text:
    Myer S. Isaacs, as Assignee, etc., Resp’ts, v. Solomon Cohen et al., Impleaded, etc., App'lts.

      (Supreme Court, General Term, First Department,

      Filed April 11, 1895.)

    1. Costs — -Sheriff’s indemnitors.
    Indemnitors, substituted as defendants in place of the sheriff, are not entitled to separate bills of costs.
    2. Same.
    Where the indemnitors of the sheriff upon levies under different executions are substituted as defendants, and no application is made to divide the action and limit each case to the part of the property for which each class of indemnitors is responsible, the defendants will not be allowed separate bills of costs.
    Appeal from an order denying a motion to increase the amount of security for costs heretofore required from plaintiff from $250 to $1,500.

      A. H. Parkhurst, for app’lts ; Julius J. Frank, for resp’t.
   O’Brien, J.

This action was commenced against the sheriff to recover $25,000 for the alleged wrongful taking-and seizure of personal property levied upon under executions issued to him on judgments in four different actions against plaintiff’s assignors. A motion was made by the sheriff to substitute all the indemnitors in the various actions as defendants in this action in his place, and an order was entered granting such motion. The plaintiff had been required to file security running to all the defendants for $250; and, upon the claim that it was insufficient, the present motion was made to have the amount increased. The motion for such increase presented the question whether separate defendants are entitled, in an action of this kind, to separate undertakings to secure costs which they expect to have awarded to themselves separately and independently of each other, or to have security in such an amount as will cover separate bills of costs to eaclii defendant in case they succeed in the action.

We might rest our decision upon the opinion of the judge below, were it not that he seems inadvertently to have fallen into an -error in construing section 1426 of the Code of Civil Procedure. Among other things, that section provides : “But if the substituted or remaining defendants recover judgment, they are entitled to single costs only.” The judgment held that this meant a single bill of costs. Whether the language quoted from the section means single, as distinguished from double, costs, or, as held by the j udge below, a single bill of costs, we think is to be determined by reference to other provisions of the Code. By section 3258 it is provided that, where the defendant is a public officer, he is entitled to recover what is called “double costsand the sheriff, who was the original defendant herein, had he successfully -defended the case, would have been entitled to the benefits of this section. The indemnitors, who are the substituted defendants, standing, as they do, in the shoes of the sheriff, would seemingly be subrogated to his rights; and the question might arise as to whether, like the sheriff, if successful, they were not entitled to ■double costs, except for the limitation which the language quoted places upon such right, and which provides that they are entitled to but single costs. We think, therefore, that, if the legislature had meant but one bill of costs, they would have said so, and not have used the term “single costs,” which is only clear when we recall that there are other provisions under which the parties who stood in the shoes of a public officer might be entitled like him to double costs. Apart, however, from this, we think the order was right. The trespass, as against the plaintiff, was originally committed by the sheriff; and, so far as the plaintiff is concerned, it was entirely immaterial whether it was as the result of a single judgment or of four, the fact being that it was made by the sheriff upon plaintiff’s property, and to recover for the injury suffered by such seizure he brought his action. The sheriff, had he remained a party, could not have claimed more than one bill of double costs; and it would be a seeming hardship to hold that, because he justifies an- alleged trespass upon the ground that he was set in motion by several independent parties, the plaintiff, in seeking his redress, which he had a right to do, against the sheriff, and subsequently, when compelled to proceed, not against the sheriff, but those whom the latter has substituted in his place and stead, should be liable as against each of these several parties for separate bills of costs, and compelled to give separate undertakings, or one large enough to cover the costs of each indemnitor. These defendants have now been substituted in the place of the sheriff, as against whom, as already said, the plaintiff would be liable for but one bill of double costs. If they had desired separately to justify and litigate and obtain the right to a separate bill of costs, they should have presented this question, as correctly held by the court below, when the application to substitute was made; “for,” as said, “the court, under section 1424, was then authorized to divide the action, and to limit each action to the part of the property for which each class of indemnitors was responsible. As this was not requested or done, the substitution was general, under sections 1421 and 1422 ; and the whole body of indemnitors were treated as responsible for the entire trespass complained of in the original action against the sheriff. Having chosen to assume that attitude, they cannot now segregated.” And, as they stand in no other or different position than the sheriff would have stood in had he still remained a defendant in the action, there is no reason why the plaintiff, who is seeking to recover damages for the trespass upon his property, should be compelled to assume responsibility for separate bills of costs in favor of such of the parties as might .establish their freedom from liability, after having chosen a position in which they all stand of justifying the trespass.

We think the order was right, and should be affirmed, with $10 costs and disbursements.

Van Brunt, P. J., and Parker, J., concur in result.


source: Caselaw Access Project

author: Van Brunt, P. J.

license: Public Domain

text:
    The People, Pl’ff, v. Mutual Benefit Life Association of America, Def't. Thomas C. Smith, App’lt.

      (Supreme Court, General Term, First Department,

      Filed April 11, 1895.)

    1. Attachment — Coeporation—Dissolution.
    In order to maintain an attachment lien upon the assets of a corporation, no matter where they may be situated, the creditor must show that such lien existed prior to a judgment dissolving such corporation.
    2. Same.
    The evidence, in this case, was held not sufficient to prove such priority.
    Appeal from an order granting the motion of the receiver compelling one Thomas C. Smith to discontinue and withdraw his action against defendant corporation, pending in the state of Connecticut, and all attachments and proceedings ending therein.

      Chas. H. Truax, for app’lt; Henry W. Sackett, for receiver.
   Van Brunt, P. J.

The defendant in this action is a domestic corporation, and proceedings having been taken for its dissolution,, on the 20th of October, 1894, a judgment dissolving such corporation was entered in said action, which judgment contained an injunction clause restraining all persons whatsoever from commencing any action or proceeding against the defendant, or from taking any further proceedings in any action or proceeding already commenced. It is claimed that, prior to the entry of this judgment, the appellant, Thomas G. Smith, obtained and caused to be levied an attachment upon the property of the defendant in the state of Connecticut; and the only question necessary to be-determined upon this appeal is whether such attachment was levied prior to the entry of the judgment aforesaid or subsequent, thereto.

It is clear that, in order to maintain his lien upon the assets of the corporation, no matter where they may be situated, the appellant, Smith, has been shown by the papers which were used upon the motion in the court below. Upon an examination of these papers, we find no proof whatever as to what, under the laws of Connecticut, constitutes a valid levy. It is true that in one of the affidavits filed upon the part of the appellant, a conclusion is stated, but no facts as to what the law of the state of Connecticut was in that respect. We further find that the sheriff makes two contradictory returns, the later one being equivocal in its language, and evidently false in respect to its date. In the return first appearing in the papers the sheriff certifies under date October 22, 1894, that he then and there levied the attachment. Upon the-part of the appellant, a certificate of the same sheriff is offered in evidence, bearing date the 17th day of October, 1894, in which the sheriff certified that he levied the attachment on the 17th day of October, and left with the garnishee a true and attested copy of the writ, summons, and order of notice, which was manifestly false, as the order of notice was not made until the 19th of October, 1894. Uo reliance could be placed upon certificates of this character, as they are manifestly untrue. The court was correct in disregarding the same, as being utterly unreliable, and affording no basis for a judgment. There would seem, therefore, to be no reason for interfering with the order of the court below so far as it was appealed from, and it should be affirmed, with costs.

All concur.


author: Wright, J.

text:
    Charles H. Robinson, Pl’ff, v Frank Grannis et al., Def'ts.

      (Supreme Court, Oswego Special Term,

      Filed March 30, 1895.)

    1. Evidence — Custom.
    A local custom of the place, where a contract is made, will not bind a> contracting party who had at the time no knowledge of it.
    2. Contract — Construction .
    A contract for the sale of stone to be measured in the wall was held to entitle the vendor to payment at the rate of ninety-nine cubic feet per cord.
    Action to recover the purchase price of a quantity of stone

