text:
    Marcus Ward & Co., Limited, App’lt., v. William H. Ward and R. Ward Carroll, Resp’ts.

      (Supreme Court, General Firm, First Department,

      Filed October 16, 1891.)

    1. Trade names.
    A person may use -his own name in a business or state that he is a certain person’s son, or that he is late of a firm the good will of the business of which he has sold.
    2. Trade-mark—Symbols to show size of paper.
    A combination of words, letters, figures and symbols intended only to indicate the size or quality of paper or other articles does not constitute a trade-mark.
    3. Sale—Of business—Vendor may solicit patronage.
    A person who has sold his business and the good will thereof to another, in the absence of an express agreement to the contrary, may lawfully apply to any of the customers of the old business and ask them to continue their custom with him.
    Appeal from a judgment rendered at special term in favor of the defendants.

      Delos McCurdy, for app’lt; John Nolman, for resp’ts.
   Bartlett, J.

I think this case was rightly decided at the special term.

The litigation grows out of the competition between the plaintiff corporation and the defendants in the business of manufacturing writing paper and stationery. Since 1883 the plaintiff has been a limited corporation organized under the British law, and carrying on business in Belfast, London and New York. It was the successor in business of a pre-existing firm known as Marcus Ward & Co., in which firm the defendant William H. Ward had been a co-partner. The firm transferred to the corporation its property, business and good will, and the defendant William H. Ward received from the corporation in payment for his interest in the firm an amount of stock proportionate to the amount of that interest. For a number of years the defendant William H. Ward was a director in the plaintiff corporation, but disagreements arose between him and some of the other directors and he retired from office* and in May, 1888, entered into partnership with the defendant R. Ward Carroll, forming a firm known as William H. Ward & Company, for the purpose of manufacturing, importing and selling linen writing paper and stationery in Belfast, London and New York.

In the course of the business thus started by the defendants’ firm the defendants have used the expression, Marcus Ward’s Son, upon some of the writing paper which they put upon the market. They have also offered for sale, and sold, a kind of paper which they have called Old English vellum, contained in boxes upon which has appeared the symbol B. 12. They have used upon their business cards and bill heads the inscription: “William H. Ward & Co., late of the firm of Marcus Ward & Co.,” and they have solicited business from the stationery trade in the city of New York, from persons among whom are included former customers of the plaintiff corporation.

Of these several acts the plaintiff complains in the present suit and asks that the defendants be enjoined from using or displaying the name or designation “ Marcus Ward’s Son,” or the expression “ late of the firm of Marcus Ward & Co.,” upon any signs, cards, bill heads or stationery; that they also be restrained from using any of the trade letters or numbers heretofore used by the plaintiff ; and that they be prohibited from, in any manner, soliciting business from the plaintiff’s customers under any pretense that they are connected with the plaintiff, or any representation that they have been connected or associated with the late firm of Marcus Ward & Co.

The proof on the trial failed in each instance to establish facts sufficient to warrant the court in granting the relief prayed for by the plaintiff. '

The defendant, William H. Ward, is in fact a son of the late Marcus Ward, and had a perfect right to represent himself as ■such. In the agreement which transferred the business of the late firm of Marcus Ward & Co. to the plaintiff corporation known as Marcus Ward & Co., Limited, there was no covenant or engagement on the part of the vendors not to engage in the same business. The defendant, William H. Ward, was therefore entirely at liberty to organize a new firm with his co-defendant when he ■could no longer get on harmoniously with the directors of the ■corporation and found it necessary or expedient to go into business for himself. He was only stating the truth when he described himself as Marcus Ward’s Son, and as late of the firm of Marcus Ward & Co. The exhibits which have been submitted to the court as a part of the appeal book show that there is no such resemblance between the marks used by the plaintiff and the marks used by the defendants as to be likely to deceive any one or to lead a person desiring to purchase the plaintiff’s goods to accept those of the defendants by mistake.

This is true not only of the water-marks on the writing paper, but of the devices and decorations upon the boxes in which the different sorts of paper are offered for sale. Indeed the distinction is so manifest upon a mere cursory inspection as to indicate that considerable pains were taken on the part of the defendants not to imitate the plaintiff’s stationery in any way which would be likely to mislead the public. Furthermore, there is absolutely no evidence that any'purchaser, or intending purchaser, ever was deceived or mistook the. defendants’ goods for those of the plaintiff.

As to the use of the symbol E. 12, it appeared that it was merely a private mark used for office convenience, and that its meaning was unknown to the stationery trade. It was employed only to indicate a particular size of paper. Such a combination used for such a purpose does not constitute a trade-mark. There can be no right to an exclusive use of any words, letters, figures or symbols which have no relation to the origin or ownership of goods, but are intended only to indicate their- dimensions and quality. Amoskeag Manuf. Co. v. Spear, 2 Sandf., 599.

Finally, as to the complaint that the defendants solicited business from former customers of the plaintiff. It was formerly held in England that although the vendor of the good will of a business might, in the absence of an express agreement to the contrary, carry on the same business wherever he pleased, and solicit customers in any public manner, he could not lawfully apply to any of the customers of the old business, asking them to continue their custom with him rather than deal with the vendees. Labouchere v. Dawson, L. R., 13 Eq., 322: This doctrine, however, no longer prevails. It was declared to be incorrect by a majority of the court of appeal in Pearson v. Pearson, L. R., 27 Chan. Div., 145, and was rejected as no longer the law by Mr. Justice Stirling in the later case of Vernon v. Hallara, L. R., 34 Chan. Div., 748.

There was no basis in the proof for any finding that the defendants had appropriated any trade-mark belonging to the plaintiff, or been guilty of any fraud, misrepresentation or deception, or had exceeded their legal rights in soliciting custom. The complaint was, therefore, properly dismissed, and the judgment in favor of the defendants should be affirmed, with costs.

Van Brunt, P. J., concurs.


source: Caselaw Access Project

author: Bartlett, J.

license: Public Domain

text:
    Jacob Mark, App’lt, v. Elizabeth A. L. Hyatt and Thadeus Hyatt, Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed October 16, 1891.)

    Injunction—Damages.
    In an action to cancel licenses to make and sell articles protected by a patent, Mrs. Hyatt recovered judgment which included an injunction against any further use, manufacture or sale of such articles, which was served on plaintiff, and he obeyed the same under advice of counsel, thereby suffering some loss. Held, that even if the court acted without authority in granting the injunction, the parties who procured it could not be held liable in a suit to charge them as wrongdoers without proof that they were aware of the lack of jurisdiction of the court, and that the complaint in this action for damages was properly dismissed.
    Appeal from a judgment dismissing the complaint on the merits at the close of a trial at circuit without a jury.

      Edward D. McCarthy, for app’lt; George W. Van Slyck, for resp’ts.
   Bartlett, J.

This controversy grows out of a suit in the superior court relating to certain patents of Elizabeth A. L. Hyatt, under which she had granted licenses to the firm of Ingalls & Mark, consisting of Joshua K. Ingalls and Jacob Mark. In that suit Mrs. Hyatt alleged that Ingalls & Mark had broken their agreement with her, and she sought a rescission of the license, an accounting for the royalties and injunctive relief, all of which were awarded her by the judgment. Mr. Mark was served with a copy of the judgment containing the injunction against any further use, manufacture or sale of the articles protected by the patents; and acting under the advice of counsel he obeyed it, thereby suffering some pecuniary injury, although the case does not disclose how much. He instituted the present action against Mrs. Hyatt and her husband, who assisted her in the superior court suit, to recover damages for the wrong which he alleges they committed against him in procuring an injunction which the superior court had no jurisdiction to grant.1

The proposition of the learned counsel for the appellant that the superior court had no authority to take cognizance of the case of Hyatt v. Ingalls at all, is not open to discussion since the decision of the court of appeals to the contrary. Hyatt v. Ingalls, 124 N. Y., 93; 35 N. Y. State Rep., 114. The most that can be claimed is that the part of the judgment which enjoined the use, manufacture or sale of the patented articles was in excess of the jurisdiction of the state court. At the circuit, Mr. Justice Barrett refused to hold as matter of law that this injunction was null and void; but he expressed the opinion that even if "it were so, the plaintiff was not entitled to maintain the present action, inasmuch as he was in nowise injured by the restraining order, which there never was any attempt to enforce, and which, if made without jurisdiction, amounted to nothing more than a futile judicial threat He, therefore, dismissed the complaint.

While it is clear that the injunction in the superior court was erroneously granted, it is not clear that it was granted without jurisdiction. The court of appeals speaks of the injunctive part of the decree as “ unnecessary or improper, because on the judicial rescission of the license the defendants could not further proceed under it, and the court had no power to restrain the defendants from acts of mere infringement of the plaintiff’s patent.” Hyatt v. Ingalls, supra. This language indicates that if the purpose of the injunction was simply to restrain any further action on the part of the defendants under the rescinded agreement, the injunction would not be deemed void, although it was needless.

