author: Finch, J.

text:
    Joseph A. Lasigi, App’t, v. Clara Rosenstein, Resp't.

      (Court of Appeals,

      Filed February 27, 1894).

    '.Evidence—Custom.
    Evidence that it was the invariable custom and usage to carry the goods :in question to Liverpool and there transfer them to a steamer for New 'York, where it does not contradict, but simply explains, the broker’s note, is admissable.
    Appeal from judgment of the general term of the supreme •court in the first judicial department, entered upon an order made June 8, 1892, which affirmed a judgment in favor of defendant entered upon a decision of the court on trial at circuit dismissing the complaint.
    This action was brought to recover damages for defendant’s refusal to receive three parcels of canary seed sold to him by plaintiff.
    The facts, so far as material, are stated in the opinion

      David Keane for app’t; H. Applington for resp’t.

       Reversing 48 St. Rep., 751.

   Finch, J.

The plaintiff, through a broker, sold to the defendants three parcels of Smyrna canary seed, which the defendant agreed to buy, but on its arrival refused to receive. The broker’s sale note of the first parcel, with its indorsements, is as follows; “New York, March 14—87. Sold for account Messrs. Iasigi & Co., of Boston, to Messrs. C. Rosenstein & Co., five hundred bags good merchantable quality Symrna canary seed, March steamer shipment from Turkey, at two and three-quarter (2f) cents per lb. gross weight for net, less 1 per cent for cash, in 10 days from date of delivery on dock in New York. No tare—no charge for bags. Goods to be taken from dock on arrival of steamer, when ready for delivery. Damaged bags if any to be taken at fair allowance. Name of steamer to be given soon as known. George M. Black, broker, 60 New st. Indorsed. Accepted, New York, March 16th, 1887. C. Rosenstein & Co. Second indorsement: Name of steamer reported, Aleppo. No arrival, no sale. New York, April 22, 87. George M. Black, broker.”

The note for the second parcel was in the same form, and that for the third differed only in the fact that the name of the steamer, as the Aleppo from Rodosto, was mentioned in the body of the note. The seed was all shipped in March, on board the steamer Aleppo, sailing from Rodosto, in' Turkey, but was transshipped at Liverpool from that vessel to the A urania, which brought it to New York, where it was tendered to the buyer. There is no question of its identity. It was the same merchantable Smyrna canary seed which had been shipped in March by the steamer Aleppo from Turkey. There is no dispute as to quantity, and the exact identity is explicitly admitted. It was refused simply and only because it was not brought by the Aleppo to New York direct, but was transferred at Liverpool to the Aurania. It is not now contended that the market or the customer could appreciate a practical difference, or that there is any meritorious ground for the objection; but it is broadly asserted that the buyer has the right to make his own contracts on his own terms, and that these, however unimportant, cannot be disregarded by the courts.

But the plaintiffs offered to show by the broker who negotiated the sale that there was not at the time, and never had been, freight steamers sailing direct from Turkey to New York, but that the invariable custom and usage was to carry the goods to Liverpool and there transfer them to a steamer to New York; and that such custom and usage was well known to all persons engaged in the trade. This evidence was rejected and a verdict rendered for the defendants, which the general term has affirmed.

That affirmance is put upon the ground that the terms of the ■contract provide for a shipment on a named steamer from Turkey to New York ; that an arrival of the goods at the latter port by the Aleppo is essential matter of description and a condition precedent to the buyer’s obligation to accept; and that the usage or custom sought to be proved would contradict the terms of the contract and for that reason is inadmissible. There is no doubt of the genera] rule, and it may be conceded for the present to cover matters of description which are seemingly unimportant, but the question here is as to the application of the rule to the facts.

The broker’s notes do not, in explicit terms, require a shipment direct and in the same steamer from Turkey to New York. Such a construction is matter af inference from words which do not necessarily and inevitably involve that inference. The steamer of shipment must be the Aleppo from Turkey. The steamer of arrival is not identified. It may or may not be the one first mentioned, or another and different one. If it must mean the Aleppo, and can mean no other, the general term -were right; but if it may mean the steamer of arrival, even though not the Aleppo, then there is an ambiguity, a doubt about the real contract intention, which may be solved by proof of custom and usage. I think that is the truth. Observe the language "of primary description; that intended to. identify the goods and prescribing the date and character of the shipment. There are two elements provided : First, the property bought is to be “ good merchantable Smyrna canary seed,” and second, “ March steamer shipment from Turkey.” That ends the description of what was agreed to be bought, for the note goes at once to the question of price and other details of the contract. Plainly, for some reason, the parties contented themselves with simply saying “ shipment from Turkey,” and omitted to add to New York, or other words indicating a director unbroken voyage, and this omission occurs in the formal description of the goods, and where it was not to be expected if a direct voyage was meant. The note then passes to other details. One is “ goods to be taken from dock on arrival of steamer when ready for delivery.” This sentence, most certainly, was no part of the description of the goods bought and was not intended to, qualify or affect that description. It merely made a delivery on the dock, from the steamer having the goods, a sufficient delivery. It does not say what steamer, or dictate that it must be the Aleppo. The final provision, Name of steamer to be given as soon as known,” undoubtedly refers back to steamer of shipment. But it is said that in all the terms of the brokers’s note but one steamer is referred to. That, how-over, is the precise question. Was only one referred to? The language admits of the possibility that two were referred to; the steamer of shipment and the steamer of arrival; and it is in view of that possible doubt as to the real purpose and intention of the ■parties that the evidence of usage and custom was offered. The moment it is shown that there was no steamer sailing direct from Turkey to New York, that all importations from that country by steam came first to Liverpool and were there transshipped, and that the goods bought, if transported by steam, must come and could come in no other way, and that both parties and their broker knew the fact, all doubt and ambiguity disappears. We see at once that the provision for delivery, which says simply “ steamer,” does not and cannot mean the Aleppo, was not so intended or understood but refers to the steamer of arrival after the necessary and contemplated transshipment at Liverpool. The proof does not contradict the note; it simply explains it, and enables us to choose between two possible constructions, either of which the instrument will bear.

