text:
    JOHN HUGGARD, Respondent, v. LEWIS LEHMAN, Appellant, Impleaded, etc.

      Mew Jersey statute as to general assignments — what pj'operty the assignment must embrace in order to prevent a firm creditor from enforcing the individual liability of the members of a firm.

    'The defendants are members of a firm which made a general assignment of the firm assets in New Jersey, in which State they then resided. The plaintiff, who was a creditor of the firm, after appearing and receiving a dividend upon his claim from the assignee, brought this action to enforce the individual liability of the partners for the balance of the debt. The defendants claimed that the action was barred by the New Jersey statute regulating assignments, which provided that creditors who came in and exhibited their demands for a ■dividend should be wholly barred from having afterwards any action or suit at law or in equity against the debtors or their representatives, unless they should prove fraud in respect to the assignment.

      'Held, that the discharge given by this act only became operative when all the property, individual as well as firm, was assigned, and did not apply when the firm assets alone were transferred to the assignee.

      It seems, that the New Jersey statute may leave the individual liability of the members of the firm unaffected in a case where the copartnership liability is discharged by the acceptance of a dividend. (Davis, P. J.)
    Appeal from a judgment in favor of the plaintiff, entered upon ■a verdict directed by the court at circuit.

      JEL. Mayor, for the' appellant.

      Williamson, Reynolds & Hinriehs, for the respondent.
   Davis, P. J.:

This action was brought against several defendants who formerly ■constituted the firm of Marley, Eunson & Co., of which firm the appellant was a member. The firm was indebted to the plaintiff on their promissory notes, and while so indebted the firm (composed of James M. Marley, Eugene Eunson, Lewis Lehman and Joseph H. Harrison) made an assignment in the State of New Jersey, where they resided and carried on business, pursuant to the statutes -of that State for the benefit of their creditors, to one M. R. Moor-head. The statute of New Jersey prohibits all preferences in and by such assignments, and requires the net amount which shall come to the hands of the assignee for distribution to be distributed for the equal benefit of the creditors who may come in and prove their claims as provided by the act. The plaintiff came in under the assignment and exhibited his demands against the firm for a dividend, and received his dividend out of the assigned property. He now claims to recover against the appellant, whom he sues as a member of the firm upon his individual liability for the debts of the firm. It is stipulated by the parties that the assignment was-only of all the assets of the firm of Marley & Co., and did not include any part of the individual property of any member of the firm.

The question presented arises upon the twenty-first section of the statute of New Jersey, which is in these words: “21. Nothing in this act shall be taken or understood as discharging said debtor or debtors from liability to their creditors who may choose to exhibit their claims, either in regard to the persons of such debtors or to any estate, real or personal, not assigned, but with respect to the-creditors who shall come in under said assignment and exhibit their demands as aforesaid for a dividend, they shall be wholly barred from having afterwards any action or suit at law or equity against such debtors or their representatives; unless on the trial of such action or hearing in equity the said creditors shall prove fraud in the said debtor or debtors with respect to the said assignment or concealing his estate, real or personal, whether in possession, held in trust or otherwise.” It is claimed on the part of the appellant that by this section the plaintiff, having come in and received his dividend out of the assigned estate, is wholly barred from having afterwards any action or suit at law against the defendants, except on the condition expressed in the section; while, on the other hand, it is claimed that the bar only extends to actions against the defendants as a firm to recover indebtedness out of their firm assets, and leaves the plaintiff at liberty to pursue the several members of the firm and enforce their individual liability to him. The court at circuit accepted this view and directed judgment for the balance of the indebtedness after deducting the dividend, against him on his individual liability to be collected only out of his individual assets. The appellant was alone served in the action and appeared and defended.

The question thus presented is one by no means easy of solution. But we have come, with some hesitation, to the conclusion that the decision of the court below was correct, if not altogether for the reasons assigned by the court. We are inclined to the opinion that the statute of New Jersey, in order to entitle the assignors to an absolute discharge in such a case, requires that the assignment shall •embrace all the joint and several property of each of the assignors, ■whether owned by them as members of the copartnership or as individuals.

The second section of the act provides that the debtor or debtors making such assignment shall annex to such assignment or conveyance an inventory under oath or affirmation of his her or their •estate real and personal according to the best of their knowledge, together with a list of his, her or their creditors, and the amount of their respective claims, but that such inventory shall in no wise be conclusive as to the quantum of the debtor’s estate real and personal but the assignee or assignees shall be entitled to any other property which may belong to the debtor or debtors at the time of making the assignment, and not comprehended within the general terms •of the same. This section plainly contemplates that the debtor, or if there be several debtors each, shall annex such inventory of his or their estate real and personal; and this obviously embraces what-over and all property the assignors have whether joint or several; and so the assignors are each required to set forth a list of his or their creditors and the amount of their respective claims, the obvious purpose being, as we think is seen when this section is collated witn the other section, to make the proceeding in the nature of one in bankruptcy and provides for a distribution, according to the equitable rights of creditors, of all the estate joint or separate of each assignor. In a case where this is not done in accordance with the spirit of the act, the provision for the absolute discharge ■of each of the several assignors is not applicable. Any other construction would lead to great difficulties and embarrassments, and gross injustice. If it were practicable under this statute for a firm of debtors simply to assign their copartnership property without transferring any of their individual estate, the result would follow under the act that each of their copartnership creditors would be compelled to come in and exhibit his demand and take his dividend in the copartnership effects assigned or lose all right to share in such effects, and be thrown over to pursue by action his remedy against thi assignors upon their individual liability alone; while on the other hand if he comes in. 'and exhibits his demand and takes his dividend he is precluded from all remedy against each member of the firm upon his separate-liability however responsible he may be. To illustrate, if the assets of a firm who make an assignme .t of tu h assets only, are sufficient to pay fifty cents on a dollar of the firm indebtedness while each member of the firm is abundently able to pay the residue, the-operation of the statute is to compel the loss of one-half of every debt owing by the firm; because not to come in and take the dividend destroys all remedy against the firm property, while to come in destroys all remedy against the individual debtor. ¥e cannot conceive that the legislature intended to produce such results. On the contrary, we think that a true construction of the act requires-an assignment of all the property of each debtor whether joint or several in order that the creditors of the firm, and of each of the debtors, may receive the benefit of the entire property to be marshaled and applied as required by their respective equitable rights.

The case seems to have been submitted to the court below as one in which the assignment clearly covered nothing but the firm assets The stipulation is not precisely to that effect, but as the assignment itself is not set forth in the case, we are unable to see that the court was not correct in assuming that it did not include any part of the individual property of either member of the firm. Upon this ground we are of opinion that the receiving of the dividend did not create the-bar provided for by the twenty-first section because the assignment did not embrace the entire property joint and several of the several assignors, both as copartners and as individual debtors. Rut it may well be also that the statute of New Jersey leaves the individual-liability unaffected in a case where the copartnership liability is discharged by the acceptance of a dividend.

In either view the judgment is right and should be affirmed.

Brady and Daniels, JJ., concurred.

Judgment affirmed.


source: Caselaw Access Project

author: Davis, P. J.:

license: Public Domain

text:
    THE PEOPLE OF THE STATE OF NEW YORK ex rel. THE SWISS BENEVOLENT SOCIETY v. THE COMMISSIONERS OF TAXES AND ASSESSMENTS FOR THE CITY AND COUNTY OF NEW YORK, Respondents.

      Alms-house — what real estate of a benevolent assoeiation is exempt from taxation as — 1 i?. 8., 888, sec. 4, sub. 4.,
    The relator was incorporated by chapter 170 of 1851, for the “ purpose of affording pecuniary and other relief, to such persons, natives of Switzerland or of Swiss origin, as may be in the United States, and in need of assistance.” In 1883 it purchased certain real estate, and has ever since owned, and possessed and used the same exclusively " to give a temporary home, asylum and relief to the sicli, necessitous and others who may be proper objects of its bounty in accordance with its charter.” It derives no income from the premises and constantly relieves persons who would otherwise be likely to become a charge upon the city and county of New York.”

      Held, that the premises were exempt from taxation as an “alms-house,” under subdivision 4 of section 4, 1 Bevised Statutes, 388.
    Certiorari to review the assessment, lor the purposes of taxation, of the relator.

      F. R. Ooudert, for the relator.

      F. Henry ■Lacombe, for the respondents.
   Davis, P. J.:

The relator was incorporated by chapter 170 of the Laws of 1851. It was empowered to purchase and hold real estate for the objects of its incorporation, which by the act were declared to be solely for the “ purpose of affording pecuniary and other relief to such persons, natives of Switzerland, or of Swiss origin, as may be in the United States, and in need of assistance.” To accomplish that purpose the relator, in December, 1883, purchased the premises now assessed by the respondents for taxation, and have ever since owned, possessed and used the same exclusively “ to give a temporary home, asylum and relief to the sick, necessitous and others who may be proper objects of its bounty in accordance with its charter.”