But, however this may be, the dismissal of the complaint may be sustained on the ground that even if the superior court did act without authority in granting the injunction,.the parties who procured it cannot be held liable, in a suit of this character, to charge them as wrong-doers, without proof that they were aware of the lack of jurisdiction. Such is the rule laid down by the general term of the fourth department in Eldred v. Fawdrey, 16 N. Y. State Rep., 83. That was a suit to recover damages for a prosecution for libel alleged to have been maliciously instituted in the court of a justice of the peace; and it was held that the burden was upon the plaintiff to show that the defendant knew that the justice’s court had no jurisdiction to try the action for libel which he brought in that tribunal. In the case at bar, not only did the plaintiff fail to establish his allegations of malice, but the entire course of the defendants in prosecuting the superior court suit shows that they must have sincerely believed that the court had jurisdiction.

I think the judgment should be affirmed.

Vaw Brunt, P. J., concurs in result.


author: Bartlett, J. Barrett, J.

text:
    William P. Walton et al., Resp’ts, v. Albert P. Stewart, Trustee, App’lt.

      (Supreme Court, General Term, First Department,

      Filed October 16, 1891.)

    Trust—Distribution of fund—Parties.
    Plaintiffs are the successors of the officers of the Eleventh regiment, who-raised a fund for the benefit of sick and needy members of the regiment, and as such appointed defendant as trustee of the fund. The complaint alleges these facts and that there is no longer any other member of the regiment for whose benefit the trust was created, and asks for a destribution of the fund. Held, that no defect of parties appeared on the face of the complaint; but if other parlies are found to be necessary they may be brought in or their rights protected by the decree.
    (Barrett, J., dissents.)
    Appeal by defendant from an interlocutory judgment entered upon an order overruling a demurrer to the complaint.

      J. R. Hayward, for app’lt; Charles H. Collins, for resp’ts.
   Bartlett, J.

We agree with the learned judge who heard this case at special term, that the complaint states facts sufficient to constitute a cause of action against the defendant, although the relief to which the plaintiffs are entitled may be different in some respects from that which they demand. The fund in controversy was raised by the officers of the Eleventh regiment, as such, for the benefit of the sick and needy members of the regiment. The plaintiffs are the successors of the officers who thus raised the fund. By their action the defendant was chosen trustee. It was through these very plaintiffs, therefore, that he acquired possession and control of the money, to be applied to the use of third persons under certain circumstances; and now when they allege that the purpose of the trust has failed and ask a distribution of the fund among those who are entitled to it, the trustee who owes his position wholly to their action cannot be allowed successfully to question their legal capacity to call him to account and to insist that the money which they placed in his hands shall be judicially distributed among those to whom it belongs. They may be wrong in claiming that it belongs wholly to the persons now before the court. That matter can be determined hereafter, and other parties if necessary can be brought in or their rights may be provided for and protected in the decree. Under the allegations of the complaint, however, there does not appear to be any defect of parties of which the defendant can take advantage by demurrer. The plaintiffs who made the defendant trustee are before the court; the trustee himself is here ; and it is alleged that there is no longer any other member of the Eleventh regiment for whose benefit the trust was created. As to the original donors of the money, it cannot be determined that they are necessary parties without further information than the complaint contains in regard to the circumstances and conditions under which it was contributed to the fund

The judgment should be affirmed, with costs.

Van Brunt, P. J., concurs.

Barrett, J.

(dissenting).—I am unable to concur with my brother Bartlett. The plaintiffs in their own right have alleged no facts entitling them to any relief. They do not say that they contributed in any wise to this fund. So far as they are personally concerned, therefore, the complaint is demurrable in failing-to state facts sufficient to constitute a cause of action.

■ If, however, they are treated as pleading in a representative capacity, the complaint is defective in failing to state the origin of the fund, and to make the persons who contributed to it parties. If the old officers themselves contributed the entire fund, they should have been made parties. If they were aided by outside persdns, such persons should have been brought in. For if the trust has terminated, the defendant, when called upon to account, has a right to require such procedure as will effectually release him in a single action from all claims to the fund. Thus the beneficiaries should also have been, brought in. The complaint is entirely barren with regard to the precise form and limitations of the trust in question, and the statement that the plaintiffs as successors to the officers who “ accumulated” the fund (whatever that may mean) are the legal successors to such fund, and entitled to share therein equally, is a mere conclusion unsupported by fact I think the complaint is fatally defective, and that the demurrer should have been sustained.


author: Ingraham, J.

text:
    Rebecca M. F. Quackenbush, Pl’ff, v. Marie O’Hare, Def’t.

      (Supreme Court, General Term, First Department,

      Filed October 16, 1891.)

    Foreclosure—Surplus moneys—Inverse order op alienation.
    The respondent is the assignee of a mortgage which covered three pieces of real estate. One of the pieces was sold on foreclosure of a junior mortgage, the sale producing a surplus. In proceedings for the distribution of such surplus, Held, that the equitable rule as to the sale of the property in the inverse order of alienation where a mortgage covers several pieces had no application, and that respondent was entitled to the surplus.
    Appeal from order distributing surplus money.

      Early & Prendergast, for app’lts Washburn & Barnes; Henry G. Atwater, for resp’t Cannon; Moses Weyman, for Murray Hill Bank.
   Ingraham, J.

The equitable principle that where several pieces of property are covered by a mortgage to secure the payment of a sum of money and the owner of the equity of redemption has conveyed the several pieces of property to different grantees, that in an action to foreclose the mortgage the court will order the property sold in the inverse order of the alienation so that the property last conveyed shall be first sold to pay the amount due to secure which the mortgage was given, is not applicable to this case.

Ho application is made in this action to sell any portion of the mortgaged premises. By the conveyance or ■ mortgaging of the separate parcels of property by the mortgagor the lien of the respondent’s mortgage was not affected; it still remained a lien "upon all of the several pieces of property mortgaged, and the surplus money in this proceeding being the proceeds of a piece of property upon which the respondent’s mortgage was a lien, he was entitled to have such surplus applied to the payment of his mortgage.

The owners of the parcels of property covered by the respondent’s mortgage, other than the parcel foreclosed in this case, are not parties to this action and the court has no jurisdiction over them. It cannot make a decree directing a sale of the property, and the effect of sustaining the contention of the appellant would be to destroy the respondent’s' lien upon a portion of the property upon which he had such a lien by the execution of the mortgage.

The court having no power in this proceeding to marshall the assets so as to apply the rule above stated, the rule cannot be applied at all. Whether or not the appellant would be entitled to be subrogated to the rights of the respondent to enforce the mortgage against the West Third street property is not presented on this appeal and need not, therefore, be discussed.

When Steers took a conveyance of the West Third street property, he had no notice that the property foreclosed in this suit had been conveyed or that a mortgage to the appellant had been given, and as that mortgage was not recorded he had no constructive notice of such conveyance, so that he had the right to assume that the parcel of property foreclosed in this action would, if the rule contended for by the appellant was applicable, be primarily liable for the payment of this mortgage, and the subsequent purchase of the mortgage under which the respondent claims transferred to the respondent the right of the original mortgagee to obtain the payment of his mortgage from the proceeds of any of the property upon which it was a lien.

It is clear that the mortgage was not merged by its transfer to .the respondent, for by transferring the mortgage instead of satisfying it or taking an assignment to herself was a clear intimation by Steers that it was not the intention that the mortgage should merge, even assuming that Steers by payment of the mortgage or the amount paid by the respondent for it become its equitable .owner. . It is not claimed that Steers has realized anything out of the parcel of property conveyed to him, and the defeasance executed by Steers shows that such conveyance was simply a ■ mortgage, and that by it he acquired only a lien upon the property to secure the amount of the mortgagor’s indebtedness to him.

It does not appear from the record that any motion was made in the court below to bring other parties in so that the questions raised by the appellant could be determined, and to award this surplus money to the appellant would be in effect to hold that the appellant’s lien was prior to that of the respondent, when in fact the respondent’s lien was prior to the appellant’s.

The respondent was the real party in interest, as he was the owner of the mortgage, and it was to him that the money must be paid. The fact that, as between himself and some other person, such other person might be equitably entitled to a transfer of the mortgage, does not make such other person the real party in interest It is the real owner of the obligation that is entitled to enforce it.

I think, theréfore, the order was right, and should be affirmed, with ten dollars costs and disbursements.

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


text:
    John W. Gilbert, Pl’ff, v. Henry S. Deshon et al., Def’ts.

      (Supreme Court, General Term, First Department,

      Filed October 16,1891.)

    Costs—Referee’s and stenographer’s fees.
    Before referee’s and stenographer’s fees can he fixed and ordered paid; a statement showing the time occupied by the reference and the extent of the services of the stenographer should be required.
    Appeal by defendant Margaret G. Westerfield from an order directing the payment of certain referee’s and stenographer’s fees out of certain moneys deposited with the chamberlain of the city of New York.

      E. H. Westerfield, for app’lt; John A. Balestier, for resp’t.
   Ingraham, J.

The only evidence as to the time spent by the referee and the stenographer upon the reference was that contained in the affidavit of the defendant’s attorney that there were thirteen sessions lasting at no time more than one hour at which any substantial business of the reference was transacted or at which any thing was at all done, and that in the stenographer’s minutes 'there were 122 pages of matter equal to about 244 folios.

The referee does not state the number of days that he was engaged and there is no evidence that would justify the court in taxing the fees either of the referee or the stenographer at the amount directed to be paid to them. I think, therefore, that the court should either have denied the application or, if a larger amount than that justified by the statement of the defendant's attorney as to the time occupied by the reference was claimed, should have • required the referee to submit a statement showing the basis for his claim and for a charge for the services of the stenographer.

