author: Ruger, C. J.

text:
    William N. Nearpass et al., Appl’ts, v. Franklin Newman, Jr., et al., Resp’ts.

      (Court of Appeals,

      Filed June 7, 1887.)

    1. Trusts—Deed of separation—Reversionary interest of husband— 3B.S., p. 3183, § 63.
    In 1864 Franklin Newman conveyed certain real estate to a trustee for the benefit of his wife and children, to sell the same, paying the proceeds to her for her support and that of her children. In 1865, for the purpose of a divorce, he entered into another agreement with the same trustee, agreeing to quit-claim the real estate previously conveyed and to pay for the children’s education, if his wife performed the covenants male by her. The deed was made, delivered and recorded. In 1873 defendant was substituted as trustee, and the property deeded to him. The wife died in 1883 and the grantees of the husband brought this action to recover possession of the real estate. Held, that the reversionary interest of the land conveyed by the first instrument remained in the husband, and upon the death of the wife, reverted to him under the statute, and that by the quit-claim deed of 1865 he did not transfer his reversionary interest in the trust fund to the trustee as there was no intention to vest any personal interest in the trustee, and the property was to be returned to him when the object of the transfer had been satisfied.
    3. Same.

      Held, that no trust was created by the agreement of 1865. and that under it the trustee acquired a mortgage interest only, which became satisfied in 1871 by the performance of the obligation and the arrival of the children at maturity.
    Appeal from supreme court, general term, second department.

      Esek Cowen, for app’lts; John D. Pray and Mr. Hubbard, for resp’ts.
   Ruger, C. J.

The proof in the case is wholly documentary, and the only question arising thereon is whether, upon a proper construction of the several instruments read in evidence, Franklin Newman retained a reversionary interest in the property thereby transferred, after the trust purposes for which he had conveyed it were satisfied. Perhaps a more accurate statement of the question presented would be whether certain real estate once conveyed by him to a trustee for specific purposes was exempted from the limitations and conditions of the trust by a subsequent deed and agreement between the same parties.

The case shows that, prior to the year 1864, Newman and his wife lived unhappily together, and were desirous of making an arrangement by which they could live separately. They were the parents of four children, whom it was thought desirable should reside with and be supported by the mother. Newman had therefore given to his wife $9,000; and, being willing to provide more largely for her support, on the seventh of December, 1864, entered into a tripartite agreement with his wife and one John D. Neefus, as trustee, whereby he conveyed to said Neefus, and his successors and assigns, 13 1-2 lots of land in the city of Brooklyn, to be held and used by_ such trustee for the following purposes and conditions, viz.: To sell and convey the same, and invest the proceeds in bonds of the United States, or of the state of New York, and pay the income thereof to Harriet Newman during her natural life for her support and that of her four children. This deed and agreement was duly recorded in the register’s office of Kings county, December 9, 1864. Within a year thereafter, the parties, having determined that the peace and happiness of Newman and his wife, and of their children, would be promoted by an absolute divorce, on April 8, 1865, entered into another agreement between each other, and with Neefus, for the purpose of promoting such divorce. In this agreement it was recited that Newman desired to make still further provision for his wife and children than was made in the previous trust deed, and for that purpose, upon condition that said Harriet should faithfully perform the covenants therein contained, agreed to quitclaim to said Neefus all his right, title and interest to and in the certain thirteen and a half lots previously conveyed to said Neefus.” He also agreed, upon the same condition, to give to Neefus, for the use of said Harriet, a bill of sale of certain furniture, to pay certain bills for board of the children, to pay Neefus $300 a year for the support and education of each of two of Newman’s children until they should respectively become of age, to execute and deliver his own bond for $2,000, with collateral security, for the payment of such allowances. It is provided that “said quitclaim deed, also said bond with collateral, and the bill of sale, all to be put in escrow (said Neefus the party), to be delivered when said Harriet faithfully performs all her covenants hereinafter contained, but to be returned to said Newman if not so performed.” Certain covenants are then made by Harriet that she will facilitate the proceedings for a divorce by all means in her power; that out of the provisions heretofore and herein made, she will support herself and her children; and that, neither by herself nor the children, will she run up bills, or incur debts in Newman’s name. -It was further provided that, in case Harriet should fail to perform her several covenants, the agreement should be declared null and void, and Neefus should deliver back to Newman the quit-claim deed, bond, and collateral and bill of sale; but, in case Harriet performed her covenants to facilitate such divorce, then said papers delivered to Neefus in escrow, “shall become operative, and in full force and effect.” It is then further provided “that the furniture, taken together with the several valuable properties heretofore conveyed to said Harriet, or caused to be conveyed, or in trust for her and children’s benefit, shall be, and hereby is, taken in full satisfaction and bar of and to all or any claims whatsoever on said Newman, whether for her, said Harriet’s, own, or children’s account.”

A quit-claim deed, dated April 17, I860, from Newman to' Neefus, and to his heirs and assigns, of the thirteen and one-half lots of land, was also put in evidence. This deed was duly recorded in the clerks office of Kings county on. April 18, 1865. The next instrument, in chronological order, put in evidence, was a warranty deed, dated April 13, 1868, from Mary Jarvis and David É,. Jarvis, her husband, of a, house and lot on Jefferson street, Brooklyn, to “John D. Neefus, as trustee by and under a deed of trust from Franklin and Harriet Newman,” for the consideration of $6,500.

Next follows an agreement made on January 18, 1872, between Franklin Newman of the first part, Harriet Newman of the second part, John D. Neefus of the third part, and Franklin Newman, Jr., of the fourth part. This agreement embraces the following recitals: “"Whereas by a certain deed of trust made between the parties hereto of the first, second and third parts, bearing date the 7th day of December, 1864, * * * the said party of the third part received certain real and personal property in trust for certain purposes therein mentioned; ana whereas, such property, so received in trust by said party, has been sold, and the proceeds thereof have all been invested in a house and lot in Jefferson street, near Ormond place, in the said city of Brooklyn, and in four United States six per cent bonds of $1,000 each; and whereas, at the request of the said parties of the first and second parts, and with the consent of the said parties of the third and fourth parts, the said party of the fourth part is to be substituted as trustee in the place and stead of the said party of the third part, subject to all the covenants and conditions in said trust deed contained; and whereas, the said party of the third part has conveyed to said party of the fourth part, by deed bearing even date herewith, the house and lot on Jefferson street, and has also, simultaneously with the execution hereof, delivered to said party of the fourth part the said four United States bonds for $1,000 each, being all the property, money, or proceeds in the hands or possession of said party of the third part under and pursuant to said deed of trust.” In consideration, of the premises it was then provided that the parties of the first and second parts should release and discharge the party of the third part from all claims and demands whatsoever. The party of the third part did thereby, also in consideration of the premises, “ transfer, assign and set over to said party of the fourth part the said Jefferson street house and United States bonds, and all and every right,, claim or demand which he may or shall have for or by reason of said deed of trust,” and the said party of the fourth part in consideration of the conveyance to him of the said house and lot, and of the delivery of said bonds, did “ consent and agree to take said house and lot and bonds, and hold the same as trustee, pursuant to the covenants and conditions in said trust deed contained, in the place and stead of the said party of the third part.” On the same day, “ John D. Neefus, individually and as trustee by and under a deed of trust from Franklin and Harriet Newman,” and Mary Ann, his wife, convened by quit-claim deed all of the estate, right, title and interest, both in law and equity, of, in or to the house and lot on Jefferson street to “Franklin Newman, Jr., as trustee, in place and stead of John D. Neefus, under said deed of trust,” and to his successors and assigns forever.

From this time forward, it would seem that Franklin Newman, Jr., acted as trustee under the original trust deed until the death of Harriet Newman, which occurred in July, 1882. Harriet Newman left a will by which she devised all of her property to her daughter Mary and her son Franklin, and appointed her son Franklin sole executor of her will. On December 9, 1882, Franklin Newman, claiming to be the reversionary owner of the property held by Franklin Newman, Jr., conveyed it to the plaintiffs, and this action was brought by them to recover possession of the same.

The effect of the deed and trust agreement of December, 1864, was to create a valid power in trust to convert the land into money, and invest the proceeds in securities in which Harriet Newman was to have a life-estate only. Belmont v. O’Brien, 12 N. Y., 395. The reversionary interest in the land, not having been conveyed by such instrument, remained in the creator of the trust, and, upon the death of Harriet Newman, reverted to him under the provisions of the statute. 3 Rev. Stat. (7th ed.), p. 2182, § 62. It is also quite clear that the limitations and conditions of the attempted trust followed the property into which the estate was converted, and it became subject to the same rules of reversion which pertained to that originally conveyed. Belmont v. O’Brien, supra. These propositions were assumed to be correct by both the general and special terms in their consideration of the case, and may be regarded as conclusively settled.

It was, however, held by the general term that Franklin Newman, by the execution and delivery of the quit-claim deed of April 17, 1865, transferred to Neefus his reversionary interest in the trust fund, and that it then became vested absolutely in Neefus, and still remains in him, or the trustee, Franklin Newman, Jr., who was substituted in his place. The defendants’ answer alleges impliedly, if not directly, that this reversionary estate was held by the trustee for the benefit of Harriet Newman, and upon her death descended or was distributable to her three children, and the issue of the fourth, who had died. This contention is hardly sustainable in view of the fact that Harriet Newman left her property, by will, exclusively to two of said children, and any reversion to which she was entitled is apparently controlled by its provisions. This result is claimed to be produced by the provisions of the agreement of April 8, 18G5, which it is argued created a trust in the reversionary estate for the benefit of Harriet Newman.