The relator “ derives no income from said premises, and constantly relieves persons who would otherwise be likely to become a charge upon the city and county of New York.” The relator therefore claims that the premises so used are exempt from taxation under the provision of the Revised Statutes (1 R. S., 888, sub. 4, § 4), which is as follows :

“Section 4. The following property shall be exempt from taxation. * * *,

“ 4. Every poor-house, alms-house, house of industry and ee ry house belonging to a company incorporated for the reformation of offenders, and the real and personal property used for such purposes belonging to or connected with the same.”

In its general signification the word “alms-house” undoubtedly includes such an institution or establishment as that owned and maintained by the relator. That word is defined by Webster as a house appropriated to the poor,” and the home of the relator is shown to be exclusively so appropriated ; and to such an extent as to relieve the city and county of New York from some part of the charges that would otherwise fall upon it for the support of its poor. < But it is claimed that the word alms-house as used in this statute has a technical and restricted signification, and means only such alms-houses as are the property of the public and are used and controlled by public authorities as the receptacles of public paupers, in accordance with the general system of the poor laws of our State. This contention sharply presents the question involved in the case. But the legislature have thought proper to make the ¿xemption of that class of alms-houses the subject of another statute which defines them with unquestionable- precision. (1 R. S., 631, § 72.) That statute reads as follows: “ Every poor-house, alms-house or other place provided by any city, town or county for the reception and support of the poor, and all real and personal property whatever belonging to or connected with the same, shall be exempt from all assessment and taxation, levied either by the State or by any county, city, town or village.”

This statute takes care of all the public alms-houses provided and controlled by the authorities of any city, town or county for the reception and support of the poor, and renders the general statute (sub. 4, § 4, 1 R. S., 388), above quoted, quite superfluous and unnecessary for that end. It may well be therefore, that the legislature, since it must be presumed to do nothing in vain, enacted both these statutes having in contemplation that there might be ■other “alms-houses” “ not provided by any city, town or county,” and yet lawfully and exclusively devoted “ to the reception and support of the poor,” or, as Webster describes it. “ appropriated for the use of the poor,” and which ought also to be exempted from taxation for that reason. Such an alms-house, if created or •authorized by an act of the legislature, would be a lawful institution empowered to take care of and relieve the poor which came within its jurisdiction as defined by the act creating or authorizing it. No one can doubt the power of the legislature to make provision for any class of the poor that might otherwise need and require the aid or support of a town, county or city, by creating a body corporate with functions and powers, devoted to that end. This has been done in various forms, notably by creating religious corporations by means of which the numerous sects of the country gather in and provide for large classes of the helpless or needy who would otherwise be suffering but unrelieved objects of public ■charity. The cold and stinted bounty of municipal or State charity is thus supplemented by the generous warmth of a common humanity which is by no means the special attribute of any particular creed. Since it is lawful to do this, no good reason is perceived why, in any given case where the functions of a corporation ■are rightly exercised by establishing an alms-house for the reception and support of the poor who are the objects of its care specified in its charter, and who might otherwise be charges upon the county, town or city, such alms-house may not be held to be within the meaning of the exemption statute. Such a corporation is not a private one within the sense of a trading, commercial or moneyed •one. (It has not the powers essential to them. Its authority is a •segment of the general power belonging to the State, and by it distributed to and exercised through its various municipal organizations, to take care of and support its poor). And as it partakes of that power to a limited extent through its charter and has no other, by the expressed or implied limitations of that instrument it is an agency of the State for a purpose public in its nature although its corporators are private persons. Hene.e the reason of the case is altogether in favor of the exemption because the State by taxing •such an alms-house, is taxing so much of its own duty toward the poor who find aid and support therein.

This principle seems to have been recognized in Chegaray v. The Mayor (13 N. Y., 230) (where it was held that the statute exempting every school-house and jail did not include a private schoolhouse), when the court said : It is evident that it was intended to exempt only property used by the public for the purposes of education, or which belonged to a corporation created for the advancement of lea/rnhng, and thereby devoted to educational purposes

The alms house in question here belongs to a corporation created for the relief of a class of poor and needy persons, and is thereby^ devoted to that purpose and engaged in taking a portion of a public burthen upon its own shoulders. The legislature have created the relator for a specific purpose, to wit, to relieve the State from the care of a part of its poor and certainly cannot intend to tax th& means by which the relator performs that duty or function.

Our conclusion is that the alms-house of the relator is fairly within the statute of exemption relied on as it is plainly within the letter of its description, and is public and not private in its ends, and is a. creation of the legislature devoted and restricted to such purposes, without the right or possibility of private gain to the corporators.

We are well aware of the rule which .requires the strict construction of exemption statutes, but that rule is not controlling of this-case because the case is altogether outside of the mischiefs intended to be prevented by the rule.

The result is, that the judgment should be awarded to the relator, but it is understood to be stipulated, without costs.

Daniels, J., concurred.

Judgment awarded in favor of the relator, without costs.


text:
    THE PEOPLE OF THE STATE OF NEW YORK, Respondent, v. JOHN CARPENTER, Appellant.

      Peremptory challenge — when the right must he exercised — the time for the exercise of the right cannot he limited hy the court— Code of Criminal Procedure, secs. 369 and 371.
    The right of a party accused of a crime to peremptorily challenge a juror exists, under sections 369 and 371 of the Code of Criminal Procedure, until the juror is actually sworn.
    After the person called as the first juror had been sworn and examined upon his voir dire, the counsel for the prisoner said: “We accept this juror for the present.” To this the court said: “You must exhaust all your challenges before the juror takes his seat in the jury box.” The counsel then said: “ We accept this juror.” After the panel had been filled, but before any of the jurors had been sworn, the counsel for the prisoner challenged the seventh juror peremptorily, his peremptory challenges being then unexhausted. The-court refused to allow him to do so, stating that he had told the counsel that he must exhaust all his challenges before the jurors took their seats; that in-each case the counsel had said that he accepted the juror, and that he had thereby waived his right to challenge the juror peremptorily. To the refusal' of the court to allow the challenge the counsel excepted.

      Held, that the exception was well taken. That there was no express waiver of the right of peremptory challenge, and that one would not be implied from his mere submission to a rigid and illegal rule made by the court.

      It seems, that the court might compel the prisoner to use his peremptory challenge-as each juror appeared, by requiring each juror to be sworn before he entered the box.
    Appeal from a judgment of the Court of General Sessions, convicting tlie defendant of murder in the first degree.

      Stephen S. Blake, Ghushan Kneass and Adolphus D. Pape, for the appellant.

      R. B. Marline, district attorney, and Belancey JSTichol, assistant district attorney, for the respondent.
   Davis, P. J.:

In the progress of the trial of this case a number of exception» were taken to the exclusion or admission of evidence; and several exceptions were also taken at its close to the refusal of the court to charge several requests presented by the prisoner’s counsel. One of these latter exceptions would require careful consideration but for the fact that we are of opinion that the judgment must be reversed and a new trial granted, for error in denying to the prisoner the right of peremptory challenge of two of the jurors before they were sworn.

The question of the right of challenge arose in this manner: One Edward Eldridge was called as the first juror, and after being sworn and examined upon his voir dire, the counsel for the prisoner said: “We accept this juror for the present.” To this the court responded: “ You must exhaust all your challenges before the juror takes his seat in the jury box.” The counsel for prisoner then said: “We accept this juror.” The impanneling of the jury then proceeded, and after a large number had been called and excused or •challenged peremptorily or accepted, the panel was filled but no •one of the panel had been sworn. The following then took place, as stated by the case :

Before the twelve persons seated in the -jury box were sworn as jui’ors to try the case, the defendant’s attorney rose and addressed the court as follows: I desire, if your honor please, to challenge peremptorily the seventh juror, Mr. Simon Coggeshall.

The 'Court. — It is too late now.

Defendant’s Attorney. — Also the eighth juror.

The Court. • — I told you, and it was so understood at the commencement of the trial, that you must exhaust a.ll your challenges before the jurors took their seats in the jury box. Your associate said he was satisfied with the first juror in the box and accepted him for the present. I then said that you must exhaust all your challenges before any juror took his seat in the jury box, and you did exercise that right, and in every instance before the juror entered the box you expressly said that the defense accepts him. You thereby, that is by unqualifiedly accepting the juror, waived your right to challenge the juror so accepted peremptorily, unless for some good cause shown.

Defendant’s Attorney. —Well, for the purposes of this case we now challenge the eighth juror peremptorily.

The Court. — And for the reason I have stated the challenge is not allowed.”

The challenges were overruled, to all of which rulings defendant excepted. The twelve persons above named were thereupon sworn as jurors to try the case. At this time the prisoner’s peremptory challenges had not been exhausted. At common law the right of peremptory challenge in cases of felony exists until the juror is actually sworn. (Col. John Morris' Case, 4 Howell State Trials, 1250; Arch. Crim. Practice, 510; Reg. v. Sullivan, 8 Ad. & El., 831; Reg. v. Wardle, Carr. & M., 647; Lindsley v. The People, 6 Park., 233) Under the Constitution of the State of New York this became a part of the common law of the State, subject to such alterations and provisions as the legislature of the State shall, from time to time, make concerning the same (first Constitution, § 35), and each of the subsequent and amended constitutions have continued such adoption.