The order should therefore be reversed, with ten dollars costs and disbursements, with leave to renew the motion at special term upon further affidavits.

Yah Brunt, P. J., concurs.


author: Daniels, J.

text:
    In the Matter of The Equitable Reserve Fund Life Association of the City of New York.

      (Supreme Court, General Term, First Department,

      Filed, October 16, 1891.)

    1. Benefit societies—Reserve fund.
    A receiver took as the assets of a mutual benefit insurance association, about $78,000, of which $18,000 was the Death Fund and the balance the Reserve Fund. The Death Fund was largely deficient in its ability to pay the death losses accruing prior to the dissolution of the association, and its constitution failed to make any disposition of the Reserve Fund in case of such dissolution. Held, that this fund became available to meet all the unsatisfied debts and obligations of the association.
    3. Same.
    Among the persons entitled to satisfaction from the fund are the persons in whose favor death claims had accrued and had not been wholly paid, and the owners of certificates of insurance in force at the time of the dissolution of the association.
    5. Same.
    A special preference exists in favor of a beneficiary for whose death claim a special assessment had been made and an amount realized more than sufficient to meet the same, and the payment of which had been withheld through a dispute arising as to the liability of the association, there being no substantial ground for denying the liability for the claim.
    4. Same.
    There would be no preference in the case of a member who died after the dissolution of the. association, and his claim is not entitled to satisfaction out of assessments appropriated to the creation of the death fund.
    6. Same.
    The fact that a temporary receiver had been appointed previous to the making of the last assessment did not terminate the power of the trustees to make the same under direction of the receiver as authorized by the court, and the members who fail to pay the same forfeit their certificates.
    Appeals from an order overruling exceptions to the report of a referee and affirming such report.

      A. B. Smith, De Lancey Nicoll, F. R. Minrath, Samuel H. Benton, Lucien McAdam and Henry C. De Witt, for app’lts; Henry H. Whitman, for resp’t.
   Daniels, J.

The Equitable Reserve Fund Life Association of the City of New York was created a corporation on or about the 17th of May, 1883, under the authority of chap. 175 of the Laws of 1883. It continued its business uninterruptedly from that time until the 18th of September! 1889, a period of upwards of six years, when, upon the application of the attorney-general, John Yon Glahn was appointed temporary receiver of the assets and property of the corporation. He continued in that capacity until the 9th of November, 1889, when a decree was made dissolving the corporation and he was appointed and became permanent receiver. As such there came into his hands the sum of $78,953.99, or thereabouts. This sum was divided into two funds under the constitution and by laws of the association, one of which was designated the death fund, which was applicable alone to the payment of beneficiaries in certificates of insurance upon the lives of persons becoming deceased during the existence and force of the certificate. This fund amounted to the sum of $18,401.35, which was very largely deficient in its ability to meet the claims made by beneficiaries under certificates issued to persons who had become members of the association and fulfilled all their obligations, .and were deceased prior to the dissolution of the association. The other was denominated the reserve fund, and amounted to the ■sum" of $63,614.79. And it is as to the-disposition of this reserve fund that the principal controversy in this proceeding has arisen.

The receiver, being in doubt as to the manner in which this latter fund should be distributed, and the allowance of claims that were presented in favor of beneficiaries under certificates where the assured was deceased, applied to the court by petition for instructions, and a very comprehensive reference was directed, including these and other subjects of uncertainty or controversy arising in the case. And upon the hearing before the referee all points of a controverted character were presented to him, and he decided, as the constitution of the association required that to be ■done, as well as the form of the certificate of insurance, that the persons in whose favor death claims existed were entitled to an exclusive preference to payment, so far as that could be made out of this death fund, but that they had no legal claim whatever against the reserve fund for the amount remaining unpaid after the death fund was exhausted.

In this decision, that the beneficiaries having existing claims were entitled to payment out of the death fund, the referee is fully supported by the constitution of the association, as well as the form of the certificates which were issued. The association had no capital whatever, but the claims arising against it were provided for by means of an assessment upon the persons holding certificates of insurance issued by it; and the amount realized through these assessments, as the constitution was finally amended, was applied to the extent of seventy per cent to the creation of this death fund. Five per cent of it was applied to a contingent fund created to meet other expenses and liabilities of the association, and the remaining twenty-five per cent was devoted to the creation of the reserve fund. These assessments were, in the first instance, made as the claims arose in favor of beneficiaries under ■the certificates, but that was finally changed by an amendment to the constitution providing for the imposition of assessments on the second Tuesdays of every other month in each year, and this proceeding was continued under the authority of the court by the receiver, through the intervention of the trustees of the association, in the month of October, 1889, which was the last assessment made upon the holders of certificates in this association; and from that assessment was realized the sum of $7,044.40, which formed a part of the aggregate death fund already mentioned. For the payment of claims of this character the constitution contained this provision:

Section 1. Upon the death of a member during the continuance of his or her certificate, or certificates, in full force, the association shall within three months after due notice and satisfactory proofs of such death, and the approval thereof by the executive-committee, pay to the beneficiary named on the books of the-association, if such beneficiary be living at the time of such member’s death, otherwise to the heirs or legal representatives of such, deceased member, the amount to which the same may appeal-entitled according to the books of the association and the terms of the certificate of membership, out of the death fund (hereinafter defined) of the association; or, if the death fund shall then be insufficient to pay the whole of any such claim, then pro rata; with other claims out of the moneys to be realized to said death fund from the assessment to be made as hereinafter described, provided, however, that there shall be first deducted therefrom any counterclaim or indebtedness due from said member to the association. And no death claim shall become otherwise due or payable except from the reserve fund as hereinafter provided.

And it was further provided by § 6 of article 7 of the constitution, that the death claims should be payable from the death fund account. And this was conformable also to the certificates issued by the association for the insurance of its members. No other claim whatever was permitted to be made a charge upon this-death fund, but it was exclusively limited to the payment of the claims of beneficiaries under certificates issued to deceased members. And so far as the referee concluded that what are called the death claims maturing prior to the dissolution of the association were entitled to payment as a first charge upon this death fund there seems to be no ground to doubt its correctness. In this respect the case differs entirely from People v. Security Life Ins. Co., 78 N. Y., 115. In that action the company, which was a corporation doing its business upon an actual capital, issued ordinary policies of insurance. And when it became insolvent the-persons insured were thereby absolved from the payment of further premiums, and entitled to a valuation of their policies at the time when the insolvency commenced to exist. And so it was also held in Albert Life Assur. Co., L. R., 9 Eq., 706. While in the present case the association depended wholly upon assessments to-be made to meet the claims arising against it. And it obtained the power and the authority existed to continue such assessments as long as the association legally existed, which included the assessment made under the application of the receiver in the month of October, 1889. But after the dissolution of the association no authority appears to have survived through which additional assessments could be made. And the result which followed -this disability is that the death claims arising prior to the dissolution of the association have been paid much less than a moiety ■of their amount.

To meet this large deficit they were urged upon the attention -of the referee as entitled to payment out of the reserve fund. But he rejected that view, and held the reserve fund to be only ■distributable proportionately among the holders of unforfeited certificates in the association at the time of its dissolution. This -conclusion was considered to be supported by the peculiar language of the certificate and of the constitution of the association. And if that view is to be sustained, then the case of Burdon v. Mass. Safety Fund Society, 147 Mass., 360, seems to be an authority in favor of his conclusion. But this case differs very significantly from that authority, in the circumstance that no disposition ■of the reserve fund has heen provided for by the constitution or by-laws in any manner after the dissolution of the association. In that case there was such a provision, giving the safety fund to the persons holding certificates in the company.

Neither the constitution, by-laws or certificate of insurance of this company has in any form prohibited the payment of the deficiency remaining in death losses out of the reserve fund. But the constitution has contemplated the fact of such payment in the discretion of the board of trustees. For it has invested Ihem with authority to use the reserve fund to meet any want ■or necessity of the association that might arise by reason of unforeseen contingencies. And the unforeseen deficiency in the death fund seems to be fairly within the effect of this language. It has also been provided in the occurrence of another event, which never, in fact, however, was attained, that the excess in the reserve fund exceeding the sum of $100,000 might be used towards making up any deficiency then existing in the death fund. The constitution has also prohibited the reserve fund from being used for the payment of expenses. But it has nowhere prohibited the use of this fund after the dissolution of the association to supply the deficiency in the death fund. Neither has it given, either directly or by implication, the reserve fund in any event to the holders of certificates in the association. It is true that it was declared in the certificate that this fund should be deposited and invested in trust for the benefit -of the members of the association. But the extent to whicjr that benefit was provided for, or in any manner conferred, was through the issuing of bonds to members under certificates issued to those who paid the assessments made against them for the period of at least five years.