      D. P. Morehouse, for pl’ff; C. N. Bulger and C. F. Whitney, for defendant Grannis.
   Wright, J.

The bargain provided that the stone should be paid for at $6.50 per cord, “ measured in the wall.” The plaintiff claims that since 128 cubic feet of stone make only 99 cubic feet when laid into a wall of masonry, the wall should be measured at the rate of 99 cubic feet per cord. The defendant claims that the standard measurement of 128 cubic feet per cord should be applied to the wall. A local custom of where the contract was made, regulates the measurement according to the plaintiff’s contention ; but since the defendant, a stranger, had no knowledge of it, that custom cannot be considered. Corn Exch. Bank v. Nassau Bank, 91 N. Y. 74. All the circumstances of the bargain however, are to be considered in determining in what sense the term “ cord ” was used and understood in the contract. Kennedy v. Railroad Co., 67 Barb. 169. “ It is a rule of law, as well as of ethics, that where the language of a promisor may'be understood in more senses than one, it is to be interpreted in the sense in which he had reason to suppose it was understood by the promisee.” Hoffman v. Insurance Co., 32 N. Y. 405. Also in construing the words of a covenant, “ if the intention of the parties be doubtful, that construction is to be adopted which is most beneficial to the •covenantee.” Marvin v. Stone, 2 Cow. 806. At the bargain the plaintiff offered the stone at $6 per cord. Grannis said he would do better than that, and pay what he was paying others, $6.50 per cord measured in the wall. The plaintiff and Grannis were experienced dealers in stone and practical masonry, and knew that 128 cubic feet of rough stone make only 99 cubic feet of. masonry. It is clear that the offer of the plaintiff to take $6 per cord was understood by both parties as relating to rough stone, for Grannis testifies that he fold the plaintiff that he had agreed with Proud, who was then a partner of the plaintiff, at a $6 per cord of 128 cubic feet piled upon the outside; ” and he further testifies that he advised the plaintiff that he “ better not pile them upon the outside, but haul them inside, and we will measure the stone in- the wall.” Grannis’ increase in price was exceedingly disproportionate to the additonal amount of stone that he would obtain at the measurement he now contends for. Why, then, did he assert that his -offer of $6.50 per cord measured in the wall was better than the plaintiff’s asking price of $6 per cord of rough stone, if he contemplated a measurement of 128 cubic feet instead of 99 cubic feet for a cord? It is evident, therefore, that the plaintiff understood the measurement should be made at the standard for which he now contends, and it is also evident that Grannis believed that the plaintiff so understood it. The plaintiff, therefore, under the foregoing authorities, is entitled to recover. Again, in the bargain, it was agreed that the plaintiff’s stone_ should be laid in the wall separately from those obtained from other persons; but Grannis mixed them, thus rendering it impossible to measure the plaintiff’s stone in the wall. This act, giving it an honest interpretation, cannot be reconciled with the idea that Grannis then contemplated that it would make any material difference to his interest whether the stone was measured in the rough or after laid into masonry, for he knew his act of mixing the stone would throw the plaintiff back to proof of the amount of stone he delivered as measured in "the rough, as one method of showing the amount of his claim. From this, and all the circumstances, it is evident that Grannis understood that the bargin provided for a standard of measurement precisely as the plaintiff understood it.

Judgment is ordered for the plaintiff for $640.89, with interest from October 1, 1892.


author: Ingraham, J.

text:
    Benigno S. Suarez as Executor, etc., Pl’ff, v. Isabel De Monigny et al., Def’ts.

      (Supreme Court, New York Special Term,

      Filed April, 1895.)

    1. Trusts — Notice.
    An assignment of a mortgage, which describes the assignor as a trustee, puts the assignee on inquiry as to the farmer’s power to make the assignment.
    3. Same — Validity.
    A provision in the trust deed, which limits the power of the trustee to sell the trust property only in case of the written consent of the cestui que trust, is valid.
    3. Same — Waiver,
    Such provision cannot be waived by the cestui que trust, and a transfer, made by the trustee without first obtaining such consent, cannot be after-wards ratified.
    Action to foreclose a mortgage.
    f John E. Parsons and Chase Nellen, for pl’ff; Alfred J. Taylor, for deft Central Trust Co,; Robert Kelly- Prentice, for def’t Isabel De Montigny.
   Ingraham, J.

This action is brought to foreclose a mortgage made by the defendant Isabel De Montigny to Daniel Morison, trustee of the separate estate of Isabel Yon Linden. The question presented is whether or not the plaintiff ever became the owner of the mortgage. At the time of the execution of the mortgage, Morison was trustee, under a marriage settlement of Isabel Yon Linden, made in contemplation of her marriage with Count Yon Linden of Germany. The marriage settlement was dated November 9, 1876, by which all of the property of the said Isabel Yon Linden (then Isabel Andrews) which she might have, or in any way become entitled to, ór in possession of, under the provisions of the will of the late Loring Andrews, her father, was transferred to Blandina B. Andrews, as trustee, to be held under a certain trust specified in the said marriage settlement. Mrs. Andrews, the trustee, died, and Morison-was substituted as trustee under the marriage settlement in her place and stead. The real property of the said Loring Andrews was sold under a judgment of the court in partition, and the defendant Montigny (then Isabel Andrews) purchased the premises described in the complaint, and received a conveyance thereof from the referee ; and, as part of the consideration or purchase money of said premises, the defendant Montigny «executed and delivered to Morison, as trustee, the mortgage in question. The mortgagee is therein described as “ Daniel Morison, trustee of the separate estate of Isabel Yon Linden, party of the second part; ” and it recites the sale and conveyance of the premises by Anderson, referee, to the mortgagor, and declares that il this mortgage is given to secure part of the consideration or purchase money expressed in said deed advanced by said party of the second part thereto, to enable said party of the first part to complete said purchase.” Morison having resignéd as trustee under the marriage settlement, FrancisH. Week was duly substituted as trustee in his place ; and said Morison duly executed an assignment of the mortgage in question, dated 18th of November, 1889-, whereby he (Daniel Morison), trustee of the separate estate of Isabel Yon Linden, party of ttie first part, in consideration of the sum of one dollar, lawful money of the United States, to him in-hand paid by Francis H. Weeks, substituted trustee of the separate-estate of Isabel Yon Linden, party of the second part, duly assigned, transferred, and set over the said identure or mortgage -to-the said Weeks; and this assignment was duly recorded on the 22d day of December, 1890. Subsequently, ’on the 22d day of December, 1890, Weeks, by an instrument whereby he described himself as “I, Francis H. Weeks, substituted trustee of the separate estate of Isabel Yon Linden,” transferred the said mortgage to-the plaintiff as executor of the last will and testament of Hyacinth S. Suarez, deceased; and the said Suarez, at that time, and as consideration of such transfer, paid to said Weeks the sum of $25,000, the amount then due upon the said mortgage.

By the terms of the marriage settlement, the property of Isabel Yon Linden (then Isabel Andrews) was conveyed to the trustee to-be invested by him, and the income thereof paid to the said Isabel Yon Linden during her life, with the provision that upon her death the trustee or her successors shall well and truly transfer,, convey, and make over all property covered by the provisions of the said marriage settlement to such person or persons as she,, the said Isabel Yon Linden, may lawfully designate and appoint by her will or other instrument subscribed by her in the presence of two or more competent witnessess; and the said marriage settlement further provided that in case of the death of the said Isabel Yon Linden, leaving no such will or written testamentary disposal of her said estate, then the same should go to such person or persons as should be entitled thereto under the laws governing the descent and distribution of the property of intestates for the kingdom of Wurttemberg. And it was further provided :

“ That the said trustee and her successors shall have full power, for the purposes of this trust, to sell, grant, lease, convey, transfer, invest, and reinvest all and singular such estates, .properties, and effects so held in trust, but not without the consent of said party of the second part (Isabel Yon Linden) expressed in writing under her proper hand, and to hold all such substituted estates, property, and effects in trust for the purposes herein declared.”

Said marriage settlement further provided:

“ And the said party of the third part (the trustee), in consideration of the premises and of one mark, * * * doth hereby for herself, her executors, administrators, successors, heirs, and assigns, covenant and agree with said parties of the first and,second parts, respectively, their heirs, executors, administrators, and assigns, that she will, and her successors shall, well and truly hold said estate herein described and all substituted estates in trust as herein provided, for the sole use, benefit, and behoof of the said party of the second part; that she and they will either keep said property as at present invested and secured, or will, with the written consent of her, the said party of the second part, and not. otherwise, change the investment of the same from time to time, .as good judgment and the purposes of this indenture may require.”

The said marriage settlement further provided:

“ And on the decease of said (Isabel Von Linden) party of the second part (the trustee) shall and will make legal and sufficient ■conveyances of said estates and property to the person or persons, if any, designated by said party of the second part as herein provided. And it is further covenanted and agreed that neither of -the parties hereunto shall have any right or "power to anticipate, .advance, incumber, or in any way charge the said income, rents, profits, and dividends, or any of them, before the same shall legally become due and payable.”

It is not disputed but that this instrument created a valid trust by which the trustee became vested with a title to the property in .question, in trust for the purposes declared in said marriage settlement; that he became bound to execute the said trust according to its terms ; and that his power to deal with the trust ■estate was controlled by the limitations, conditions, and provisions of the said marriage settlement. Nor do I think it could be disputed but that, as between the trustee and his cestui que trust, no •conveyance by him of the trust property, without the consent of Madam Yon Linden, expressed in writing under her proper hand, would be valid, unless some act of hers estopped her from objecting to such transfer. The construction of this marriage settlement is not at all in doubt. It was executed at Stuttgart, in the kingdom of Wurttemberg, but it related to property in this country, both real and personal. The trustee was a resident here, and it must be construed according to our law; but, at any rate, there is no evidence that the law of the kingdom of Wurttemberg, is different from the law of this state.

The transfer by Weeks to the plaintiff was made without the knowledge or consent of Madam Yon Linden, and the first question that is presented is whether or not that assignment by Weeks to the plaintiff was sufficient to convey the title of the mortgage to the plaintiff, or vest in him any title thereto ; and the determination of this question must depend upon whether or not the plaintiff, dealing with Weeks, was chargeable with notice of the terms of the instrument under which he acted as trustee, and bound by the limitation of his authority contained in such instrument. The assignment of the mortgage to Weeks by the former trustee was expressly stated to be by Morison, the “trustee of the separate estate of Isabel Yon Lindenand the assignment to the plaintiff was- by Weeks, “substituted trustee of the separate estate of Isabel Yon Linden.” Both assignments were executed by the assignors ■describing themselves trustees, etc.; and the acknowledgment in ■each case that the assignor had executed the assignments “as trustee as aforesaid.” Thus, upon the very face of the instrument which attempted to transfer the property to the plaintiff was recited the fact that Weeks, in making the transfer, was acting as a substituted trustee of the separate estate of Isabel Yon Linden. Notice was therefore expressly given to the plaintiff that in tnaking this transfer Weeks acted as trustee; not individually, not as the absolute owner of the mortgage, but that he was selling to another a piece of property that he held as a trustee. Was plaintiff thus put upon inquiry to ascertain whether or not the instrument under which Weeks assumed to act conferred upon him power to-'sell and transfer the mortgage that he held as a trustee? I think it clear that he was.