We think the evidence should have been admitted, and that for the error in excluding it the judgment should be reversed and a new trial granted, costs to abide the event.

All concur.

Judgment reversed.


source: Caselaw Access Project

author: Andrews, C. J.

license: Public Domain

text:
    Patrick F. Fitzgerald, App’lt v. William J. Moran et al., Resp’ts.

      (Court of Appeals,

      Filed February 27, 1894.)

    1. Contract—Construction.
    A provision, in a contract, that the plastering should be done under the direction of the superintendent of the manufacturer of the cement used, gives him no authority to change the component parts of the mixture specifically prescribed.
    2. Same.
    Such authority cannot be inferred from a letter of the architect, complaining of the work as not complying with the contract.
    Appeal from judgment of the general term of the supreme court in the second judicial department, entered upon an order made August 11th, 1892, which affirmed a judgment in favor of defendants entered upon a decision of the court on trial at special term dismissing the complaint.
    This action was brought to foreclose a mechanic’s lien filed by plaintiff, a sub-contractor, against defendants, the contractor and owner.
    Plaintiff contracted to do the plasterer’s work according to the written specifications of a building contract between the owner and the principal contractor. The defendants set up as a defense a substantial breach of the contract on the part of the plaintiff.
    The further material facts are stated in the opinion. „

      Thomas F. Magner, for app’lt; Thomas F. Pearsall, for resp’ts.

       Affirming 47 St. Rep., 379.

   Andrews, C. J.

It is not claimed that the plaster was mixed with equal parts of sand and cement as required by the specifications. But the plaintiff claims that in preparing the mixture he followed the directions of the agent of J. B. King & Co., the manufacturers of the cement, and that by his direction the mixture was made of two parts of sand to one of cement. The specifications in respect to the plastering, after providing that King’s Windsor cement should be used, and that the work should be done under the direction of a superintendent of J. B. King & Co., in the next specification directed that the cement should be mixed “ with equal parts good, sharp and dry sand.” There is some evidence tending to show that the variation from the specifications in the proportions of sand and cement was directed by the superintendent of King & Co. But it is plain that the provisions that the plastering should be done under the direction of the superintendent of King & Co. had relation to the manner of applying the plaster, and gave him no authority to change the component parts of the mixture specifically prescribed. But the plaintiff claims that as he was directed by the architect of the building in the letter of February 25th, 1890, “ to follow King & Co.’s superintendent’s instructions to the letter,” and did follow them in mixing the plaster, the owner of the building could not complain of the variations from the specifications because the building contract contained this provision: “Should any dis-pate arise respecting the true construction of or meaning of the drawing or specifications, the same shall be decided by William H. Beers, the architect, and his decision shall be final and conclusive.”

■ The assumption that by the letter, the architect intended to or did change the contract in respect to the composition of the mixture, is unwarranted. The letter commenced with the statement : “ I find you are not doing your work according to your contract, nor are you following the instructions of J. B. King & Co.’s superintendent. You are skinning your work and all the browning you have put on must come off.” The superintendent of King & Co. could not of his own motion change the proportions of the mixture. It does not appear that before the letter was written any disputes had arisen as to the meaning of the specifications in that respect, nor could there well have been. It is difficult to see how a letter complaining of the work as not complying with the contract could be construed as an authority to follow the instructions of the superintendent of King & Co. in respect of a matter fixed by the specifications, and a departure from which in reducing the .proportion of cement would not be of advantage to the owner of the building.

The general term disposed of the other considerations presented by the appellant’s counsel, and because of his complaint that the effect of the letter of February 25, 1890, was not specially noted, we have deemed it proper to refer to it. It- furnishes no reason for reversing the conclusions of the courts below that the plaintiff failed to perform his contract.

The judgment should be affirmed.

All concur.

Judgment affirmed.


author: O'Brien, J.

text:
    Joshua C. Sanders, Resp’t, v. Nathan Downs, App’lt.

      (Court of Appeals,

      Filed February 27, 1894.)

    I. Equity—Cloud on title.
    An equitable action to cancel a tax deed, as a cloud on title, will lie, where the proceedings are in fact void.
    2. Taxes—Assessment—Validity.
    In order to the validity of an assessment for the purposes of taxation, the statute, under which it is made, must be complied with in every substantial particular.
    3. Same.
    An assessment, made in such form as, at least, to leave it open to doubt whether a non-resident's name was so entered as a part of the description of the land, or for the purpose of including him among the taxable inhabitant, is void.
    Appeal from judgment of the general term of the supreme court in the second judicial department, entered upon an order made December 13, 1887, which affirmed a judgment in favor of plaintiff entered upon a decision of the court on trial at special term.
    This action was brought to perpetually enjoin defendant from entering upon and cutting and removing lumber from or in any way interfering with certain lands in the town of Riverhead, in the county of Suffolk, and that defendant be adjudged to surrender a deed oE said premises issued to him by the county treasurer upon a sale thereof for taxes, and for such other and further relief as might be proper.
    The facts, so far as material, are stated in the opinion.

      John L. Shirley, for app’lt; J. G. Sanders, for resp’t.
   O'Brien, J.

The plaintiff in this case sought relief against a sale of his land for taxes. The defendant purchased the land at the sale and received a conveyance from the county treasurer pursuant to chapter 620 of the Laws of 1878. The form of the action was to set aside the deed as a cloud upon the plaintiff’s title, and as the deed is, by the ninth section of the statute, made conclusive evidence that the sale was regular, and presumptive evidence that all prior proceedings were regular according to the provisions of the act, an equitable action will lie if the proceedings are in fact void. Dederer v. Voorhies, 81 N. Y., 156; Guest v. City of Brooklyn, 69 id., 506; Clark v. Davenport, 95 id., 477.