In favor of such members, or holders of certificates, the constitution did provide for an apportionment of the reserve fund to their holders on such basis and principles as the board of trustees should deem safe and equitable. And, to render the apportionment available, the members to be included in it were authorized, after ten years from the date of the apportionment, to apply the sum apportioned towards paying dues and assessments under the certificate. But this was qualified by the further proviso that if the member in whose favor an apportionment was made should die, or otherwise cease to be a member, leaving the apportionment, unapplied, that then it should' be withdrawn, and apportioned in like manner to the holders of other certificates at the expiration of the next five years in which the apportionment could by the constitution be made. The only advantage secured to the holder of the certificate by this apportionment was the right to use the-amount apportioned, after the expiration of ten years from the-time of making the apportionment, towards the payment of future-dues and assessments under his certificate, and that never became available. This contemplated no advantage to the member under the apportionment alter he ceased, by death or otherwise, to be a member of the association, but the benefit conferred was wholly to be realized while he remained a member, and the association, itself continued to exist. If he ceased to be a member, or the association should be dissolved, from that time, as there could be no further assessment, very manifestly under these provisions-of the constitution he could derive no benefit whatever from the apportionment. It accordingly did not affect the disposition of the reserve fund in any manner whatever if the association itself should cease to exist. The regulations, on the other hand, were all made in contemplation of the continued existence and business ability of the association itself. When it should cease to exist no regulation or provision whatever was anywhere-made controlling, directing or indicating what disposition should be made of this reserve fund, but it was left entirely to be disposed of under the rules and regulations to be applied by law to-the distribution of the assets of the insolvent corporation.

There was but one appropriation made from the reserve fund under this authority vested in the trustees, and that was in August, 1889, amounting to no more than the sum of $8,204.72. And as that became ineffectual by the dissolution- of the association, the reserve fund remained unaffected by any action, direction or disposition on the part of the trustees of the association. And that fact seems to place the disposition of this fund under the authority of People v. Security, etc., Co., 78 N. Y., 114, which in the main has also been sanctioned by Attorney-General v. North America Ins. Co., 82 N. Y., 172..

The provisions of the constitution of the association having-failed to make any disposition of this fund, for the apportionment, necessarily failed with the dissolution of the association, the fund remained the unqualified property of the association itself. It. was not given to the members holding the certificates at the time of the dissolution, neither was any authority given to the trustees to bestow it on such members, nor has the constitution in any form created any power of that description. And the consequence seems to follow that this fund, as the property of the association itself at the time when the permanent receiver was appointed,, became available to meet all the unsatisfied debts and obligations of the association, and was not distributable as that was directed to be done by the referee, among the holders of certificates of insurance. In this respect, § 3 of chap. 285 of the Laws of 1887, amending the act under which the association was formed, appears to contemplate a general application of the assets of the association among all the persons having claims or demands against it. For that purpose it has provided for the appointment of a receiver or trustee “for the distribution of its assets among its members, certificate holders, policyholders and creditors,’’ which contemplates equality of disposition among these various persons in proportion to their final rights against the association. The provision has been awkwardly connected with the verdict of a jury on the disposition of the controverted right of the attorney-general to the appointment of a receiver. But it could not have been intended by the legislature that it should depend alone upon this event.

There was no reason why it should be made to follow the verdict, and not generally to include the disposition of the assets of the association. And. while the language employed has in form made this disposition dependent upon the verdict, it is still to be understood as the creation of a general authority conferred upon the court to distribute the assets of the association among the persons actually appearing entitled thereto. And that is conformable to the legal principles which have been applied to the distribution of the assets of insolvent corporations when they have been brought before the courts for distribution.

As the property of this association at the time when its affairs passed into the hands of the permanent receiver, this reserve fund became entitled to be used and appropriated to the satisfaction of all legal demands existing against the association. It was its property. And as its disposition had been no otherwise encumbered or declared by the authority of the association, it was subject to this obligation. And among the persons entitled to satisfaction from this fund are the persons in whose favor death claims accrued and have not been wholly paid by the amounts received by them from the death fund. For they were creditors of the association entitled to be satisfied, so far as the assets were sufficient for that purpose, equally with other creditors having demands against them. And among these, under the authorities which have been referred to, are to be included the owners of the certificates of insurance in force at the time of the dissolution of the association. For to them the association had become obligated to maintain its existence and ability to meet the certificates in the event of the decease of the persons upon whose lives they were respectively issued. The extent of this liability was fully considered in People v. Security Ins. Co., already referred to. And it was there held, in the event of the company becoming disabled to continue the insurance, as this association did when it was dissolved, that a liability arose in favor of the holder of its obligation to pay to him such a sum as would be sufficient to obtain a similar insurance at the same rate of premium or assessment, in another similarly organized association. To that extent the holder of the certificate became a creditor of the association, equally entitled to payment with the beneficiaries in the death claims left unpaid by the amount of the death fund. And in principle this has been followed in Darrow v. Family Fund Society, 116 N. Y., 537 ; 27 N. Y. State Rep., 474; and O'Brien v. Home Benefit Society, 117 N. Y., 310 ; 27 N. Y. State Rep., 326. And between them, after paying the expenses and any other superior liabilities, the reserve fund of this association should be distributed.

All these parties are equally creditors of the association, entitled, as far as that may be done, to the satisfaction of their unsatisfied legal claims by the application to them of this reserve fund. This obligation results from the necessities of the situation. Neither the contract made by the certificate, qualified as it was by the constitution and the by-laws, nor the constitution or by-laws provided for any final disposition of this fund in the event of the dissolution of the association. And it consequently devolved upon the court to distribute it under the rules and dictates of the principles of equity. And they require its equal distribution among all the creditors of the company.

A special preference was claimed in favor of the beneficiary, John Hurley, under the certificate of insurance issued on the life of Johanna Hurley, who died on the 23d of April, 1889. It appeared by the evidence that the assessment following the decease of the person named in the certificate, was specially made to pay the death claim asserted in favor of this beneficiary, together with others which had then accrued against the association. And under the assessment an amount was realized more than sufficient to satisfy all the death claims which at that particular time were required to be provided for. But the amount payable to this beneficiary was not paid over, for the reason that a dispute afterwards arose concerning the liability of the association to make the payment. And the fund realized for this purpose passed into the hands of the receiver and became a part of the amount of the death fund of the association. The referee considered that this beneficiary was not entitled to the payment of the claim existing in her favor out of this balance which was paid over to the recover. In that he seems to have been in error, for the money was raised to pay this and the other claims allowed at the time by the trustees. It was a special fund received by them which it was their duty to pay over, inasmuch as it turned out that there was no substantial ground for denying the validity of the claim. And the receiver having this money specially charged with this obligation should apply it to the payment of this demand.

It was also claimed in behalf of Benjamin J. Kleme that he was entitled, as the beneficiary named in the certificate issued to John P. Schulte, to participate in the division of the death fund. But it appeared that Schulte died on the 12th of November, 1889, after the association had become dissolved and the rights of the parties had been fixed by that event. He was at the time of its occurrence the holder of a certificate alone entitled to no further compensation than such an amount as would enable him to secure another insurance in a similar company at the same rate of liability to assessment. There was therefore no error in rejecting the claim made by him to satisfaction out of assessments so far as they have been appropriated to the creation of the death fund.

The claim made by Martin and Johnson as the beneficiaries of Mrs. Johnson, who died on the 4th of July, 1889, has been Sufficiently disposed of by what has been said concerning the disposition which should be made of the reserve fund. And so also has that made by Maggie C. Lewis as the beneficiary of J. 0. Lewis, who died on the 10th of May, 1889. And the same is true as to the claim presented in favor of Theodore A. Liebler, Jr.

This leaves alone to be considered the claims presented by John E. Eoley and others, who failed to pay the last assessment made in October, 1889, and were therefore held by the referee to have forfeited their certificates. It appeared by the evidence that the notices which were required to be served of the making of this assessment were served upon these persons, and they failed to pay the amount assessed against each of their certificates. And in that event, not only the certificate itself, but the by-laws of the association, provided for the forfeiture and termination of the certificate of the person in that manner in default. Within the express language employed for this object, therefore, these certificates were forfeited. It has been insisted that the assessment made in October, 1889, and which is known as the thirty-fifth assessment, was made without authority, for the reason that a temporary receiver had been appointed for the company and had entered upon the discharge of his duties prior to the time of the making of this assessment. But that fact did not terminate the ability or the obligation of the trustees to make the assessment On the contrary, it was provided by the constitution, as it had been amended, and subject to the right to make which the certificates were expressly issued, that the assessment should be made on the day in October in which it was made.

The receiver applied to the court for liberty or authority to have it made, and that was accredited to him, and under that the trustees made the assessment. And in all respects they appear to have proceeded regularly in so doing. Associations or corporations of this description are distinguished as to the exercise of this authority from life insurance companies carrying on their business upon acquired as well as contributed capital. Their insolvency puts an end to the right to demand the payment of premiums on the policies. But the business of this company was carried on solely upon contributions expected to be obtained from its members through the instrumentality of these assessments. And both the right and ability to make the assessment and require its payment from the holders of the certificates continued as long as the association retained its corporate existence. This subject was considered in McDonald v. Ross, 29 Hun, 87. And so it was in Vanatta v. N. J., etc., Ins. Co., 31 N. J. Eq., 15. And in Com. v. Mass., etc., Ins. Co., 112 Mass., 116. And the exercise of this authority has been further sanctioned in N. H. Mut. Ins. Co. v. Rand, 24 N. H., 428, and Sterling v. Mercantile Ins. Co., 32 Penn., 75. Both upon principle and authority this assessment, therefore, appears to have been regularly as well as legally made. And as the parties failed to pay their proportionate parts of it, after they had been regularly notified of it, and payment required, their certificates were forfeited and became void under the language forming a part of each certificate, as well as under the by-laws of the association. And because of this default there seems to have been no error in the disposition of this part of the case as it was submitted to and decided by the referee.

