of the 8th of May, and upon the books of the firm the credit appeared in favor of the defendant in the defendant’s account with the firm.

It further appeared from the evidence that the defendant was entitled to this credit and it was allowed by the refefee, leaving a balance due from the defendant to the plaintiff as found by the referee.

It is claimed upon the part of the defendant that the evidence established an agreement between himself and O. M. Bogart, senior, that these puts should be accepted by his firm in settlement of the purchase of any stock which might be ordered by him from the firm.

And it is urged that while conceding that every living member of the firm denied any such agreement, yet as O. M. Bogart, senior, was examined as a witness, and although testifying that no such arrangement existed as is claimed by the defendant, did not contradict the testimony of the defendant in detail, that therefore it is a concession upon his part that some such arrangement was made.

We fail to see the force of the suggestion. The testimony of O. M. Bogart, senior, contradicted the testimony of the defendant upon this point; and it may be proper to observe that even if the defendant had established by his testimony and that of O. M. Bogart, senior, the existence of srrch an agreement, it would not be binding upon the firm unless it was shown that they had knowledge of its existence and acquiesced therein. It was certainly beyond the power of any member of a firm to make such an agreement. It was not shown to be the ordinary way of transacting the firm business, and O. M. Bogart, senior, was not shown to have authority to make any such arrangement. And the mere fact that upon previous transactions the firm had accepted these puts in settlement of stock sales cannot be relied upon to show ratification by the firm, without also establishing knowledge of the agreement which it is claimed O. M.. Bogart, senior, made with the defendant. The firm in accepting these puts in settlement were accepting the personal responsibility of one of the members of the firm as long as that member was in good standing, and nothing more. It was precisely the same as though in settlement of these sales the defendant had presented the individual check of one of the members of the firm, and the same had been accepted by the firm.

It will thus appear that the question of the existence of this agreement was. one of fact which the referee has decided adversely, to the defendant; and we think rightly, because the weight, of evidence is strongly against the claim made by the defendant; and it seems to us that the idea of the arrangement and understanding has grown in the defendant’s mind out of the fact that, he had been in the habit of using the puts in the manner described.

It is claimed upon the part of the defendant that the referee erred in allowing evidence as to how these transactions were entered in the books of O. M. Bogart’s individual account in those books.

It is undoubtedly true that the entries were not binding upon the defendant. But it is also equally true that the introduction of this evidence could not possibly work to the prejudice of the defendant as it in no way tended to contradict or in any way impeach the testimony he had given, but on the contrary seemed to-strengthen it and give some plausibility to the statement which he made of the agreement which he had entered into with 0. M. Bogart, senior.

The entries were made precisely as they would have been had such au agreement been entered into. And it is equally true that, they were made precisely as they would have been had no such agreement been entered into, but the firm had simply accepted the contract of a solvent promisor in settlement of their transactions with the defendant. The proof under no circumstances could have any effect in determining the question of fact injurious to the defendant.

The objection to the exclusion of evidence whereby the defendant sought to prove that certain items in the account of the defendant in the ledger of 0. M. Bogart & Co. did not represent actual transactions upon the theory that the evidence tended to support the claim of the defendant herein, is not. well taken for the reasons already given. Whether such arrangement had been made or not, if Bogart & Co. accepted the puts of 0. M. Bogart, senior, upon any transaction the entry in question would have been made, and consequently the evidence would not have tended to establish the arrangement claimed upon the part of the defendant.

The fact that these entries appeared to represent actual sales both in the books and in the bill of particulars in this action in no way altered the question, in view of the fact that the evidence was uncontradicted that the firm had been in the habit of accepting the puts of 0. M. Bogart, senior, in liquidation of transactions between the defendant and the firm.

Upon the whole case, therefore, the conclusion of the referee seems to be supported by the evidence and the judgment should be affirmed, with costs.

Brady and Daniels, JJ., concur.


text:
    Josephine F. Clason, Resp’t, v. Elizabeth S. Baldwin, App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 13, 1891.)

    1. Ejectment—When holder op record title need not prove actual possession.
    Where the plaintiff’s title appears by the record to have been regularly derived from the original owner there attaches to it aright of possession; and this secures to the holder of the title constructive possession and the right to recover against one without title, without showing actual possession.
    2. Same—Non-joinder op parties.
    Where in an action of ejectment the plaintiff failed to make tenants, who were the actual occupants of the premises, parties as required by § 1512, Code Civil Procedure, and the complaint did not disclose this omission, the remedy of the defendant is to set up the non-joinder by answer; otherwise the objection is waived.
    3. Same—Damages—Must be alleged in complaint.
    Where in such an action the plaintiff wishes to recover damages for the withholding of the possession he must lay a foundation for the claim by specifically alleging it in the complaint; if he do not he cannot recover damages.
    Appeal from a judgment on the verdict of a jury, and from an order denying a motion for a new trial.

      Isaac N. Miller, for app’lt; Geo. W. Stephens, for resp’t.
   Daniels, J.

The judgment appealed from is for the recovery by the plaintiff of the possession of the premises known as No. 42 Sheriff street, in the city of New York, and the sum of $3,942.50 damages for the withholding of the same after the commencement of the action. The case was previously before this court, and the decision then made in it is reported in 31 N. Y. State Rep., 350.