We are of the opinion that no trust was created by that agreement, and that under it Neefus acquired a mortgage interest only, which became satisfied in 1871 by the performance of the obligation, and the arrival of Franklin and Mary at maturity, and the termination of the period for paying annuities for their support. The case was considered at the general term upon the theory that its determination depended solely upon the effect to be ascribed to the quitclaim deed unaffected by the contemporaneous agreement, and, as thus viewed, might afford some reason for doubt as to its true solution.

A careful consideration of the provisions of that agreement, however, leads to the conviction that there was no intention on the part of Newman, or his wife, to vest any personal interest in the property in Neefus. It was conveyed to him, indeed, but it was conveyed for a purpose which it is the duty of the court to discover and enforce if consistent with the rules of law. This purpose is clearly disclosed by an examination of the provisions of the agreement. Among other things, it appears therefrom that the sole consideration for the deed was furnished by Harriet Newman, and its object was declared to be “to make still further provision for said wife and four children.” It was also provided that Neefus should reconvey the property to Newman in case the said Harriet “should fail to comply with or perform in good faith her part of the covenants herein contained;” and, finally, it was declared that “said quit-claim deed, also said bond with collateral and the bill of sale, all to be in escrow (said Neefus the party), to be delivered when said Harriet iaithfully performs all her covenants hereinafter contained.

The delivery here spoken of was a delivery to Neefus to take the place of the conditional delivery there made, because it obviously was not intended that Harriet Newman was to take Franklin Newman’s bond, or the judgment assigned as collateral thereto, or the bill of sale of the furniture transferred “ for her use,” which are therein spoken of in connection with the quit-claim deed. The idea that the property was to be conveyed to Newman if Harriet failed to perform her contract is inconsistent with the theory of any personal interest in Neefus, while it was essential to the performance of his trust, as well as the enforcement of the security, that he should have the title of the property with the power of converting it. On the other hand, if the reversion had been intended to be given to Neefus in trust for Harriet Newman, the legal estate would have vested immediately in her by force of the forty-ninth section of the statute; and, the life-estate and reversion uniting in the same person, the former would have merged in the latter, thus destroying the trust. That this was not intended, is shown by the repeated declarations of the parties as to the continued existence of the trust of 1864. It matters not whether the provisions of the agreement were all valid or not; for when the object of the inquiry is to ascertain the interest of the parties in making a contract, their meaning is as much revealed by the expression of invalid as valid provisions, and the court will avail itself of-every lawful means, and ascertain and give effect to the intention of the parties, if not contrary to the law. It seems quite clear, therefore, that the object of the deed was simply to furnish additional security to Harriet Newman that Franklin Newman should promptly make the additional payments of income which he became liable to pay by the agreement.

It certainly was not intended that Neefus should take the reversionary interest for himself, and there is no color of a provision in the agreement by which Harriet Newman was entitled to take it. Neefus received the property in question. simply as a security for the performance of Newman’s agreement, to be returned to Newman when the object of the transfer had been satisfied. The practical construction given to this conveyance and agreement by the subsequent-dealings and conduct of the parties, and the various contracts executed between them, is quite controlling as to their real intention in making it. The 13 and 1-2 lots were converted, into money, amounting, presumably, to about $9,000. Six; thousand five hundred dollars of this sum was invested in the house and lot on Jefferson street, the title to which was taken to Neefus as trustee under the trust deed of 1864, and the balance in four per cent United States bonds. By the-agreement of January 18, 1872, it was recited that the properties were held by Neefus as trust property under the trust-deed of 1864, and he thereby agreed to convey them to-Franklin Newman, Jr., as substituted trustee, subject to the conditions and limitations of the said trust; and the' said Franklin Newman, Jr., received them solely as trustee under, such instrument. The quit-claim deed from Neefus to Franklin Newman, Jr., conveys all of the interest in the property held by Neefus, either individually or as trustee» ™to the grantee therein named as trustee under such trust deed. Whatever effect, therefore, may be ascribed to the deed of April 8, 1865, all of the interest thereby conveyed was reconveyed to Franklin Newman, Jr., and by the agreement of January 18, 1872, executed by all of the parties having an interest in the subject, and which was recorded in the register’s office of Kings county, January 19, 1872, the trust was redeclared, and the entire proceeds of the whole property were reconstituted a trust fund subject to the limitations and conditions of the deed and contract of December 9, 1864. It follows that, upon the death of Harriet Newman, the corpus of the trust-estate reverted to Franklin Newman, and passed to the plaintiffs under the conveyance from him to them.

Other questions made in the case become immaterial in the view which we have taken of the questions raised.

The order of the general term should be reversed, and the judgment of the special term affirmed, with costs to the plaintiffs in the court below and in this court.

All concur.

       Reversing 34 Hun, 632, mem.


source: Caselaw Access Project

author: Learned, P. J.

license: Public Domain

text:
    Farmers' National Bank of Malone, Resp't, v. Margaret Houston, et al., app'lts.

      (Supreme Court, General Term, Third Department,

      Filed May 19, 1887.)

    1. Reference—Manner of taking testimony in actions at law and in equity made uniform—New York Constitution, art. 6, § 8.
    Prior to the adoption of the State Constitution the manner of taking testimony in courts of law and of equity had differed. In one the witnesses were produced, sworn and examined before the tribunal in winch the action was brought, in the other they were examined before an examiner and their written testimony presented to the tribunal. The State Constitution, article 6, § 8, provides that testimony in equity cases shall be taken in like manner as in cases in law. Held, that this abolished the difference previously existing in the manner of taking testimony, but did not mean that equity cases should be tried by jury.
    2. Same — What manner prescribed — New York Constitution, art. 1, § 2.

      Held, that the provision cited, taken in connection with article 1, section 2, meant that the mode of taking testimony in both classes of cases should be that which had been previously used in courts of law.
    3. Actions at law and in equity—Distinction abolished—Code Civ. Pro, § 3339—Reference—Code Civ. Pro., £§ 1011, 1013.

      Held, that the distinction between actions at law and in equity was abolished by Code Civ. Pro., § 3339, and that Code Civ. Pro., §§ 1011, 1013, providing for references to try the issues in actions, applied equally to those formerly denominated at law and in equity, and that no other reference Could be made when an action was at issue.
    4. Reference to take testimony—Cannot be ordered in action of foreclosure.

      Held, that a compulsory reference to take testimony could not be ordered in an action of foreclosure.
    5. Same—Code of Civ. Pro., § 827.

      Held, that Code Civ. Pro., § 827, did not affect this question.

      Cantwell, Badger & Cantwell, for resp’t; Beman & Munsill, for app’lts.
   Learned, P. J.

The constitution provides that testimony in equity cases shall be taken in like manner as in cases in law. Article 6, sec. 8. This does not mean that equity cases shall be tried by a jury. The difference in the two courts as to the manner of taking testimony had previously been this. In courts of law the witnesses were produced, sworn and examined before the tribunal which was to decide. In courts of equity witnesses were examined before an examiner, and only their written testimony was presented to the tribunal. It was this difference which was abolished by the constitution.

Of course this did not disturb the exceptional cases of testimony taken on commission, etc., because, in such exceptional cases, written testimony was used in courts of law.

But the constitution by this section abolished the old mode of taking testimony in equity cases, and put such cases in the same position, in this respect, as cases at law. Phillips v. Gorham, 17 N. Y., 273.

And it is well known that dissatisfaction had arisen before the constitution with this and other peculiarities of the court of chancery.

The Code has not attempted to interfere with this provision of the constitution. Section 968 specifies the actions which must be tried by a jury; substantially common law actions. Section 969 says that all others must be tried by a court, unless a reference or a jury trial is directed. The present action then must be tried by a court unless a reference or a jury trial is directed. References are provided for in sections 1011 and 1013, and they are references to try the issues. No intimation is given that any other reference can be made when an action is at issue.

Although for convenience we speak of equitable and common law rights, yet there is but one form of action, and the distinction between actions at law and suits in equity is abolished. Code, § 3339. If, therefore, a reference to take testimony upon issues joined can be made in an action for foreclosure, it can be made in an action for assault and battery. The latter proposition probably no one would admit.

The constitutional provision above cited may have two constructions. It may mean that, after its passage, testimony must be taken in the same manner in both classes of cases. Or it may further mean that the mode of taking testimony in both classes shall be that which had been previously used in courts of law. Taking it in connection with article 1, § 2, the latter is probably the meaning. For the production of witnesses before the jury has always been an important characteristic of that mode of trial. But on the present question either meaning is sufficient, because it cannot be claimed that in actions of every kind such a reference could be ordered. And if not in every action, then in none.

In this connection it may be noticed that even in cases of special motions the language of the Code is that the reference is to be to “ determine and report upon a question of fact,” not to take evidence. Section 1015.