Before considering the authorities which seem to require me to come to this conclusion, we must bear in mind the fact that Weeks was selling this mortgage, and the plaintiff was buying it from the trustee. Whether or not a trustee has power to sell and dispose of the trust property must depend upon the instrument creating the trust, and under which he is acting. It cannot be said that the mere transfer of a piece of property, be it real or personal, to a trustee, confers upon him the right to sell and convey the property so transferred. As to real property, a trustee would have no power to sell unless such power was expressly given by a provision of the instrument creating the trustee; and in the case of personal property there must be either express authority to sell, or, front the nature of the property and the provisions of the instrument, it must appear that there was no limitation upon the power off the trustee to sell But at all events, a provision in the instrument creating the trust, restricting the power of the trustee to sell, or imposing a condition upon him in the exercise of that power, must limit his right or power to convey a title to a purchaser. An entirely different question would be presented upon the right of a trustee to receive from the mortgagor a payment of the mortgage held in trust.

The rule is stated in 27 Am. & Eng. Enc. Law, p. 264, as follows :

“Those who deal with a trustee upon the faith of the trust estate which he represents are bound at their peril to know the extent of the trustee’s power." It is only when they have had no notice of the trust, either active or constructive, that they are to be protected in the possession of trust property, or in the enjoyment of rights acquired through dealings with the trustee."

And the rule as thus stated is amply sustained by the authorities.

The case of Swan v. Bank, 24 Hun, 278, is exactly in point. There certain bonds were deposited by a trust company to be used under an agreement in adjusting the affairs of a railroad company. The receipt for them was issued to David E. Swan, as trustee; and he acted in the business for his sister, who was the owner of the bonds. The owner of the bonds authorized the trustee to use the receipt to borrow for his own benefit from the defendant the sum of $750. He transferred the receipt to the defendant as security for the payment of $1,650. -The court held that:

“The fact that he was described as a trustee was a circumstance from which persons disposed to deal with him upon the basis of the receipt should have inferred that his right to dispose of it, or of the bonds mentioned in it, was no more extended than that of the terms Of the trust which had been created. The description of a person as trustee in an instrument of this nature is necessarily notice that he is not the absolute owner of the property affected by the terms of the instrument but that he holds it for the benefit of some other person. Before they could safely deal with him for the disposition of either the receipt or the bonds, it was incumbent upon them, therefore, that they should ascertain what were the limits of his authority over the subject-matter of the trust, and to-restrict their transactions with him concerning it within those limits.”

See, also, Smith v. Burges, 133 Mass. 511.

And the question was presented to the court of appeals in the case of Kirsch v. Tozier, 143 N. Y. 394; 62 St. Rep. 439, where Andrews, C. J., in delivering the opinion of the court, says:

“Persons dealing with a trustee must take notice of the scope of his authority. An act within his authority will bind the trust estate or the beneficiaries as to third persons acting in good faith and with notice, although the trustee intended to defraud the estate, and actually did accomplish his purpose by means of the act in question."

See, also, Griswold v. Perry, 7 Lans. 98.

It seems to be" clear, therefore, that plaintiff was chargeable with notice of the terms of the instrument creating the trust, and was bound to know the extent of the trustee’s power. There can be no ' question but that the limitation of the power of the trustee to convey, as contained in this marriage settlement, was valid. Such a condition was expressly held to be valid by the court of appeals in the case of Kissam v. Dierkes, 49 N. Y. 602; and it would follow,, therefore, that the attempt by Weeks of the transfer of this mortgage to the plaintiff was, at the time that it was made, invalid, because Weeks had no power to transfer any of the securities in which the trust estate was vested, except with the written consent of the cestui que trust, and the plaintiff was chargeable with notice of this limitation upon his power.

The plaintiff, however, claims that the subsequent acts of Madam Yon Linden ratified this transfer by Weeks of this mortgage, or that she is now estopped, as against this plaintiff, from questioning the validity of the transfer, and that the trustee substituted in place of Weeks is also estopped. The effect of this limitation upon the power of the trustee was to impose a condition upon his power to transfer the securities in which the trust estate was invested; and it was a condition, not for the benefit of Madam Yon Linden only, and was not one that could be waived by her. The estate and all those interested or to become interested in it were thereby guarded against any sale of the securities being made except with the assent of the trustee, and also the assent of Madam Yon Linden. It was to protect the estate against an unauthorized use of the trust property by the trustee without the assent of a person interested in the performance of the trust; and the object clearly was to provide an additional safeguard against an improper, disposition of the trust estate, and it was a condition precedent to any interference with the trust estate. The substituted trustee could not be bound by any assent that Madam Yon Linden gave to an unauthorized use of the trust property. The marriage settlement expressly provided that neither of the parties-to the agreement should have any right or power to anticipate, advance, incumber, or in any way charge the incomes, rents, profits and dividends, or any of them, before the same should legally become due and payable. And, taking the whole instrument together, it was clearly the intention of the parties to protect the principal of the trust estate, and prevent its being misapplied or wasted. The only power that Madam Yon Linden had, in relation to the investments, was either to consent or refuse to ■consent to any proposed change of investments. She had no knowledge of this transfer by Weeks to the plaintiff of the mortgage in question until long after it was actually transferred. And, to make this assignment valid, it seems to me clear that there must be an express assent in writing to the particular assignment contemplated. Madam Yon Linden could not waive the necessity of her judgment being exercised upon each 'proposed assignment or transfer of property in which the trust estate was invested. For the benefit of the*estate, her independent judgment upon each proposed transfer was required; and a general assent to change of securities, or a general waiver on her part of knowledge of the action of the trustee, would not avoid the necessity of an independent exercise of her judgment upon each proposed transfer. That judgment was never exercised by her. It is not claimed that she ever had knowledge of this particular transaction until after Weeks’ fraud was discovered, and nothing that she said or •did can take the place of what the marriage settlement required ; that is, her'assent in writing to the particular transfer of the mortgage. And when we come to examine the particular transaction . that is relied upon by the plaintiff as a waiver of this provision, or by which she and the trustee under the marriage settlement were -estopped from insisting upon the invalidity of the transfer, it is ■apparent that that transaction was not such a consent as was contemplated by the marriage settlement, but was an attempt by the trustee and Madam Yon Linden to appropriate to the use of Madam Yon Linden a portion of the trust property, in express violation of the terms of the instrument creating the trust. The trustee had no power, with or without the consent of Madam Yon Linden, to take any portion of the trust fund, and remit it to the German bankers for any purpose. Such an act was an express violation of the trust, and was expressly prohibited by law ; and her consent, which expressed upon its face a consent to sell any of the trust estate for the purpose of thus violating the provisions -of the trust agreement, would be void, and would not be a protection either to the trustee or any one dealing with the trustee in the disposition of the trust estate.

The case, however, fails to show that the proceeds of this mort- ■ gage were directly used for the purpose of carrying out this illegal understanding. Assuming that there is evidence to show that the proceeds of the transfer of the mortgage to the plaintiff went into the bond and mortgage known as the “ Weeks mortgage,” that mortgage was not taken in the name of Francis H. Weeks, as trustee under this marriage settlement, but was taken in Weeks’ individual name, and was a misapplication of the trust property. It may be true that the cestui que trust would have been entitled to follow the trust property and compel a transfer of this Weeks bond and mortgage to the estate; but they were not bound to do so. It has been held that a third party may not, for his own protection, require the cestui que trust to pursue the proceeds of the trust funds into other investments. See Barr v. Cubbage, 52 Mo. 404. None of the cases cited by the plaintiff go to the extent of holding that a person charged with the duty of approving the investment of trust funds can waive the approval required by the instrument creating the trust, or can ratify an improper or illegal disposition of the trust property by any subsequent act; nor do I see that upon any principle the trustee of this estate is es-topped by any act of Madam Yon Linden in regard to this property.

The case of Dillaye v. Bank, 51 N. Y. 348, as qualified by the case of Trustees v. Wheeler, 61 id, 106, is not in point. In the last-named case, Dwight, C., in delivering. the opinion of the court, referring to Dillaye v. Bank, said: “ The point was whether one who held a mortgage in trust with an apparently unrestricted power of disposition could transfer it free from the claims of the cestui que trust to a purchaser in good faith. It was held that he could.”

And the distinction between that case and this is, that in this case the trustee did not hold the mortgage in trust with an apparently unrestricted power of disposition, but held it in trust-with a restricted power of disposition conditioned upon the assent, in writing, of Madam Yon Linden.

But even assuming that Madam Yon Linden could have ratified the action of Weeks in transferring this mortgage, and thus estop her and the trustee from enforcing their rights, the ratification in this case was ineffectual, because Madam Yon Linden was not aware of material facts which most certainly would have seriously affected her action. At the time that the transfer was made, Weeks had appropriated over $100,000 of the trust property for his own use. He had sold this particular mortgage, and had appropriated the proceeds of it to his own use, in lending the money to another person and taking security therefor in his own name, and not as trustee. If Madam Yon Linden had been informed of these facts it could not for a moment be supposed that she would have ratified the sale of this mortgage.