The plaintiff derived her title from her father, William Jones Clason, as one of his children and heirs at law. At the time of his decease he left three children and his widow surviving him. By his will, which was duly proved, he provided an annuity for his widow amounting to the sum of $700, and charged its payment upon his real and personal estate. Subject to the payment of the annuity, he gave his real and personal estate to his two sons and such future child or children as should be born of his wife as tenants in common, subject to the further direction that if either of his children should die without lawful issue, then the share of that child should go to the survivor or survivors of his children. The will was dated on the 18th of March, 1823, and the plaintiff was born on the 13th of June of the same year. One of the sons died on the 27th of April, 1825, and the other on the 7th of October, 1860. They were each unmarried when they became deceased, and consequently without lawful issue. And the widow died on the 27th of August, 1853. The plaintiff, therefore, acquired the estate according to the will on the decease of the second son, free and discharged from the widow’s annuity. It was admitted on the trial that William Jones Clason appeared by the record title to the property in suit to have received a deed of the same on the 11th of March, 1873. And that the record, if produced, would show title in his grantor at the time of such conveyance, and that production of the record was waived by the defendant. That admission, with the. other evidence to which reference has been made, vested the plaintiff with the title to this land. But it was objected that she could not maintain this action to recover its possession without additional evidence that actual possession had been taken of the land under the title appearing by the record.

But that is not the law, where the plaintiff appears to be the owner of the land by a title, as this was, in no way depending upon the fact of possession. If the deed to the plaintiff’s ancestor had been executed by a person not appearing to be vested with the title, then possession by him would have been a necessary factor in the way of proving title. But when the title is shown, as it was by this record, to have been derived successively from the original owner, there it is accompanied with a right of possession which secures to the apparent owner the constructive possession and the right to recover it by an action of ejectment from a person withholding it without title. That is conceded and assumed in the authorities cited to support the appeal, Miller v. Long Island R. R. Co., 71 N. Y., 380; Dunham v. Townshend, 118 id., 281; 28 N. Y. State Rep., 864; Cagger v. Lansing, 64 N. Y., 417, and is without doubt the well established law.

The premises in suit were occupied by tenants who were not made defendants, and not by the defendant herself. And as § 1502 of the Code of Civil Procedure has required the occupant to be made a defendant, it is objected that the action cannot be maintained. But by § 1503 the defendant, as the asserted landlady, could also be made a defendant in the action. And if she desired the actual occupants to be joined with her as defendants, her remedy to secure that end was to set up by way of answer this non-joinder of the occupants, as the complaint itself did not disclose the defect. That she has failed to do, and that failure deprived her of the right to insist on this objection. Code Civ. Pro., .§§ 488,498-9; Finnegan v. Carraher, 47 N.Y., 493. This objection as well as the one previously considered was, therefore, rightly overruled at the trial.

There was evidence in the case that the defendant had rented and collected the rent of considerable portions of the premises. And that evidence related to at least one tenancy created before the commencement of the suit. Under this evidence the question was submitted to the jury, whether the defendant was in fact in possession of the premises. They found the fact against her and their verdict as the evidence stood is entitled to be sustained.

Exceptions were taken to portions of the charge which related to the right of the plaintiff to recover the land. But neither of them seems to be well founded, and they require no further consideration for the decision of this part of the appeal. She was proved to be the owner, and as there was sufficient evidence to render the fact of possession a question for the jury to decide, and that was found in her favor, the judgment awarding the recovery of possession to her was fully warranted.

The plaintiff was also held to be entitled to recover the damages for withholding possession from the time of the commencement of the action, and those damages have been included in the verdict and j udgment. But that cause of action was not set out in the complaint It stated no more than the facts of her own seizin, with a description of the property, followed by the allegation that the possession was wrongfully withheld by the defendant. That was not sufficient to entitle the plaintiff to these damages, although damages were included in the demand for judgment. Larned v. Hudson, 57 N. Y., 151.

The damages accruing after the commencement of the action were considered not to be within the principle of this decision. But there seems to be no good reason for the distinction. It is as important that the right to recover the damages after the action has been commenced should be made to appear by the complaint, as it is that it should lay the foundation for such damages as accrue previous to the event, to entitle the plaintiff to recover them. The defendant was to be informed of the fact, to supply her with an opportunity to .be prepared with proof, if that could be obtained, to contest it upon the trial. That was not secured in this instance. And both the evidence proving the damages and the ruling allowing their recovery, were erroneously sanctioned at the trial.

The judgment should, therefore, be modified by setting aside and reversing so much as permits the recovery of these damages, and as modified affirmed, without costs of the appeal to either party.

Van Brunt, P. J., and O’Brien, J., concur.


text:
    Ernest Dichman et al., App’lts, v. George M. Robeson, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed March 13, 1891.)