The established provisions of the common law are preserved by the Code of Criminal Procedure by sections 369 and 371, the first of which enacts that “ before a juror is called the defendant must be informed by the court, or un der its direction, that if he intend to challenge an individual juror, he must do so when the juror appears and before he is sworn.” The second (sec. 371) enacts that “ a challenge must be taken when the juror appears and before he is sworn, but the court may, in its discretion, for good cause, set aside a juror at any time before evidence is given in the action.

These sections establish a rule for the benefit of .the accused which not only defines his rights as to the time when his challenge may be made, but secures them to him by force of statutory law. Under that rule he may challenge a person who appears as a juror at any time Toefore he is sworn, and it is not in .the power of a court to deprive him of that, right. But in this case the prisoner was deprived of that right by the peremptory adoption of a different rule directly in conflict with that of the common law and of the Code of Criminal Procedure.

When the first juror was called and examined under the challenge for cause, which challenge was not sustained, the prisoner’s counsel said, “ we accept this juror for the present.” The court then announced what was in effect a general rule for the case, requiring the prisoner to make his peremptory challenge of each juror before lie took his seat. It is true the language of the rule applied to the particular juror then about to take his seat; but it was afterwards interpreted by the court to be general, by saying: “I told you, and it was so understood at the commencement of the trial, that you must exhaust all your challenges before the jurors took their seats in the box; * * * that you must exhaust all your challenges before any juror took his seat in the jury box.” It requires no argument to show that the rule thug emphatically laid down was in striking conflict with that of the Code which gives the prisoner in such cases the right of peremptory challenge of any juror before he is sworn. It was error for the court to abridge that right; and it needed no exception to the ruling to sustain the right. It is in principle as though while the Code gives thirty peremptory challengesAn a case punishable with death, the court had ruled that the prisoner must make but twenty or a less number; or that all peremptory challenges must be made before a challenge to the favor. Such rules would contraven e the law, we think, and exceptions would not be needed to protect a prisoner’s rights.

After the panel was filled by twelve jurors but before any one was sworn or any act done which constitutes a part of the administration of an oath, the prisoner’s counsel said he desired to challenge peremptorily Simon Coggeshall, the seventh juror. The court said, “it i« too late now.” The counsel added : “ And also the eighth juror.” Thereupon the court stated what is above quoted as to the rule made when the first juror was challenged, and that the counsel had accepted each juror before he took his seat in-the box and had therefore waived the right to challenge him peremptorily unless for some good cause'shown.” The counsel added: “ Well, for the purpose of this case, we now challenge the eighth juror peremptorily, and the court answered : And for the reason stated the challenge is not allowed.” And the prisoner then duly excepted. The twelve jurors then in the box were thereupon sworn as the jurors to try the cause and the trial proceeded.

The exception, we think, was well taken. It is -thought to be answered by the claim that the defendant, by accepting the juror after the ruling of the court that his peremptory challenges must be made before each juror took his seat in the box, waived all right to his peremptory challenge. But a waiver in such a case implies a voluntary and not a compulsory act. The order of the court established an arbitrary rule. Submission to such an order was not a waiver of the rights it denied ; nor ought it to be so construed Counsel could do no otherwise without putting himself or his client in unpleasant antagonism with the court and perhaps in actual contumacy. After each juror had passed the ordeal of a challenge fo the favor, if he were not then prepared to challenge peremptorily, he had nothing else to do but allow him to take his seat in the box; and his saying simply I accept him, was nothing more than consenting to the jurors taking the seat, because, under the order of the court, he must then accept or challenge him peremptorily.

When a jury is impanneled in the manner in which this was being done, that is, by filling the panel before any one is sworn, prudent counsel may, with entire propriety husband his peremptory ■challenges for use against more obnoxious persons that may be afterwards called ; and when the box is full, if his challenges are not exhausted, then he may use them to sift out any of the panel whom his judgment or imagination, or caprice even, leads him to reject. Besides, when the inrpanneling occupies considerable time, he has had the opportunity to inquire touching the jurors, or to scrutinize and act upon their appearance, conduct, or any hint or suggestion of prejudice, partiality or unfitness. It is the very essence of a peremptory challenge, that it is “ one for which no reason need be given ” (as section 311 of the Code of Criminal Procedure defines it); and not infrequently such challenges are made because the prisoner, or his counsel, “ don’t like the looks of the juror.” It is true the prisoner may be compelled to use his challenges as each juror appears, by the court directing that each one be sworn before he takes his seat, and that course is legal because the law is fully complied with. But that fact does not militate in the slightest degree with the right of a prisoner to challenge peremptorily up to the last moment before the oath is administered where the other mode of impanneling in this case is pursued.

In this case there was no express waiver of the right of peremptory challenge of either juror. And the law will not imply one from mere submission to a rigid and illegal rule made by the court, palpably against the rights and the manifest desire of the prisoner and his counsel. It was not too late therefore, to raise the question of his rights after the box was full and before the jurors were sworn. A waiver to c &::ch at: eileei must be plainly and intentionally made with that object-in view; and then it may be availing. But not so when it is manifestly the effect of a compulsory rule, against which counsel merely defers, for a time his protest or struggle. It is manifest that the Code of Criminal Procedure has not relaxed any common law rule on this subject. On the contrary, it aims to preserve the rights of accused persons, for the 369th section enjoins it upon the court, “ before cojuror is called,” to see that the defendant is informed that if he intends to challenge an individual juror, he must do it when the juror appears and before he is sworn. It is not'difficult to imagine cases in which a failure to do this would be fatal to a conviction ; but the duty becomes of slight importance if the court is at liberty to follow it with a,. restriction of the right of peremptory challenges within limits not recognized by the law.

But we think there was no such acceptance of the challenged jurors as prevented the exercise of the right of peremptory challenge before either of them was sworn. What was done in the way of acceptance should be construed as having been done subject to-the lawfully existing rights of the accused up to the time of administering the oath. There had been no peremptory challenge, followed by a deliberate withdrawal of it; and no express waiver of the right to such challenge. The most that can. justly be claimed is that in deference to an absolute rule of the court, made in derogation of the rules of law, the defendant-accepted the juror and allowed him to take his seat for the purpose-, of raising the question as to his rights (to the deprivation of which he was forced to submit for the time being), by afterward challenging-peremptorily before the juror was sworn. How else could he effectually’raise the question? To be available he must show on appeal that the ruling deprived him of some legal right. He could not do-it by simply excepting to the rule; for the rule itself did not harm him till its operation deprived him subsequently of his challenge. If he challenged in conformity to the rule, his challenge would, of course have been allowed, and he could assign no error in the-allowance, for the juror would be rejected upon his own motion. The effectual way to save his rights was therefore to wait till the jurors were in their seats in the box, and then by challenge before the oath was administered get an exception to the denial of hia right thus to challenge. That this was the intention of the defendant’s counsel rather than to waive the right of challenge is manifest from the course he pursued. No waiver can be implied therefore from his omission to except to the rule made by the court. His mere saying that he accepted the juror, after the examination on voir dire,. cannot properly be construed to be anything more than a consent-that the juror should take his seat so that an available exception: could be then taken to a refusal to allow the challenge.

In Lindsley v. The People (6 Park., 233) there had been noi unlawful rule established by the court. After challenge for cause had been overruled the court asked the prisoner if he challenged the juror peremptorily, to which he answered, “ no.” The juror then took his seat; but afterwards, and before he was sworn, the defendant’s counsel insisted on challenging him peremptorily. The court denied his right on the ground of express waiver. This was held on appeal to be error. Yery able opinions were written by Marvin, P. J., and Daniels, J., the latter dissenting; and the case has been the accepted law of the State for many years. It is a much stronger case against the People than that now before us, for in that case the court had not held and so instructed the prisoner that he must challenge peremptorily before the juror took his seat, and thus compelled the prisoner to allow the juror to enter the box in order to reserve effectually the right to test the peremptory order of the court. That case is really quite decisive of the present, for in this case it may well be said, as in Bell v. The State (48 Ala., 675), “ We do not think there was any intelligent and intentional waiver in this ease.”"

In Hendrick v. The Commonwealth (5 Leigh, 709) the prisoner elected the juror and he took his seat; after another juror was called one of the counsel stated that the prisoner was acting on his advice in challenging, and in electing the juror had mistaken it.”1 The court refused to allow the challenge, and this was held error on the appeal, as the juror had not been sworn.

The counsel for the people cites numerous cases on the effect; of a waiver of the rights of parties, but none that establishes that an act merely conforming in the conduct of a trial to an arbitraryr and unlawful rule, deprives a prisoner of the benefit of excepting to. the effect of such a rule when he seeks to avail himself of a right conferred on him by statute.