The provision of section 827 does not affect this question. That section, by its language and its position, has evidently nothing to do with the trial of issues. The reference thereby authorized is such as just previous to the abolition of the court of chancery might have been made to a clerk or a master. Whatever may have been the early history of the office of master, it is well known, that at the time referred to, evidence on an issue was not taken before a master, but before an examiner. 1 Barb. Ch. Pra., 277. A master exercised certain judicial and executive powers. An examiner was little more than a scribe, writing down questions and answers. Whether a master might not do an examiner’s work is immaterial to this question. For no such work as the taking of testimony on an issue is intended in this section. The taking of such evidence was not a matter referable.” The parties took their evidence before any examiner, as they might choose. No reference was made; and, indeed, the words “a matter referable” would not include an issue in chancery.

Some cases cited by plaintiff should be noticed. Elmore v. Thomas (7 Abb., 70), was a case referred by consent. The only remarks of the court which are cited respect facts other than those presented by the pleadings.” Those remarks do not apply here. Camp v. Ingersoll (86 N. Y., 433), reversed an order of reference on the ground that the issues did not directly involve the examination of a long account. The court referred also to section 1015, and said that if the suit was one in equity, the testimony as to value of the assets 'might be taken by a referee. An examination of that section will show that it does not speak of a reference to take evidence upon the issues, but only upon what may be called collateral matters. Nor was anything decided by the court of appeals except a reversal of the order of reference.

Ketchum v. Clark (22 Barb., 319), was a case of a reference merely to take and state an amount.

Muhlenbrinck v. Pooler (1 N. Y. State Rep., 223), presented no question as to the validity of such a reference. The reference may have been been by consent; and at' any rate no objection was made. The subject is mentioned ■only in answer to the position that the court was concluded by the facts found by the referee.

On the other hand, the case of Rathbun v. Rathbun (3 How., 139), and Stewart v. Gardener (3 How., 156), are decisions on this very point, and are in conflict with the order in this case. We concur with these two decisions, and are of the opinion that the court has no power compulsorily to order that testimony to be used on a trial should be taken before a referee. Of course this does not prevent the taking of testimony de bene esse and on commission .and the like.

As there was no appeal from the refusal to refer to hear •and determine as a long account, that question is not before us.

The part of the order appealed from is reversed, with ten -dollars costs and printing disbursements.

Bockes and Landon, JJ., concur.


author: Learred, P. J.

text:
    James Bolles, App’lt, v. Richtmyer Hubbel, Resp’t.

      (Supreme Court, General Term, Third Department,

      Filed May 19, 1887.)

    Referee—Action tried before—Consideration of on appeal.
    Where the issues in an action are sent to a referee to hear and determine if the evidence is balanced, and it can be seen by an appellate court that inferences drawn from the appearance and manner of testifying of witnesses might move the scale toward the fact testified to, it may be assumed that such circumstances, proper for the consideration of the referee, were present and affected his determination as to the degree of credit to be given them.

      M. S. Wilcox, for app’lt; Krum & Grant, for resp’t.
   Learred, P. J.

This is an action to recover for work, labor and services. The defense is that the work, etc., were done for the plaintiff himself, and not for the defendant, ■under a written lease, by which the plaintiff leased from defendant a farm, with cows upon it, and agreed to pay certain rent therefor; also that the items of account were incurred in the performance of the duties imposed by the lease. The defendant set up, as a counter-claim, the rent and certain items due him. The referee to whom it was referred found that the lease was made, but that, about the time when plaintiff was to take possession, a verbal agreement was made that the defendant “would do what was right ” in regard to the cows being thinner in flesh, and so many of them being barren.

He found numerous items in detail, making the account of plaintiff against defendant $646.18; and numerous items of defendant against plaintiff amounting to $297.78. This-amount, with the rent $350, amounted to $647.78. He re-reported in favor of defendant $1.70, with costs. The plaintiff appeals.

An examination of this case shows that it is peculiarly one which a referee is most competent to decide, and in which an appellate court can hardly, with any certainty of doing justice, attempt to disregard his finding and to make new findings for themselves. There is a large amount of testimony and some forty distinct items of account.

In Sherwood v. Hanser (94 N. Y., 626), the general term had reversed the decision of a referee on questions of fact. The court of appeals said: “If the the evidence is balanced, and we can see that inferences drawn from the appearance and manner of testifying of witnesses might move the scale toward the fact testified to, we may assume' that there were circumstances of that kind, proper for the consideration of the referee, and that they affected his determination as to the degree of credit which should be given to them.” (Sic.)

The court came to the conclusion that it did not appear, either that the referee decided without evidence, or that the weight of evidence was clearly with the defendant, and that under the rule laid down the findings of the referee should stand. And they reversed the decision of the general term. This may not be quite in harmony with Godfrey v. Mozer (66 N. Y., 252), where the court said that cases of serious doubt were rare, where proper deference should be awarded to the judgment of the referee; that generally it was the duty of the appellate court to take the responsibility of examining the evidence and determining the facts for itself. But the latter decision should probably control.

The first point of dispute is in regard to the transaction about the first of April. The plaintiff claimed that it was then agreed that the lease should be surrendered. The defendant that there was but a modification, viz., that plaintiff should go on, and defendant would do what was right as to the cows, etc.

And that matter becomes material on the question whether the plaintiff went into possession of the farm as a tenant of defendant, or whether he was on the farm only as the servant of the defendant. Now, on this point, the evidence was contradictory; and we cannot say that the referee decided without evidence, or that the evidence was clearly with the other side. There had been a sealed lease executed January 7 and signed by both parties. There does not appear to have been any actual cancellation or actual surrender of that lease. All upon which plaintiff relies is the conversation, about April first. It seems to us that upon all the evidence the referee’s finding is just and reasonable. The matter of complaint at that time was an incidental affair, respecting the condition of the cows. It seems probable that the parties should have agreed that “ defendant should do what was right,” etc., in this respect, rather than that, without a cancellation or surrender of the written lease, they should have changed their position completely; so that the defendant should work the farm, and plaintiff be only his hired servant.

The plaintiff objects that the referee held him liable for the value of a bull. The defendant had a bull on the farm. By his consent plaintiff traded this bull for another, paying-six dollars. This other bull was kept by plaintiff on the farm, till he moved off in the spring of 1883, when he sold the bull for thirty dollars. The referee charged defendant with this price, less the six dollars paid by him, viz.* twenty-four dollars. The plaintiff claims that he should be charged only ten dollars. It seems by the lease of January, 1881, and also by the lease for 1882, that the defendant was to leave on the place his cows and his bull. It was therefore defendant’s duty to keep a bull on the place. And we think the referee rightfully held that when, with defendant’s consent, his bull was sold and another bought for the farm, the purchase was the defendant’s. The new bull was in the place of the old, and plaintiff’s payment of six dollars on the exchange was for the defendant. If the bull had died, it would have been defendant’s loss.

Next, the plaintiff insists that the referee erred as to certain hay of the plaintiff’s, which was in the barn April 1, 1882, and was used for defendant. The plaintiff claims that he should have the price, as it was in 1883. But we think that the time at which the price was fixed by the referee was correct.

Next, the plaintiff insists that the referee should have allowed plaintiff for the improved condition of the cows at the spring of 1883. But the referee has allowed the plaintiff damage for the cows being thinner in flesh April 1 than January 4, 1881; also for some of the cows being barren. Having thus allowed this damage to the plaintiff, according to the verbal agreement that defendant was to do right, the claim for increased value is not sound.

Objections are made by plaintiff to certain questions put to defendant when on the stand, testifying in his own behalf. The objection that questions are leading is not one to be heard on review. The testimony was proper, as it related to conversations between the parties. It was not necessary that the questions should be in the language used by plaintiff in his testimony.

Another objection is as to defendant’s testifying that he told plaintiff that one Duchworth wrote so and so. ' This was not part of the contents of Duchworth’s letter. It was only proof of what defendant said to plaintiff.

There are several other objections raised as to admission and exclusion of evidence, bub we find no material error.

The judgment is affirmed, with costs.

Bockes, J., concurs.


author: Learned, P. J. Mayham, J. Landon, J., Landon, J.

text:
    Edwin R. Lawrence, App’lt, v. Dwight B. Baker, Resp’t.

      (Supreme Court, General Term, Third Department,

      Filed May 24, 1887.)

    1. Statute of limitations—What a" payment under—Code Ciy. Pro., § 395.
    The giving by a debtor of a note of a third person to apply on his debt is a payment under the statute of limilations. Code Civ. Pro., §395. It is immaterial so far as the effect of payment goes whether the debtor pays cash, or in chattels, or in the obligations of another.
    2. Same—Debtor’s own note not a payment under—An acknowledgment.
    When he gives his own notes he parts with nothing of value, he only-makes a new promise in a new form, but he makes a written acknowledgment or promise under the section cited above.
    3. Same—Written acknowledgment takes effect from delivery.
    The time when the acknowledgment or promise is actually delivered (not the time when it is payable) is the time when it takes effect, in respect to the statute of limitations as a written promise or acknowledgment.
    4. Same—Effect of payment of debtor’s own note.
    The defendant gave his note to the plaintiff for part of a certain debt, which note the plaintiff had discounted at the bank. Meld, that payment to the bank of the note was no admission by defendant of any other indebtedness to the plaintiff. Landon, J., dissenting.
    5. Same—When payment does not take case out of statute.
    When the debtor is in such a position that he has to make the so-called payment, whether he owes the debt or not, then there is no longer any admission.
    Motion for a new trial by the plaintiff upon exceptions directed to be heard in the first instance by the general term. See statement of facts prefixed to dissenting opinion of Landon, J.