I have thus come to the conclusion that the attempted assignment of this mortgage to the plaintiff was ineffectual to vesta title to it, and it follows that the plaintiff has no cause of action.

The defendant the Central Trust Company asks for affirmative relief; first, that the bond and mortgage should be assigned by the plaintiff, and delivered to the Central Trust Company of New York; and to that relief I think it is entitled. The defendant trust company, in its answer, also asks that Isabel De Montigny be decreed to pay to it interest on this bond and morigage from July 1,1891, and for further relief. As there is no evidence before me that this answer was served upon the defendant De Montigny, I do not understand that I can grant any judgment in favor of the Central Trust Company against its codefendant in this action.

The defendant De Montigny asks for affirmative relief against the plaintiff for a judgment for $1,875, interest paid to the plaintiff upon the bond and mortgage in question. There is no evidence, however, but that this payment was a voluntary payment; and I do not think the defendant is entitled to such relief.

There must be judgment in favor of the defendants, with costs in favor of the defendant Be Montigny, and affirmative judgment directing the plaintiff to transfer the bond and mortgage to the Centra] Trust Company, as trustee under the marriage settlement in question, with costs to the Central Trust . Company ; decision and judgment to be settled on notice.


author: Parker, J.

text:
    In the Matter of the Board of Street Opening. In the Matter of Audubon Avenue. New York Institution for the Blind, App’lt.

      (Supreme Court, General Term, First Department,

      Filed April 11, 1895.)
    Statutes — Repeal.
    Section 4, chap. 565 of 1865, which relates to laying out streets north of the one hundred and fifty-fifth street, was repealed by the consolidation act.
    Appeal from an order, confirming the report of the commissioners of estimate and apportionment.

      James A. Deering, for app’lt; Francis M. Scott, for resp’t.
   Parker, J.

The question presented on this appeal is whether section 4 of chapter 565 of the Laws of 1865 is still in force. If it is, the commissioners of estimate and apportionment erred in assessing the total expense of acquiring title to Audubon avenue upon the property benefited, for that section provides that, when a street shall be laid out north of the southerly line of 155th street, if the street be more than a mile in length, not more than one-half of the expense shall be assessed on property owners. Aududon avenue is more than a mile in length. The consolidation act (chapter 410, Laws 1882) contains many of the provisions of chapter 565 of the Laws of 1865, and it is conceded that such provisions of the latter act as were in substance incorporated into the consolidation act superseded and operated to repeal such of the provisions of the act of 1865 as relate to the same subject. But, as the act of 1865 was not expressly repealed, it is contended that section 1008 of the consolidation act kept in force such of the provisions of the fomer act as were neither in direct conflict with, nor in substance like, provisions of the. consolidation act. Section 1008 reads as follows:

“Nothing contained in this title shall be construed as affecting any provision of special acts relating to particular districts or portians of the city, so far as such provisions are inconsistent with the provisions of this title.”

It is conceded, but for this section, the decision In re New York Institution for Instruction of the Deaf and Dumb, 121 N. Y. 234; 30 St. Rep. 921, would require the court to hold that the section in question, as well as the entire act of 1865, is no longer in force. The argument, however, in that case as well as In re Wheelock, 21 St. Rep. 369, seems to us to call for a determination that section 4 is no longer operative. In the first case the court, speaking of the consolidation act, and how it should be construed, said:

“It was the manifest intention of the legislature that it should take the place of the numerous special and local acts applicable to the city of Mew York, which had been enacted for more than a century, and to rescue them from the obscurity, uncertainty, and difficulty caused by their scattered condition, and that intention should have effect.”

Granting that such was the object of the enactmant, nevertheless urges the appellant, a failure to repeal in terms the act of 1865, considered in connection with the saving clause contained in section 1008, should satisfy the court that section 4 of the act of 1865 was intentionally reserved from the operations of the consolidation act; and appellant insists that the course of legislation on that general subject constitutes a forceful argument in favor of its position. But it does not so impress us. By chapter 536 of the laws of 1879, commissioners were appointed to compile and revise all special or local laws affecting local interests in the city of Mew York, and to report at the succeeding legislature. Their report, containing nearly 2,200 pages, and entitled, “A compilation,” was declared to contain presumptively all special and local laws affecting public interests in the city of Mew York, and included in it was chapter 565 of the laws of 1865. By chapter 594 of the laws of 1880, passed subsequently to the submission of the compilation to the legislature, the same persons were constituted commissioners to revise all the special or local laws affecting public interests in the city of Mew York which shall be in force at the time such commissioners shall make their final report, or at such time prior thereto as such commissioners shall deem advisable. The statute further directed that the commissioners should not make any change in the meaning of existing laws, but seek to simplify and mold into consistent acts all existing statutes upon matters embraced in such special or local laws. Thereupon they prepared what is known as the “Consolidation Act,” which was presented to the legislature, where it passed, and became chapter 410 of the laws of 1882. At the same time the commissioners submitted an act expressly repealing a number of acts which they deemed to be repealed or covered by the consolidation act, which did not include the act of 1865. The commissioners’ reasons for this ma3r be found in their note to chapter 13 of their final report, in which it is stated that “chapter 565 of the laws of 1865, Comp. 998, superceded by laws 1871, chap. 534, and laws 1874, chap. 604.” It is apparent that the act of 1865 was not overlooked by the commissioners, for it not only appeared in the first compilation, but in their further report, submitting the consolidation act, it was asserted to be their understanding that it was superceded by the statutes to which they referred. It is evident, therefore, that the commissioners did not intend that section 1008 should operate to continue in force section 4 of that act.

The title of the act of 1874 was substantially like that of 1865, and many of its provisions were of the same general character, although the act of 1874 conferred exclusive power upon the department of public parks to lay out all streets north of 155th street, while under the act of 1865 that power was vested in the commissioners of the Central Park. In Re New York Institution for Instruction of the Deaf and Dumb, supra, the court held that section 8 of the act of 1865 was not repealed or superseded by the act of 1874, because the latter act was in no wise inconsistent with that section, nor did it relate to the subject embraced therein, to wit, the improvement of streets opened. The court then considered the question whether it was repealed or superseded by the consolidation act. It observed that the provisions of section 8 of .the act of 1865 were not embraced therein, but that other provisions of the act of 1865, so far as they were re-enacted in the act of 1874, were. As section 8 was omitted from the act, which, however, did contain certain general provisions for regulating, grading, and improving streets, “ we have not, therefore (said the court), a case where some prior statute has been wholly omitted, and no provision of any kind substituted in its place. But this case is a case where the prior provision of law has been entirely dropped, and provisions upon the same general subject are found in the new act.” And the conclusion was reached that the effect of the consolidation act was to repeal section 8 of the act óf 1865. It seems to us that the argument of the court, upon which it based its determination that section 8 of the act. of 1865 was superseded by the consolidation act, is clearly applicable to section 4 of -that act. Section 4 of the act of 1874, which the commissioners assumed had superseded the act of 1865, contained substantially the same provisions as to assessments for benefit as section 4 of the latter act, with reference to that part of the city north of 155th street, except that it limited its operations to the twenty-third and twenty-fourth wards ; and the provisions of section 4 of the act of 1874 were re-enacted in section 677- of the consolidation act, in the chapter relating to the department of public parks, and also in section 958, under the chapter relating to street openings. And upon the question of intent it is worthy of note that no part of the act of 1865, except so far as re-enacted by chapter 604 of the laws of 1874, was incorporated in the consolidation act, and yet we have before us the evidence that the act was brought to the attention oí the commissioners, for it was quoted entirely in their first compilation, and referred to in a note in their revision, as superceded by the act of 1874. The decision of the special term seems to us in line with the construction adopted in Re Wheelock and Re New York Institution for Instruction of the Deaf and Dumb, supra, and justified by the provision of the several statutes to which we have referred, considered in connection with the history of their enactment. The order should be affirmed, with $10 costs and printing disbursements.

All concur.


text:
    Eliza Davis, Resp’t, v. Bertha K. Myers, App’lt.

      (Supreme Court, General Term, First Department,

      Filed April 11, 1895)

    1. Estoppel — Equitable.
    A statement by the defendant that he had invested at ten per cent, money placed in his hands" by another estops him from denying the investment and from claiming credit for excess paid over legal interest.
    2. Usury — Question for jury.
    Usury was held, under the facts and circumstances of this case, to be a question for the jury.
    3. Costs — Extra allowance.
    Where it is the duty of an executrix to defend and she partially succeeds, she is not liable for costs and extra allowance.
    Appeal from a judgment entered on a verdict in favor of plaintiff, and from an order denying a motion for a new trial, and also from an order granting costs and extra allowance.

      E. J. Meyers, for app’lt; Geo. Putnam Smith, for resp’t.
   Van Brunt, P. J.

This action was to recover from the defendant, as executrix of Herrmann Koehler, deceased, the •sum of $4,000, with dividends thereon from the 1st of January, 1894, at the rate of ten per cent, per annum. The evidence in this ease showed that prior to June, 1881, the plaintiff had saved $4,000, and had deposited it in different savings banks in the city of New York; and that on the 23d of June she gave the money to Herrmann Koehler, upon the representation by said Koehler that he could invest it for her, and it would bring ten per cent., and that she could have it at any time by giving thirty days’ notice. Subsequent to that time and down- to his death, in April, 1889, the said Koehler paid to the plaintiff the sum of $400 per annum, and after his death the defendant continued such payments until the 1st of January, 1894. The defendant then having refused to pay the claim of the plaintiff, this action was brought; and, the case being submitted to the jury, they rendered a verdict in favor of the plaintiff, and the court granted costs and allowances; and from the judgment thereupon entered, and from an order denying motion for new trial, and also from an order granting such costs and allowances, this appeal is taken.