The assessment by the town assessors, which is the foundation of all the proceedings, was made in 1882, and the only question is whether that was valid to confer jurisdiction upon the board of supervisors to levy the tax upon which the sale was made. There is no dispute with respect to the facts and the question is purely one of law. The defendant was not a resident of the town where the lands were situated, nor of the county the authorities of which assumed to collect it. The lands, therefore, could be charged only under the provisions of the statute for the assessment of the lands of non residents. They were unoccupied, and while the lands were taxable, no one could be subjected to a personal charge, as the assessors had no jurisdiction of the person of the owner not residing in the town. It is essential to the validity of every assessment for the purposes of taxation that the statute, under the authority of which it is made, is complied with in every substantial particular. The only warrant for the imposition of a tax or burden upon the citizen or his property without his consent, must be found in some positive law, and it cannot be enforced unless imposed in the manner pointed out by the statute. The duties and powers of assessors in making up the assessment roll of the town, which is to be the basis of taxation, are clearly pointed out by statute and must be followed. 2 R. S., 8th ed., p. 1097. They have jurisdiction of both the person and the property of every resident of the town, and in such cases the entry of the name in the first column of the roll, in legal effect, signifies that the person and the property have been charged. They have also jurisdiction of the real property within their town of non-residents, but in such cases the statute forbids the insertion of the name of the ■owner in the first column among the taxable inhabitants of the town for the reason that the tax does not constitute a personal charge. The statute requires that a description of the lands be entered in the second column and the value in the next, and assessments against non-residents must be separated from the other assessments, though in the same roll. §§ 12, 13. All these provisions of the statute were complied with by the assessors, in making the assessment in question, except that the name of the plaintiff has been inserted in the first column of the roll as the owner of the land that was assessed and has been sold. True, his name appears under the head of non-residents, and his place of residence is written under the name in the first column, which plainly shows that he resided in another county. The assessors doubtless intended to assess the plaintiff’s lands only, but the question is whether they have hot, in fact, subjected him to a personal charge, and if they have, the assessment is void. We have not overlooked the fact that in the warrant delivered- by the supervisors to the town collector of taxes, they have commanded him to collect the tax from the persons whose names are inserted in the first column of the roll by distress and sale, “ other than such persons as are named as a part of the description of the lands of non-residents described therein.” There certainly can be no objection to the insertion of the name of the non-resident owner of lands in the second column for the purpose of describing or identifying the lands, and in many cases that may be necessary. But the difficulty with this assessment is that it was made in such form as to leave it open to doubt, at least, whether the plaintiff’s name is in the first column as a part of the description of the land, or for the purpose of including him among the taxable inhabitants. Had the name béen inserted in the second column, with the description, the assessment would, no doubt, be entirely valid. But to hold that -the assessment, as actually made, is a substantial compliance with the statute, we would be obliged to rest the proposition upon the uncertain and somewhat arbitrary inference that the name in the first column is part of the description of the land. The case is, doubtless, what may be termed a border one, and the deviation from the express directions of the statute providing for the manner of imposing taxes in such cases may appear to be slight, but the judgment below is sustained by the decisions of this court in cases that differ in no important element of fact from this. Stewart v. Crysler, 100 N. Y., 378; People v. Hagadorn, 104 id., 516; 5 St. Rep., 782. Any construction of the statute which would in any degree encourage erroneous, lax or careless methods of making up the assessment roll, would disturb the security with which the law guards private rights, and at the same time prove detrimental to public interests. If it was possible by any fine distinction to take this case out of the general rule applicable to assessments of this character, it would not be desirable to weaken or qualify by any such exception the safeguards which the legislature and the courts have erected against the invasion of property rights otherwise than in strict compliance with law.

The judgment should, therefore, be affirmed.

All concur.

Judgment affirmed.


author: Earl, J.

text:
    Ellis N. Crow, Resp’t, v. Patrick J. Gleason, App’lt.

      (Court of Appeals,

      Filed March 6, 1894.)

    Limitation—Part Payment.
    In order to make a money payment a part payment within the statute of limitations, it must be made under such circumstances as to show a recognition of a larger debt remaining unpaid.
    Appeal from judgment of the General Term of the Supreme Court in the first judicial department, entered upon an order, made October 20, 1892, which affirmed a judgment in favor of plaintiff entered upon the report of a referee.
    The nature of the facts, so far as material, are stated in the opinion.

      Jesse Johnson for app’lt; Edwin B. Leavitt for resp’t

       Reversing 48 St. Rep., 912.

   Earl, J.

This action was brought to recover for the use of horses let bv the plaintiff to the defendant during all the years from the 26th day of April, 1875, to some time in November, 1885. The plaintiff claims in his complaint that the whole sum for the hire of his horses was upwards of $12,000, upon which the defendant had paid him upwards of $10,000, leaving a balance due him of about $2,000. The defendant in his answer denied that he had had the use of plaintiff’s horses to the amount claimed by him ; denied that there was anything due the plaintiff, and alleged that he had paid' him in full. He also set up the Statute of Limitations. The action was commenced on the 28th day of April, 1890.

We will assume that the plaintiff’s account for the use of his horses was sufficiently proved. But we are of opinion that upon the undisputed evidence all of the account prior to the 28th day of April, 1884, was barred by the Statute of Limitations.

The referee found that the last item of debit in the account was for horses furnished on the 4th day of November, 1885 and he found the last payment made by defendant to plaintiff on account of the horse hire was $7.00 paid November 13th, 1885, which was duly credited on the account and that that sum was a payment upon the balance of the entire account. He further found that each and every payment made by the defendant to the plaintiff on account of the horses hired to the defendant was applied by the plaintiff upon the entire balance due therefor on the date of such payment, and was credited generally by the plaintiff upon the account; that the defendant never made any application nor requested plaintiff to make any application of any of the payments upon account of any particular portion of the horse hire, nor upon any particular portion of the indebtedness; and he found that no part of plaintiff’s claim was barred by the Statute of Limitations.