It is not necessary, therefore, in this case, to decide that a prisoner -eannot be bound by a clear and intelligent waiver of bis right of peremptory challenge of a particular juror made for that express purpose, for that case is not before us. The case was tried by the learned court with great fairness and ability. The evidence, doubtless, justified the conviction, and although we have much hesitation whether the refusal to charge the first request was not error, yet we think an affirmance might be justified but for the error we have so fully discussed.

The judgment must be reversed and a new trial ordered.

Brady and Daniels, JJ., concurred.

Judgment reversed, new trial ordered.


text:
    WILLIAM H. SPEER, Respondent, v. THE PHŒNIX MUTUAL LIFE INSURANCE COMPANY, Appellant.

      Damages — measure of, upon ihe refusal by a solvent inswance company to continue a valid policy.

    In 1867 the plaintiff procured from the defendant a policy of insurance for $10,000, upon the life of his father, and paid the premiums falling due thereon from that time until 1879, when the defendant refused to receive them, notifying the plaintiff that it would no longer continue the policy, or be bound thereby, because it had been procured by fraudulent representations as to material facts. In. this action, brought by the plaintiff to recover damages for the defendant’s breach of its contract, a verdict was rendered in his favor, and he was allowed as damages the amount of the premiums paid by him, with interest thereon from the date of their respective payments.

      Held, that the measure of damages adopted by the court was erroneous.
    That if at the time of the refusal of the defendant to accept the premiums the life of the plaintiff’s father was still insurable, the measure of his damages was the difference between the then present value of the premiums he would have ¡been compelled to pay during the life of his father under the policy issued by -the defendant and the present value of the premiums which he would be compelled to pay under a policy which could then be obtained from another responsible company.
    That if at that time the life of his father was not insurable, his damages would be the actual value of the policy at the time of the breach, as being a valid and obligatory claim against an entirely responsible company.

      Appear from a judgment in favor of the plaintiff, entered on the verdict of a jury, and from an order denying a motion for a new trial made upon the minutes of the justice before whom the action was tried.

      J. W. Simpson and T. Thacker, for the appellant.

      U. B. Glosson and J. E. Parsons, for the respondent.
   Davis, P. J.:

This action is brought to recover damages for an alleged breach of contract by defendant in refusing to receive the annual premium on a policy of life insurance and continue the insurance. The defendants sought to justify this refusal on the ground that the policy was obtained by fraudulent representations as to material facts. The policy was issued to the plaintiff in the year 1867 for ■an insurance of $10,000 on his father’s life. The plaintiff paid and the defendant received the annual premiums until 1879. In that year the plaintiff tendered the premium and the defendant refused to receive it, notifying him that it would no longer continue the policy in force or be bound thereby. The plaintiff thereafter ■demanded a return of all the premiums previously paid and this ■demand was refused. The relief demanded in the complaint is the repayment of the premiums with interest on them respectively from the dates of payment; and this is what under the rulings of the court the plaintiff has been allowed to recover.

The material questions of the case arise upon various rulings of the court affecting the introduction of evidence in answer to the-■charges of fraudulent representation, and upon portions of the charge relating to the effect of such evidence. But inasmuch as we are of opinion that there must be a new trial of this case for error in adopting an erroneous rule of damages recoverable, it is tinneces•sary to consider them further than to say that under the authorities we are inclined to the opinion that the rulings and charge of the learned judge Were correct.

The question what is the true measure of damages in such a case as this is an extremely interesting one, and not easy to determine. We think however that it must be controlled by the application of settled principles of law. The verdict of the jury has established that the policy of the plaintiff on the life of his father was at the time of its breach by defendant, and had been at all times since its issue, a valid contract obligatory upon the defendant. The-defendant by refusing to receive the premium and continue the policy broke the contract at the date of such refusal, and subjected itself to the consequences that follow the breach of a binding agreement. The plaintiff had two remedies — one, to enforce the policy in equity by compelling the company to receive the premium and continue the insurance in force; the other, to recover at law such damages as he sustained by reason of the breach. He elected the second of those remedies and succeeded in establishing that the-defendant is liable to pay the damages that have resulted to-the plaintiff by its unjustifiable acts. As such damages he has, been allowed to recover the full amount of each annual premium paid by him from'year to year with interest from the date of each payment. This measure of damages can only be sustained upon the basis of a total failure of consideration for the premiums annually paid. But there has been no such failure, because the policy being obligatory upon the company each one of those payments-was necessary by its terms to keep it in force, and each secured to-the plaintiff for the year for which it was paid the continued assurance of the life covered by the policy. He acquired and received, by each annual payment precisely what he • contracted for, to wit, the valid insurance of his father’s life ; and the verdict has established that had the father died at any point of the period during-which the payments were made the plaintiff would have been entitled to recover the $10,000 of insurance. There has been therefore, no failure of consideration, but each party has received under the contract from year to year precisely what was contracted for: the company has received its premiums, the plaintiff has received the obligation of the company to pay the amount insured in the contingency of death. This state of fact and of law necessarily results from the establishment by the verdict of the obligatory character of the policy. But the plaintiff had an additional right secured to him by the policy, which was to have it continued by the payment of the same rate of premium annually, until the death of his father. That right was based upon an average valuation of the probabilities of his father’s life, according to established tables- •or rules. When the company broke this contract and the plaintiff decided to sue for damages instead of compelling the continuance •of the contract, he was entitled to recover a sum that equaled the value to him of the policy; or, in other words, that would make good to him the loss he sustained by its breach. One mode of ascertaining that would be to determine the actual value of the policy at the time of its breach. By that is not meant what the •company would be willing to pay for it as the surrender value under some rule of its own, but what it would cost the plaintiff to replace the broken contract by another of equal value to him for the same amount of insurance and at the same rate of annual premium. His father, on whose life the policy was taken, had advanced in years and doubtless in infirmities. The difference in cost, in a responsible company, of a policy upon his life, assuring the same at $10,000 ■during life, would make good the loss caused by the breach. That amount could easily be ascertained; and the payment of that ■difference, together with the amount of premium called for by the present policy, would put the plaintiff in the position in which he would have been, had no breach occurred. The plaintiff was entitled to a continued assurance of $10,000 on the payment, annually, during the life of his father, of the premiums required by the policy. Assume for illustration only, that the premium was $500 annually, based upon the probability of the father’s continuing life. Assume, also, that to secure a policy in another responsible company on the same life, at the date of the defendant’s breach, would require the annual payment of $1,000 for the remaining probable period of the life. The utmost real damages the plaintiff could sustain would be the difference between the present values of these differing annual premiums, which he would be entitled to have ascertained and predicated upon the same probability of life, that required him to pay the assumed $500 upon the broken policy. That difference would, of course, entirely reimburse his damages, and ought to have been ascertained and adopted as their measure. We suppose a competent actuary would have no difficirlty in ascertaining the amount, because the plaintiff would be entitled for the purpose of damages to have the same period of probable life assumed by the actuary as the basis of computation.

Either this must be the true rule of damages if the life continue-to be insurable, or if it has ceased to be insurable, their mode of ascertainment should be one which shall determine the actual value of the policy at the time of the breach, as being a valid and obligatory one against an entirely responsible company. "What that actual value might in that case be, would depend upon facts and circumstances susceptible of proof, but not now before the court. The injustice of the mode actually adopted can be illustrated by the fact that if the plaintiff’s father continued to live, and the plaintiff continued to pay the premiums, and the defendant to receive them for a few years longer, the amount to be recovered upon the breach, under the rule applied in this case, would soon have exceeded the-sum assured upon the life. Ten thousand dollars is the utmost the plaintiff could receive upon a full performance of the contract by both parties, and that sum would be subject to the deduction of his-premium notes held by the company. The amount of premium notes added to the amount of the verdict approximate nearly to-the sum the plaintiff would be entitled to receive on the policy at the death of his father. He has suffered no such damages by reason of the breach unless it be held that he is entitled to recover all' that has been paid on the policy during its life on the ground of total failure of consideration, and that ground cannot we think be maintained.

The result is that the judgment must be reversed and a new trial ordered, with costs to abide the event.

Daniels, J., concurred.

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

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


text:
    ALFRED NELSON, as Executor, etc, of FRANZ OSCAR ERICSON, Deceased, Respondent, v. SUTHERLAND TENNEY, as Assignee of ALEXANDER D. FINDLAY, Appellant, Impleaded, etc.

      General assignment, with preferences — it cannot he made hy a surviving partner without the consent of the representatives of the deceased pa/rtner — right of the executor of the latter to have it set aside.

    A surviving partner has no power, without the consent and concurrence oí the representatives of the deceased partner, to make an assignment to a trustee for the benefit of the creditors of the firm, by which preferences are created among the creditors.
    The question as to whether or not such an assignment can he made with the assent of the representatives of the deceased member, not considered nor decided.
    When such an assignment has been made, the executor of the deceased partner-may maintain an action to set aside the assignment and procure the appointment of a receiver, by whom the business of the firm may he closed up and its obligations discharged in such manner as will protect the rights of the legal representatives of the deceased.
    The question as to whether such an assignment is valid as between the surviving partner and the firm creditors, not considered and not decided.
    Appeal from order of the Special Term, appointing a receiver.