It is urged upon 'the part of the defendant that the transaction between the plaintiff and Koehler was only a loan or forbearance of a sum of money due. with interest reserved at the rate of ten per cent, per annum, and therefore usurious and void. We think this question was properly submitted to the jury. There is no suggestion to the effect that usurious interest was to be paid, but the representation seems to have been that this money could be so invested by Koehler that it would earn ten per cent, per annum for the plaintiff; and it was on this representation that the plaintiff delivered the money to Koehler, and there was nothing to show but what the plaintiff believed this to have been the nature of the transaction. There seems, therefore, to be no reason for interference with the finding of the jury upon this subject.

It is claimed that it was error to admit the letter of Mrs. Koehler, the defendant, without connecting it with the defendant’s testator by proof of authority or ratification. It seems to us that the record in this case contains ample evidence of ratification, if not of authority. The plaintiff produced a book, the entries in which, except a few of the latter ones, were made by Mr. Koehler himself. It is headed as follows: “ Herrmann - Koehler, in Acct. with Miss Eliza Davis.” In this book he acknowledges to have received between the 23d of June, 1881, and the 10th of October, 1883, the sum of $4,000, and he pays her from that time down to his death ten per cent, upon that amount, which clearly connects the letter of Mrs. Koehler to the plaintiff with the transaction. It shows that Herrmann Koehler received the money upon the terms stated in the letter. This seems to be ample evidence of ratification.

It is further urged that the court erred in not allowing, as payment on account of the principal, the excessive interest paid above the lawful rate. It seems to be a sufficient answer to this proposition that, as long as Mr. Koehler lived, the plaintiff was under the impression that her money was invested and was yielding the amount of income which' Koehler paid to her. He had possession of that money under those circumstances, and it will not lie in his mouth to say that his statements in regard to the investment of-the money were false, and, therefore, that he should be credited with the excess over legal interest. The same principle will apply to his executrix. She kept possession of the money, and paid the ten per cent, to the plaintiff, leaving the latter to suppose that her money was still invested and yielding this income; and she cannot now be heard to say, as against the plaintiff, that her representation made by these payments were false. If she has made excessive payments, and has thereby rendered herself liable as executrix of the estate, she must settle it with her cestui que trustent. After having induced the plaintiff to leave the money with her under such a contract, she cannot now be heard to say that her representations of income were untrue.

It is further urged that the executrix was justified, as matter of law, in refusing to pay the claim made by the plaintiff. The action was brought* to recover $4,000, with dividends at the rate of ten per cent. The recovery was for $4,000 with interest at six per cent. It seems to us that the executrix would not have been justified in paying the claim as presented, because after a demand had been made for the money and a refusal to pay, there was simply a breach of contract, with liquidated damages, which drew legal interest and nothing more. The claim being made for ten per cent., it became the duty of the executrix to defend ; and, she having partially succeeded, it is difficult to see how it could be said that she has unreasonably neglected to pay.

The question in regard to the presentation of the claim,.within the statutory time does not seem to be of any moment, because, by reason of the payments which the executrix made on account of the money alleged to have been invested, there was a recegnition of the claim, which, until some question was raised, made it unnecessary for the plaintiff to take any steps as against the estate.

We think the judgment should be modified by striking therefrom the costs and allowances, and, as modified, affirmed, without costs.

All concur.


author: Lewis, J.

text:
    William W. Allen, Resp’t, v. Grove Springs Hotel and Steamboat Company, Limited, App’lt.

      (Supreme Court, General Term, fifth Department,

      Filed April 12, 1895.)

    Sale — Acceptance. Where the proprietor of a hotel assumes to, and does lease, a piano to its tenants with knowledge of the oral agreement on the part of its president to purchase and pay for the same, it indicates a manifest intention to receive and accept the piano as its property, and thereby becomes liable to the vendor for its value.
    Appeal from a judgment entered in favor of plaintiff.

      George T. Spencer, for app’lt; Monroe Wheeler, for resp’t.
   Lewis, J.

This action was brought to recover the value of a piano which the plaintiff claimed to have sold to the defendant in the spring of 1887 at the agreed price of $450. The defendant is a foreign corporation organized under the laws of the state of Illinois. In 1877 it was the proprietor of a summer hotel at the village of Grove Springs, on Lake Keuka, known as the “Grove Springs Hotel-” The hotel, prior to the spring of 1883, had been run by a tenant of the defendant. In the spring of that year the defendant assumed its management. There was at that time in the hotel a piano belonging to the plaintiff. He had placed it in the hotel under an arrangement with the tenant that he would pay to the plaintiff an annual rental of $25 until he should determine if he wished to purchase it. When, the defendant assumed the management of the hotel, in the spring of 1883, the plaintiff negotiated with its president, John W. Gonlogue, with a view of selling the piano to the defendant. Mr. Gonlogue declined to purchase it then, but promised, if the plaintiff would allow the piano to remain in the hotel, he would purchase it in the fall of that year, and in the meantime would pay the same rental as bad been theretofore paid for its use. Mr. Gonlogue stated to the plaintiff that they needed the piano in the hotel for the use of guests. He had authority to purchase the piano. It remained in the hotel down to and including the year 1886, and defendant paid for its use. In the spring of 1887 plaintiff agreed with Gonlogue to sell and deliver the piano to the defendant at the agreed price of $450, the defendant to pay therefor within a short time thereafter. The agreement was oral; it was made in the village of Hammondsport, at a distance of several miles from the hotel. Mr. Gonlogue died shortly after making the agreement, and Mr. Henry H. Cortright was appointed president in his place. The defendant had notice of the making of the agreement by its former president, and thereafter, and in the month of May, 1887, it gave a written lease of the hotel and the property therein, for a term of five months, to one Charles W. Lane. The property was described therein as “the Grove Springs Hotel, and the-furniture and other property in said hotel.” .The piano remained in the hotel during the term of Mr. Lane's lease. On the 21st day of April, 1888, the defendant again leased said hotel, with all the fixtures and'furniture, of every kind and sort, in and about said hotel, to one Omar F. Cage, for the period of one year from the 1st day of April, 1888, with the privilege of two additional years. At the time of making the lease to G-age, the piano was in the hotel, and the defendant put the tenant in possession of the hotel with the furniture, including the piano. The piano remained in the hotel, and under defendant’s control, down to the time of the trial of this action. No rent was paid for its use after the arrangement made as aforesaid with defendant’s president in the spring of 1887.

The referee found as a conclusion of law from the foregoing facts that the plaintiff was entitled to judgment for the $450, with interest thereon from the 21st day of April, 1888. The agreement, for the sale of the.piano not being in writing, was void under the statute of frauds unless there was a delivery and acceptance of it under said agreement. The referee found as a fact that the defendant made the leases mentioned with notice of the said agreement of sale. The evidence to sustain this finding was quite meagre, but we think it was sufficient. The plaintiff at the time of making the agreement sold the defendant a cover belonging with the piano, which the defendant paid for at the time. The plaintiff’s agent, Mr. Allen, testified that he knew Mr. Cortright, defendant’s president, and that in the summer of 1887 he went down to the Grove Springs Hotel to see Mr. Cortright about the pay for the piano, and saw him, but does not state what occurred. The plaintiff testified that his agent reported the sale of the piano tollina shortly after the agreement mentioned, and that he had never received any notice from any one to remove the piano since the-sale was so reported to him; that he had seen the piano in the-hotel parlor as late as 1892, and that it was then open and in use, that he wrote to defendant’s president about the piano after the-sale was reported to him. The fact that the defendant assumed to lease the piano to its tenants as above stated, and never thereafter offered to pay for its use, taken in connection with the facts testified to by thé plaintiff and his agent, "was sufficient to justify the referee’s conclusion that the defendant -was aware of the agreement for the sale of the piano at the times the leases were executed. While the piano was not specifically mentioned in either of the leases, we are of the opinion that it was included in the property leased. A piano has come to be a part of the furnishing of private dwellings, and especially so of hotels. A hotel making any pretensions to being well furnished which did not provide a piano for the use of its guests would excite comment. It was held in Crossman v. Baldwin, 49 Conn. 490; see Browne, Common Words & Phrases, p. 138, that a piano is part of the furniture of a. hotel when kept for the use of the guests. The court said:

“ That a piano used as this was is furniture used in innkeeping, we can entertain no doubt. Bouvier, in his Law Dictionary, defines 1 furniture ’ as 1 personal chattels in the us of a family.’ By the term ‘ household furniture ’ in a will, all personal chattels will pass which may contribute to the use or convenience of the householder or the ornamentation of the house, as plate, linen, china, both useful and ornamental, and pictures, Webster defines it as ‘that which furnishes, or with which anything is furnished or supplied; fitting out; supply of necessaries; convenient or ornamental articles for any business or residence.’ That these definitions are comprehensive enough to include this piano admits of no question.”