    Bills and notes — Consideration — Draft on a firm which had CEASED TO EXIST, BUT WHOSE ASSIGNEE HONORED DRAFTS UPON IT.
    In an action to recover on defendant’s check it appeared that he gave it to one B. solely for the latter’s accommodation; that on May 28 at Washington, D. C., B. endorsed the check to 8. E. M. doing business as M. & Co., and was to receive in return a draft; S. E. M. at once endorsed the check to M., D. & Co. of New York, for account of M. & Co., and subsequently forwarded it to M., D. & Co. It was credited to M. & Co., but, upon payment being refused as hereafter stated, it was charged back. The firm of M., D. & Co. had ceased to exist, but plaintiff had taken an assignment of the interest of 8. E. M. and another partner in said firm and had continued to honor drafts upon M., D. & Co. On May 29 R. E. M. delivered to B. a draft on M.. D. & Co. which was good then but was worthless on J une 2d when presented, M. & Co. having failed May 81st, and. payment of the check having thereupon been stopped. Held, that it did not appear that the draft, although upon a non-existent firm, would not nave been paid if presented in time, and that a verdict for defendant was erroneous.
    Appeal from a judgment recovered on trial before the court without a jury.

      William Niles, for app’lts ; Walker Hartwell, for resp’t.
   Daniels, J.

The action was brought upon a check made by the defendant upon the Camden Safe Deposit & Trust Company, whereby he directed the company to pay to A. P. Brown, or order, the sum of $3,500. The check was delivered 'to Brown to be used by him for his benefit whenever it might become necessary that such use should be made of it. It was solely for his accommodation, and at the time when he received it he made and delivered to the defendant his own check for the same amount by way of evidence only that this check had been made and delivered to him. There was no exchange of checks by which the defendant was empowered to use the one made by Brown, but his check was made a voucher or evidence that he had received the defendant’s check for his own use and accommodation.

On the 28th day of May, 1884, two days after the making of the check by the defendant, Brown, at the instance and request of S. E. Middleton, who was then carrying on business in the city of Washington, under the style of Middleton & Co., endorsed and delivered the check to him. For this check he was to receive from Middleton a draft of the same amount on the following day. When Middleton received the check he endorsed it payable to the order of Middleton, Dichman & Co., for account of Middleton & Co., and transmitted it to the city of Hew York, addressed to that firm.

At that time no such firm as Middleton, Dichman & Co. existed, or was engaged in carrying on business. But prior to the making and delivery of the check the plaintiffs, together with D. W. & S. E. Middleton, were engaged as. copartners at the city of Hew York in the banking and stock brokerage business. But on the 24th or 25th of May, 1884, this firm was dissolved, and Dichman, one of the plaintiffs, took an assignment from each of the Middletons of his interest in the preceding firm of Middleton, Dichman & Co. The draft which Middleton delivered to Brown on the 29th of May, 1884, to complete his part of the agreement, was drawn upon the firm of Middleton, Dichman & Co., but it was not presented for payment until the 2d of June, when payment was refused. Prior to that time, and after the draft was drawn, Middleton drew down his aeount with Dichman & Co., and created a balance in their favor against himself. And for that reason and because payment of the check had been previously countermanded, the draft was not paid. Middleton failed on the 31st of May, 1884, and when that fact became known, the Camden Company was ordered by telegraph not to pay the check. When the check was received, as it was by Dichman & Co. on the 29th of May, Dichman endorsed it with the name of the preceding firm of Middleton, Dichman & Co._ But payment of it was not refused because of any irregularity in the endorsement, but on account of the failure of Middleton.

When this check was sent to the city of Hew York and received as it was by the plaintiffs, it had been endorsed for account of Middleton & Co., Bankers, in Washington, and it was credited to them in their account with the plaintiffs. And after the payment of it had been refused it was charged back, with the protest fees, in the same account to Middleton & Go.

The trial of the action resulted in a judgment for the defendant. And this judgment appears to have proceeded upon the findings that the draft which was drawn by Middleton in favor of Brown was worthless, being drawn upon a firm which had no existence on the day of its date. But the evidence tended to establish the fact that after Dichman had purchased the interest of each of the Middletons in the firm of Middleton, Dichman & Co., he and his other partner continued to transact business and to pay drafts drawn upon and addressed to them in the name of Middleton, Dichman & Go. And no instance appears to have occurred where this firm, as the successor of Middleton, Dichman & Co., declined to discharge obligations of this description because they contained the address of this former firm. In this state of the evidence, therefore, the court could not infer as a fact that the draft delivered to Brown and addressed to this firm was worthless for the reason that the firm had ceased to exist a few days prior to the date of the draft. The finding, on the contrary, was directly against the evidence proving the fact to be that paper of this description was received and honored by Dichman & Co. the same as it would have been if it hud been drawn and addressed directly in that firm name.

A further finding of fact upon which the judgment proceeded was that Dichman knew of the insolvency of Middleton & Co. on the 28th of May, 1884, and prior thereto, and knew that any draft on Middleton, Dichman & Co. was worthless and would not be paid. This finding also is without evidence to sustain it, for both Dichman and his partner Tuttle testified that they had no knowledge or information of the insolvency of Middleton prior to the time when his banking office failed to open its doors, which was on the last day of May, 1884. Dichman was in the city of Washington on the 28th of May and had interviews with Middleton. And it may very well be that he received information at that time that Middleton had become insolvent and incapable of proceeding with his business, but there was no evidence given upon the trial tending to prove the existence of that fact.