The contention of the plaintiff is that the whole account is saved from the bar of the Statute of Limitations by part payments, and in that way only.

In order to make a money payment a part payment within the statute, the burden is upon the creditor to snow that it was a payment of a portion of the admitted debt, and that it was paid to and accepted by him as such, accompanied by circumstances-amounting to an absolute and unqualified acknowledgment by the debtor of more being due, from which promise may be inferred to pay the remainder. Part payment of a debt is not of itself conclusive to take the case out of the statute. In order to have that-effect it must not only appear that the payment was made on account of a debt, but also no account of the debt for which action is brought, and that the payment was made as a part of a larger indebtedness, and under such circumstances as warrant a jury in finding an implied promise to pay the balance. If it be doubtful whether the payment was a part payment of an existing debt, more being admitted to be due, or whether the payment was intend ed by the party to satisfy the whole of the demand against him, the-payment cannot operate as an admission of a debt so as to extend the period of limitation. If there be' a mere naked payment of money without anything to show on what account, or for what reason the money was paid, the payment will be of no avail under the statute. The payment must, be made under such circum-stances as to show a recognition of a larger debt remaining unpaid. These rules, in varying phraseology, are laid down and illustrated in many authorities. Abbott’s Trial Ev. 824; 1 Wood on Limitations, 271, et seq.; Harper v. Fairley, 53 N. Y. 442; Albro v. Figuera, 60 id. 630; Smith v. Ryan, 66 id. 352.

How what have we here ? There is no proof whatever of the oircumstances under which the $7.00 was paid on the 13th of Hov., 1885. There was no proof even aside from the plaintiff’s ledger in which it was credited that it was ever paid. The finding of the referee that the plaintiff credited all of the numerous payments made by the defendant during all the years upon the account generally is of no moment. The question is not how he applied the payments, but how -the debtor intended they should be applied and understood they were applied. And if it be true that the defendant never made any particular direction as to how the payments should be applied, that is not sufficient to save the bar of the statute, unless the plaintiff can show that they were made by the defendant consciously to apply upon the whole account, and in recognition of the whole account.

How. what are the facts here bearing upon these payments? The plaintiff himself testified that he never presented a statement of the account to the defendant. So far as the evidence discloses he never mentioned the general account to the defendant and asked of him any payment thereon, and it does not appear that he ever brought the general account to the mind of the defendant at the time, of, any payment. On the contrary, every bill presented to the defendant, from the middle of April, 1884, to the end of the account, was generally for horses let to the defendant during the previous month. So far as the evidence discloses every bill presented to the defendant for payment was a bill for a specified time npon, which the defendant made his payment. There is no satisfactory evidence in this case that the defendant knew or believed that he owed the plaintiff any account which antedated the middle of April, 1884. If we assume that the defendant had all the horses charged to him on the plaintiff’s ledger from April 1st, 1884, to November 15th, 1885, and that he made all the payments credited to him in that ledger, we then have the fact that all the payments were less by more than one hundred dollars than the amount he owed for horses hired during the same period. -So that there were no payments within the six years prior to the commencement of the action which are necessarily to be applied upon the whole account existing prior to that time. So far as we can discover, therefore, in this evidence, there is no warrant whatever for finding that the defendant made or intended to make any payment during the six years prior to the commencement of this action to apply upon any account for horse hire existing at an earlier date.

We are not satisfied with the conclusion reached by the referee. The case should go back for a new trial, when, if possible, the plaintiff may make such proof as will, within the rules of law above stated, save the whole of his account from the bar of the Statute of Limitations. Upon the record as it now appears he has failed to do that, and the judgment must be reversed, and a new trial granted, costs to abide the event.

All concur.

Judgment reversed.


text:
    George W. Crouch, Jr., App’lt, v. Gustave Muller, Resp’t.

      (Court of Appeals,

      Filed March 6, 1894.)

    1. Assignment—Equitable.
    An order by the contractor upon the owner, directing him to pay a sum specified, and deduct the same from the amount of the contract, operates m equitable assignment pro tanto.

      2. Same—Notice.
    But in the absence of due prior notice thereof to the owner, he is only liable for the amount remaining unpaid on the contract when the action therefor is brought.
    Appeal from judgment of the general term, of the supreme court in the fifth judicial department, entered upon an order made at the October term, 1892, which affirmed a judgment in favor of defendant entered upon a verdict directed by the court.
    This action was brought to recover upon the following instrument :
    “ Rochester, N. Y., Oct 18, 1889.
    “Mr. G. Muller:
    “ Dear Sir—Please pay to George W. Crouch, Jr., one thousand dollars ($1,000.00) and deduct the same from the amount of my contract for building your house on Sullivan street.
    “ J. B. Scheuch.”
    The complaint alleged, and it appeared, that said order was given to plaintiff in payment for materials furnished, to be used by Scheuch in erecting a house for defendant under a contract between them. The complaint alleged that on the day of the delivery of the instrument it was presented to defendant, notice given him of its contents and payment demanded, but that no payment had been made upon it. Defendant denied the presentation or any notice of the giving of the instrument prior to the last payment on the contract; he admitted that there was still due upon the contract the sum of $153.90, and this amount, with interest from the completion of the contract, he made an offer to pay. A verdict was directed and rendered for that amount.
    Further facts are stated in the opinion.

      C. F. Dean, for app’lt; J. W. Taylor, for resp’t.

       Affirming, 48 St. Rep., 355.

   Finch, J.