In Von Storch v. Winslow, 13 R I. 20, it was held that a sewing machine and a piano are household furniture, exempt from attachment; in Richardson v. Hall, 124 Mass. 228, that bronzes, statuary and pictures were included in a bequest of all the household furniture, it appearing that they were distributed about the homestead with a view of making it more comfortable and agreeable as a place of residence. We think that the defendant, by making the leases aforesaid, assumed to and did lease th,e piano to its tenants, and, having done so with knowledge of the oral agreement on the part of its president to purchase and pay for the same, indicated a manifest intention to receive and accept the piano as its property, and thereby became liable to the plaintiff for its value.

The judgment appealed from should be affirmed.

All concur.


text:
    Joseph Coleman, Resp’t, v. Martha R. Hiller, as Administratrix, etc., App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed April 12, 1895.)

    Contract — Promise for benefit of third person. A promise made upon a good consideration as between the promisor and promisee for the benefit of a third person, who is an entire stranger to the consideration and to whom the promisee was in no manner indebted, cannot be enforced by such third party against the promisor.
    Appeal from a judgment entered in favor of plaintiff.

      Wm. A. Sutherland, for app’lt; Henry W. Conklin, for resp’t.
   Lewis, J.

The referee found as facts that for many years prior to July, 1887, one Jerome B. Newcomb lived in the city of Rochester on a farm, which he owned and cultivated. For many years the plaintiff had lived in the same neighborhood with New-comb, and was on very intimate relations with him; worked for him upon his farm; was at one time a member of his family ; and had rendered him many services of a friendly and neighborly nature, and Newcomb had frequently expressed an affection for and feeling of gratitude for the plaintiff. Newcomb died in July, 1887. He left no living descendants. On the 29th day of June, 1887, Newcomb, being ill, transferred and conveyed his farm., worth about $50,000 to his wife, Lucy A. Newcomb. The transfer was made and intended as a final disposition of his property, in view of death, whic.n he felt was approaching. Prior to said ■conveyance, an understanding was had between Mr. Newcomb and his wife that the land should be conveyed to her, and that, in •consideration thereof, she would pay, as soon as she realized sufficient money from sales of the property, certain sums of money to certain persons; among others, that she would pay to the plaintiff $2,000, which sum Mrs. Newcomb undertook and agreed, in consideration of said conveyance, pursuant to such arrangement, to pay to the plaintiff as soon as she should sell a sufficient amount of the real estate to be in funds for that purpose; that thereafter, and on or about July 31, 1890, she did sell and convey about twenty-three acres of the land for the consideration of $23,000. Mrs. Newcomb died August 31, 1890, intestate, without performing the agreement to pay the money to the plaintiff. The defendant was duly appointed administratrix of her •estate. In the course of her administration, she caused to be published a notice to the creditors of Lucy A. Newcomb, -to present their claims on or before April 20, 1891. The plaintiff did not present his claim until August 6; 1891. The defendant denied its validity, and refused to pay it. From these facts the referee found as a conclusion of law that the plaintiff was entitled to recover of the defendant, as administratrix, the sum of $2,000, with interest thereon from August 6, 1891. The referee did not find that Mr. Newcomb was, at the time of the agreement mentioned, or at the time of the conveyance of the property to his wife, or at any time thereafter, indebted to the plaintiff in' any sum whatever. The evidence would not have warranted any such finding. It was made to appear quite clearly to the contrary.

It is not claimed that a trust was created in favor of the plaintiff by the agreement between Mr. and Mrs. Newcomb, for in an action heretofore tried between these same parties it was adjudicated that no trust was in fact established in plaintiff’s favor. So the question is presented, can a promise made upon a good consideration, as between the promisor and promisee for the benefit of a third person, who is an entire stranger to the consideration and to whom the promisee was in no manner indebted, be enforced by the third party against the promisor? The learned referee has held that such a promise can be enforced. This question has afforded a fruitful subject for the consideration of the courts of this country and England and text writers, and it may be difficult to reconcile all of the decisions. Remarks may be found in many of the cases and in the text-books sustaining the rule contended for by the respondent, but where such promises have been enforced there will be found, with perhaps here and there an exception, some especial reason for taking the case out of the'general rule that an action upon a contract can be maintained only where there is privity of contract between the parties. If the promise be exacted for the purposes of paying a pecuniary obligation which the promise is under to the person for whose benefit the promisee is made, or the latter has a claim upon the promise arising out of relationship, there are many cases holding that the agreement may be enforced. In the much quoted and leading case of Lawrence v. Fox, 20 N. Y. 268, the promisee owed the debt which the promisor agreed to pay, and the promisee placed in the hands of the promisor the funds with which to pay it. It was held in Burr v. Beers, 24 N. Y. 178, that a mortgagee may maintain a personal action against the grantee of the mortgaged premises, where the conveyance to the grantee contained a recital and covenant that it was subject to two mortgages, which were deemed and taken as part of the consideration of the conveyance, and which the grantee assumed to pay. The decision was put upon the ground that the undertaking of the grantee tó pay off the incumbrance was a collateral security acquired by the mortgagor, which inured by equitable subrogation to the benefit of the mortgagee, and upon the further ground that the statute relating to foreclosures provided that if a mortgage debt be secured by the obligation or other evidence of debt, executed by any other person besides the mortgagor, such person may be made a defendant, and decreed to pay the deficiency. Schermerhorn v. Vanderheyden, 1 Johns. 139, is relied upon as sustaining the plaintiff’s contention. The general doctrine contended for by plaintiff is stated in the opinion. The defendant applied to Schermerhorn to assign to him his personal property. Schermerhorn consented upon condition that the defendant would purchase a desk for the plaintiff’s wife, who was the daughter of Schermerhorn and a sister of defendant. Plaintiff recovered in justice’s court, and the judgment was reversed upon appeal because of the admission of paroi evidence as to the agreement to furnish the desk, which agreement was not mentioned in the written assignment. Coster v. Mayor, etc., of Albany, 43 N. Y. 399, is easily distinguishable from the case at bar. So is Smith v. Perine, 121 N. Y. 376; 31 St. Rep. 294. In Todd v. Weber, 95 N. Y. 181, the defendant’s testator was the father of the plaintiff, though not the husband of her mother. He promised various persons, relatives of the plaintiff, that if they would care for and educate her he would pay therefor by making due provision for her in his last will. Relying on this promise, they maintained and educated the plaintiff until the death of the testator. He died without making any provision for the plaintiff, by will or otherwise. The plaintiff was informed by her relatives of this promise of the testator, and with that knowledge, and in reliance upon said promise, assured them at different times, both before and after she arrived at her majority, that she would pay them for what they did for her when able. There was the natural obligation which the father owed to the child, which furnished the consideration for the agreement. Linneman v. Moross’ Estate, 98 Mich. 178, is an authority for the appellant’s contention. This case is also reported in 39 Am. St. Rep. 528, and in a marginal note many cases bearing upon the question are collected. The supreme court of the state of Minnesota in Jefferson v. Asch, 53 Minn. 446, held to the same effect. This case is also reported in 25 Lawy. Rep. Ann. 257, where can be found an instructive collection of authorities in a note to the case. This is also the doctrine of the Massachusetts courts. See American notes to 1 Eng. Ruling Cas. 705. The question is considered in an article published in 13 Alb. Law J. 362. The latest decision upon this question in our court of appeals is Townsend v. Rackham, 143 N. Y. 516; 62 St. Rep. 851, It is the contention of the respondent's counsel that the question before us was not involved in that case. Whether that be so or or not, there can be no doubt that the statement of the law in the opinion of the court fully covers the question before us. Judge Peckham in his opinion says : “ The doctrine of Lawrence v. Fox, 20 N. Y. 268, and the subsequent cases, can furnish no ground for sustaining the right of the plaintiffs to maintain this action. In none of them is there an intimation that the action could be sustained by the third person, in the absence of any liability in his favor due or to grow due from the one to whom the promise was made. In Gifford v. Corrigan, 117 N. Y. 257; 27 St. Rep. 233, Judge Finch reviews the subject, and cites the various authorities, and states the grounds upon which the liability has been placed. To. maintain the action by the third person, there must be this liability to him on the part of the promisee.” There being, as we have stated, an entire absence of any evidence tending to show that Mr. Newcomb was indebted to the plaintiff,, or that he was under any obligation to provide for him, he failed to make a case entitling him to recover. The judgment appealed from should be reversed, and a new trial granted, with costs to abide the event.


text:
    In the Matter of the Judicial Settlement of the Accounts of Charles Brenneman, as Surviving Executor of Frederick Leonhard, Deceased.

      (Supreme Court, General Term, First Department,

      Filed April 11, 1895.)