The most that could be done would be to conjecture that Dichman probably received this information, .but so slight a probability would not be sufficient to be accepted as proof of the fact, when Dichman himself, as a witness, in his evidence denied it. In addition to that the account which was produced and given in evidence very clearly indicated that a draft drawn by Middleton on Dichman & Co. on the 29th of May, 1884, was not worthless, for the reason that at that time a balance of account appears to have existed in Middleton’s favor exceeding the amount necessary to pay this draft. But this balance was more than drawn out of the firm of Dichman & Co. by drafts, on the 31st of May and the 2nd of June, 1884. It therefore appeared that a draft drawn upon the 29th of May was not worthless, and that there was no reason for supposing or inferring that it would not be paid. The inference, on the contrary, would be, as Dichman & Co. continued to pay drafts drawn in the name of Middleton & Co. upon the firm of Middleton, Dichman & Co., that this draft would have been paid if it had been presented for payment on the 30th of May, as it well might have been, instead of the 2nd of June, when Middleton’s balance had been entirely exhausted. These are the important findings of fact in the defendant’s favor, and neither of them is supported by the evidence given upon the trial.

There was evidence in the case tending to prove that Dichman & Co. paid drafts drawn by Middleton directly against this check, but it was not controlling upon the court. So that there was evidence that Brown had been induced to endorse and deliver the check to Middleton upon a false representation that he had been informed by telegraph from Dichman & Co. that his draft upon them for this amount would be paid, when in fact no such communication had passed from the firm to him. And it may be that if proper findings of fact had been included in the case embodying and following the opinion of the justice presiding at the trial, that the dismissal of the complaint could be maintained. But upon the facts which were found by the court, and are directly in conflict with the evidence, and upon which the judgment itself was dependent, the direction for the dismissal of the complaint was not warranted.

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

Yaw Brunt, P. J., and O’Brien, J., concur.


author: Parker, J. Bradley, J.

text:
    Moritz Pach, Resp’t, v. Frank T. Gilbert, as Sheriff of Erie County, App’lt.

      (Court of Appeals, Second Division,

      Filed April 21, 1891.)

    1. Sheriff—Failure to return execution—Attachment—Restoration of LIEN.
    It is the duty of a sheriff to give preference in the application of proceeds of a sale under junior executions to a prior warrant of attachment, although no levy he made thereunder.
    2. Same.
    An attachment in favor of plaintiff was levied on property of one 0. The warrant was vacated and the sheriff released the levy. Executions on confessed judgments were then placed in his hands under which he levied and sold the property. Thereafter the order vacating the warrant was set aside. Held, that as the warrant of attachment came first into his hands and the effect of the last order was to give it vitality as of the date when delivered to him, it should have been treated in the application of the proceeds of the sale as if he had neglected to make a levy under it, but had instead levied and sold under executions subsequently issued, and as defendant did not do this he could not. in an action for failure to return execution, show in mitigation of damages that plaintiff was not injured by his action.
    Appeal from a judgment of the general term of the superior court of Buffalo, affirming a judgment entered on the verdict of a jury.

      Charles B. Wheeler, for app’lt; O. O. Cottle, for resp’t.

       Affirming 30 N. Y. State Rep., 486.

   Parker, J.

This action is brought to recover of the defendant for fail ure to return an execution within sixty days after its delivery to him. The delivery of the execution and failure to return it within the time prescribed by statute was admitted, and thus was established prima facie the plaintiff’s right to recover the full amount which the defendant was commanded by the execution to make out of the property of the defendant therein. Ledyard v. Jones, 7 N. Y., 550.

The defendant in mitigation of damages asserted that it was not possible for him to have collected the amount of the execution or any part thereof out of defendant’s property. It is conceded that the defendant did not have at the date of issuing the execution or at any subsequent time any property out of which it could have been satisfied in whole or in part. But the plaintiff insists that by virtue of prior proceedings taken in the action there should have been in the hands of the sheriff applicable to the payment of the judgment moneys sufficient for that purpose; that if there was not it was solely due to the fault of the defendant, and therefore not available to him in this action by way of mitigation of damages.

It appears that on the 30th day of December, 1887, a warrant of attachment in that action was granted, and on the same day, at 3.40 P. M., delivered to the defendant as sheriff of Brie county; he executed the warrant within two hours thereafter by making a levy on a stock of dry goods belonging to Lizzie Orr, the defendant ; the property so levied on was sufficient to satisfy the plaintiff’s demand ; on the same day the judge who granted the warrant of attachment, on an ex parte application, made an order vacating it; such order was duly served on the sheriff the same evening, who thereupon, and on" the day following, went to the store of Mrs. Orr and formally released the goods from the levy made under the attachment. Thereafter and until January 3d she continued to sell goods from the store as formerly, and on that day she confessed judgments in favor of certain creditors upon which executions were issued against her property to the sheriff, who on the 4th day of January levied on the stock of goods of the judgment debtor. Such confessions of judgment were followed by a general assignment for the benefit of creditors made by the judgment debtor, Lizzie Orr, dated January 4, 1888, and which was duly filed in the county clerk’s office on the day following.