      James J. Curtis, for appl’t; Garret Z. Snider, for resp’t.
   Learned, P. J.

The giving by a debtor of a note of a third person to apply on his debt, is a payment under the statute of hmitation (Smith v. Ryan, 66 N. Y., 352; Code Civ. Pro., § 395), because it is immaterial, so far as the effect of payment goes, whether the debtor pays in cash, or in chattels, or in the obligation of another. In either case he parts with something of value and transfers it to the creditor to apply on the debt.

But when he gives his own note he parts with nothing of value. He only makes a new promise in a new form. He makes a written acknowledgment or promise under the section above cited. Kincaid v. Archibald, 73 N. Y., 189. Whether he makes any written acknowledgment or promise, except to the extent of the note which he gives, seems to me doubtful. A man who makes a note promising to pay $300, does not thereby acknowledge that he owes, nor does he promise to pay, $460. If there be any presumption, it is that the amount of the note is all that he owes.

At any rate the time when the acknowledgment or promise is actually delivered is the time when it takes effect in respect to the statute of limitations as a written promise or acknowledgment. Kincaid v. Archibald, ut supra. If then, the giving of the $300 note was an acknowledgment or promise under section 395, in respect to the alleged residue of the debt, it was such at its delivery; and the statute of limitations began again to run from that time as to the alleged residue. As to that $300, the statute did not begin to run until maturity of the note, three months later.

Assuming then (which I doubt), that the giving of the $300 was an acknowledgment or promise as the alleged balance of $162, its effect was to make the statute of limitations run as to the $162 from July 1, 1878, the time of the giving of the note; while as to the note itself, the statute would begin to run only from maturity, viz., October 4, 1878.

The plaintiff at once had the note discounted at the bank. No direct proof is given of the payment of the note, but it may be inferred that it was paid by defendant at some time; whether before or after maturity is not shown. This action was commenced September 29, 1884. If, then, the defendant paid that note a week before it was payable, all the plaintiff’s argument falls. And if the plaintiff tries to take a case out of the statute of limitations on the ground of payment, he should show positively when the payment was made.

But even assuming that payment was made on the exact day of maturity, the plaintiff is no better off. The defendant could not avoid the payment. The note had passed into the hands of the bank and was evidently negotiable.

The defendant had no alternative but to pay. He could not have defended on the ground that he owed plaintiff nothing. Now there is no mysterious virtue in a payment. It is held to avoid the statute of limitations, because, by making a partial payment, the debtor admits the debt. The courts say: “Why did he make a partial payment if he did not owe the debt.” Harper v. Fairley, 53 N. Y., 442. Now when the debtor is in such a position that he has to make the so-called payment whether he owes the whole debt or not, then there is no longer any admission. This defendant was obliged to pay his note at the bank, whether he owed plaintiff any balance or not; or even whether he had ever owed plaintiff anything. Therefore the payment of the note was no admission by the defendant of any indebtedness to the plaintiff. The bank was not plaintiff’s agent, but held the note in its own right. Defendant’s money, when he paid, did not go to the plaintiff but to the bank. The payment was no admission of any facts except such as might have served as a defense to the note, if the defendant had refused to pay. And that he did not owe the plaintiff would not have been such a fact. Therefore he did not admit his indebtedness to the plaintiff by paying this note.

Judgment should be granted for defendant on the non-suit, with costs, and motion for new trial denied.

Mayham, J.

I concur. The giving of the note was not in itself an acknowledgment of an unpaid balance not included in it. If any inference is to be drawn from it, it is that the note was prima facie evidence of a settlement, and that the note represented the amount found due. But if this presumption does not apply, still it could almost only be used as an admission of indebtedness at the time of its delivery. As the note was negotiable at the bank by endorsement and became the property of the bank before payment, the payment by defendant to the bank cannot, it seems to me, be treated as payment on the account so as to amount to an acknowledgment of any other indebtedness from the maker to the payee at that time. Again, as the evidence does not show when the note was paid, there is no affirmative proof that the note, even, was paid within six years before the commencement of the action.

Landon, J.,

dissents in the following opinion:

The plaintiff, by his complaint for lumber sold to the defendant, claimed a balance of $18.07 due May 1, 1876, also an additional balance of $162 for the lumber sold July 1, 1878.

The action was commenced September 30, 1884. The answer was the statute of limitations.

The plaintiff proved the sales and balances as of the dates claimed. He also proved that on the 1st day of July, 1878, the defendant gave his note for $300, at three months, upon account of the lumber sold. The plaintiff had the note discounted at a bank, and the proceeds placed to his credit, which he subsequently drew out upon his check. This note was paid at maturity by the defendant to the bank.

He also proved that he received from the defendant at its date the following letter:

“ Suffern, N. Y., July 10, 1880.
“Mr. E. R. Lawrence,
“Dear Sir:—Enclosed find check for $18.07 to balance accounts. Yours truly,
D. B. Baker.”

There was no other evidence touching a check. The court, upon the close of the plaintiff’s case, granted the defendant’s motion for a non-suit.

Landon, J.

(dissenting)—The note for $300 was given more than six years before the action was commenced, but it was paid within the six years.

The giving of the note was an acknowledgment as of the date when given. The statute (Code Civ. Pro., § 395), makes “an acknowledgment or promise contained in a writing, signed by the party to be charged thereby, the only competent evidence of a new or continuing contract whereby to take a case out of the operation of this title.” What we need, therefore, is “a new or continuing contract.” The original one is too old to be valid. If we have a new one we can see whether that is not recent enough, and we can only determine that by ascertaining the date it was made. Such seems to be the tendency of the decisions in this state. Kincaid v. Archibald, 73 N. Y., 189; Smith v. Ryan, 66 id., 352; McCahill v. Mehrback, 37 Him, 504; Chace v. Higgins, 1 T. & C., 229.

_ The giving of the note postponed the statute of limitations upon the amount stated in the note, but it did not, unless paid, postpone it upon the residue of the indebtedness. This was held in Smith v. Ryan (supra), in a case in whichthe debtor gave the note, yet to become due, of a third person.

Gowan v. Forster (3 B. & Ad., 507) was the case of a draft drawn by the debtor upon his consignees in favor of his creditor, and delivered to the latter. Turney v. Dodwell (3 E. & B., 136) was a similar case. It was held in these cases that the acknowledgment was of the date of the drafts and not of the day of payment. Both cases are cited with approval in Smith v. Ryan. Irving v. Veitch (3 M. & W., 90) was to the same effect.

Was the payment by the defendant at maturity of the note of $300 to the bank a payment of money upon the whole debt to the plaintiff ? If so, then it was a recognition of the residue of the debt not embraced in the note, and the statute would begin to run from the date of the payment.

The cases last above cited are to the effect that when the debtor gives, in part payment, a note or draft of a third person, payable at a future day, the payment thereof by the third person is not the payment of the debtor, and therefore does not affect him. The reasoning of the cases seems to proceed upon the theory that if the payment can be traced to the original debtor he may be regarded as paying upon the original obligation. See also Harper v. Fairley, 53 N. Y., 442; Fowler v. Clearwater, 35 Barb., 143.

The note was given as a conditional part payment of the entire demand. By it the defendant may be considered as promising to pay, three months afterwards, 8300 upon the entire sum. He paid no less to the plaintiff because the plaintiff had endorsed the note and transferred it to the bank. Payment to the bank was practically payment to plaintiff. It satisfied his liability upon his endorsement.

We think a new trial should be granted, costs to abide event.


author: Learned, J.

text:
    Andrew Williams et al., App’lts, v. Ætna Life Insurance Company, Resp’t.

      Supreme Court, General Term, Third Department,

      Filed May 19, 1887.)

    Interpleader — When bill or interpleader granted — Code Civil Procedure, § 820.
    The court has a discretion to grant or refuse a bill of interpleader, but there must always be a real doubt in the mind of the defendant, based, upon facts as to who has the just claim, before an interpleader will be permitted or the provisions of Code Civ. Pro., § 820 enforced.
    Appeal from a judgment granting a bill of interpleader.

      Beckwith, Barnard & Wheeler, for app’lts; Palmer, Weed, Kellogg & Smith, for resp’t.
   Learned, J.

The request which the defendant makes is not one to which it has an absolute right. The court has a discretion to grant or refuse it. And in considering the matter we should be very careful to see that the alleged claim of the third perso]| (in this case Isham) is one which has at least an apparent validity. There must always be a real doubt in the mind of the defendant, based upon facts, as to who has the just claim, before an interpleader should be permitted, or the provisions of the Code, § 820, should be enforced. _•

Now, in this present cáse, the affidavit of the defendant merely states that Isham makes a demand without collusion, and that the nature of the demand is that plaintiffs are not lawful assignees of the claim. Isham, on whom notice was duly served, made no affidavit as to his claim, and did not appear on the motion for substitution. He should have presented some proof of the validity of his claim before the plaintiffs should be embarrassed in prosecuting a clairn to which they show an apparently good title. It is an injury to the plaintiffs to have a defendant, who may be irresponsible, substituted for one who is responsible, and ,thus be in danger of paying the costs of litigation. And it is also an injury to them to lose the interest on their claim. For these reasons substitution should not be granted, unless a clear case is shown. It is quite doubtful in the present instance whether defendants show any prima facie ground of action on the part of Isham.