In this and the other respects in which the referee is considered to have rightly disposed of the claims submitted to him, the exceptions to his report were correctly overruled at the special term, and the order to that extent should be affirmed. But in the conclusion reached by him that the death claimants were restricted to the death fund for the satisfaction of their claim, and were unauthorized to participate in the distribution of the reserve fund, upon an equality with the holders of certificates in force at the time of the dissolution of the corporation, for the residue remaining unpaid to them after exhausting the de^th fund, and as to the claim made in behalf of John Hurley, the order should be reversed, and the report of the referee set aside. And as to those matters a further hearing should be provided in conformity to the conclusions which have been indicated in this investigation to determine the value of the certificates, and apportion the fund between them and the other creditors of the association. And this disposition of the case in each respect should be without costs to either party.

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


author: Bischoff, J.

text:
    Abraham Wolf, Resp’t, v. Charles A. Farley et al., App’lts.

      (New York Common Pleas, General Term,

      Filed November 4, 1891.)

    1. Execution—Exemption.
    A wagon worth $75, belonging to an expressman, who is married and has a family to support, is exempt from levy and sale on execution, where his household furniture does not exceed in value $50, and his team $90.
    2. Same.
    Such wagon does not cease to be exempt because temporarily in disuse while undergoing or awaiting repair.
    3. Replevin—Judgment.
    An omission to render judgment in the alternative in an action of replevin is an irregularity which may be cured by modification on appeal.
    Appeal from a judgment rendered in the district court of the city of New York for the seventh judicial district, in favor of the plaintiff. •

      H. Steinert, for resp’t; Ezekiel Fixman, for app’lts.
   Bischoff, J.

This action was brought to recover a wagon claimed to be exempt from levy and sale, and seized by the defendant Farley, a city marshal, under an execution directed to him, issued upon a judgment recovered by his co-defendants and indemnitors against the plaintiff. No question arose upon the trial concerning the recovery of the judgment, the issue of execution thereon, the seizure of the wagon thereunder, and service before the sale on the marshal of a notice by the plaintiff claiming the property as exempt and demanding its return, these facts being conceded. The defendants limited their defense to the contentions now urged for reversal, to wit: That the evidence was insufficient to show the wagon to be exempt by law, and that because of plaintiff’s alleged denial of ownership at the time of the levy he was precluded from subsequently asserting the same, and claiming the wagon to be exempt.

The trial justice rendered judgment for the plaintiff, and, except in the irregularity hereinafter pointed out, we can discover no error in his conclusion.

It appeared in evidence that the plaintiff was a married man, having a family consisting of his wife tond three children with whom he resided, and who were .dependent Upon him for support; that his avocation was that of an expressman, or carrier of parcels and packages, necessarily requiring the use of a wagon and horses; that his earnings derived from that avocation were needed in and applied by him towards the support of his family; that the necessary household furniture owned by him did not exceed in value $50; that the horses o.wned by him and used in his calling were worth $90, and the wagon seized $75 ; that he owned no other wagon or horses.

The aggregate value of the household furniture, horses and wagon was thus shown to be much below the sum of $250.

Pursuant to § 1391 of the Code of Civil Procedure, as amended in 1879, the necessary household furniture, working tools and team, professional instruments, furniture and library, not exceeding in value $250, are exempt from levy and sale by virtue of an execution when owned by a person being a householder or having a family for which he provides; and as this provision of the Code is, in all respects, an express re-enactment of the exemption law of 1842, as amended in 1859, the interpretation of the former statutes by the court of last resort is apposite to the provisions of the Code re-enacting the same.

In Wilcox v. Hawley, 31 N. Y., 648, 653, 656 and 658, the decision wherein was predicated upon the law of 1842 as amended in 1859, it was held that the word “ necessary,” as used in the statute, applies only to the household furniture and qualifies the extent to which that is exempt, and that to establish his right to claim the exemption it was not required of a person shown to be a householder and having a family dependent upon him for support to prove anything beyond the fact that the necessary household furniture and the team owned and possessed by him did not exceed in value the sum of $250, and that it was imma terial whether the person claiming the exemption is possessed of other means which, with the property claimed to be exempt, exceeded the statutory limit.

Applying this ruling to the evidence in the case at bar, the plaintiff must be deemed to have established the fact that the wagon, of the possession of which he was deprived, was at the time of its seizure exempt; a wagon or vehicle to which the plaintiff’s horse, or horses, were ordinarily attached being a part and parcel of the “ team ” within the meaning of the statute. Brown v. Davis, 9 Hun, 44; Hawley v. Wilcox, above cited.

Whether or not the plaintiff is precluded from claiming the wagon as exempt because of his alleged denial of ownership thereof at the time of its seizure is a question which cannot arise in this case, since the defendants are in error in contending that the evidence relied upon by the defendants to establish the facts of plaintiff’s denial of ownership is unchallenged, and we, therefore, refrain from discussing it.

The defendant Farley testified that at the time of his seizure of the wagon the plaintiff stated to him that it belonged to his wife, and in answer to this testimony the plaintiff stated upon cross-examination by defendants’.counsel that he had no conversation with Farley at the time of the levy and that he did not remember having stated to Farley that he did not own the wagon.

While the plaintiff’s denial of the statement imputed to him may not have been as positive as the defendant Farley’s assertion that it was made, that fact may be taken into consideration in determining the degree of credibility which should be attached to the denial; but the lack of a more explicit denial would not warrant an assumption that Farley’s testimony was thereby left unchallenged.

So also as Farley’s testimony was that of an interested witness it was within the province of the trial justice to reject it though wholly uncontradicted, Elwood v. Western Union Telegraph Co., 45 N. Y., 549; Kavanagh v. Wilson, 70 id., 177; Gildersleeve v. Landon, 73 id., 609; Wohlfahrt v. Beckert, 92 id., 490, and we cannot, for the purposes of this appeal, assume that the justice did not discredit Farley’s testimony in this respect.

Another proposition made by the counsel for appellant, and to which we do not accede, is that, as it appeared upon the trial that the wagon levied upon had not been in actual use by the plaintiff for some six weeks prior to its seizure, the plaintiff had lost the right to claim its exemption. The non-use of the wagon was sufficiently explained by the fact that it was in need of repair, and that the plaintiff was at the time using a borrowed wagon while awaiting the accumulation of sufficient means to enable him to meet the expense of repairing his own. It would seem absurd to hold that the wagon possessed the attribute of exemption when fit for use, and lost it when temporarily in disuse while awaiting or undergoing repairs.

A further ground urged for the reversal of the judgment appealed from is that the trial justice erred in granting the plaintiff's motion made during the progress of the trial to continue the action as one to recover a chattel.

In the absence of written pleadings we are at a loss to understand why this motion was made or what need there was for granting it. The justice’s return states that the action was brought to recover a wagon.”

This was in every legal sense an action “ to recover a chattel ” and the granting of a motion allowing it to be continued as such did. not in any respect change the issues or the nature of the relief sought to be obtained, and the defendants could not, therefore, have been prejudiced. The trial justice should, however, have rendered judgment for the plaintiff in the alternative, that the plaintiff recover possession of the wagon, and for the value thereof, as ascertained on the trial, in case a delivery could not be had, instead of a judgment absolute for the value of the chattel. Stauff v. Maher, 2 Daly, 142; Code of Civil Procedure, § 1730.

The omission to render judgment in the alternative is an irregularity, however, which may be cured by the appellate court by a modification of the judgment appealed from, and does not necessarily call for reversal. Stauff v. Maher, above cited; Fitzhugh v. Wiman, 9 N. Y., 559; Wood v. Orser, 25 id., 355-360; Code Civil Pro., § 3213.

The other exceptions taken by the defendant at the trial and not hereinbefore specially referred to prove upon examination to be without sufficient merit to require discussion.

The judgment appealed from should be modified hy making it in the alternative, that plaintiff recover possession of the wagon for which this action was brought and if delivery thereof cannot be made then for the sum of sixty-five dollars, the value thereof as found by the justice, and as so modified the judgment should be affirmed, with costs.

Bookstaver, J., concurs.


text:
    Isaac Berg, Resp’t, v. Joseph W. Carroll, App’lt.

      (New York Common Pleas, General Term,

      Filed November 4, 1891.)

    1. Evidence—Secondaby.
    To justify a reversal of a ruling excluding secondary evidence of the alleged contents of a written instrument, the proof of the existence of such instrument, as well as of its loss or destruction, should he so conclusive that it would be error of law not to hold it sufficient.
    2. Same.
    The only evidence as to the existence of the letter in question, alleged to have been written by plaintiffs assignor, was the testimony of the defendant and his bookkeeper, the latter also testifying that it was enclosed in an envelope addressed to said assignor and so placed in the mail, but it was not shown where or by whom it was mailed. Plaintiffs assignor positively denied having written such letter. Held, that the evidence was not so conclusive that it could be said that the court erred in refusing to admit proof of the contents of the letter.
    Appeal from a judgment of the district court for the fifth judicial district, in favor of the plaintiff, entered upon the verdict of a jury, in an action to recover damages sustained by plaintiff’s assignor by reason of defendant's breach of a contract for his employment

      Samuel D. Levy, for resp’t; William H. Shepard, for app’lt.
   Bischoff, J.