January 12, 1888, on motion of the plaintiff in Pack v. Orr, an order was made setting aside the order of December 30th, vacating the warrant of attachment, which order also contained a provision that “ the lien of said attachment is restored.” This order was subsequently affirmed at general term, but on appeal to the court of appeals it was modified by striking out such provision, and as thus modified, affirmed. The special term order, was, immediately following the granting thereof, served on the sheriff. While the warrant of attachment, the order vacating it and the order setting aside the order of vacation were in his hands, and on January 16th, he sold the property of the judgment debtor under the executions issued January 4th.

The sum realized on that sale was more than sufficient to pay the amount of the execution now in controversy, but the proceeds of the sale were by the sheriff wholly applied on the executions issued on the judgments confessed January 3d. The granting of the order vacating the attachment, followed by the action of the defendant in going to the store and formally releasing the goods from the levy made, operated to destroy all rights which had been acquired by the granting of the warrant of attachment and levy thereunder. Before that order was set aside other judgment creditors issued executions and caused levies to be made on the property of the defendant which was followed by a general assignment on her part for the benefit of creditors, and the first contention on the part of the plaintiff is that the order setting aside the first order operated to restore the rights which had been acquired in that property by virtue of the attachment and levy thereunder. It is asserted by the defendant that this question has been passed on by this court adversely to plaintiff’s contention. This assertion is founded on the fact that the court modified the order setting aside the order vacating the warrant of attachment by striking out the clause which provided that “the lien of said attachment is restored,” and it is urged that this was in effect a determination by this court that it did not rest within the power of the special term to restore to the plaintiff the rights lost by the vacation of the warrant of attachment.

While this was not necessarily the decision made, it may well have been concluded that the court could grant to the plaintiff on that application no other relief than would be afforded by setting aside the order vacating the attachment and that the only possible effect of the provision would be to embarrass the intervening rights of third parties, if such there should prove to be. When the warrant of attachment was vacated and the levy thereunder released the situation of the property was for the time being the same as if there had never been a warrant of attachment issued, and a subsequent restoration of that warrant of attachment could not operate to burden the property in the hands of a bona fide purchaser nor become a charge upon it in the hands of an assignee acquiring the property by virtue of a general assignment for the benefit of creditors. Executions become liens on personal property from the time of the delivery thereof to the proper party to be executed. Code of Civ. Pro., § 1405.

But no lien is acquired by the granting of a warrant of attachment, or by the delivery of the same to the sheriff for execution. The right to subject a debtor’s property capable of manual delivery to levy and sale under an execution to be issued on a • judgment thereafter to be obtained can only be acquired by the act of the sheriff in taking the property sought to be attached into his actual possession. “No other mode is prescribed. Nothing else will constitute the levy. Until the officer has obtained actual custody he has made no levy and can make none.” Anthony v. Wood, 96 N. Y., 180.

But while we are of the opinion that restoring the vitality of a warrant of attachment did not operate to affect or change the rights which the assignee had acquired in the property, a question is presented whether it was not the duty of the sheriff under the statute to apply the proceeds realized on the sale made under the executions so far as would have been necessary in order to satisfy the execution which is the subject of this controversy.

The effect of setting aside the order vacating the warrant of attachment was to give it validity in the hands of the sheriff as of the date when it was issued. Because of the order of vacation, and the act of the sheriff in releasing his levy, the right to retain control of the property, and subsequently subject it to sale under an execution to be .thereafter issued in such action, was lost, because in the meantime the title to the property had passed to another.

Therefore, the remaining question is whether it was the statu•tory duty of the sheriff to give preference in his application of the funds realized from the sale made under the executions to the warrant of attachment first issued to him, notwithstanding the absence of a levy thereunder.

Section 697 of the Code of Civil Procedure provides that “ where two or more warrants of attachment against the same defendant are delivered to the sheriff of the same county to be exr ecuted, their respective preferences, and the rules where a levy, or a levy and sale have been made under a junior warrant are the same, as where two or more executions against the property of the ■same defendant are delivered to the sheriff of the same county to be executed.”

Section 1406 provides that “where two or more executions against property are issued out of the same or different courts of record against the same judgment debtor, the one first delivered to an officer to be executed has preference notwithstanding that a levy is first made by virtue of an execution subsequently delivered.”

Under this section, which is substantially a re-enactment of § 14, part 3, chap. 6, title 5, 2 B. S., notwithstanding a sale be made under a junior execution, the sheriff must first apply the proceeds in satisfaction of the execution first delivered to him although no levy has been made thereunder. Peck v. Tiffany, 2 N. Y., 451; Patterson v. Perry, 5 Bosw., 518-535; Atwood v. Lynch, 37 Sup. Ct., 5-11.

While the first section quoted provides for the order of preference where two or more warrants of attachment are delivered to the sheriff, and the second where two or more executions are issued to him, § 1407 makes provision for a situation presented by the delivery to the sheriff of executions and warrants of attachment. It declares that “ where there are one or more executions and one or more warrants of attachment against the property of the same person, the rule prescribed in the last section (1406) prevails in determining the preferences of the executions or warrants of attachment, the defendant in the warrants of attachment being for that purpose regarded as the judgment debtor."