Order reversed, with ten dollars costs and printing disbursements, and motion denied, with ten dollars costs.

Bockes and Landon, JJ., concur.


text:
    Louis Knoff, Resp’t, v. John P. Ellsworth, App’lt.

      (Supreme Court, General Term, Third Department,

      Filed May 19, 1887.)

    1. Arrest—Order op—Grafted under Code Civ. Pro., § 550, subd. 2, PRIOR TO THE.PASSAGE OP LAWS 1886, CHAP. 672, IS NOT ANNULLED THEREBY.
    An order of arrest made under Code Civil Procedure, § 550, subd. 2, prior to the amendment of that section by Laws 1886, chap. 672, is not annulled by the passage of that act.
    2. Costs—Stay op proceedings for non-payment op—Code Crv. Pro., § 779.
    Under Code Civil Procedure, § 779, a party who for ten days after the service upon him of an order by which he is directed to pay the costs of a motion neglects to pay the same, is stayed in his proceedings, except such as may be taken by him to review or vacate the order. Held, this exception did not include proceedings to set aside an execution against the person.

      A. D. L. Baker, for app’lt; H. B. Cushney, for resp’t.
   Learned, P. J.

The plaintiff commenced an action April 1Y, 1885, alleging simply the sale of goods and demanding payment therefor. An order of arrest was obtained November 19, 1885, on affidavits alleging matters of fraud extrinsic to the cause of action under subdivision 2, § 550, Code Civ. Pro., as it then existed; and the defendant was arrested and gave bail the next day. The motions were made, and denied, to set aside this order.

The cause being at issue on complaint, and answer, was noticed for trial at circuit in October, 1886, and an inquest was there taken and judgment entered in favor of the plaintiff October 26, 1886. An execution against property was issued the next day and was returned unsatisfied. An execution against the person was then issued.

By chapter 6Y2 of the Laws of 1886, § 550, was amended so as practically to leave subdivision 4 in force. And section 549 was also amended so that practically subdivision 2 of section 550, as it previously existed, was made part of subdivision 5 of section 549.

Thus, as the sections were made to read by this amendment, the fraud of disposing of property with intent to defraud creditors was to be alleged in the complaint.

We may remark here that the affidavits on which the order was obtained are not before us. But it is stated in one affidavit that the order was obtained under section 550. And subdivision 2 of that section is the only subdivision which it would seem could be applicable. We may, therefore, assume, as stated in the plaintiff’s points, that the order was granted under subdivision 2 of section 550.

There are two questions raised here:

First. That the defendant has never paid the motion costs of the motion to set aside the order of arrest, and ■hence is stayed from moving to vacate the execution against the person.

Second. That as the order of arrest was granted and executed before the amendment of 1886, it was not affected by that amendment

The first position was taken by plaintiff on the hearing of the motion, as appears by the papers, and is on the plaintiff’s points; but it is not referred to by the defendant.

Section 779 of the Code of Civ. Pro. is plain that all proceedings on the part of the party required to pay costs are stayed. The Code is explicit, and it is hardly necessary to cite cases. We may refer to National Bank v. Hansee (7 Browne Civ. Pro. Rep., 350).

The motion to set aside the execution against the person cannot reasonably be considered as coming under the exception in section 779 of a proceeding “to review or vacate, the order.”

But further, on the merits, the motion was properly denied. The order of arrest had been properly granted. The amendment of 1886 did not annul the order, and there is no-reason to construe that amendment as having such an effect. The defendant argues that the plaintiff might have amended his complaint so as to conform to the provisions of section 449, as amended. But why should he amend his complaint? If chapter 672 of the Laws of 1886 annulled the plaintiff’s order, then it would be of no use to amend his complaint, except as the basis of an application for a. new order of arrest. While if that chapter did not annul, the plaintiff’s order of arrest, then such order remained valid, and is valid still.

Now, without some express words to that effect, there is no reason to think that the legislature intended to annul and make invalid all orders of arrest which had previously been granted lawfully. To do so would be unjust.

The order appealed from is affirmed, with ten dollars costs and disbursements.

Parker and Landon, JJ., concur.


author: Per Curiam.

text:
    Matthew F. Norton, Resp’t, v. Bernard Dreyfuss, App’lt.

      (Court of Appeals,

      Filed June 7, 1887.)

    Acceptance of articles manufactured under executory contract
    Plaintiff having manufactured and delivered goods, and defendant claiming that defects existed, the . former received the articles back and attempted to remedy the defects and redelivered them. Defendant refusing to pay for them, dr to give them up, on the ground that he wished to consult his counsel as to his rights, on the trial of the action for the purchase price, the court ordered judgment for plaintiff, holding that defendant’s refusal to return was an acceptance of the goods. Held, error, that the case should have been left to the jury to determine as a question of fact upon the requests made by the defendant.
    Appeal from superior court of New York city, general term.

      John Frankenheimer, for app’lt; Edward S. Hatch, for resp’t.
   Per Curiam.

The plaintiff brings this action to recover the contract price for manufacturing and delivering certain dies and frames for the defendant. The answer was that the goods were not such as the contract required, and also set up a counter-claim. The evidence given upon the trial differed very much as to the terms and conditions of the contract, the time for its performance, the quality of the articles manufactured, their fitness for the purposes intended, and as to whether the goods delivered corresponded with the articles ordered by the defendant. It was conceded that the plaintiff manufactured and delivered goods in quantity and number corresponding with those required by liis contract, and that some faults in their character and quality were alleged *by the defendant to exist when tendered in performance of the contract. It was also proved that the plaintiff received the articles back on several occasions, and attempted to remedy the alleged defects, and finally redelivered the whole quantity to the defendant. It was then still alleged by the defendant that they did not correspond with the articles which the plaintiff contracted to make for him. Three or four days after this time the plaintiff called upon the defendant for payment of the amount claimed by him to be due upon the contract, which was refused by the defendant. The plaintiff thereupon demanded the return of the goods, and the defendant replied, in substance, that he would not then give them up, as he wished to consult counsel as to his right to keep them for reimbursement of the damages which he alleged he had sustained by reason of the plaintiff’s failure to perform his contract. The evidence as to what was said by the defendant at the time of the demand was somewhat contradictory, but we believe the above statement expresses' the meaning substantially of the defendant’s version of the transaction. The defendant gave no evidence as to the damages claimed to have been sustained by him on account of the alleged breach of contract. Upon this case, aside from some immaterial circumstances which do not affect the question of law presented, the trial court ordered judgment for the plaintiff for the amount of his claim; holding that the refusal of the defendant to return the goods, when requested, amounted to an acceptance of them upon the contract. The defendant excepted to this direction. He also requested to be allowed to go to the jury on “the question of fact involved in the case, upon the whole evidence, whether the defendant did accept the frame dies or the medallions as in compliance with the order as given by him,” and also upon the further question, “whether the defendant did absolutely refuse to return the frame dies or medallions, or whether it was a qualified refusal.” Both of the requests were denied by the court, and the defendant excepted.

We are inclined to think the trial court erred in these decisions, and that the case should have been left to the jury to determine as a question of fact upon the requests made by the defendant. It is now quite well settled that the acceptance by the vendee of articles manufactured for him under an executory contract, after an opportunity to examine them, precludes him from raising any question as to defects or imperfections which were visible and capable of discovery on inspection, unless there is a warranty of their quality which was intended to survive their acceptance, and give the vendee further time for trial and examination. When there is such a warranty, the vendee may still retain the goods; and, when action is brought for their price, may recoup such damages as he can show he has suffered by reason of the defective or inferior character of the goods delivered. He may also, in such an action, recover damages for a breach of contract on the part of the vendor, in respect to the time of its performance, if he can prove that he has suffered loss therefrom.

But these propositions do not seem to us .to dispose of the case. When one party has the property of another in his possession, and refuses to surrender it upon demand, a jury is authorized to infer from these facts a conversion of the property, but such evidence raises a question of fact alone, and cannot be determined as a question of law. We think this case is analogous to the question arising in an action of trover. Here two courses were open to the defendant to adopt in case he was dissatisfied with the-performance of the contract by the plaintiff, and was satisfied that he had a warranty of the goods which would survive their acceptance. He could return the goods, and plead the rescission of the contract as a defense to the action for their price, or he could keep the property, relying upon his warranty to recover such damages as he could show he had suffered by its breach as a counter-claim to the plaintiff’s- action for their price. These defenses are, however, inconsistent with each other, and cannot both be sustained in the same action. In case of a return of the goods and proof of their defective character, or a valid offer to rescind the contract, he makes out a defense to the claim to recover their price. If he retains the goods, however, and attempts to recoup his damages for a breach of warranty, he may, provided he claims an affirmative judgment in his answer, not only defeat any recovery, but recover judgment for the entire amount of damages shown by his proofs which exceed the plaintiff’s claim.

It is quite uncertain, on the pleadings and evidence in the case, what line of defense the defendant really attempted to adopt, for the evidence was about as applicable to one theory as the other. While he admitted that he had declined to give up the goods, he strenuously insisted that he had always refused to accept them; and, while denying that he ever became liable for their price, he claims that he was entitled to damages for the plaintiff’s non-performance of his contract. Under these circumstances we think it was a question for the jury to determine whether the defendant’s refusal to give up the goods was an election to accept them, or simply a tentative proceeding to give him further time for examination and trial, or whether it was the expression of a determination to keep them, and rely upon the damages which he might be able to prove arising from the alleged breach of warranty to their quality, and the nonperformance of the contract in other respects by the plaintiff.