Only one of the grounds urged for reversal of the judgment appealed from is of sufficient importance to merit discussion, that relating to the exclusion of secondary evidence of the letter alleged to have been written and sent by plaintiff’s assignor to the defendant, on July 23, 1890, and to have been returned by the defendant. This, upon examination, proves of no avail to appellant.

It was not attempted to show, or was it even claimed, that the alleged letter was at any time in the possession or control of the plaintiff. The service of a notice to produce it upon him was therefore wholly nugatory and without effect, and assuming that the denial of plaintiff’s assignor while examined as a witness for the plaintiff that he ever wrote such a letter obviated the need of serving him with a subpoena duces tecum to cause its production on the trial, it still remained for the defendant to establish the existence of the letter, its subsequent loss or destruction and his inability to produce it by evidence so convincing in its character that its rejection by the trial judge constituted legal error.

These matters presented preliminary questions of fact to be determined by the trial judge before receiving or excluding secondary evidence of the contents of the alleged letter. The judge presiding at the trial has the advantage of hearing and seeing the witnesses, and their demeanor while under examination may largely influence him in attaching a greater or lesser degree of credibility to their respective statements than otherwise would be the case, and an appellate court should not for that reason disturb his ruling when founded exclusively upon the conflicting statements of witnesses. Mason v. Libbey, 90 N. Y., 683. To justify a reversal of the ruling of the trial judge excluding secondary evidence of the alleged contents of a written instrument it has been held that the proof of its loss or destruction should be, so conclusive that it would be error of law not to hold it sufficient. Kearney v. Mayor, 92 N.Y., 617, 621. This must of necessity apply with equal force to the evidence relied upon to prove that the instrument alleged to have been lost or-destroyed did at one time exist, for that which never existed cannot be lost or destroyed. Taylor on Evidence, § 429; Wood’s Practice Evidence, § 8; Nichols v. Kingdom I. O. Co., 56 N. Y., 618.

Upon the trial of this action only two witnesses testified to the receipt on July 23, 1890, by the defendant of a letter addressed to him and in the handwriting of plaintiff's assignor, Cronin, the defendant himself and Quinn, his bookkeeper. The farmer’s statement could have been discredited as that of a party in interest though wholly unchallenged, Kearney v. The Mayor, etc., 92 N. Y., 621, and cases cited; and the refutation of the latter’s testimony is found in Cronin’s denial that he ever wrote such a letter. Here then was a question of veracity between these two witnesses, which the trial judge solved in favor of Cronin, and it is impossible for us to say that he erred.

If it is urged by the appellant that his testimony and that of his bookkeeper were corroborated by the testimony of other witnesses for the defense to the effect that on the morning of July 23,1890, they heard Cronin say to the defendant that his letter of resignation was in the mail, we answer that testimony as to alleged oral admissions of facts in dispute, particularly so when the witnesses are confessedly stating but the fragment of a conversation, is evidence of such inferior quality that error in law should not be predicated upon a refusal to credit it in the face of positive denials of the fact alleged to have been admitted by the party charged with the admission. Greenleaf on Evidence, §§ 199, 200.

But assuming that the existence of the disputed letter was established by evidence of such a nature as to command credit, it still remained with the defendant to prove its loss or destruction, and his inability to produce it in consequence thereof, by evidence so conclusive as to repel eveiy inference that it was fraudulently destroyed or intentionally withheld. Wood’s Practice Evidence, § 8 ; Renner v. Bank of Columbia, 9 Wheat. (U. S.), 581. On this point also the defendant relied exclusively upon his own testimony and that of Quinn. These witnesses said that they had seen the letter, that Quinn, at the direction of defendant, endorsed a statement thereon to the effect that further communications from Cronin were unwelcome, that it was thereupon enclosed in an envelope addressed to Cronin and thus deposited in the mail. The person by whom the letter was mailed and the place where it was mailed were, however, not stated. No other attempt was made to explain the defendant’s inability to produce the letter. His own testimony was subject to discredit as that of an interested party, while Quinn declined to be positive in his statements, and a careful reading of his testimony shows that his statement that Cronin’s alleged letter was returned to him by mail was not made upon his personal knowledge of that fact The evidence was, therefore, wholly destitute of the character required.

The judgment appealed from must be affirmed, with costs.

Bookstayer, J., concurs.


text:
    James B. Hackett et al., Ex’rs, Resp’ts, v. George W. Patterson, Impl’d, App’lt.

      (New York Common Pleas, General Term,

      Filed November 4, 1891.)

    Safe deposit companies—Renewal by one of two joint lessees. ■
    On the death of one of two joint lessees of a safe in a safe deposit company the safe was transferred by the company to his executors and the survivor jointly, and the time extended for a year. Before 1lie year expired, the survivor took a renewal in his own name, and at his request, upon the expiration of the former lease, access was denied_ to the executors. Held, that the survivor took his lease subject to the equitable rights of the executors, and held the same in trust for the joint benefit of himself and them, and that the court p-operly decreed that they have the right of access to and egress from said safe.
    Appeal from a j udgment directing that plaintiffs, individually and in their representative capacity, have free and uninterrupted access to and egress from the safe, in an action to recover access to a safe in the vaults of The Safe Deposit Company of New York.
    During his lifetime, John Patterson, plaintiffs’ testator, and the defendant, George W. Patterson, were joint lessees of a safe in the vault of The Safe Deposit Company of New York
    This safe consisted of one of numerous compartments, forming a vault upon the company’s premises, to which access could only be had by and with the consent of the company, its officers, or authorized employes, and was used by the lessees thereof for the-safe keeping of valuables and securities. At the time of testator’s death there were contained therein securities of considerable value, documents of a private nature and muniments of title, placed there by the testator.
    On or about April 21, 1888, John Patterson died leaving a last, will and testament, naming James B. Hackett and Daniel Paxton, executors thereof, which was duly admitted to probate. The persons named as executors after qualifying were duly appointed such, and entered upon the execution of their trust. Thereafter,, on August 13, 1888, the executors and the defendant Patterson, presented themselves at the premises of the Safe Deposit Company, and at their, request the safe was transferred by the company to them jointly upon its books, and at the time their right to iliense of the safe and access thereto was extended for the period of one year from August 4,1888, upon their agreement to pay therefor the sum of thirty dollars, of which fifteen dollars were paid October 3, 1888.
    There were but two keys to the safe issued by the company, of which the executors were in possession, and the receipt given to-them at the time of payment of the rent bore on its face the following statement: “ Safe not relinquished until keys are returned.” These keys were never returned to the company. In,January, 1889, plaintiffs had access to the safe for the purposes of the inventory of the personal estate of the testator, and its appraisement,, as required by law, but the securities, documents and muniments of title were restored to the safe and suffered to remain there by them.
    On July 25, 1889, before the expiration of the year for which the safe had been let to plaintiffs and defendant Patterson, the-latter without authority from the plaintiffs, and without their knowledge and consent, induced the Safe Deposit Company to cancel the transfer and letting of the safe to the plaintiffs jointly with defendant Patterson, and to grant him the exclusive use-of, and access to, the safe for the year ensuing after August 4, 1889, on which day the then existing lease would expire by limitation.
    In December, 1889, the plaintiffs, in ignorance of the lease last referred to, applied to the Safe Deposit Company for access to-the safe, but such access was denied to them at the request and direction of the defendant Patterson. In February, 1890, the executors brought this action against the Safe Deposit Company and said George W. Patterson to recover access to, and egress-' from, the safe.
    Upon the trial the foregoing facts were undisputed, and plaintiffs offered to pay their just proportion of the rent reserved for the use of the safe. Their right to the possession of the securities and papers in the sáfe was not controverted. Ho contest was-made on behalf of the defendant, the Safe Deposit Company, which by its answer disclaimed all personal interest and offered to abide by the judgment of the court in the premises. Judgment was thereupon rendered in favor of the plaintiffs to the effect that.

      .they have the right of access to, and egress from, the safe and to remove securities and documents therein deposited by them or their testator, and that the defendants, and each of them, be restrained from hindering or obstructing such access, egress or removal. From this judgment the defendant Patterson only appealed.

      William G. Choate, for app’lt; William A. Hamilton, for resp’ts.
   Bischoff, J.

The facts that the defendant, The Safe Deposit •Company, by answer offered to abide by the judgment of the court, and did not appeal from that judgment, enable us to dispose of this appeal upon the sole consideration of the rights of the other parties to this action respecting the usé of the safe in the •vaults of the Safe Deposit Company and the right of access thereto, freed from any embarrassment which might have arisen if the ■defendant, The Safe Deposit Company, had asserted the right to control the use of the safe and access to the vault upon its premises, against the desires of the plaintiffs. So also does the fact that George W. Patterson upon the death of plaintiffs’ testator .assented to a lease of the safe to himself and plaintiffs jointly, dispose of any question as to what his rights were prior to that lease bv reason of his survivorship, and renders a discussion of ■such rights futile.