The order drawn by the contractor upon the defendant, by its terms and under the circumstances, operated as an equitable assignment of the sum expected to become due upon the owner’s contract with the builder. Brill v. Tuttle, 81 N. Y., 457. There would be no doubt of plaintiff’s right to recover the whole of such sum if due notice of the assignment had been given to the drawee; but the trial court and the general term have concurred in the conclusion that no such notice was given, and have so held as matter of law upon the evidence. It is that ruling which is assailed "on this appeal.

If .there was no proof except that given by the two persons who presented the order to the defendant it would be easy to uphold the decision made, for the defendant did not understand English, and was not fully or correctly informed of the contents of the paper by Miller, who sought to explain it in German. Both of these persons described it as a paper to be signed by the defendant, and he must necessarily have understood it to be, if not a note, as he testified, at least an order depending for its effect upon his signature and acceptance, and so not an equitable assignment of the fund which could operate without his assent. The agents of the plaintiff, therefore, misled him, and failed to give him the requisite notice. They knew he could not read English, and came prepared for that emergency, but instead of translating the order itself into German they described in that language their own mistaken idea of its legal effect, and instead of leaving the order or a correct copy of it with him, so that he might procure it to be translated into his own language, they took the instrument away and left him with an incorrect understanding of the paper, and without means of correcting it.

But the question becomes closer and more difficult when we come to the testimony of the defendant himself. He says at first that Babcock said to him, “ Here I bring a note of a thousand dollars,” which he wants me to sign and I wouldn’t do it. He adds, “ Babcock read it and Miller translated it into German for me.” . How Miller had translated it he had himself testified, and what the defendant meant by such translation became apparent when he stated in answer to the court what it was that Miller said. His statement was: “ Miller said, ‘ Here I bring a note of a thousand dollars and I want you to sign it’ ” So far it is quite clear that no such idea as that of an equitable assignment had been conveyed to the mind of the defendant, or had been understood or comprehended by him, but, on the contrary, the notice was of an order requiring an acceptance and signing by him as essential to its operative force. The trouble arises from what he further said. He testified, “ I told Miller I wanted to see my architect and my lawyer. I saw my attorney and my architect both afterwards. I went to the architect and asked, who do I owe the money ? Who am I to pay this money to, the contractor or to Crouch ? ” It is argued that this inquiry of the defendant justifies a possible inference that he knew and understood the true character of the order; that he realized that Crouch in some manner had asserted a claim upon him for the balance to become due, and that for such reason he sought to ascertain to which of the two he ought to make payment; and so a question arose as to the real tenor and effect of the notice which should have been submitted to the jury. The point is somewhat close, but I am, inclined to think that the defendant’s statement does not change the situation, and is consistent with all that preceded it The defendant did know, for he had been told, that his contractor had drawn an order upon him which he was asked to accept, and we must assume that he went to his attorney and architect with that statement, and that he understood the order to be an effort to divert his future payments to Crouch; so that his inquiry was whether that effort did or did not make him debtor to Crouch instead of the contractor. He was told it did not. If he had not been misled, if a correct description of the order had been given him, or it had been literally transcribed into German, or a copy had been given him to take to his advisers, who could read it, his inquiry would have had a different answer. I think the question he asks does not indicate, in opposition to all the other evidence in the case, that the defendant understood the order to be something different from the description given of it, or to be one which transferred the right to the fund, but that, on the contrary, he thought it to be what was described to him, but the effect of which, and the propriety of his refusal to accept it, he thought it prudent to submit to the judgment of his advisers.

I am disposed, therefor, to approve the conclusion of the courts below, and the judgment should be affirmed, with costs.

All concur.

Judgment affirmed.


author: Peckham, J.

text:
    Allison K. Hume, App’lt, v. Edward C. Randall et al., Resp’ts.

      (Court of Appeals,

      Filed March 6, 1894.)

    1. Powers—General Beneficial.
    Where a grantee of a life estate takes also by his' deed a power to alien in fee to any person by means of a will, and no other person has, by the terms of the creation of such power, any interest in its execution, it a is general beneficial power.

      2. Same.
    In such case, such grantee can, by deed with warranty, convey the fee.
    Appeal from judgment of the general term of the supreme court in the fifth judicial department, énteredupon an order made October 4th, 1892, which directed judgment in favor of defendants upon a case submitted under the Code of Civil Procedure, § 1.279.
    Plaintiff sought in this controversy to compel defendants to complete a contract entered into by them with him to purchase certain lands in Brie county in this state. Defendants claimed that the title offered by plaintiff was not merchantable.
    The facts, so far as material, are stated in the opinion.

      Frank F. Williams, for app’lt; Jesse H. Behrends and 0. M. Bushnell, for resp’ts.

       Reversing 48 St. Rep. 49.

   Peckham, J.

The sole question arises in this case over the deed from Yan Duzee and wife to Sarah A. Cornell and Laura S. Beal. If, under the provisions of that deed, the grantees therein were able, subsequent to the death of Yan Duzee, to convey a fee, then the plaintiff took such fee by virtue of a deed from these grantees, and plaintiff’s deed tendered to defendants conveyed a good title, and the judgment should be in his favor. Otherwise not.

The case was submitted to the general term upon an agreed state of facts. The defendants agreed to purchase from plaintiff the premises described in the Yan Duzee deed, but now object to complete the purchase on the ground that the plaintiff cannot convey a good title. The Yan Duzee deed conveys certain land in .Erie county in this state to the above-named grantees, and upon terms and conditions as follows:

“ It is hereby intended and understood that the parties of the second part shall both have an equal and undivided interest in the property conveyed above, and said parties shall control and direct said property during their natural life after the decease of William S. Yan Duzee, one of the parties of the first part. If one of the parties of the first part should be taken away by death, the other party shall have the control during her natural life after the time mentioned above, but neither party nor both shall have the right to convey away this property by deed or other forms during their lives without the written consent of William S. Yan Duzee, one of the parties of the first part, but it may be arranged to be disposed of by will by one of the second party who shall survive the other, or by a mutual will as the parties may agree, which shall take effect after the death of both parties of the second part mentioned above. Said Yan Duzee shall have the full control of said property and its products' during his natural life, but the products, interest and issue of said property shall go for the benefit of the pafties of the second part. It being understood that said products, interest and issues shall be equally divided between the parties of the second part, but after the décease of one of the second parties the survivor shall have the said rents, products and issues at her use and control. And it is further stipulated that if either of the parties marry mentioned, above, then the other party shall have full control and possess the entire premises herein deeded.”