      John Lindley, for the appellant.

      Francis Forbes, for the respondent.
   Davis, P. J.:

This action is brought by Alfred Nelson, as executor of the last will and testament of Eranz Oscar Ericson, to set aside an assignment, with preferences made by Alexander D. Eindlay to the appellant Tenney. Eindlay and Ericson were copartners, carrying on the business of tailors in the city of New York, under certain articles of partnership a copy of which is annexed to the complaint. On the 22d of June, 1884, Encson died, leaving Eindlay him surviving, and leaving a last will and testament which nominated the plaintiff Alfred Nelson as executor, and which was subsequently probated and letters testamentary thereon were duly issued to the plaintiff. Eindlay as surviving partner continued in possession of the store and the stock in trade, and managed and carried on the business for the purpose of disposing of the stock and collecting the debts owing to the firm until the 20th day of August, 1884, at which time he made an assignment to the appellant Tenney without consultation with the executor and without his consent. The assignment prefers two creditors of the firm in the Bum of about $4,500, and directs that after their payment the surplus in hand be applied to the payment of the other debts of the firm ratably to their several amounts. The appellant accepted the trusts of the assignment, and took possession of the property. The appellant demurred to the complaint, and the order appealed from was made upon the pleadings and upon affidavits.

Two questions have been argued on this appeal: First. Whether the surviving partner of a firm has power to make an assignment of the firm assets to a trustee creating preferences among the creditors ; and, secondly, whether the executor or administrator of a deceased partner can maintain an action to set aside such an assignment.

As to the first of these questions we are- of opinion upon a careful examination of the authorities, that a surviving partner has no power without the consent and concurrence of the representatives •of the deceased partner, to make an assignment to a trustee for the benefit of the creditors of the firm and to create preferences among the creditors by such an assignment. Whether it can be done with such assent is a question not now before us. ít is undoubtedly true that a surviving partner takes by virtue of his title as partner the assets of the firm with authority for the purpose of closing up the affairs of the partnership, to sell and dispose of or collect the same, and convert them into money and apply the same in payment of the partnership debt (Collyer on Part., §§ 123-129; 3 Kent, 37; 1 Pars, on Cont., 183; Story on Part., § 346); and in doing this-he has the right, in the exercise of his discretion, to pay the debts of the firm in full or in part in such order as he shall deem just and equitable although his doing so may operate to give preferences to the creditors whom'he thus pays. That this is the law must be regarded as settled in this State by Loeschigk v. Hatfield (51 N. Y., 660; reported below, 5 Robt., 26; Loeschigk v. Addison, 19 Abb. Pr., 169); and Cushman v. Addison (52 N. Y., 628).

In doing this he is acting in pursuance of the authority existing in him as surviving partner. He is liable, both as surviving partner .and individually, for all the partnership debts, and his right to the possession and control of. the .property for the purpose of paying and extinguishing the copartnership debts entitles him to the exercise of his own discretion in the application of the assets or other proceeds for that purpose. (Egberts v. Wood, 3 Paige, 517.) He is no more a trustee in any strict sense of that term for the creditors of the firm, than is any other debtor for his creditors, and their remedies against him in the collection of the debts of the firm are precisely the same as those which existed against the firm prior to its dissolution by the death of one of its members. But as between •him and the representatives of the deceased partner a clear and well defined trust exists which devolves upon him duties and obligations in respect of the disposition and application of the assets of the firm and their proceeds which equity recognizes, and when abused or evaded, will interpose to enforce. The duties of that trust are not such that they cannot be performed by agents, servants or attorneys acting under his control or direction. He may, therefore, employ clerks and attorneys and authorize them to act for him .and on his behalf in performing those duties precisely as the firm might have done for the purpose of closing its affairs. But it is a very different question whether he can by an assignment of the property of the firm transfer the trust to another trustee in the manner attempted to be done in this case, imposing upon that trustee duties which operate as preferences among the creditors of the firm and over which the surviving partner has no control. Such an act is an entire abnegation of the duties of the trust existing between himself and the representatives of the deceased partner, and if it be attempted to be done without the consent of such representatives, equity will, we think, step in to prevent the consummation of the attempt and take possession of the property through its receiver for the purpose of distribution among the creditors in such manner as shall be just and equitable. The plaintiff in this case is the sole representative of • the deceased partner as executor •of his last will and testament. He shows that the assignment by the surviving partner was made without consultation with him, and without his knowledge or assent; and that he has transferred the entire remaining assets of the firm to the appellant, and thereby sought to transfer.to him the duties of the trust existing between the surviving partner and the executor. In such a case we think a. court of equity has a clear right to intervene and, by the appointment of a receiver, proceed to close up the business of the copartnership and discharge its duties in such manner as will protect the 'rights of the legal representatives of the deceased partner. This-must be the result, we think, springing out of the general rule as laid down by Mr. Justice Story, in Story on Partnership (§ 344), where he says, after speaking of the general powers of receivers: However, if there be any danger of abuse or positive misapplication of funds by the surviving partner, a court of equity will interpose and restrain it by injunction, and even appoint a receiver, upon the application of the representatives of the deceased.”

The surviving partner, being a trustee for the settlement of the-estate as between himself and the personal representatives of the-deceased partner, cannot pass his whole duty over to another trustee without the consent of such representatives; and the attempt to do that is in our judgment, such an abuse of his powers and duties as justifies the representatives of the deceased partner in applying-to a court of equity to take possession of the estate by a receiver. It is an attempt to escape from his obligations as a trustee for such-personal representative.

In disposing of- this appeal we are not called upon to pass, and therefore do not pass upon the question whether such an assignment is valid as between the surviving partner and the creditors of the firm. That question depends upon other principles; and, besides no such creditor is a party to this action, and the plaintiff does not represent-such creditors. We think, however, enough was shown in this case-to justify the court below in making the order appealed from appointing a receiver; and, therefore, the order should be affirmed, with the usual costs to abide the event of the suit.

Daniels, J., concurred.

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

Order affirmed, with ten dollars costs and disbursements, to abide the event of the suit.


author: Brady, J.: Davis, P. J.

text:
    JOSEPH J. O’DONOHUE and JAMES McGOVERN, Respondents, v. ZACHARIAH E. SIMMONS, Appellant.

      Bond of indemnity to a sheriff — what is evidence of the exercise by the sheriff of hi» judgment in making a levy.

    This action was brought against the sureties on a bond of indemnity given to the-sheriff of New York .to protect him, and all persons assisting him, from any damages that might accrue to him of them from the levying, attaching and making sale, under and by virtue of an execution then in the sheriff’s hands, of all or any personal property which he or they should or might judge belonged to the judgment debtor. Upon the trial the defendant’s counsel requested the court to charge that if neither the sheriff, nor any of Ms deputies, judged that the property taken under the execution was owned by the judgment debtor, then the defendant was entitled to a verdict.

      Held, that the court erred in refusing so to charge.
    That the mere fact that the levy was made, was not to be construed when an issue was created in regard to it, as evidence of the exercise of the judgment required by the bond. (Davis, P. J., dissenting.)
    Appeal from a judgment in favor of the plaintiffs, entered upon the verdict of a jury, and from an order denying a motion for a new trial made upon the minutes of the justice before whom the action was tried.

      11. M. Whitehead, for the appellant.

      James M. Smith, for the respondents.
   Brady, J.:

This action was brought by the plaintiffs upon a bond of indemnity executed by the defendant and one Michael S. Purcell (since deceased), to the plaintiffs’ assignor, James O’Brien, then sheriff of the city and county of New York.

The case is here for the second time on appeal, and several of the questions which are now presented are kindred to those already passed upon on the first appeal, the result of which is reported in SI Hun, 267. It is not at all improbable that a consideration of all the other exceptions in the case would result favorably to the respondents, but it is not deemed necessary or advisable to consider them, for the reason that one exception appears to be fatal to the maintenance of the judgment. The bond is in the usual form of a bond of indemnity, and provides for protection to the sheriff, and all persons assisting him, from any damages that might accrue to him or them for levying, attaching and making sale, under and by virtue of the execution, of all or any personal property which he or they should or might judge belonged to the judgment debtor named.

The defendant’s counsel requested the court to charge that if neither the sheriff nor any of his deputies judged the property taken under the execution, in reference to which the indemnity applied, was owned by the judgment debtor, then the defendant was entitled to a verdict. The court refused so to charge, and an exception was duly taken. What was said on that subject, if anything otherwise, does not appear, inasmuch as the charge is not given in the record. As said in the case of Clark v. Woodruff (83 N. Y., 525): “It is never the purpose of these indemnities to make the obligors responsible for trespass which they do not direct or authorize. We should not yield to such a construction. The mischiefs resulting would be very great, not only to the parties and to the. public, but to the officers themselves.” And in the same case in the Supreme Court (18 Hun, 423), it was said : “It can hardly be supposed that the parties who executed the bond intended to create a roving commission by which the plaintiff would be at liberty to seize, by way of experiment, any property which he might even judge to belong to others, and rely upon such bond for protection against loss.”