Thus by statute it is made the duty of a sheriff to give preference in the application of proceeds of a sale under junior executions to a prior warrant of attachment, although no levy be made thereunder. As the warrant of attachment in question came first into his hands, and the effect of the last order made was to give it vitality as of the date when delivered to him, it should have been treated in the application of the proceeds of the sale as if he had neglected to make a levy under it, but had instead levied and sold under executions subsequently issued. This the defendant did not do. He has, therefore, failed in his attempt to show in mitigation of damages that the plaintiff was not injured by his action.

The judgment should be affirmed.

Bradley, J.

My view is that there was no destruction of the lien of the attachment, but that when the vacating was set aside the lien of the attachment was rendered effectual (except as against bona fide purchasers or mortgagees) from the time of the levy of it on the goods notwithstanding the apparent surrender of the custody of them by the sheriff. I concur in the result

All concur, Bradley, J., in result, except Haight and Brown, JJ., absent.


author: Vann, J.

text:
    Charles H. Pendergast, Receiver of the Produce Bank, Resp’t, v. Nelson Greenfield et al., Executors, App’lts.

      (Court of Appeals, Second Division,

      Filed April 21, 1891.)

    1. Trust—Trial by jury—Equity.
    D. executed to defendant as “trustee” an assignment of all sums payable to him, the contractor, by the city of New York for the “ Riverview Drive.” At the same time defendant executed a declaration that the assignment to him was in trust only to pay out of the moneys all claim si growing out of said work and existing against the firm of D. & Co. by reason thereof, and defendant agreed to account to D. for all moreys or profits received, or to be received by him after payment of said claims, etc. The Produce Bank having previously loaned D. upon notes which it had transferred to the 0. bank, brought this action, alleging that an account had been made by, and a certain sum found in the hands of, the defendant as trustee, and demanded an accounting and payment of said sum. Defendant demanded a trial by jury; which was denied. He also pleaded an individual claim against plaintiff. Held, that the assignment by D. and declaration of trust by defendant constituted a contract to which the Produce Bank was not a party, that it could only enforce iis rights by virtue of the trust, that the action was equitable in its nature, and that the application for a jury was properly denied.
    2. Same.
    The trust was one simply to receive, apply and account., and the applicacation was expressly limited to claims already in existence.
    (Bradley, J., dissents.)
    Appeal from a judgment of the general term of the supreme court in the first judicial department, affirming a judgment entered upon the decision of the court at special term ; and also affirming two orders, one of which denied a motion of the defendant for a trial by jury, and the other granted a motion of the plaintiff for an extra allowance