The deed contained in the habendum clause following the above language, the words “ to have and to hold the said premises as above described with the appurtenances unto the said party of the second part and to-heirs and assigns forever.” It also contained a covenant of warranty. At the date of the deed from the grantees in the above deed to the plaintiff herein, the grantors Van Duzee were both dead. The general term held that the Van Duzee deed did not vest in the grantees the fee of the premises even after the deaths of the Van Duzees, and that the grantees could not convey a fee to the plaintiff. It, therefore, ordered judgment in favor of the defendants. The plaintiff appeals here and insists that he took the fee and has a good title, which the defendants should receive and pay for as agreed upon.

We think the general term erred in the conclusion it arrived at.

It is not disputed that under this deed the grantees took a power to alien in fee by means of a will to any alienee whatever, and that no person other than the grantees of this power had by the terms of its creation any interest in its execution. This constitutes what is termed a general beneficial power. 1 R. S. 732, §§ 77, 79; Cutting v. Cutting, 86 N. Y. 522, 531.

It is claimed by the plaintiff that the grantees also took a life estate which, subsequent to the death of the grantor, Win. S. Van Duzee, could be aliened, and that by virtue of the provisions of the statute they could convey a fee to purchasers.

The sections referred to are sections 81, 82, 83 and 84 of the article on Powers. 1 R. S. 732, 733:

“ § 81. Where an absolute power of disposition, not accompanied by any trust, shall be given to the owner of a particular estate for life or years, such estate shall be changed into a fee absolute in respect to the rights of creditors and purchasers, but subject to any future estates limited thereon, in case the power should not be executed, or the lands should not be sold for the satisfaction of debts.

§ 82. Where a like power of disposition shall be given to any person to whom no particular estate is limited, such person shall also take a fee, subject to any future estates that may be limited thereon, but absolute in respect to creditors and purchasers.

§ 83. In all cases where such power of disposition is given, and no remainder is limited on the estate of the grantee of the property, such grantee shall be entitled to an absolute fee.

§, 84. Where a general and beneficial power to devise the inheritance shall be given to a tenant for life or for years, such tenant shall be deemed to possess an absolute power of disposition within the meaning and subject to the provisions of the three last preceding sections.”

Within the last or 84th section it would seem that the power to convey a fee was granted to those occupying a position such as the grantees in the Van Duzee deed. If it be assumed that the grantees had the right to alien their life estate after the death of Van Duzee as above stated, then there would seem to be no doubt that their deed in this case was a good one. In such case their conveyance with warranty conveyed the fee, and any subsequent attempted execution of the power to devise would be fruitless. Freeborn v. Wagner, 2 Abb. Ct App. Dec. 175. The defendants, however, urge that the terms of this deed are such that the grantees had no power to alien their life estate without the consent of Van Duzee, which has never been given, and as he is dead, it never can be, and that the suspension of the power of alienation provided for in the deed was not longer than the statute permits, and hence the case last above cited does not apply nor the provisions of the statute above cited in regard to powers. It is said that if the tenant for life have no power to alien it is immaterial whether the lack of power comes from the terms of the instrument creating the estate by reason of which the grantee, although clothed with the legal title, is prevented from making it the subject of alienation, or because the legal title is in a trustee, and the life tenant, so to speak, is only the beneficiary. It is urged that in neither case can the statute apply and no fee can be conveyed to a purchaser.

The cases cited by defendants’ counsel are Cutting v. Cutting, 86 N. Y. 522; Crooke v. County of Kings, 97 id. 421, and Genet v. Hunt, 113 id. 158; 22 St. Rep. 774. These are cases where the legal title was in the trustee and they are the foundation for the claim that where the tenant for life has no power to alien his life estate the case does not come within the above statute, although the tenant may have a power to dispose of the.fee by will. The argument is founded upon the assumption that the life tenant has no power to alien his life interest. If he have that power the argument is inapplicable.

Upon a careful examination of the language of this deed we are convinced that the grantees after the death of William S. Van Duzee had power tó alien their life estate. The deed said that neither party nor both should have the right to convey by deed or other forms during their lives without the consent of Van Duzee, but it also provided that after his death the parties (grantees) should control and direct the property during their natural lives. Looking at the whole language of the deed we are persuaded the grantees had the power subsequent to the death of Van Duzee to convey their life estate, and that power joined to the power to alien by will in fee, gave them power to convey a fee to the purchaser by their warranty deed.

The plaintiff, therefore, took a good title from the grantees in the Van Duzee deed and tendered a good one to defendants.

Upon this construction of the deed, it becomes clear that the judgment of the general term should be reversed, and judgment ordered for the plaintiff, with costs.

All concur.

Judgment accordingly.


author: Andrews, Ch. J.

text:
    William H. Thomas, Resp’t, v. William B. Gage, App’lt.

      (Court of Appeals,

      Filed March 6, 1894.)

    Evidence—Admissions.
    The silence of one to whom a letter is written, when there is no duty to speak, does not operate as an admission of the matters to which the letter relates.
    Appeal from judgment of the general term of the supreme court in the third judicial department, entered upon an order made July 2, 1892, which affirmed a judgment in favor of plaintiff entered upon a verdict and also affirmed an order denying a motion for a new trial.
    The nature of the action and the facts, so far as material, are stated in the opinion.