The refusal of the judge to charge the proposition stated, necessarily results in a declaration of a converse proposition, namely, that the defendant would be responsible if property should be taken by the sheriff, which neither he nor his deputies judged to be the property of the judgment debtor, and thus would sanction the seizure of property in the language of Clark v. Woodruff (supra), by way of experiment. The mere fact of the levy is not to be construed, when an issue is created in regard to it, as the exercise of judgment or an act in conformity to the bond. A jury may be called upon ■ to determine whether the levy was made within the spirit of the bond itself, which was designed to secure the appropriation of the property of the debtor, if, in the judgment of the officer intrusted with the execution of the process, it was proper to levy upon, and thus to secure its appropriation to the payment of the judgment.

It is no answer to this proposition that there was no conflicting evidence on the subject of the levy. It may be said that except from the mere act of levying, there is no evidence that the property was judged to belong to the judgment debtor by the persons who made the levy. At all events, as already suggested, the defendant was entitled to a submission of the question to the jury, and which was rejected, as we have seen, whether the act of the sheriff, upon which his liability rested, was done in conformity to the bond.

For these reasons the judgment should be reversed and a new trial ordered.

Daniels, J., concurred.

Davis, P. J.

(dissenting):

The official act of levying property under an execution was sufficient prmiafaeie evidence that the officer “judged” it to belong to the defendant in the execution. There was nothing in the case rebutting or impairing this prima faeie evidence, and therefore no occasion to make the charge requested. If there had been a controversy by evidence so as to make an issue on the question whether or not the officer “ judged ” the property levied on to be that of the execution defendant, then the charge requested would have been proper, and its refusal fatal. Otherwise it was not error to decline to charge at all on that question.

I dissent from the conclusion that on the ground considered in the opinion of Brady, J., there should be a reversal and new trial.

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


author: Beady, J.:

text:
    CHRISTIAN T. CHRISTENSEN, Appellant, v. EDWARD A. QUINTARD, Respondent, Impleaded.

      Statute of limitations — when it commences to run against a creditor seeking to recover assets of a corporation improperly given to its stockholders.

    In tlie year 1871, the Illinois and St. Louis Bridge Company, a foreign corpora tion chartered in the States of Illinois and Missouri, issued to the defendant Quintard, one of its stockholders, stock and bonds without receiving any consideration therefor. July 5, 1882, the plaintiff recovered a judgment against the company for a cause of action which arose in 1873 and 1874 in the State of Missouri. An execution having been issued thereon to the sheriff of New York, and having been by him returned unsatisfied, the plaintiff brought this action to compel Quintard to pay the amount unpaid upon the shares of stock and the value of the bonds so issued to him.

      Held, that as the plaintiff’s right to sue the defendant did not arise until the execution had been issued and returned unsatisfied,, the statute of limitations did not begin to run against it until that time, and that it was not, therefore, barred thereby.
    Appeal from a judgment dismissing tbe complaint, entered upon the trial of this action at the Special Term.

      Charles E. Traoy, for the appellant.

      Hamilton Odell, for the respondent.
   Beady, J.:

The plaintiff is a judgment creditor of the Illinois and St. Louis Bridge Company, a corporation chartered in Illinois and Missouri; The defendant Quintard was a subscriber for 250 shares of the capital stock of the company of the par value of $25,000, which he paid in full. In or about January, 1871, the company issued to him twenty-five additional shares, the certificate for which stated, upon its face, that forty per cent, or forty dollars upon each share, had been paid, and Quintard subsequently paid the company the sixty per cent. The learned justice in the court below, in reference to these additional shares, found that the defendant did not subscribe for them, but that they were issued to him pursuant to the resolution of the board of directors of the bridge company of May 4, 1871. The forty dollars a share which the company represented as paid was not paid by Quintard.

It also appears that the company called in the remaining sixty dollars a share and contemporaneously therewith divided and distributed amongst the stockholders a million dollars, in nominal amount, of second mortgage bonds, without receiving value therefor. The plaintiff’s judgment was recovered on the 5th of July, 1882, and was for causes of action originating in the years 1873 and 1874, in the State of Missouri. An execution was duly issued on this judgment to the sheriff of the city and county of New York, and was returned unsatisfied, whereupon the plaintiff brought this action against Quintard and the company to compel the former to pay him the forty dollars a share upon the twenty-five shares already mentioned, and the sum of $5,332.18, the alleged value of the second mortgage bonds, which it was charged had been delivered by the company to Quintard without consideration.

The defendant, amongst other defenses, interposed that of the statute of limitations, and the learned judge in the court below held that this prevented the plaintiff from recovering. His view seems to have been that no recovery could have been had upon these claims by the corporation or by any person representing it, as the causes of action arose in 1873 and 1874, nearly ten years before the action was commenced and the statute had run, and further, that the proposition that because this action could not be maintained until the return of an execution unsatisfied the statute did not run, could not •obtain, as such a rule would entirely defeat the object of the statute. The learned judge further suggested that if the judgment debtor’s right to recover was lost by lapse of time, it seems hardly possible that the judgment creditor, claiming through him, could recover. That is to say, inasmuch as the corporation could not, by reason of the operation of the statute, recover from Mr. Quintard any sum arising from the distribution of the stock and bonds mentioned, the creditors of the corporation claiming through it could not r'ecover in this action. The learned justice suggested that if such a rule was to prevail, then, in case a creditor should become insolvent, claims outlawed fifty years before would be revived if a suit was brought by a judgment creditor to reach them as assets.

The success of the plaintiff in this action does not depend, however, upon the right of the bridge company to recover from the defendant, but upon tbe recovery of tbe plaintiff in this action against that company. The causes of action upon which the judgment was obtained against the company arose in 1873 and 1874, and there is nothing to show that the statute of limitations applied against the plaintiff as to his claim. The right of the creditors of the bridge company to pursue the defendant on a demand such as asserted herein, rests upon a judgment recovered against the company and the exhaustion of the remedies attendant upon that judgment. The time within which to bring the action is dependent upon the provisions of the Code, which, by section 415, declares, that the periods of limitation prescribed by this chapter, except as otherwise specially provided, must be computed from the time of the accruing of the right to relief by action, special proceeding, defense or otherwise, as the case requires, to the time when the claim for that relief is actually interposed by the party as a plaintiff or defendant in a particular action or special proceeding.

The plaintiff seeks to obtain from the defendant property distributed improperly to him as one of the stockholders of the bridge-company, and if he can establish the fact alleged, he may recover, the assets of a corporation being a trust fund for the payment of its debts, and its creditors having a lien thereon and the right to priority of payment over its stockholders. And this appears to be a right whether the stockholder receives the dividend by fair agreement with his associates or by a wrongful act, and the creditor is-not-required to bring a suit on behalf of other creditors who may choose to. come in, or to make all the stockholders . parties to the-action. But he cannot proceed thus until a judgment is obtained against the company and an execution issued and returned unsatisfied; his right of action accrues, therefore, after the latter cere mony has been observed. (Hastings v. Drew, 50 How. Pr., 254; 76 N. Y., 9; Bartlett v. Drew, 57 id., 587; Sturges v. Vanderbilt, 73 id., 384; Stephens v. Fox, 83 id., 313-317; Scovill v. Thayer, 105 U. S., 143; Taylor v. Bowker, 111 id., 110.)

Although, therefore, the alleged improper distribution of stock and bonds took place in 1871, the right of the plaintiff to seek such appropriation out of the assets of the company did not accrue until after his judgment was obtained and an execution issued upon it. As long, therefore, as the liability of the corporation is continued, the responsibility of the stockholder must necessarily continue; although, perhaps, it may be that the time within which, all the proceedings should be commenced must be ten years from, the time of the indebtedness to the company, which in this case, assuming the liabilities to have existed in 1873, would expire in 1883, prior to which time a judgment had been obtained against, him and this action commenced against the defendant.

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

Daniels, J., concurred.

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

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


author: Brady, J.:

text:
    ELIZABETH GRIFFITHS, Respondent, v. EDWARD A. MORRISON and Others, Appellants.

      Conveyance of land with the buildings thereon — appurtenances—what will not pass itss.
    Prior to 1880, the plaintiff was the owner of two lots of ground, with the buildings thereon, known as Nos. 141 and 143 West Forty-ninth street, each of which, was twenty-two feet front and rear, and one hundred feet four inches deep. Upon the rear of No. 141 had been erected a small structure, the west wall of which was within, and five feet eight inches east of, the west line of the said lot-Thereafter a similar structure was erected upon the rear of lot No. 143, which extended over lot No. 141 to the west wall of the other structure. The second structure had no east wall, its beams being supported by piers. Thereafter the plaintiff conveyed to the defendant Morrison’s grantor the said lot No. 143, by a deed describing it as twenty-two feet front and rear, by 100 feet four inches; in depth, together with the buildings and improvements thereon and the; appurtenances.