By the direction of a verdict the defendant was deprived of the right of going to the jury on the question of the worthlessness of the goods to the defendant as a performance of the contract. The evidence upon this question was quite contradictory, and the jury might well have found either way upon the question. If they had found that the goods were utterly valueless to the defendant, he would then have made out a defense, and was then entitled to a verdict at their hands. If they found, however, that the refusal of the defendant to redeliver them was intended as an acceptance, or that the goods delivered were substantially the same as those ordered, and his refusal to return was dictated by an intention to evade the payment of the contract price after finding that they were not adapted to the purpose he designed for them, the jury would have been justified in giving a verdict for the price. But the question as to whether such a demand and refusal, under all the circumstances of the case, was the equivalent of an acceptance of the goods under the contract, was a question for the jury to determine, and could not be decided as a question of law.

We are, therefore, of the opinion that the judgments of the courts below should be reversed and a new trial ordered, with costs to abide the event.

All concur, except Buger, Oh. J., and Earl, J., not voting.


author: Andrews, J.

text:
    Humphrey Sisson et al., Resp'ts, v. Cecilia Cummings et al., Appl'ts.

      (Court of Appeals,

      Filed June 7, 1887.)

    Ejectment—Parties—Infant remainder men—Code Crv. Pro., § 1503.
    Where infant remainder men neither claim title to or the right to the possession of the land in controversy, nor do any act in hostility to plaintiffs’ title, they are not proper parties to an action of ejectment.
    Appeal from supreme court, general term, fourth department.

      Wayland F. Ford, for app’lts; Denis O’Brien, for resp’ts.

       Reversing 35 Hun, 22.

   Andrews, J.

We deem it unnecessary to decide the interesting question argued at the bar respecting the construction of a grant by the state of lands bordering on the river St. Lawrence above the ebb and flow of the tide, which bounds the granted premises by the margin or the .shore of the river, and whether, under such a description, the title of the grantee extends to the margin of the water at its low stage, or only to high-water mark.

- We are of opinion that the judgment against the infant defendants, who are the only appellants - here, must be reversed upon a preliminary question. Assuming that the plaintiffs’ title under the Macomb patent extended to the line of low water, and that they established title to the water front, and to the land under water to low-water mark, lying southwest of and adjoining the premises embraced in the deed of July 5, 1861, from John W. Fuller to David and William Woodworth, under which the defendants claim, we think, nevertheless, the appellants were entitled to a dismissal of the complaint on the ground that it did not appear on the trial, by the pleadings or evidence, that they were in possession of the demanded premises, or claimed title thereto, as remainder-men or otherwise, at or before the time of the commencement of the action. Upon the death of Ellen Cummings, January 31, 1875, the title to the Woodworth lot descended to her two children, the infant defendants, subject to a life-estate in Peter Cummings, the husband, as tenant by the curtesy. Ellen Cummings acquired title to the lot by deed from David Woodworth, November 10, 1871, subject to a reservation (so called) to Fuller (the original grantor of the Woodworths), contained in the original deed from Fuller to them, of “ah his rights to the land now under water, and to the water front beyond or southwest ” of the southwest hue of the lot conveyed. She entered into possession under her deed from Wood worth, and occupied the lot, and the house upon it, with her husband and children, until her death. The premises in controversy are those embraced in this reservation. It neither appears that Ellen Cummings ever entered upon, or that she claimed any right or interest in, the premises in question. There is evidence that, subsequent to her death, Peter Cummings, her husband, one of the original defendants in the action, entered upon the premises in dispute, and built a hog pen and privy thereon, and tore down a wharf, constructed by the plaintiffs, between the lot conveyed to Ellen Cummings and the river. It may be admitted that enough was shown to entitle the plaintiffs to maintain ejectment against Peter Cummings. He has submitted to the judgment below, and has not appealed, and his rights are not now in controversy. But the case discloses no ground upon which a judgment against the infant defendants can be supported. There is no pretense of any act on the part of the infants by way of assertion of title in themselves to the premises in question, nor is there any evidence that they have ever questioned or disputed the title of the plaintiffs.

The complaint alleges that the defendants, after the death of Ellen Cummings, wrongfully entered into possession of the real estate described, and wrongfully withheld the same from the plaintiffs, and that the defendants, ‘ ‘ or some of them,” claim to own the same, and deny the plaintiffs’ title thereto. These allegations are not admitted by the infant defendants in the answer, but are denied, and they expressly aver that they have no interest in any lands except those of which their mother, Ellen Cummings, was seized at the time of her death, to wit, the lands embraced in the Woodworth deed, and they insist that the action cannot be maintained against them. It is clear, we think, that the infant defendants are not bound by the acts of their father, the tenant for life. It is true that both his rights, and the rights of the infants in the land conveyed to Ellen Cummings, are derived through her, but, as we have said, the deed to Ellen Cummings carried no part of the premises in dispute, which he wholly outside of the boundaries in the deed. The evidence also tends to show that Peter Cummings, in entering upon the land in controversy, was asserting a supposed right as riparian owner to use the shore between high and low water mark adjacent to his land. But his acts must be referred to his own interest and title, and not to the title of the remainder-, men. The infants could not control his conduct, and it would be grossly unjust to make them responsible for wrongs committed by him without their sanction or authority. The joinder of the infant defendants is not justified by section 1503 of the Code. That section authorizes any person claiming title to, or the right to the posses-sion of, real property sought to be recovered in an action, as landlord, remainder-man, or reversioner, or otherwise, adversely to the plaintiff, to be joined as defendant. The infants, so far as appears, neither claimed title to, or the right to the possession of, the land in controversy, nor did they do any act in hostility to the plaintiffs’ title, and the complaint as to them should have been dismissed.

Judgment reversed as to the appellants, and a new trial ordered, with costs to abide the event.

All concur.


author: Danforth, J.

text:
    August Noel et al., App’lts, v. Frederica M. Kinney, Impleaded with John P. Kinney, Resp’t.

      (Court of Appeals,

      Filed June 7, 1887.)

    Hxjsband and wipe—Separate estate op wipe—Partnership.
    A note was given by John P. Kinney in payment for mirrors placed in houses belonging to his wife, and signed J. P. Kinney & Co., he repsenting that his wife was the sole owner, and that such name was used as a mere matter of convenience in transacting her business. Reid, that the wife was as capable of contracting as if she had been unmarried—as capable of adding to her estate by fresh acquisitions; and she should npt be permitted to escape payment by joining to her own name that of her* hus- or the two into a firm or name

      Cases distinguished.

    Appeal from an order of the general term ,of the city court of Brooklyn, directing judgment for defendant Frederick M. Kinney.

      Nicholson P. O'Brien, for Noel and another, app’lts; G. Storms Carpenter, for resp’t.
   Danforth, J.

The action is upon a note signed J. P. Kinney & Co.,” payable to the order of plaintiffs at bank, for $505, value received. The complaint contains allegations usual in such cases, and sufficient to charge the defendants as partners under the name affixed to the note. -Frederica M. Kinney alone answered, and her sole defense is that at the time stated she was a marriedwoman, and that the note was executed, and delivered by her husband. But there is no allegation that it was made without her knowledge and consent, nor that it was made without her authority. Upon the trial the plaintiff put the note in evidence, and the defendant proved her marriage with the other defendant. But there was evidence from which the jury might have found that she was the owner of improved real estate in the city of Brooklyn; that the consideration of the note was the purchase-price of mirrors placed in houses built upon her land; and that the mirrors were unpaid for. The note was fairly taken, and the consideration delivered upon the representation by the husband that the wife was the sole owner of the property, and that the name of J. P. Kinney & Co was used as mere matter of convenience in transacting her business. It does not appear ■that there was any business except in relation to the houses.

No question was made as to the authority of defendant’s husband to execute the note, nor as to the truth of his representations.

The defendant Frederica moved to dismiss the complaint upon the ground that as to her the note was invalid, “ its form,” as her counsel stated, “showing it was not given in respect to her separate business or estate.” The trial judge directed a verdict for the plaintiff, subject to the opinion of the court. It was so rendered, but, on motion of the defendant’s counsel, afterwards set aside by the same judge, and judgment ordered for the defendant. Exceptions taken by the plaintiffs to this ruling were directed to be heard in the first instance at general term, judgment in the mean time to be suspended. The general term overruled the exception, and ordered judgment for the defendant.

It is obvious that the contract, in fulfillment of which the note was given, was of value to the defendant, for by it she acquired articles for the improvement of her property. She retains those articles, and has so far avoided payment upon the ground that she and her husband, upon contracting and consummating marriage, became one person, and so incapable of thenceforth contracting one with the other; that, therefore, they could not be partners; and, as the contract sued on was in form a co-partnership contract, it could not be enforced against her. If this is the present rule of law, then the .statutes which enable the woman to acquire and hold property, to bargain sell, assign and transfer it, to carry on any trade or business, and perform any labor or service on her own account, and which protect her in the enjoyment of her earnings from her trade, business, labor, or services, and permit her to use and invest those earnings, are effectual only so far that she may, alone or jointly with any person or persons save her husband, derive profit and increase from her work, and gain from the use of her estate. If they are to be so limited in her favor, they may easily, as in this instance, become not merely enabling statutes for her benefit, but also in her hands instrumentalities of fraud.