    Surrogate — Jurisdiction—Land.
    The surrogate’s court has jurisdiction to compel an executor or trustee to account for real estate in which the moneys of the estate have been invested, if the facts surrounding it are such that it may be treated as personalty, and an accounting compelled of it as a part of the assets of the estate.
    Appeal from a decree passing on the accounts.
    Frederick Leonhard died July 3, 1873, leaving a last will and testament, wherein, after giving certain legacies to his children, Elizabeth Brenneman, Joseph and Augustus Leonhard, and directing that the payment of his debts should be provided for he provided 'as follows: “Thirdly. All the rest, residue, and remainder of my estate, both real and personal, I give, devise, and bequeath unto my wife, Margaret Leonhard, to have and to hold the same for and during her natural life. Fourthly. After the decease of my said wife, I give, devise, and bequeath unto my said three children all the rest, - residue, and remainder of my said real and personal estate, share and share alike, to have and to hold the same to them, their heirs and assigns, forever. Lastly. I now nominate and appoint my son Joseph Leonhard and my son-in-law, Charles Brenneman, executors of this, my will and testament. ” Charles Brenneman duly qualified as executor, and letters were issued to him as such on August 20, 1873, he has continued to act as such executor down to the present time. Margaret Leonhard, the testator’s wife, died on the 24th day of July, 1891. All of the persons interested in the estate have waived all claim against the accounting executor except Mary E. Side, Frederick Leonhard, Josephine Leonhard, and Edward Leonhard, who are entitled to one-eighteenth of the residuary estate. The referee found, among other things: That the executor collected the sum of $768.13, interest upon mortgages which had accrued prior of the death of the testator, viz. July 3, 1873, and has not charged himself with the same as principal in Schedule A of his account as amended. That the executor, when he received the moneys of the estate, deposited them in a bank account in his individual name, wherein were deposited moneys belong to himself, and that he mingled the moneys of this-estate with his own. That prior to the death of the testator, and about June, 1873, Charles Brenneman the executor herein, had formed a quasi partnership with Frederick Folz and Frank Heerlein for the purchase of land and the erection of buildings thereon. That the partnership thus formed continued down to and about the 16th day of March, 1875. That between June, 1873, and the close of the partnership, March 16, 1875, Charles Brenneman, the executor herein, paid unto the partnership the sum of $120,224.07, and received therefrom during the said time the sum of $91,035.71, an excess of payments over receipts of $29,188.36. 'That Charles Brenneman, the executor herein, drew from the account where the moneys of this estate were deposited and mingled with his own moneys the sums paid into partnership between September, 1873, and March 16, 1875. That of the moneys paid into the said partnership by Charles Brenneman between September, 1873, and March 16, 1875 (the date of the partnership settlement), $12,388.71 were moneys of the estate of Frederick Leon-hard, deceased, and formed part of the $29,188.36 which said Brenneman had invested at the close of the partnership, March 16, 1875. That at the close of the partnership business, March 16, 1875, Charles Brenneman, the executor herein, received, subject to. mortgages amounting to $42,000, the property situated at the southwest corner of Mott and Houston streets, being about sixty-three feet, four inches wide on Houston street, by seventy-six feet one-half inch on Mott street, as and for the moneys invested and his share of the profits of said partnership. That the executor collected $704.50 rent per month on the said property at Houston and Mott streets, between July 24, 1891, and August 23, 1892, amounting in the aggregate to $9,158.50. That the executor herein paid taxes on the said property at Houston and Mott streets between July 24, 1891, and August 23, 1892, amounting to $866.-67 That the executor herein, paid interest on mortgages on said property at Houston and Mott streets between July 24, 1891, to August 23, 1892, amounting to $2,394.17. The referee reported, as a conclusion of law, so far as the interests of Mary E. Side, Frederick Leonhard, Josephine Leonhard, and Edward Leonhard are concerned, as follows: That the executor should be charged with the interest on mortgages collected by him, which interest had accrued prior to 'the testator’s death, aggregating $763.13. That the executor should be charged with 1238871 j 2gl8836 0f the property situated at the southwest corner of Mott and Houston streets, being about sixty-three feet four inches wide on Houston street, by seventy six feet one-half inch on Mott street, as an asset-of the estate, subject, however, to the mortgages thereon, amounting to $42,000. That the executor should be charged with the sum of 12388711 2918836 of $9,158.50, rents collected on the Houston and Mott streets property between July 24, 1891, the date of the death of the life tenant, and August 23, 1892, viz. $3,886.24. That the executor should be credited with the taxes paid on the Houston and Mott streets property between July 24,1891, and August 23,1892, to wit, $866.67. That the executor should lie credited with the interest on the mortgages paid on the Houston and Mott streets property between July 24, 1891, and August 23,1892, to wit, $2,394.-17; leaving a balance in hands of the executor of $11,877.93, in cash, and 12388711 2918836 of the Houston and Mott streets property, subject to the mortgages of $42,000; of which balance the contestants are entitled as follows; Mary E. Side, one-eighteenth; Edward Leonhard, one-eighteenth; Josephine Leonhard, one-eighteenth; Frederick Leonhard, one-eighteenth.

      Howard Y. Stillman, for app’lt; Henry A. Foster, for resp’t.
   Parker, J.

The question to be considered relates to the findings that the executor is chargeable with 12388711 2918836 of the property at the southwest corner of Houston and Mott streets. In May, 1873, the executor entered into a partnership with Frederick Folz and Frank Heerlein to buy, improve, and sell real estate. The partnership continued until March 16, 1875, when it was dissolved, and the assets were divided; the executor receiving as his share of the assets the three houses on the southwest corner of Houston and Mott streets. The executor invested from $26,000 to $29,000 in the partnership, his partners testifying that the former was the correct amount, and the executor the latter; and the referee found the fact to be as testified to by the executor. Of this amount the contestants claimed that about $15,000 was the money of the estate, but the referee has found that the ,true sum was $12,388.71. One of the difficulties which confronted the contestants in their effort to ascertain the amount was due to the fact that the executor did not keep a separate account with the funds of the estate. All receipts, whether of moneys of the estate or his own personal funds, were deposited to his individual' credit, and drawn out by checks as demands were made upon him by parties-interested in the estate, or by his own creditors, or for business ventures. There was no difficulty whatever in determining the-sum for which he should account, but, as the executor was insolvent, the contestants deemed it essential, if the accounting was to result in any practical benefit to them, to trace such of the funds-into the real estate venture as were actually put into it. Even the Houston and Mott streets houses were by the executor conveyed to his father and the life tenant in 1876. Another reason, doubtless, was to secure a portion of the profits resulting from the real estate investments between the time of the death of the life tenant and the institution of this proceeding for an accounting. Between the time of the testator's death and the termination of the real estate partnership, 1875, the executor received sums of monej' from various sources, aggregating $25,618.13; and he paid out for legacies, debts of testator, and in satisfaction of liens, $10,606.79; thus leaving in his hands $15,011.34.

That the executor was either unwilling or unable to assist the contestants in their inquiry as to the disposition which he had made of this unaccounted for balance clearly appears from the following extract from his testimony :

“Q. Your balance of January, 1875, according to your account, should have been $12,211.21. From your check book the balance is shown to be $1,220.61, leaving a balance of over $11,000 estate money used. In December, can you tell me where the money was ? A. No doubt, loaned it. Q. You can’t tell me the loans or the amounts? A. I could not. Q. Now, in July, 1875, you should have had a bank balance to your statement and your own account, of $14,871.76. Your bank balance in both banks, the German Exchange and the Germania, shows a balance of $1,960.37 or $12,-911.50 of the estate money used by you. Can you tell me where that money was at that time ? A. I cannot. * * * Q. From your accounts you owed to this estate $15,821.87, and your bank balance on that day shows $746.77, showing over $15,000 or $15,-075.10 of the estate money that was used by you. Can you tell me where the money was on that date ? A. I could not. * * * Q. Now, in March, 1876, March 8th, * * * where, then, was this money ? A. I could not tell you. I do not know. Q. Is that the best answer you can give me in regard to that ? A. It is so long, I can’t tell you what I did with it. Q. You had no bank account at that time ? A. No. Q. Savings or business bank account? A. No. Q. You had no securities of any description in March, 1876 ? A. No, sir. * * * The Referee: Let him tell me what he did on May, 1876, with the estate. A. I don’t remember that.”

He further testified that the properties conveyed by him in 1876 to his father and the life tenant represented all the property that he held, of any kind or description, at that time. The effect of the testimony to which we have referred was to negative, at least, the possibility of its investment in anything else than the partnership houses. As the contestants were necessarily largely dependent upon the testimony of the executor to show that the moneys of the estate were invested in the property, resort was had to his examination on proceedings supplemental to execution in the year 1876, with the following result:

“Q. Now, on the prior examination in this proceeding, was this question put to you as having bfeen put to you on an examination in supplementary proceedings, and did you give this answer: :Q. What did you do with the money? A. I put it where it belonged. Q. Did you give that testimony? A. I suppose so.’ Q. Was this question asked you at that time : ‘Where was that ? A. The estate of Frederick Leonhard. Q, Did you give that testimony? A. I suppose it must be true.’ A. Yes; I said that. Q. Was this question asked you in the prior examination in this matter: ‘Was that testimony true ? Is that the fact that the money belonged to the estate of Frederick Leonhard ? A. If I said so, it must be so. Q. It is so, isn’t it? A. Yes.’ A. That is right. Q. On the prior examination in this matter, was this question put to you as from the supplementary proceedings: ‘Q. Was this question put to you in that examination, and did you give this answer: ‘Q. How did you get it from there ? A. I had misappropriated funds of the estate which came into my hands as executor, and had used them to build houses in Hester, Essex, and Houston •streets. Q. Was that question asked, and did you give that answer? A. I don’t recollect any more. I suppose it was so if it is there.’ Q. Are the statements made in that answer true? A. I suppose they are. Q. They are true, aren’t they ? A. I think so.’ A. Yes; I stated that. Q. The houses at Houston and Mott were conveyed to you to represent your share in the partnership property? A. Yes, sir. Q. It was afterwards retransferred to you? A. Yes, sir./ Q. And whatever it was transferred to him for was canceled? A. There was a running account between us. Q. Both money invested and profits, if any ? A, Yes. Q. They still stand in your name? A.. Yes, sir. Q. And have never been out of it, except during the times they were conveyed, as you have testified to Mrs. Leonhard and your father ? A. Yes.”