      Action to enforce a trust
    The complaint alleged the appointment of the plaintiff as receiver of the Produce Bank, the discount by that bank, prior to January %1¡,, 1880, of certain notes for the firm of N. H. Decker ■& Go., contractors for the construction of the Riverside Drive; that said bank held as security certain liens upon the amount to become due from the city of New York for said work; that on the day last named, Nicholas H. Decker, a member of said firm, assigned to Ernest Greenfield, defendant’s testator, certain claims to the contract and the work done thereon between the city and said Decker and one Quintard, for the construction of said drive, and that “for the purpose of such assignment all lights in such respect had theretofore been transferred ” to said Decker with the assent of said bank; that at the same time and as a part of the same transaction said Greenfield executed a declaration of trust, of even date, whereby he acknowledged that said assignment was made to him in trust only to pay out of the profits and proceeds of said contract “ all liens, claims, debts and demands growing out of said work and existing against the firm of N. H. Decker & Go. or either member thereof as such by reason of said work,” and agreed to account to said Decker and to pay over to him “ any and all moneys by such accounting found to be due after payment of said liens, claims, debts and demands ” by him to be paid as aforesaid.
    The complaint further alleged that from time to time accounts were had between the Produce Bank and said trustee, concerning the amounts collected, disbursed and ofi hand; that April 1,1885, “ an account was stated between the plaintiff, as "receiver of the said Produce Bank, and Ernest Greenfield, as trustee, as aforesaid, as to all sums and amounts up to that time collected, and as to all sums or amounts paid or payable by him to such date, by which account and statement as aforesaid a balance was found due by the said Ernest Greenfield as such trustee, under his trust, of the sum of $5,958.48.” The complaint also charged that it thereupon became the duty of said trustee to apply such balance in his hands in accordance with the trust and to pay the outstanding notes helcl by plaintiff, or endorsed and pledged by the Produce Bank, less his commissions, which on the 23d of December, 1884, were fixed by agreement between him and the plaintiff at the sum of $2,500, including all services and expenses; that after deducting said •sum there still remained a considerable balance in his hands which, upon due request, he refused to apply to the purposes of the trust, or to account therefor. The demand for judgment was that “an ■accounting be taken of all sums in the hands of ‘ said trustee ’ and of any amounts paid out, or just charges on the same;” “that the balance found to be duq be paid over or applied to the purposes of the trust;” that a receiver be appointed, an injunction issued and such further relief granted as should be just and equitable.
    The answer denies portions of the complaint, but not that part relating to an account stated, except the allegation that it included all the items properly chargeable against the trust fund; insists that the plaintiff is not entitled to a further account and that the unpaid notes discounted by said bank, if any there were outstanding, were not the only outstanding claims, within the meaning of the declaration of trust A counterclaim in favor of Ernest Greenfield, individually, was also pleaded against the plaintiff, who duly replied thereto.
    Subsequently the Continental Bank was made a party defendant upon its own motion, and its answer alleged that it then held a number of unpaid notes, duly transferred to it by the Produce Bank, that were secured by the assignment and declaration of trust and united in the prayer of the complaint for an accounting and other relief against the trustee.
    After issue joined and on the 11th of October 1886, said trustee moved at special term that the cause be tried by a jury “ upon the ground that the issue of fact arising upon his counterclaim and his demand thereupon of an affirmative judgment against the plaintiff must be tried by a jury as of right,” but the motion was denied as to the cause of action alleged in the complaint and the issues relating thereto were directed to be tried at said special term. The issues of fact relating to the counterclaim were ordered to be tried by a jury at circuit.
    October 19, 1886, the first branch of the case was tried at special term, and before any evidence was taken or the cause opened, the defendant Greenfield, as trustee, and individually, demanded “ that the issues of fact in the case be tried by a jury,” bnt the motion was denied, except as to the counterclaim, and exception was duly taken. Thereupon evidence was given in behalf of the plaintiff tending to support the allegations of the complaint. That which was termed an account stated was read in evidence, consisting of charges of money received by said trustee on one side, and credits of money by him paid out on the other, and concluding with a balance due of $5,958.48, with interest from October 12, 1881. It appeared that this account was made up from statements and vouchers furnished by the trustee, and that it included all items up to February 22, 1885, when it was delivered to him and about two weeks afterward it was pronounced by him correct and corresponding to his own. Evidence was given tending to show that a balance of $13,000 or $14,000 was. still due from the Produce Bank to the Continental Bank secured by notes of N. H. Decker, or N. H. Decker & Co., discounted by the former bank, but not all of them prior to January 24, 1880. Six notes, aggregating $33,840 were discounted in February, 1880r and two, amounting to $8,079.71, in March, 1880.
    When the plaintiff rested the defendant moved to dismiss the complaint upon the ground that the plaintiff had had an accounting before this action was commenced, and that the declaration of trust applied only to liens and demands existing on the 24th of January, 1880, and not to notes discounted by the Produce Bank after that date, but the motion was denied, and the defendant excepted.
    Evidence was thereupon offered by the trustee tending to show that he had made payments pursuant to said trust 'other than those included in the account stated, but the evidence was. excluded and such as had been received was stricken out, as “ in derogation of the account stated.”
    At the close of the evidence, the counterclaim having been withdrawn and the trial completed at special term, the defendant Greenfield moved for a nonsuit upon the same grounds as those stated in the motion to dismiss and, also, because the plaintiff had not shown himself entitled to any recovery against said Ernest Greenfield, either as an individual or as trustee, but the motion was denied and exception taken. The special term thereupon found the facts substantially as they were alleged in the complaint, and as conclusions of law that “ the aforesaid account stated between the plaintiff, as receiver, and the defendant, as trustee, is valid and binding, and that the said defendant, as trustee, is chargeable with the sum of $5,958.48, with interest from October 12, 1881, * * * and which sum he is bound to apply to the payment of the notes aforesaid.” Judgment was directed requiring Greenfield as trustee to pay to the plaintiff a balance of $5,484.58, after adding interest and deducting commissions, “ to be by him applied pro rata in payment of the said notes held by the Continental Bank as aforesaid.”

      Burton N. Harrison, for app’lts; John L. Cadwalader, for resp’t.

       See 27 N. Y. State Rep., 885.

   Vann, J.

The assignment from Decker to Greenfield and the declaration of trust by the latter constituted a contract to which the Produce Bank was not a party. Its rights were not direct, but derivative. It was not a creditor of Greenfield, but of Decker, and its rights against the former were derived through the latter by virtue of the trust contract. It could only enforce those rights by enforcing the trust upon which they depended. It could enforce the trust only by an action to compel the trustee to account and to apply the moneys received by him to the purposes specified in the declaration of trust. In order to succeed in such an action it would not be enough for it to show that the trustee had on hand moneys applicable to the trust, but it would also be required to show that it had a status to maintain the action, either by proof that it owned a claim covered by the trust, or that it had owned such a claim and had transferred it to another, but was still liable over as endorser or surety.

Thus the plaintiff, as the legal representative of the Produce Bank, could compel an accounting by the trustee after it had parted with its claim to the Continental Bank, provided it still remained liable to the latter for the payment thereof. Such was his theory in bringing this action, so far as it is disclosed by the complaint, and it is obvious that it was not an action at law to recover a definite sum of money, but a suit in equity to enforce a trust, by compelling the trustee to do his duty. The beneficiary,” says Mr. Pomeroy, “ being the true owner, may always, by means of an equitable suit, compel the trustee to convey or assign the corpus of the trust property and to account for ana pay over the rents, profits, issues and income which he has actually received. or in general, which he might with the exercise of reasonable care and diligence have received." Pomeroy’s Eq. Jur., § 1058.