Upon the precise question presented, the opinion of the court below assumes that the decisions of other courts are conflicting; but we are referred to no case in this court where a woman has successfully asserted her coverture as a defense to an action for the price of goods purchased by her, and I am unable to see why, as against creditors, she should be permitted to interpose the mere form of her promise as an obstacle to their recovery. It is settled that the "things which the statutes above referred to permit her to do in person she may also do by another as her agent. This is necessarily so, for she is allowed to act in respect to them as if unmarried; and it cannot be doubted that the improvement of her land, or the management of her personal property, whether for preservation or business, may be conducted by her by means of any agency which any other owner of property might employ, and that the produce and increase thereof will be hers. Knapp v. Smith, 27 N. Y., 278, Abbey v. Deyo, 44 N. Y., 344. So she may do those things through her husband as her agent. Abbey v. Deyo, supra; Rowe v. Smith, 45 N. Y., 230. She may also have such a community of interest with him in relation to real estate as will render her liable for his frauds relating to it; and when he, professing to act as her agent, makes false representations, although without her knowledge, and she receives the proceeds, she cannot retain the fruits of his fraud. Krumm v. Beach, 96 N. Y., 398.

Again, as to all contracts relating to her separate estate, or made in the course of her separate business, she stands at law on the same footing as if unmarried, and can, therefore, make negotiable paper which will be governed by the law-merchant, and can be sued upon m the ordinary way by general complaint, and without special statements. Freaking v. Rolland, 53 N. Y., 422. Nor can she escape liability because she and her husband are joint makers of the note sued on. In Freaking v. Rolland (supra), the action was' upon a joint promissory note signed by the defendants, who were husband and wife. He set up usury, .and she set up coverture. The court directed a verdiet for the wife, and the jury gave a verdict against the husband. The creditor appealed. The general term affirmed the verdict in favor of the wife, and the creditor appealed to this court. Against the appeal it was argued (1) that, being a married woman, she was not hable for the note in suit; (2) that the complaint, being general and not specific, was insufficient to charge her property. Neither objection prevailed, and the judgment in her favor was reversed. There the husband acting for himself, and as the agent of his wife, borrowed money with which to pay. for a factory bought by her. The money was loaned to them, and was in part so applied. The note was given for the money loaned and for services. The court, in answering the defendant’s objections, show that the capacity of a married woman to make contracts relating to her separate business is incident to the power to conduct it, for the latter would be barren and useless if disconnected with the right to conduct it in the way and by the means usually employed. In the case cited she became a joint contractor with her husband, but she was as much bound to perform the joint engagement as if the undertaking had been several, and she did not escape liability because her joint contractor was her husband. It was not necessary to inquire in thqt case whether the one paying could obtain contribution from the other, nor is it necessary to go into that question here. In that case both undertook to pay the creditor; in this case both undertook to pay the creditor. Can it make a difference in the measures of liability that in one case the married woman entered in her own name and her husband in his name in the execution of. a joint obligation, and in the other case a name which represents also joint liability, but which may in effect also be several ?

Partners are at once principals and agents. Each represents the other, and if, in the relation of partnership, there are obligations which a married woman cannot énforce againt her husband, or the husband against the wife, they involve no feature of the present action, which asserts only the obligation of a debtor to discharge her debt, or the obligation of a promisor to fulfill her promise. More like the present case is that of Scott v. Conway (58 N. Y., 619), where, in an action for the price of labor and materials supplied to a theatre carried on by Sarah T. Conway and her husband, Frederick B., under the name of Mrs. F. B. Conway’s Brooklyn theatre,” and in which the wife and husband were jointly interested, it was held to be no defense, against one who dealt with her in ignorance of the partnership, that she had a dormant partner, and that the rule was not changed by the fact, that the partner was her husband. In Bitter v. Rathman (61 N. Y., 512), it was held that a married woman who, in secret trust for her husband, becomes a member of a co-partnership, is to be regarded as the owner of the interest she represents, and might maintain an action for the dissolution of the co-partnership and for an accounting. The defendant in that case denied that she was a partner, and claimed that he alone was interested in the business; claiming that, being a married woman, she could not in law be his partner. The court held otherwise, and also that, having suffered herself to be regarded by the public as a partner, she was hable as such to the creditors of the ostensible firm, although it might he otherwise as regarded her husband and his creditors, but as to any liabilities of the ostensible firm she would be entitled to protection as against the defendant and her husband.

It would seem, therefore, that by becoming a partner either with a husband or another person, a married woman loses no right of property. And no principle is suggested upon which her estate can be increased at the expense of creditors, nor how either in her own name, or in her own name and that of another, or with another, she can purchase goods on credit to the advantage of her separate estate, and not become hable for its payment. In Coleman v Burr (93 N. Y., 17), cited by the appellant, the sole question was whether the conveyance of property by the husband to his wife was sustained by a consideration good as against his creditors who impeached it. Here the wife was as capable of contracting as if she had been unmarried ■—as capable of adding to her estate by fresh acquisitions; and she should not be permitted to escape payment by joining to her own name that of her husband, or by combining the two into a firm or partnership name. It was by that name she chose to contract, and, as between herself and creditor, she is bound by it. Individuals may be liable as partners to third persons, while, as between themselves, they are not.

Here, then, the question is not between husband and wife. Assume that as to and with him she has no capacity, it by no means follows that she shall not be held upon a contract made by him upon a consideration moving to her, where a third person, who parted with that consideration in rebanee upon the husband’s apparent agency, seeks to enforce the contract. If the adoption of a firm name was a mere contrivance to carry on the business jointly, and at the same time to put the property acquired and added to the wife’s separate property out of the reach of creditors dealing with either bona fide as the partner of the other, it should not be permitted to have that effect. If, as the testimony shows, the wife was the sole owner of the property, that the husband had no interest in it, but that for convenience they were doing her business in the name of J. P. Kinney & Go., her liability for a debt contracted in that name is entirely consistent with the fact, if it be a fact, that, as between the parties themselves, no partnership exists. This is so, although the plaintiff alleges in the complaint that the defendants are partners, and that allegation is not denied. For the purposes of the action it may be true. The plaintiff gave credit to them as such, but the goods he sold were intended by them to be annexed to the wife’s separate estate, and they were so annexed. If the arrangement was valid between all parties, there is no pretense of a defense. If invalid only as between the defendants, the wife, who received the fruits of the transaction, cannot, as against a creditor, assert its invalidity. Although married, she may be estopped by her acts and declarations in any matter in respect of which she is capable of acting sui juris. Bodine v. Killeen, 53 N. Y., 93. In this instance the plaintiff proved the contract, that it was made by her authorized agent, and that it had reference to the improvement and benefit of her separate estate. She had capacity to do all these things, and, if the arrangement which led to the use of her husband’s name as joint promisor or partner was beyond her power to enter into, she must meet that liability without regard to any question whether her husband is also Hable, or as to what rights of indemnity or otherwise she might have against him. She was a principal, and he was her agent. He neither exceeded his power, nor were her acts to his prejudice, and if, by reason of any technical incapacity, they could not contract with each other or together, as constituting that artificial entity, a firm or copartnership (a question we do not decide), she is liable, and the contract enforceable against her in favor of the plaintiff, whose property has been added to her estate upon the strength of a promise made in her name by her authorized agent.

We think the court erred in directing judgment for the defendant. It should be reversed, and the plaintiff have judgment upon the verdict. .

All concur.


text:
    Ira Seymour, Resp’t, v. Alexander McKinstry, Jr., et al., App’lts.

      (Court of Appeals,

      Filed June 7, 1887.)

    1. Vendor’s lien—When superior to that of mortgagee.
    Plaintiff, who was in possession of certain premises, conveyed them to his son under an arrangement that $5,000 of the purchase price was to he procured through a mortgage to an insurance company and paid to plaintiff. The company refused to loan, when the son executed a mortgage to McKinstry, who knew of the claim of plaintiff, but made over the consideration to the son, and afterwards assigned the mortgage to Sabey. Held, that Sabey’s title was no better than that of his assignor, and that as he did not show that he took without notice, the lien of the vendor will be held superior to that of the mortgagee. Simpson v. Del Hoyo, 94 N. Y., 189, and other cases distinguished.
    2 Same
    Appellant claimed that plaintiff was estopped from asserting his lien as vendor because he had voluntarily conferred upon his son the apparent ownership of the premises Held, that it was sufficient to put Sabey on inquiry that the property was in the actual possession of the plaintiff, and that it was his duty to ascertain whether plaintiff had any interest in it, and if so, to what extent, and for this purpose to have some communication with or from him.
    3 Same.
    The rule is well settled that, if a claim can be sustained only upon the ground that the person asserting it is an innocent, bona fide purchaser, he must positively deny notice, even though it be not charged.
    Appeal from a judgment of supreme court, general term, fourth department, affirming a judgment of Onondaga special term, giving plaintiff a vendor’s hen for purchase money to be superior to mortgage liens.

      Louis Marshall, for McKinstry and Sabey, app’lts; M. M. Waters, for Seymour, resp’t.

       Affirming 35 Hun, 663, mem.

   Danforth, J.