      Held, that no right was conferred by such deed to continue and maintain upom the five feet eight inches of lot No. 141, the portion of the structure in the rear of No. 143 which had been constructed upon such five feet and eight inches..
    Appeal from a judgment in favor, of the plaintiff, entered upon a Yerdict directed by the court.

      James J. Thomson, for the appellants.

      Samuel Jones, for the respondent.
   Brady, J.:

This is an action of ejectment. It appears that James 'Wakely was the owner of two lots of land in the city of New York, known as Nos. 141 and 143 West Forty-ninth street. These lots were each twenty-two feet front and rear and one hundred feet four inches in depth. Mr. Wakely conveyed them to the plaintiff by deed dated November, 1863. By deed dated June, 1880, the plaintiff conveyed to Mary Larkin, afterwards Laverick, the lot and premises 143, and the latter, by deed dated April 1, 1882, conveyed the same premises to the defendant Morrison. In the deed from the plaintiff to Larkin the lot was described as twenty-two feet front and rear by one hundred feet and four inches in depth, and was conveyed with the buildings and improvements thereon, together with the appurtenances. It appears that there was a small structure built upon the rear of lot 141, which was complete, walls and all, before a kindred structure was erected upon the rear of lot 143. The structure upon the rear of 141 did not cover the whole lot. The structure upon 143 covered not only the rear of that lot but extended about five feet eight inches over the line of lot 141 and ■ up to the west wall of the structure erected upon 141, and the west wall of 141 therefore formed the easterly wall of the “structure "upon 143. The walls of the structure of 143, although they extended to the westerly wall of 141, were not keyed to it. The beams rested on piers. The dispute is as to the right of the defendant, under his deed, to occupy the five feet eight inches of lot 141 over which the structure upon 143 extends, as we have already seen.

It will have been observed that by the boundary lines established by the grant to the defendant, he is only entitled to twenty-two feet front and rear by one hundred feet four inches in depth and the buildings and improvements thereon, together with the appurtenances ; and this line being strictly construed would have necessarily confined his possessions to a location within twenty-two feet in width on straight lines running one hundred feet four inches in depth. It is quite evident from the language of the deed describing the grant, that there was no intention to allow him any more land than this, and it is quite apparent, from the manner in which the rear building is constructed upon that lot, that there was no intention to make that portion of that building, extending over lot 141, a part of the premises known as 143. This is evident by the fact that the beams rest on piers and that no easterly wall was built, the westerly wall of 141 acting as a substitute for it, and from the fact that the structure itself could be subsequently altered and changed by erecting its westerly wall upon the premises of 143.

It can be very well understood, that as long as the two lots were •owned by the plaintiff, the structure upon 143, extending over the line of and upon 141 should be permitted to remain, but the sharp lines of twenty-two feet in front and rear by 100 feet four inches in depth, indicates very clearly, as already suggested, that the structure on lot 143 was designed to be severed from the premises 141. In a grant or demise the addition of the word “ appurtenances ” will not vary the effect of the grant or extend it so as to include other lands not parcel of the house and close mentioned. And it is well settled, that in a deed the word appurtenances will not pass any corporeal real property or title to lands, but merely incorporeal easements or lights and privileges. It cannot include a strip of land adjacent to that granted. A title to land will not pass by implication. Easements exist as appurtenant to a grant of lands, .and as arising by implication, only by reason of a necessity to the full enjoyment of the property granted. Nothing passes by implication or as incident or appurtenant to the lands granted, except ■such rights, privileges and esasements as are directly necessary to the proper enjoyment of the granted estate. "When the necessity ceases the rights resulting from it cease. It must be an actual and a direct necessity. A mere convenience is not sufficient to create ■or convey a right or easement or impose burthens upon lands other than those granted as incident to the grant. In all cases the question of necessity controls. (Ogden v. Jennings, 62 N. Y., 526.)

It is quite apparent that for the enjoyment of the rear building there is no necessity for the use of the walls of the house on the rear of 141 to sustain the structure upon 143, to which reference has already been made. The effect of confining the defendant to the grant of lands which was made to him, would be to diminish the size of that structure and nothing more. There is now no easterly independent wall for it, but one can be constructed by the defendant upon the premises which he purchased. The cases referred to by the learned counsel for the defendant, Lampman v. Mliks (21 N. Y., 506); Huttemeier v. Albro (18 id., 51); Doyle v. Lord (64 id., 437); Rogers v. Sinsheimer (50 id, 648), not only do not conflict with the doctrines enunciated in Ogden v. Jennings (supra), bnt sustain them. And the case of Grant v. Chase (17 Mass., 443), cited with approbation in Parsons v. Johnson (68 N. Y., 62), is an authority for the proposition that an easement not absolutely necessary to the enjoyment of the demised premises does-not pass with the grant.

For these reasons we think that the plaintiff was entitled to-recover, and that the judgment pronounced in her favor, should be-affirmed, with costs.

Daniels, J., concurred.

Present — Brady and Daniels, JJ.

Judgment affirmed, with costs.


author: Heady, «T.:

text:
    GEORGE McADAM, Plaintiff, v. THE MAYOR, ALDERMEN AND COMMONALTY OF THE CITY OF NEW YORK, Defendants.

      Contract between the board of education of New York and one of the clerks of that city — invalid under section 59 of chapter 410 of 1882.
    The plaintiff, who was the chief clerk of the bureau of city revenue in the finance department of the city of New York, was appointed by the board of education of that city an instructor in the evening High School, his duty being to-lecture three evenings in each week of the school term.

      Reid, that the employment of the plaintiff was a violation of section 59 of chapter 410 of 18S2, providing that “no member of the common council head of department, chief of bureau, deputy thereof, or clerk therein or other officer of the corporation shall be or become directly or indirectly interested in or in the performance of any contract, work or business, or the sale of any article the expense, price or consideration of which is payable from the city treasury.”

      Macdonald v. The Mayor (82 Hun, 89) distinguished.
    Case agreed upon in a controversy submitted without action under section 1279 of tbe Code of Civil Procedure.

      Everett P. Wheeler, for tlie plaintiff.

      David J. Dean, for tlie defendants.
   Heady, «T.:

The plaintiff claims to recover the sum of seventy dollars for .eervices rendered in the following manner:

He is a well-known lecturer on economics and political science. He was appointed by the board of education instructor in the evening High School, his duty requiring him to lecture three evenings in each week of the school term on the subjects mentioned, with special reference to the duty of citizenship in New York city. He was at the time of such employment chief clerk of the bureau of city revenue in the finance department. The payment for his services, if payment were made, would be made out of the moneys in the city treasury. It is admitted that the money to pay the sums required by the pay-roll of the board of education has been appropriated by the board of estimate and apportionment in the estimate of the expenses of the board of education, to be raised by tax and deposited in the city treasury. The defendants object, however, to the payment of the claim under the provision of section 59 of -the Consolidation Act of 1882 (chap. 410), which are as follows: “No member of the common council, head of department, chief of bureau, deputy thereof or clerk therein, or other officer of the corporation, shall be or become directly or indirectly interested in oi in the performance of any contract, work or business, or the sale of any article, the expense, price or consideration of which is payable from the city treasury.”

And the objection seems to be fatal to the validity of the plaintiff’s demand, lie is a clerk of a bureau and is directly interested in the work for which he seeks to recover, namely, the delivery of lectures in the evening High School. The case of Mullaly v. The Mayor (3 Hun, 664) seems to be directly in point in principle; .and the cases of McDonald v. The Mayor (68 N. Y., 23), Donovan v. The Mayor (33 id., 291) and Davenport v. The Mayor (67 id., 456) also bear upon the question.

In Dannat v. The Mayor (66 N. Y., 585) the Court of Appeals recognized the proposition that payment of the expenditures of the board of education was to be made by the comptroller from the city treasury, although the board was independent, so far as the control and management of the educational matters of the city were concerned. Section 123 of the Consolidation Act provides that “ wages and salaries, including payments for the board of education may be paid upon pay-rolls,” so that there is no doubt that if the plaintiff is to be paid he is to be paid by a draft on the city treasury, either directly or indirectly, it matters not which.

The plaintiff relies, apparently with great confidence, upon the decision made by this court in the case of Macdonald v. The Mayor (32 Hun, 89), where the same objection was interposed by the city to the payment of the sum the plaintiff claimed to have earned for services rendered. But his recovery was predicated of the conclusion arrived at and expressed by the court, namely, that he was-not embraced within the provisions of section 59 {supra). He-was neither a “ head of department, chief of bureau, deputy thereof or clerk therein, or other officer of the corporation.” It was upon that ground he was allowed to recover for the services that he rendered. Of course, that presents a very different state of facts from that agreed upon here, for the reason that the plaintiff is a clerk in a bureau. Perhaps it might be said that the legislature never contemplated excluding payment for services such as rendered by the plaintiff herein, though connected with one of thebureaux. But the language of section 59 is very broad, and indicates a determination on the part of the legislature to prevent any person from receiving compensation from the city in two-modes or by two methods, thus preventing by any possibility the use of official position for personal aggrandizement, by interest in, any contract other than that which exists directly between the official and the city for the services to be rendered by him directly to it.