      Charles S. Lester, for app’lt; John A. Foley, for resp’t

       Reversing 46 St. Rep., 963.

   Andrews, Ch. J.

By the written contract of January 20th, 1890, for an alleged breach of which the action is brought, the firm of Thomas & Miller were to make and erect for the defendant a monument to be placed in the cemetery grounds in Saratoga Springs, according to a^design of the “ Argersigner ” monument of which a photograph was furnished by Thomas & Miller to the defendant. The contract contained this provision: “ Mr. Gage is to inspect model when in clay, and it is to be made to his entire satisfaction.” Thomas & Miller made a clay model of the monument, and in April, 1890, tne defendant went to Quincy, Mass., to inspect it. The case turned at the trial on the interview between the parties on this occasion. The plaintiff (assignee of Thomas & Miller) gave evidence tending to show that the defendant then expressed his satisfaction with the work and accepted the model as conforming to the contract. This evidence was contradicted by the defendant, who testified in substance that on that occasion he found fault with the model as not conforming to the “ Argersigner ” statue, and declared his dissatisfaction, and specified various defects and objections. It was conceded on the trial that unless the model was made to the satisfaction of the defendant the plaintiff could not recover. The jury found a verdict for the plaintiff. They must, therefore, have credited the version given by the plaintiff’s witnesses of the interview between the parties in April, 1890, there being no other proof from which it could be found that the model had been accepted by the defendant. Subsequent to the interview in April, there was a correspondence running through several weeks between the parties relating to the monument. The last letter, written by the defendant under date of Aug. 21, 1890, contained a declaration that he rescinded the contract because the work was unsatisfactory, and he therein notified Thomas & Miller to proceed no further. This letter was introduced by the plaintiff and read without objection. It appears from the testimony of Mr. Thomas, one of the firm, that on or about the 1st day of June, 1890, the defendant in a conversation with him at Saratoga Springs, informed him that he was “ dissatisfied with everything,” and stated that a photograph of the plaster cast of the model which had been sent him was a clumsy imitation of the “ Argersigner ” statue.

The plaintiff was permitted, against the objection and exception of the defendant, to read in evidence a letter dated June 6, 1890, written by Mr. Miller, of the firm of Thomas. & Miller, from Quincy, Mass., to the defendant at Saratoga Springs, which •commences with the statement that “ Mr. Thomas, my partner, writes me that you did not like the photograph of the model, and you thought it a clumsy imitation of the 1 Argersigner statue, and that you wanted us to hunt up the artist that made the 1 Argersigner ’ model and have him make a new one.” The writer then proceeds to speak of Mr. Muer’s (the modeler’s) ability as an artist, and of other work which he had done which had been highly commended by a person named, a student of art. The letter then states that the model in question was made by Mr. Muer, and asks, “ if you were not satisfied when you were here why did you not say so,” and the letter then, among other things, says: “ The fact is, Mr. Gage, this figure has been on exhibition in our •studio for about a month, and there have been hundreds of visitors to see it, doctors, merchants, newspaper reporters, granite contractors, and ladies from all sections of the state, and it has been the unanimous expression that, it is the best that has been made in Quincy,” and then follows a statement of what certain individuals, naming them, said, concluding as follows: “ Mr. Bussell, one of our local artists, said, ‘ there can be no fault found with it.’ These are but few of the comments by disinterested parties,” ■ etc. The letter was objected to generally as incompetent on the ground that it was a -statement by the witness in his own favor, and special objection was taken to the statements therein of the declarations of other persons, and to each paragraph therein. The •admission of this letter was error. It was not an answer to any letter of the defendant. The issue was, whether the defendant had, in April,. 1890, expressed himself satisfied with, and had accepted the model as a compliance with the contract. If the declarations in the letter to the effect that the defendant, in April, had expressed himself satisfied might be considered as a reply to the oral statement made by the defendant to the partner of the writer, that he had always been dissatisfied, the recapitulation in the letter of declarations of third persons as to the merit of the model, had no relation to anything said in that conversation. These opinions did not bear upon the issue being tried, viz., whether the defendant, in April, had declared himself satisfied, but they were calculated to prejudice the jury. The minds of the jury would naturally be diverted from the real issue, and they might well be inclined to discredit the evidence of the defendant where so many competent judges had declared that the work was of the highest merit. They would, at least, regard the objections made by the defendant to the work as captious and unreasonable. The evidence was hearsay and inadmissible under the plain rules of evidence. By admitting the letter the plaintiff was allowed to put in evi-dence his own declaration of what the persons had said, and this too on a matter not material to the issue, which was as to the personal satisfaction of the defendant with the model. The letter was not competent as tending to show an acquiescence by the defendant in the opinions of third persons stated therein, He was under no obligation to deny the assertions made. One to whom a letter is written may remain silent when there is no duty to speak, and in such case silence does not operate as an admission of the matters to which the letter relates. The cases of Learned v. Tillotson, 97 N. Y., 1, and Bank of British North America v. Delafield, 126 id., 418; 37 St. Rep., 864, are quite applicable here.

The error in the admission of the letter of June 6, 1890, requires a reversal of the judgment. The other exceptions need not be considered, as on a new trial the question raised thereby may not be again presented.

Judgment reversed and a new trial ordered.

All concur.


author: Bartlett,

text:
    In the Matter of the Appraisal for Taxation of the Estate of William M. Merriam, Deceased.

      (Court of Appeals,

      Filed March 6, 1894.)
    1. Taxes—Collateral Inheritance.
    A bequest to the United States is subject to the tax imposed by § 1, chap. 399 of 1898.
    8. Same.
    The right to succession to stocks of foreign corporations, held by an executor as such, is subject to the payment of the tax imposed by this act.
    Appeal from order of the general term of the supreme court in the second judicial department, made December 1,1893, which affirmed an order of the surrogate’s court of Suffolk county affirming an order of said court assessing and fixing the collateral inheritance tax due from the estate of William W. Merriam, deceased.
    The facts, so far as material, are stated in the opinion.