Admitting that upon the death of John Patterson the defendant George W. Patterson became vested with the exclusive right to the use of the safe, it was nevertheless competent for him to .surrender his interest and this was effectually accomplished by bis assent to, and acceptance of, a lease inconsistent with his rights as sole surviving lessee under the former lease. The new lease constituted the plaintiffs and defendant Patterson joint lessees, and whether their relation thereunder was that of joint tenants, or tenants in common, is equally immaterial in disposing of -the question presented for adjindication, since either relation involves the application of the same principles of equity jurisprudence.

“ Equality is equity,” and steadily adhering to the application •of this familiar maxim courts of equity have ever regarded the rights of joint tenants and tenants in common respecting their ■common estate to be reciprocal, neither being permitted during the continuance of the cotenancy furtively to acquire and hold any advantage which would not also enure to the other’s benefit, x provided the latter manifests a willingness to assume his just proportion of any burdens attending its acquisition and maintenance. Washburn on Real Property, vol. 1, p. 557, star paging 411, p. 566, star paging 418. So one of several cotenants will not be permitted to purchase and retain for his exclusive benefit, and for the purpose of disseizing and expelling the others, any outstanding adverse title, but will be deemed in equity to hold such title in trust for the benefit of such of the cotenants as will contribute towards the expense incurred. Van Horne v. Fonda, 5 Johns. Ch., 388, 406; Swinburne v. Swinburne, 28 N. Y., 568 ; Fallon v. Chidester, 26 Am., 164; Wears v. Van Meter, 20 id., 616; Armour v. Alexander, 10 Paige Ch., 571.

And this principle is extended to others jointly interested in, the maintenance of an estate, such as life tenant and reversioner or remainderman. Dickinson et al. v. Codwise et al, 1 Sandf. Ch.,. 214, 226; Whitneg v. Salter, 1 Am. St., 656.

The constructive trust for the benefit of all the co-tenants growing out of the purchase, with intent thereby to secure unfair advantage, by one of any interest in the common estate, by means whereof the rights of the others will become jeopardized, lessened or impaired, and which finds its incipiency in the unity of interest of all, seems to subject the present case to the influence of" those equitable principles upon which a partner is deemed to hold, a renewal to himself of the lease of the co-partnership premises, intrust for the benefit of the co-partnership and all the members, thereof, as interpreted by the court of appeals in the leading case-of Mitchell v. Reed, reported in 61 N. Y., p. 123.

Approving of many similar cases adjudged in this state and elsewhere, the court, in Mitchell v. Reed, firmly declares it to be-the law of this state that, though the lease may contain no covenant of renewal by the lessor, courts of equity will nevertheless, pi’otect a lessee in possession in the enjoyment of his mere chance-of expectancy of renewal by the lessor against the clandestine acts of those standing as to the lessee in an attitude of trust and. confidence. Such was the attitude of the defendant Patterson, towards the plaintiffs as hereinbefore shown respecting their rights-as joint lessees with him- of the safe in question, and the conclusion reached by the learned trial justice to the effect that the renewal of the lease taken by the defendant Patterson in his own name, while the former lease was as yet unexpired, though not to take effect until after such expiration, meets with our unqualified approval and assent.

Nor have we any doubt of the power of a court of equity to entertain this action and to grant the relief awarded. The main relief sought was to enforce the execution of a trust respecting the use of the safe, the legal title to the leasehold interest in which, under the renewal, was in the defendant Patterson, the equitable-owners being the lessees under the former lease, including these-plaintiffs. The remedy at law by an action for ejectment was inadequate, since the legal title of the defendant would effectually bar the recovery of possession against him by that means. Proceedings to recover the securities and papers deposited in the safe, or an action to recover the value thereof, could only result in partial relief to the plaintiffs, since possession of the safe, or access thereto, could not be therein awarded, and the contents thereof' might not be susceptible of pecuniary recompense. Clearly, then, the only adequate relief was to accord plaintiffs that access to the safe to which, as beneficiaries of the leasehold interest, they were-entitled, and the exclusive jurisdiction of equity in matters of trust authorized that court to take cognizance of the action..

The novelty of the question to be determined in adjusting the-matters in controversy is not an obstacle in the way of administering exact justice, National Tradesmen's Bank v. Wetmore, 124 N. Y, 241; 35 N. Y. State Rep., 316, and the court having ob-tamed jurisdiction of the subject-matter of the action and of the parties thereto will award relief adapted to the exigencies of the case. Valentine v. Richardt, 126 N. Y., 272, 277; 37 N. Y. State Rep., 12. Jurisdiction once acquired by a court of equity will not be divested because it appears that partial relief was obtainable at law, but the court will proceed to administer complete -relief and may for that purpose decree the possession of land which, but for the matters of equitable cognizance, was recoverable only by means-of the common law action of ejectment. Pomeroy’s Equity Jur., vol 1, §§ 177, 180,185.

The judgment appealed from is not invalidated because in express terms it authorizes the plaintiffs to take possession of such of the contents of the safe as belonged to them in their representative capacities or as individuals. The clause is wholly immaterial, for without it the effect of the judgment awarding plaintiffs access to and egress from the safe, would have been the same. No particular item of property is awarded to the plaintiffs, and having obtained access to the safe it was their right, by virtue of their ownership as executors, or individuals, to remove whatever-belonged to them in either capacity. No greater right is given by the judgment, and defendant is in no manner prevented from having like access to the safe and from removing therefrom so much of the contents as to which he is entitled to possession.

Thus, if any controversy should arise between the plaintiffs and the defendant Patterson concerning the right to the possession of any specific item of property, it would be left to be determined in subsequent proceedings.

The judgment appealed from should be affirmed, with costs.

Bookstaver, J., concurs.


text:
    Mary Campbell, Adm’rx, App’lt, v. Bernard Campbell, Resp’t.

      (New York Common Pleas, General Term,

      Filed November 4, 1891.)

    1. Partnership—Accounting.
    After the death of his partner, defendant stated to his administratrix that his interest in the business amounted to a certain sum, and presented a statement of the account. The administratrix afterwards received said sum, executed a receipt in full therefor, and included said sum in her inventory of the estate. She now claims that through confidence in her attorney she signed the papers without reading them, and asks for a further account. Held, that the statement rendered by defendant became an account stated, and that plaintiff was not entitled to a further account.
    2. Same.
    The fact alone that no allowance was made in the statement for the lease of the place of business, or the good will, cannot be made a valid ground for the imputation of fraud or mistake. The right to the use of the firm name passed to the survivor, and there was no proof of the value of the unexpired term of the lease.
    3. Same—Finding as to testimony.
    A finding that “ according to the testimony” of a witness the assets amounted to a certain sum ii not a finding that such was the fact, but is simply a finding that the witness so testified.

      4. Same—Attorney.
    The fact that the same attorney acted for both parties at the time of the accounting is no ground for imputing fraud in the transaction where the parties were aware of that fact and raised no objection.
    5. Same—Confidential relations.
    The relation of the surviving member of a firm toward the personal representative of a deceased partner is not of that confidential class to which the doctrine of constructive fraud is applicable, and by means of which any transaction between the parties is tainted with a presumption of fraud as against the person in whom, for the time being, confidence and trust are reposed.
    Action brought by the administratrix of a deceased partner against the surviving member of the firm, for an accounting and to recover the value of the deceased partner’s interest in the co-partnership assets Appeal from a judgment in favor of the defendant dismissing the complaint.

      William H. Hamilton, for app’lt; E. H Benn, for resp’t.
   Bischoff, J.

Upon the death of John Campbell, the defendant as the surviving member of the firm of John Campbell & Co. became entitled to the possession of the copartnership assets and ■effects for the purpose of •closing up its affairs subject, however, to the right of the personal representative of the deceased partner to demand an accounting, and to have paid or delivered to her the share to which such deceased partner would have been entitled after the discharge of all partnership liabilities and obligations. Story on Partnership, § 344; Evans v. Evans, 9 Paige, 178; Stewart et al., v. Robinson, 115 N. Y., 328, 343; 26 N. Y. State Rep., 117, 196; Beste v. Burger, 17 Abb. N. C., 166, 167.

Such an accounting was found to have been had between the parties to this action, and this finding is amply supported by the evidence. It is admitted by the plaintiff that shortly after John ■Campbell’s death about July, 1880, the defendant told her that John Campbell’s interest was worth about $3,500, but that he did not exhibit to her any statement of account. Defendant, however, was positive that he had prepared a statement of account nnd exhibited it or a copy thereof to the plaintiff. In this he was ■corroborated by Murphy, a witness for the defence, who testified that the matter of adjusting the interest of John Campbell in the assets of John Campbell & Co. was talked over between the parties to this action in his presence ; that a statement of account was ■exhibited to the plaintiff from which it appeared that John Campbell’s interest was worth about $3,560; that plaintiff did not dispute the account, she appearing only to desire to be substituted as the partner of the defendant i n her husband’s place, and that the business be thus continued, to which the defendant objected. The defend■ant was further corroborated by the facts that about two years later, in July, 1883, the plaintiff by an instrument under her hand and seal acknowledged the receipt of the sum of $3,561.06 in full satisfaction of John Campbell’s interest in the co-partnership property and released and conveyed all of said interest to the defendant; that she had rendered to the surrogate a sworn inventory of the property of her intestate stating the value of his interest in the copartnership property to be $3,561.06, and that upon the footing of that inventory she had settled with one of the children of John Campbell, who was entitled' to a distributive share of her father’s estate.