The questions in this case are between the plaintiff, as an unpaid vendor of real estate, and the defendants, one as mortgagee, and the other as assignee of the mortgage given by the vendee of the land. The controversy relates to the priority of their claims in those capacities. The court below decided in favor of the vendor’s hen, and both defendants appeal

It appeared that on and prior to the 1th of August, 1812, the title to and the possession of the premises in question were in the plaintiff, and he on that day conveyed them to his son, one Ira B Seymour, by a deed, with warranty, for the price of $9,100, of which all but $5,000 was paid or satisfactorily arranged for; that to enable Ira B. to raise that sum it was agreed between the plaintiff and Ira B. and the Equitable Lifo Insurance Society that Ira B. should execute to that company a first mortgage therefor upon the premises, the amount of which should be paid by them directly to the plaintiff, and in reliance upon this arrangement he delivered the deed to Ira B. Seymour; that the company declined to make the loan, but, notwithstanding this, Ira B. caused the deed to be recorded, and, on the twenty-third of September, without the knowledge or consent of the plaintiff, executed to the defendant McKinstry a mortgage of $5,000, which was recorded on the same day. At the same time, and before he advanced any of the consideration of the mortgage, McKinstry, as the court and jury find, “had knowledge that the plaintiff claimed to be entitled to $5,000 as part of the purchase price of the premises therein described. ” The consideration for this mortgage was composed of a prior account of $2,400 due from Ira B. Seymour to McKinstry, two judgments of $300 against him, and $2,100.37 in a check payable to the order of Ira B., which he on the same day indorsed and gave to the plaintiff. On the twenty-eighth of September, McKinstry sold the mortgage to the defendant Sabey for the sum of $5,000, and covenanted that there was unpaid and owing thereon the sum of $5,000. The court finds that “Mc-Kinstry, before he assigned said mortgage, and before he advanced any part of its consideration,. had notice of the equity of plaintiff arising from the non-payment of said purchase money, and the defendant Sabey has not shown that he, when he took the assignment, did not have notice of plaintiff’s equitable rights, or of the facts from which they arise;” and, as matter of law: (1) The plaintiff has an equitable hen upon the premises for the balance due him for the purchase price of the same; (2) that such equitable lien is superior to the lien of the $5,000 mortgage given to said McKinstry, and assigned by him to said Sabey; (3) that the said Sabey, as assignee; has no _ better rights than his assignor McKinstry; (4) that the plaintiff is entitled to a decree establishing his equitable hen, and declaring its priority, and that it is a first hen upon said premises, and directing a sale and foreclosure to enforce it.” The judgment entered upon these findings has been affirmed by the general term. We find no error in its conclusion.

So far as McKinstry is concerned, it is entirely plain that he was not a bona fide incumbrancer, nor a purchaser for value beyond the sum of $2,100.37 (Insurance Co. v. Church, 81 N. Y., 221), which he included in the check, and which was in fact indorsed by Ira B. to his father, and paid to him.

We may turn to Sabey’s case as presenting the only question which requires discussion. He is not found to have had notice of the plaintiff’s equities, and is charged because (1) he did not show that he took without notice; and (2) because he could, in the nature of the transaction, have no better right than McKinstry. On the other hand, the contention made on his behalf on this appeal is that the plaintiff is estopped from asserting a lien as against Sabey because he has voluntarily conferred upon Ira B. Seymour the apparent absolute ownership of the premises, and the apparent authority to mortgage the same. The learned counsel for the appellant says there is no finding nor evidence that he was not a purchaser in good faith. As we have seen, the finding is that Sabey has not shown that he took without notice of the plaintiff’s equitable rights as an unpaid vendor. If this will not sustain the judgment, the appellant must succeed. His contention is that the precise question came up in Simpson v. Del Hoyo (94 N. Y., 189), and was answered in his favor by this court. There is this important difference: In the Simpson Case, the party giving the mortgage was clothed, not only with the record title to the land mortgage, but was in possession of it under that title; here possession was in the plaintiff, and an inquiry of him would have led to a true statement of the situation. It does not appear that he made such inquiry, nor is there the slightest evidence that he informed the plaintiff he was about to purchase the mortgage, or had been asked to do so. He himself says that he did not call upon the plaintiff directly, but, on the twenty-eighth of September, passed the plaintiff’s place of business on his way to dinner, “passed the time of day with him,” and says, “I asked where 93 East Genesee street (the property in question) was. He said just below; and I walked down towards it. He sort of followed me down. As we arrived there, I think I asked him what the property was worth. He said it had been appraised at $10,000. He didn’t consider it worth as much as that; between $8,000 and $9,000. I asked him if the mortgage in the hands of McKinstry, which his son had been to see me about, was a genuine, bona fide mortgage. He said it was. I think that was all that was said. I don’t know as I said anything that I was about to buy it. I don’t know whether I did or not.” Upon this testimony the counsel for Sabey asked the court to find that the plaintiff is estopped from asserting his lien against the defendant Sabey by reason of his silence when questioned by Sabey with reference to the genuineness and bona fides of the mortgage of September 23, 1872, and, on refusing to do so, excepted.

There are many circumstances in the case which would have warranted this refusal, but it is enough that the plaintiff flatly contradicted the statement of the defendant Sabey in every respect and particular; saying not only, “I never saw him at the time the conversation is alleged to have taken place,” but, also, “I never had any conversation with him on the subject in any manner or form. I should certainly have remembered it if I had. I never had any conversation with him until this suit was commenced.” he general testimony in the case creates no surprise that the trial court did not credit the defendant in face of this contradiction. But as it was a question clearly within its province, and not within that of this court, the casé must stand on its conclusion, and we have only to see whether the burden of alleging and proving innocence and good faith in the transaction was upon Sabey.

In the first place, it was sufficient to put Sabey on inquiry that the property was in the actual possession of the plaintiff (Cook v. Travis, 20 N. Y., 400), and it was his duty to-ascertain whether the plaintiff had any interest in it, and, if so, to what extent, and for this purpose to have some communication with or from him. Spofford v. Manning, 6 Paige, 383. In the Simpson Case (supra), attention is-called to the- fact that the mortgagor had possession as well as the apparent title, and that “she was in possession, thereof at the time of the execution of the mortgage and. of -its assignment to the plaintiff,” and in that case it was held sufficient if inquiry was made of the mortgagor. The reason of this limitation does not apply here. The plaintiff, and not the mortgagor, was in possession, and an inquiry of him would have led to a disclosure of the equities of the plaintiff.

There is a like or greater difference between the present-case and the others cited by the appellant. Fisk v. Potter (*41 N. Y., 64), was an action to enforce an equitable lien for the purchase money, against a subsequent purchaser under a mortgage executed by the vendee while in possession, and failed for that and other reasons which have no place in the record before us. To meet the question of pleading and proof, the appellant relies upon an averment in the answer that “he took the assignment of the mortgage upon the faith of plaintiff’s admission that the mortgage was a valid mortgage, accompanied by a denial of knowledge or information of the alleged facts upon which the allegations of fraud or conspiracy are based.” So far as reliance is placed upon the admission, it is the finding that none was made, and as a pleading the allegations are far short of the affirmative allegation which the law requires of one who is bound to allege that he took his security without notice. Moreover, he must both allege and prove it. It is a defense founded upon new matter.

The plaintiff’s lien, as an unpaid vendor, is good against, the vendee, and against the whole world, unless waived by the vendor/ or defeated by an alienation of the property by the vendee to a purchaser without notice. Dusenbury v. Hulbert, 59 N. Y., 541. It was not necessary for the plaintiff in this case to allege that he had not waived his-lien. The defendant might and did rely upon the plaintiff’s waiver as a defense, and so pleaded and sought to prove it. He failed. That issue has been found against him. It, was not necessary for the plaintiff to allege that the defendant Sabey took with notice, for his case was made out-when his hen was established against his vendee, and. against McKinstry, unless Sabey was a bona fide purchaser from McKinstry; and, if Sabey relied upon the fact that he took without notice, it should have been set up in the answer Weaver v. Barden, 49 N. Y., 286. The reason for this rule may be the same ascribed to the doctrine which requires the holder of a note, shown to have been fraudlently obtained, to prove under what circumstances, and for what value, he became the holder; viz., that, when there is fraud, the presumption is that he who is guilty will part with the instrument for the purpose of enabling some third person to recover upon it, and such presumption operates against the holder, and it devolves upon him to show affirmatively the facts essential to overcome that presumption, and relieve himself of its effect. First National Bank v. Green, 43 N. Y., 298; Ocean Bank v. Carll, 55 id., 441; Farmers' Bank v. Noxon, 45 id., 762. So, where the true owner sues to recover goods against a person claiming from the fraudulent vendee, the burden is upon the claimant to prove good faith and value. Stevens v. Brennan, 79 N. Y., 258. Indeed, the rule is entirely well settled that, if a claim can be sustained only upon the ground that the person asserting it is an innocent, bona fide purchaser, he must positively deny notice, even it be not charged. Denning v. Smith, 3 Johns. Ch., 332. No error was committed, therefore, by the trial court, in giving force to Sabey’s omission to deny notice of the plaintiff’s rights, and making it, in connection with other circumstances, a ground for postponing his mortgage to the plaintiff’s lien for the unpaid purchase money.

The other questions raised by the appellant relate to facts depending on evidence, and have been found against him by the trial court and the general term. They require no other discussion. Upon those findings the judgment is. without error, and should be affirmed.

All concur, except Roger, C. J., not sitting.