No reason is discovered in the consideration of this case justifying a judgment for the plaintiff, and, therefore, judgment must be ordered for the defendants, but without costs.

Davis, P. J., and Daniels, J., concurred.

Judgment ordered for defendants, without costs.


text:
    JAMES NASER, and PETER BOWE, as Sheriff of New York, Plaintiffs, v. THE FIRST NATIONAL BANK OF THE CITY OF NEW YORK, Defendant.

      Transmission of a drajt for collection — when the collecting banlc becomes the debtor of the owner of the draft.

    The firm, of E. 0. Dennecken & Co., of London, having drawn a draft for a sum named, upon the plaintiff Naser, payable at his place of business in blew York city, gave the draft to the firm of McCulloch & Co., London, who, at the request of the drawers, transmitted the same to the defendant, at New York, for collection. McCulloch & Co. had no interest in the draft or its proceeds, %nd received it merely for transmission to the defendant. Before the draft became due the plaintiff Naser commenced an action against Dennecken & Co., and immediately after paying the draft attached the moneys so paid as a debt due from the defendant to Dennecken & Co. The defendant disputed the validity of the attachment, upon the ground that it was the debtor of McCulloch & Co., and not of Dennecken & Co.
    Held, that this claim could not be sustained, and that the plaintiff acquired a valid lien upon the proceeds of the draft by virtue of his attachment.
    Motion for a new trial on exceptions, ordered to be heard in the first instance at the General Term, after a verdict had been directed in favor of the defendant.

      Samuel Untermyer, for the plaintiff.

      Fisher A. JBaTeer, for the defendant.
   Brady, J.:

The plaintiff Naser and the firm of E. 0. Dennecken & Co., of London, had business transactions, in the course of which the firm mentioned drew upon Naser, at No. 7 Beaver street, this city, by draft, dated London, June 19, 1880, for £817 9s., and which was sent to the defendants by the firm of McCulloch & Co. by request of the drawers. Before the payment of the draft Naser began an action by attachment against Dennecken & Co., for a claim due to him, and on the 3d of July, 1880, paid the draft to the defendant and immediately attempted to levy upon the proceeds or the money by which the draft was paid. Thereafter judgment was entered by Naser in the action brought by him against Dennecken .& Co., and an execution was duly issued upon that judgment. This action, was then commenced by leave of the court to reduce into the possession of the sheriff the moneys which had been attached so that they could be applied toward the satisfaction of the judgment. The court below directed a verdict for the defendant on the ground that it was not the debtor of Dennecken & Co., ■but of McCulloch & Co.

Upon the trial the testimony of the members of the firm of McCulloch & Co. was given, and it appears from it, nothing to the contrary appearing, that that firm had no business with Dennecken & Co. in the months of May, June and July, 1880, other than to forward a draft for collection on the plaintiff Naser for £350 in the month of May, and also the draft which is the subject of this controversy. It also appears that there was no account on the books of McCulloch & Co. with the firm of Dennecken & Co., or with any of the members of that firm; neither the firm of Dennecken Sc >Co., nor any of its members, had at any time any account with McCulloch & Co., and none of them ever saw the draft or bill of «exchange in question.

McCulloch & Co. had no interest in the draft nor in its prooeeds therefor. They received it merely for transmission to the ■defendant for collection. It is insisted by the defendant that upon the collection of the draft, that is, upon the payment of the amount by the plaintiff Naser, the defendant became the debtor of McCulloch & Go. as its depositor; the relation of debtor and creditor being at once created as a legal sequence of that act.

The plaintiff contends that the defendant was the agent of Dennecken & Go. to collect the draft, McCulloch & Go. being only employed or asked to transmit it for collection. In the consideration of the question presented for decision, we start with the fact that McCulloch & Go. had no interest whatever in the draft, or any part of it, either as a firm or as individuals, and that all they undertook to do was to send it away for collection, the title to the draft and its proceeds remaining absolutely in Dennecken & Co., in whose favor it was drawn and by whom it was transmitted. In the cases of the Bank of Washington v. Triplett (1 Pet., 25); Bank of Orleans v. Smith (3 Hill, 560); Fabens v. Mercantile Bank (23 Pick., 330); Lawrence v. Stonington Bank (6 Conn., 528), and Montgomery County Bank v. Albany City Bank (17 N. Y., 459), the distinction is drawn between the delivery of a draft or promissory note to an •agent at the place where the drawee resides for collection, and its delivery to a person merely for transmission to another agent at the place where the drawee resides.

In the case of the Montgomery County Bank v. Albany City Bank (supra), the court said, speaking of the Bank of Orleans v. Smith: “There the case shows that Triplets Neal, the owners •and holders of a bill drawn at Alexandria by Briscoe on Carnes of "Washington city placed it in the hands of the cashier of the Mechanics’- Bank of Alexandria, not for collection by that bank, but for the purpose of its being transmitted to a bank in "Washington for collection, there being no allegation that the bank at Alexandria made any contract to collect the bill.” And the learned Chief Justice Marshall in delivering the opinion of the court said : “ The bill was not delivered to the Mechanics’ Bank at Alexandria for ■collection, but for transmission, that the bank at Washington became the agent of the holder ; that the Bank of Alexandria performed its duty by transmitting the bill, and the whole responsibility of the collection devolved on the bank which received it for that purpose.” Applying the principle of that case to this, the draft was delivered to McCulloch & Co. to be transmitted to the ■defendants for collection, and they did their whole duty by transmitting it, the responsibility of collecting it devolving upon the defendant. The court further said in that case: “ It was equally well settled that when a note is deposited with a bank for collection, which is payable at another place, the whole duty of the bank so receiving the note in the first instance, is seasonably to transmit the same to a suitable bank or other agent at the place of payment, and •as a part of the same doctrine it was well settled that if the acceptor ■of a bill or promissor of a note has his residence in another place, it shall be presumed to have been intended and understood between the depositor for collection and the bank that it was to be transmitted to the place of residence of the promisor.”

This distinction substantially disposes of the question, for the reason that the defendant being the agent of Dennecken & Co., "became the debtor of that firm, a fact made manifest by the proof given herein that the firm of McCulloch & Co. had no interest whatever in the draft or its proceeds. The money, which was employed for the payment of the draft, fiie>'.- \>,-e, as soon as it was-paid to the bank, became subject to the attachment issued by the plaintiff in his suit against Dennecken & Co., there being no question upon the facts or the law stated that the money belonged to-the attachment debtors. It seems to be quite clear upon these facts that an action could be maintained against the defendant by Dennecken & Co., and if an action could be maintained by Dennecken & Co., the attaching creditors by virtue of the attachment were subrogated to the rights of Dennecken & Co.

There is a class of cases to which the respondent refers, in which the responsibility of the collecting agent has been discussed, but none of them treat of the question here considered. The liability of the collecting agent has been considered and declared under a variety of circumstances, but in each case .there was a distinction actually existing between the respective duties of collecting and transmitting for collection. The liability has been declared to be different. The case of Colvin v. Holbrook (2 Comst., 126) does not sustain the defendant’s proposition for the reason that that was an action brought against a deputy sheriff for money actually received by him in that character. It appeared in that case that there had been a sale of real estate upon execution and that a junior judgment-creditor on redeeming from the sale paid to the deputy Holbrook, for the use of the purchaser, the amount of the bill and interest. And it was held that an action would not lie against the-deputy to recover the money, although he had not paid it over to-the sheriff, and had refused on demand to pay it to the plaintiff, who was the assignee of the certificate of sale. That case differs-essentially from this. There the sheriff was liable.

The ease of Costigan v. Newland (12 Barb., 456) is not analogous to the one in hand. There the defendant, as attorney for one DeForrest, foreclosed a mortgage, and after paying the mortgage debt and interest and costs out of the money arising from the sale, a surplus remained in the hands of the defendant amounting toll 80.95. The plaintiff claimed the surplus by reason of a judgment he had recovered against the mortgagors, which was the oldest unpaid lien on the premises proved on the trial. And while such gurplus remained in the defendant’s hands, the plaintiff served notice on the defendant of his claim and the facts on which it was based and demanded the money. The canse was referred and á report given in favor of the defendant, which was upheld. The court said in that case, it is true that where money was properly paid to an agent the party ultimately entitled to it could recover only from the principal; in other words, that where the party claims the money in affirmance of the right of the agent to receive-it for his principal, he can sue only the principal and not the agent for the money.

The doctrine in that case may be applied here, because the judgment-creditor by virtue of his attachment and execution, and acting-under them, became the principal; in other words, succeeded to all the rights of Dennecken & Co. in the fund which was in the defendant’s hands on payment of the draft.

The examination of this case leads to the conclusion, therefore, that the plaintiffs were entitled to recover and that the judgment should have been in their favor and not for the defendant. The result should be therefore that the verdict be set aside and a npvf' trial ordered.

Daniels, J., concurred.

Present — 1 Ready, P. J., and Daniels, J.

Yerdict sot aside, new trial ordered, costs to abide event.