Neither the execution of the release and conveyance nor the making of the inventory and settlement was denied by the plaintiff, her only statement with reference to these matters being that she reposed confidence in her attorney and signed whatever he wanted her to sign without reading, although she admitted that she was not illiterate. Besides, defendant’s witness Murphy testified that plaintiff had knowledge of the contents of the papers at the time of their execution by her.

The account of 1880 thus became an account stated, the rule being that where an account showing a balance is duly rendered the person receiving it is bound, within a reasonable time thereafter, to examine the same and object thereto, if he disputes its-correctness, and if he acquiesces in the account rendered, without examination, or omits to dispute its correctness within a reasonable time after its rendition, he is bound and concluded by itr unless it be impeached for fraud or mistake; and if so impeached the burden of proving such fraud or mistake is upon him who alleges it; nor in the absence of proof of such fraud or mistake is he entitled to a further accounting concerning the same subject-matter. Lockwood et al. v. Thorne et al., 11 N. Y., 171; Pomeroy’s Eq. Jur., § 1421. It follows, therefore, that unless the plaintiff has successfully impeached the account of 1880 for fraud or mistake, the judgment denying a further accounting concerning her intestate’s interest in the co-partnership assets was proper.

For affirmative proof of fraud or mistake the appellant relies-upon the fact admitted by the defendant, that at the time of rendering the account no allowance was made for the value of the good will of the business and of John Campbell’s interest in the unexpired lease of the firm’s place of business, of which two years remained. But the fact alone that no allowance was made for the lease or good will cannot be made a valid ground for the imputation of fraud or mistake. For aught that appears, the parties did not at. the time consider these things of any value whatever. The existence of a lease of the co-partnership property and the good will of the business must have been as apparent to the plaintiff as to the defendant. The nature of this species of property precludes the •possibility of its concealment, and it nowhere appears that defendant made misrepresentations concerning it. The good will consisted of the right to continue the business at the place where-it was conducted by the late firm and to the use of the firm name.

The co-partnership articles containing no provision to the contrary, the right to the continued use of the firm name became-the exclusive property of the defendant on the death of his partner. Blake v. Barnes et al., 12 N. Y. Supp., 69; aff’d, id., 354; 34 N. Y. State Rep., 919; Caswell v. Hazard, 121 N. Y., 484 ; 31 N. Y. State Rep., 576, and the laws of this state Laws of 1833, chap. 281; Laws of 1854, chap. 400, prohibit the use of the firm name by any persons other than the members of the firm or their assigns or appointees. Manifestly, then, the firm name was of no value to the plaintiff, and whether the unexpired term of the co-partnership lease independently of the right to continue the use of the firm name, had any value whatever over and above the rent reserved, is, in the absence of proof of value, a mere matter of conjecture.

We have not overlooked the finding of the learned trial judge il that according to the testimony of Patrick Keeny, the St. Louis member of said firm of Campbell & Keeny, the assets of said firm over liabilities, at the time of John Campbell’s death in July, 1880, were about $30,000, etc.” This is claimed to be relied upon by the appellant as convicting the defendant of wilful fraud and deliberate misrepresentation when at the time of the accounting he stated such assets to be of the value of $19,-668.95 only. We decline, however, to consider this finding to be anything more than a statement that the witness testified as therein set forth, but this is far from saying that what the witness did testify to was the fact. To have validity the finding must appear to have been made upon all the evidence and not upon a part of the evidence to the exclusion of the rest. The alleged finding is not a finding of a fact in issue within the meaning of §§ 1022 and 1023 of the Code of Civil Procedure, and many, if not nearly all, of plaintiff’s proposed findings are open to the same objection.

But it is urged for the appellant that conceding the evidence does not affirmatively prove fraud, the transactions between plaintiff and defendant were presumptively fraudulent, first, because for the purposes of the accounting they were represented by the same attorney; secondly, because the plaintiff reposed confidence in the defendant and relied upon his statement of the condition of the copartnership affairs and the value of John -Campbell's interest in its assets and property, and thirdly, because of this presumption of fraud it was incumbent upon the defendant to rebut it by proof of fairness of the transactions, on the failure of which the plaintiff was entitled to judgment.

To the first of these propositions we answer'that it is admitted by plaintiff that she was aware of the fact at the time of the accounting that Murphy, the attorney, was acting for her and the defendant, and that she raised no objection thereto. In such a case there appears to be no good reason for impeaching the transaction without proof of actual fraud, and so it has been expressly held in Joslin v. Cowee, 56 N. Y., 626. See, also, Weeks on Attorneys, § 265.

The second proposition is equally untenable. The relation of the surviving member of a firm toward the personal representative of a deceased partner, which the law creates, is not of that confidential class to which, by the policy of the law, the doctrine of constructive fraud is applicable, and by means of which any transaction between the parties is tainted with a presumption of fraud against the person in whom, for the time being, confidence and trust are reposed. The surviving partner, as such, is avowedly possessed of individual interests in the copartnership affairs, the right to protect which is not withdrawn from him, and this fact is known to the personal representative of the deceased partner. With this knowledge of the surviving partner’s incompatible position, the personal representative of the deceased partner is placed on his guard, and there does not appear to be any sound reason for permitting him to complain, except upon proof of actual fraud.

Moreover, the class of persons whom the law seeks to protect against imposition, or against their own improvidence, by regarding transactions as against themselves constructively or presumptively fraudulent, when between them and another owing to them the discharge of duties resting in trust and confidence, comprehends only persons towards whom such other party to the transactions sustains a personal, intimate relation, which, for the time being, precludes the probability that he is subsering his own self interest, such as a client and his attorney, a patient and his physician, or a ward and his guardian, by means, of which relations the person in whom the trust and confidence are reposed has opportunity for unduly influencing the mind or conduct of the other to secure his own advantage.

The judgment should be affirmed, with costs.

Allen and Pryor, JJ., concur.


author: Per Curiam.

text:
    The People ex rel. Joseph Flynn v. Henry I. Hayden, Commissioner.

      (City Court of Brooklyn, General Term,

      Filed October 26, 1891.)

    1. Municipal Corporations—Police—Removal.
    On the trial of charges against the relator an envelope containing his former record was admitted in evidence. Held, that ^while the practice was not proper, no injury was done to relator thereby, as it did not appear that the envelope was sealed or that relator was not allowed to read its contents.
    3. Same.
    Two witnesses were cross-examined in part by relator, but on the adjourned day they did not appear. Held, that if relator’s counsel wished to further cross-examine them his remedy was by subpoena and attachment for non-attendance.
    Certiorari to review the action and proceedings of the respondent in removing relator from the position of patrolman in the department of police and excise of the city of Brooklyn.
    The relator' was appointed a patrolman in the department of police and excise of the city of Brooklyn, on the 27th day of April, 1889, and thereupon qualified, and entered upon the discharge of his duties, and continued in the performance thereof until August 1, 1890, when he was dismissed from the department.
    On the 30th day of June, 1890, the relator was charged with a violation of § 2 of rule 117 of the department, and thereafter and on the 3d, llth and 25th days of July, and the 1st day of August, 1890, the charge so preferred was examined into, and the proofs submitted to the respondent who thereupon adjudged the relator guilty of the said charge.

      The rule, the violation of which relator was charged with, is as follows:
    “ Rule 117, § 2. No member of this force while in uniform, except in the performance of his duty, will enter, or attempt to enter, any saloon or place in which any kinds of intoxicating drinks are sold or furnished.”
    Two witnesses were produced on the hearing in support of the charge, viz.: Patrick McCabe and Mrs. McCabe, relator’s counsel being absent during their examination. Said counsel at th<e next meeting held July 25th, informed the commissioner, in form as follows, that he desired to cross-examine said witnesses.
    “Defendant’s counsel states that before proceeding with his case, he desires to cross-examine Mr. and Mrs. McCabe; that he has subpoenaed them to be present, but they have not come; he therefore asks an adjournment.”
    At the same session an envelope containing the relator’s previous record was admitted in evidence.

      E. F. O'Dwyer, for relator; F. A. McCloskey, for resp’t.
   Per Curiam.

The relator, Joseph Flynn, was appointed a patrolman on April 17, 1889, and was dismissed from the force on the 1st day of August, 1890. He was charged with the violation of the rule of the department which provides that a member while in uniform shall not enter a saloon, except in the performance of his duty. Charges were preferred in proper form and a trial was had, and testimony taken. A certiorari was granted, and the proceedings before the commissioner are now before us for review.

The learned counsel for the relator contends that there was not sufficient evidence to uphold the finding that he (Flynn) was guilty of the charge. The testimony before the commissioner was conflicting, and, after a careful review of the record, we see no reason to disturb his conclusion. The relator complains that, on the trial, an envelope containing his previous record in the department was received in evidence. No objection was taken at the time, and we assume that the contents were the same as printed at folio 33. It does not appear that the envelope was sealed, or that the relator was not allowed to read its contents. We cannot understand why the envelope was offered in evidence, and do not approve of the practice, but cannot see that any injury was done to the relator. Mr. and Mrs. McCabe did not fail to appear for cross-examination. Their examination was completed, and if the counsel for relator desired their appearance again for cross-examination, his remedy was by subpoena, and by attachment for non-attendance.

Proceedings affirmed, with fifty dollars costs and disbursements.

Clement, Ch. J., Van Wyck and Osborne, JJ., concur.