It would far exceed the proper limits of this- discussion to attempt anything like a review of the testimony in this voluminous record so far as it bears upon the present question, but what we have quoted sufficiently indicates that the referee and the surrogate as well, who confirmed his report, and entered a decree thereon, were justified in the conclusion reached, — that a sum exceeding $12,000 in money of the estate was invested by the executor in the real estate ventures with his partners, Folz and Heerlein. The executor was not idle in his efforts to create the impression in the mind of the referee that the money was not invested in the real estate, and from his standpoint there was occasion for activity, for thy profits resulting from the real estate during the period which lasted between the time of the death of the life tenant and the commencement of the accounting were far greater than the legal rate of interest which otherwise would be charged. Again, he was quite likely not without hope that a decree which should merely adjudge that he had a certain amount of money in his hands belonging to the estate, out of which he should pay over to the contestants four-eighteenths, would result less seriously than one which should adjudicate that in a particular piece of valuable property, still remaining in the family, the moneys of the estate were invested, and that such moneys and the interest which they purchased constituted assets of the estate. With that end in view, he produced two books of account, which he claimed contained the items of account between himself and his partners, Folz and Heerlein. They did show certain payments and receipts of moneys during the years 1873, 1874, and 1875, but did not furnish evidence as to the source from which the principal amount of moneys came which were invested in the real-estate partnership. The accuracy of the books did not pass unchallenged. Folz and Heerlein testified that the basis upon which they made a settlement with the executor was entirely different from that shown by the books. The first book also bore evidence of mutilation, some thirty-four pages being missing. The tops of several of the pages were off, and appeared to have" been cut off, and they were open to criticism, of a character tending strongly towards justifying the referee in regarding the testimony of the executor on the other examinations, to which we have referred, as not being overborne, to ■say the least, by the books.

Our conclusion being that the evidence justified the finding of fact made, we come now to the questions of law involved. It is a general rule, where a trust fund has been misapplied, that the beneficiary may follow it so long as it can be traced until the rights of a bona fide purchaser intervene, and may redeem it in whatever form it has been invested by the trustee. Newton v. Porter, 69 N. Y. 133; Holmes v. Gilman, 138 id. 369; 52 St. Rep. 873. The beneficiary’s right to reclaim misappropriated estate moneys from an executor is not affected by the fact that the executor has substituted other money for it, or exchanged it for other property. Van Alen v. American Nat. Bank, 52 N. Y. 1; Baker v. Bank, 100 id. 31. This right can be enforced against property which the wrongdoer has obtained in exchange, provided the owner elects to take it in the shape in which it has been converted. Cavin v. Gleason, 105 N. Y. 260. Where trust moneys can be followed into the lands, to the purchase of which they have been applied, the cestui que trust may elect whether to hold the unfaithful trustee personally responsible or claim the lands. Ferris v. Van Vechten, 73 N. Y. 113. And, if a trustee in the purchase of property uses his own money and that of his cestui que trust in payment, if the cestui que trust so elect they will become co-owners of the property in the proportion which the contributions from the trust fund and the personal moneys of the trustees bear to the sum total invested. Holmes v. Gilman, 138 N. Y. 369-378; 52 St. Rep. 873.

The principles enunciated by the several cases to which we have referred are applicable to the facts of this case, but they were applied by a court having general jurisdiction in equity, whereas the surrogate’s court has not such jurisdiction ; and this brings us to the question whether the surrogate’s court had jurisdiction to compel the executor to account for lands in which he had invested the funds of the estate. The surrogate’s court has such jurisdiction only as is given it by statute, which governs it in proceedings for an accounting, and for the disposition of the assets of the decedent ; and, where the aid of a court of equity is required to impose a trust, the surrogate’s court cannot declare and direct the execution of it in advance of the making of a decree of a court of general jurisdiction establishing it. But this does not prevent the surrogate’s court from compelling an executor or trustee to account for real estate in which the moneys of the estate' have been invested, if the facts surrounding it are such that it may be treated as personalty, and an accounting compelled of it as a. part of the assets of the estate. Such a situation has illustration in Redfield on Surrogate’s Courts (5th ed.) p. 425 :

“Land bought in by executors, on a foreclosure of a mortgage belonging to the estate, is to be treated as personal property,' and a surrogate’s court has jurisdiction to direct an accounting in respect thereto where the administrator, through a mesne convey- ■ anee, has acquired title in his individual name, It is not necessary to first proceed in equity for the imposition aud declaration of a trust.”

In Re Gilbert, 39 Hun, 61, an administrator purchased land on foreclosure by crediting the amount of the purchase price on a mortgage belonging to the estate, conveyed the land to his son on a nominal consideration, and took a reconveyance from his son on a nominal consideration ; and it was held that the surrogate’s court had jurisdiction to compel him to account for it, and would treat it as personal estate. In the course of the discussion had, the court said:

“The administrators, as such, took the title as purchasers on the mortgage foreclosure sale; and, without any consideration paid, they, through his son, placed the title in the appellant. In the hands of the administrators the property had the character of personalty, and the handing it over to one of them, unembarrassed with any other facts, would seem to continue its character and relation to the estate represented, of which it might be treated as assets for the purpose of accounting. * * * We are inclined to think that, upon that state of facts, the surrogate had jurisdiction of the proceeding.”

The discussion in Lockman v„ Reilly, 95 N. Y. 64, is in point:

“It may happen that an executor or administrator, without authority, invests the funds of the decedent’s estate in land; or he may take land in payment of a debt due to the estate which he represents, or may purchase it for the protection of the estate. * * * Under such circumstances, the executor or administrator, in one sense, holds the land in trust for the persons beneficially interested in the estate, and can be compelled to account for it. * * * The legal title to the land is in the executor or administrator, but, as between him and the legatees, next of kin, and creditors, * * * it is personal estate, and he holds it as the legal representative of the deceased. * * * It was not made as a purchase of land, * * * under a power contained in the will, for there was no power in the will to invest in land. * * * The effect of the conveyance to the executrix was to make the lands in her hands take the place of the mortgage, as personal estate; and she was liable to account for it as such. * * * The beneficiaries * * * only had the right to require the executors to account for it as for any other item of personal estate in her hands as executrix. * * * That land bought in by executors on a foreclosure of a mortgage belonging to the estate is to be treated as personal property, which the executors may sell, and for which they are accountable as such, has been frequently decided ; and it is immaterial whether the deed is taken in the names of the executors as such or in their individual names. The beneficiaries under the wills * * * never had any interest in it as land. It was personalty when the testator died, and, so far as their rights are concerned, it still remained personalty in the hands of the executrix.”

These cases seem to be authority for the proposition that the surrogate’s court, in a situation such as is presented by this record, could treat the lands into which the moneys of the estate went as personalty, and compel the executor to account therefor. And the decree certainly does not transcend the rule' which they establish, as will be observed from a reading of the provisions of the decree bearing upon that subject. They read as follows:

“The said executor is also charged with 123SOT1y/|8gjg 0f ^he property situated at the southwest corner of Houston and Mott streets, in the city of New York, being about sixty-three feet four inches wide on Houston street, by seventy-six feet one-half inch on Mott street, subject, however, to the mortgages thereon, amounting to $42,000. * * * And it is further ordered, adjudged, and decreed that $12,388.71 of the $29,188.36 invested by the executor in the property at the southwest corner of Houston and Mott streets, being about sixty-three feet four inches wide on Houston street, by seventy-six feet one-half inch on Mott street, was money of the estate of Frederick Leonhard, deceased ; that the executor is charged with I23S8’iy/2g]8836 0f said property, as an asset of the estate, subject, however, to mortgages thereon amounting to $42,000.”

Of this interest the decree adjudges that each one of the four parties in whose behalf the contest was made is entitled to a one-eighteenth part. While the surrogate’s court had undoubted authority, under the facts in this ease, to decree as it did, a practical difficulty may confront the successful contestants as to the manner in which, if at all, its provisions may be enforced for their benefit. But with that question we have no concern on this review, for we have only to consider whether the decree violates any of the legal rights of the executor.

The decree should be affirmed, with costs.

All concur.


author: Per Curiam.

text:
    Cochrane Carpet Company, Resp’t, v. Henry C. Howells, Jr., et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed April 11, 1895.)

    Reference — Compulsory.
    Where, in an action for goods sold, the sales were made on ten different dates and covered one hundred and thirty-three items, a reference will be directed, if the answer denies I'he allegation in the complaint as to the sale and delivery.
    Appeal from an order directing a reference.

      C. N. Bovee, for app’lts; J. J. Adams, for resp’t.
   Per Curiam.

It is alleged in the complaint that between September 16, 1892, and April 8, 1893, plaintiff sold and delivered to the defendants goods, wares, and merchandise at the 'agreed price of $3,381.42. Upon the motion to refer, it appeared by the affidavits served in behalf of the plaintiff that the merchandise was sold on ten different dates, and consisted of 133 pieces of goods. The defendants by their answer deny the allegation contained in the complaint, that the goods and merchandise at the agreed price mentioned were sold and delivered. This presents a material issue. The defendants have not tendered a stipulation admitting that goods of the quantity and at the agreed price alleged in that complaint were sold and delivered. Had this been done, or had they by stipulation reduced the question to an issue over a single delivery, they would have avoided the necessity for a reference. Under the decisions, an action involving an account, with as many items as are directly put in issue by the answer, is referrable.

The order should be affirmed, with $10 costs and disbursements.