The same learned author further says: “The jurisdiction exists, therefore, and it is well established, but the question arises, since there is a similar jurisdiction at law, when may a suit in equity for an accounting be brought? This question, of course, docs not arise in those cases where an accounting is decreed as an incident to other equitable relief; nor should it arise where the subject matter is an equitable interest or estate, for here the jurisdiction should be exercised as a necessary consequence, without regard to legal remedies.” Id., § 1420. “Ho precise rule can be laid down on the subject, but it may be stated generally, that in all cases in which an action of account would be the proper remedy at law and in all cases where a trustee is a party, the jurisdiction of a court of equity over accounts is undoubted.” Whiton v. Spring, 74 N. Y., 171; Farwell v. Importers & Traders’ Bank, 90 id., 491; 1 Wait’s Actions & Defenses, 174.

This action was not based upon an “ account stated ” within the proper meaning of that term, because the relation of debtor and creditor did not exist between Greenfield and either of the banks. Lockwood v. Thorne, 18 N. Y., 292 ; 1 Am. & Eng. Enc. of Law, 124. Mr. Decker, the creator of the trust, was the debtor, the banks were the creditors and beneficiaries, while the trustee was the executive officer of the trust and for that purpose clothed with the legal title. The statement rendered was not made out by the trustee, although he pronounced it correct.

It was important as evidence, but not controlling as a basis upon which to found an action. An admission that there was a balance on hand did not admit that the plaintiff had any interest in it, or that it belonged to any of the primary beneficiaries, for it was consistent with ownership by Decker, the ultimate beneficiary. As was said by the learned general term, it “ was but an incident of pleading and proof in an action calling for the application of the ascertained balance to the trust purposes,” but “ settled nothing with regard to the extent of the plaintiff’s demand against the ascertained balance.” Volkening v. DeGraaf, 81 N. Y., 271.

These views are confirmed by the demand for judgment, which, although not decisive, illustrates the theory of the action. There is no demand for the recovery of any sum of money, but for an accounting and the application of any balance found due to the purposes of the trust. We think that the action was equitable in its nature, and that the motion and the application for a trial by jury were properly denied.

The main question arising upon the appeal from the judgment is whether the declaration of trust embraces notes discounted after its date. The answer to this question must be found in the declaration itself, which is the charter defining the powers of the trustee. By that instrument he acknowledged that he was trustee for a single purpose only, viz.: to pay out of the moneys received under the contract for the Riverside Drive “ all liens, claims, debts and demands growing out of said work and existing against the firm of H. H. Decker & Oo., or either member thereof as such, by reason of said work.” It was a trust to receive certain moneys and to make certain payments therefrom. When this was done, the powers of the trustee, under that instrument, were ended, and his remaining duty was to account to Decker for all moneys so received and to pay over to him the balance remaining after making the payments which formed the primary object of the trust. Although the theory of the plaintiff, according to his complaint, was that the trust covered simply notes discounted by the Produce Bank prior to January 24, 1880, the common date of the assignment, the declaration and the dissolution of the firm of H. H. Decker & Oo., still he claimed upon the trial, and judgment was rendered in his favor'on the theory, that notes discounted after that date were also included.

The expression growing out of said work ” would support either theory, as it might refer with propriety to the past or the future or both, but the demands to be paid are further defined as existing demands. By this is meant demands existing at the date of the instrument and not at the date of payment, or at any indefinite date in' the future. Reference is not made to claims thereafter to be created, but to those existing against the firm that day dissolved, or either member thereof, as such. How was it possible for a claim against that firm, or against either member thereof, as such, to be created after the firm had been dissolved ? If original discounts were afterwards made by the Produce Bank for Decker, or for a new firm organized by him, they were not existing demands within the meaning of the declaration of trust and could not be paid by the trustee without further authority from the creator of the trust, and even then only out of the surplus that otherwise would have been going to him after all the other beneficiaries had been satisfied. The contract which bounds the rights of the parties does not refer to work done and to be done, or to debts created and to be created, but to existing debts growing out of the work. It does not appear that any work was done after the date of the trust agreement, which does not suggest that the work was incomplete, nor contemplate that the contract with the city, if in any respect unperformed, was to be completed by the trustee. It was not a trust to do work for the city, for nothing of that kind is mentioned, and the assignment, as recited in the declaration, was “ of certain interests in the profits and proceeds of the work on the Riverside avenue ’* * * and the contract therefor ” with the city authorities. On the other hand, as already suggested, it was a trust simply to receive, apply and account, and the application was expressly limited to claims already in existence. For these reasons we are of the opinion that the courts below misconstrued the declaration of trust, and as it may appear upon another trial that Debker consented that the trust should extend to debts created after January 24, 1880, we do not dismiss the complaint, but order a new trial.

The order denying the motion for a trial by jury should be affirmed, without costs, but the judgment should be reversed and a new trial granted, with costs to abide event..

All concur, except Bradley, J., dissenting, and Haight, J., absent.