      Jesse Johnson, for app’lt; Charles Duane Baker, for resp’t.

       Affirming 56 St. Rep. 159.

   Bartlett,

J.—This is an appeal from an order of the general term of the supreme court in the second department, affirming two several orders of the surrogate’s court of Suffolk county.- Two -questions are raised by this appeal: First, whether or not a bequest of money to the United States is liable to pay the inheritance tax-imposed by the laws of this state; second, can such a tax be levied on stock of a foreign corporation, which was the property of the decedent at the time of his death, the proceeds of which pass to the United States. The courts below have answered both of these questions in the affirmative. The testator died January 30, 1889, and the tax was assessed February 16, 1893, on the personal estate bequeathed to the United States. At that time ehapter 399, laws of 1892, entitled “ an act in relation to taxable transfers of property,” was in force and had repealed all previous acts, subject to a saving clause contained in section twenty-four of said act, providing, in substance, that the repeal should not affect or impair any act done, or right accruing, accrued or acquired, or liability, penalty, forfeiture or punishment incurred prior to the passage of said act. § 25 of said act also provides that “ the provisions of this act, so far as they are substantially the same as those of laws existing April 80, 1892, shall be construed as a continuation of such laws, modified or amended according to the language, employed in this act, and not as new enactments.” So that when this tax .was assessed it was under the said law of 1892 construed as amending the previous statutes.

§ 1 of said act reads in part as follows: “ A tax shall be and is hereby imposed upon the transfer of any property, real or personal, of the value of five hundred dollars or over, * * * to persons or corporations not exempt by law from taxation on real or personal property,” etc.

In the view we take of this case the legacy to the United States is subject to this tax whether we consider the assessment as made under the language of the law of 1892, or of the various statutes it amends and repeals. Whether the transfer is “ to any person or persons, or to a body politic or corporate,” in the words of the earlier statutes, we are of opinion the language includes the government of the United States. For the purpose of receiving legacies and for many other purposes, the United' States is to be regarded as a body politic and corporate. In the United States v. Maurice et al., 2 Brockenbrough’s Reports, 96, Chief Justice Marshall says at page 109: “ The United States is a government, and, consequently, a body politic and corporate, capable of attaining the objects for which it was created by the means which are necessary for their attainment. This great corporation was ordained and established by the American people, and endowed by them with great powers for important purposes.”

The United States being capable of taking this legacy, it remains to consider whether there is any reason why this tax should not be collected. This court has recently decided that this tax is not imposed on property, but on the right of succession under a will, or devolution incase of intestacy. In the Matter of the Estate of James T. Swift, 137 N. Y., 77; 50 St. Rep., 81.

This tax, in effect, limits the power of. testamentary disposition, and legatees and devisees take their bequests and devises subject to this tax imposed upon the succession of property. .This view eliminates from the case the point urged by the appellant that, to collect this tax would be in violation of the well-established rule that the state cannot tax thh property of the United States. Assuming this legacy invested in the United States at the moment of testator’s death, yet in contemplation of law the tax was fixed on the succession at the same instant of time. This is not a tax imposed by the state on the property of the United States. The property that vests in the United States under this will is the net amount of its legacy after the succession tax is paid. The appellant urges that the United States, if regarded as a corporation, is, under the act in relation to the taxable transfers of property, a corporation exempt from taxation.

This court has held that the provisions exempting the religious, charitable and other corporations named in the inheritance tax acts apply only to domestic corporations. Matter of Estate of Prime, 136 N. Y., 347; 49 St. Rep., 658. It is suggested that the United States is to be regarded as a domestic corporation, so far as the state of New York is concerned. We think this contention has no support in reason or authority. A domestic corporation is the creature of this state created by its legislature, or located here and created by or under laws of the United States. Code of Civil Procedure, §3343, sub. 18. The United States is a government and body politic and corporate, ordained and established by the American people acting through the sovereignty of all the states.

There remains one other question in this case as presented by the briefs of appellant — whether the stocks of foreign corporations held by the executor as to be regarded as part of ike estate, subject to the tax now under consideration. The tax being imposed on the right of succession, and not on the property, as before remarked, this question must be answered in the affirma tive. To compute the succession tax on the total personal estate is not imposing a tax on the stocks of foreign corporations constituting a part of that estate.

The orders appealed from are affirmed, with costs.

All concur.


text:
    Charles L. Rowland, Resp’t, v. Thomas F. Rowland, App’lt.

      (Court of Appeals,

      Filed March 6, 1894.)

    1. Accounting—Right To.
    Where the parties, in their verified pleadings, assert that the compensation or interest of the plaintiff was to be a fixed weekly sum and a percentage of the net profits of the business, plaintiff is entitled to an accounting, unless concluded by payment or discharge.
    3. Reference—Compulsory.
    Where an accounting will involve the examination of many transactions and items, and no difficult questions of law, the case is referable by order of the court.
    3. Same—Settlement.
    The fact that an alleged settlement has been procured by fraud does not affect the jurisdiction of the court to refer the case.
    Appeal from order of the general term of the supreme court in the second judicial department, made February 15th, 1894, which affirmed an order of special term granting a motion for a reference and appointing a referee.
    The complaint in this action alleged that plaintiff and defendants were associated in business, under an agreement in the nature of a general partnership or quasi partnership; that plaintiff was to draw thirty dollars per week and to be also entitled to a percentage of the net profits, which it was agreed should be two per cent, for the first three years, four per cent, for the fourth and five per cent, for the balance of the period; that statements of the profits, which were not intended to be final, were made from time to time, and that a settlement was made which was induced by the fraudulent representations of defendant. Plaintiff prayed for an accounting and judgment for such sum as he might appear to be entitled to and for such other and further relief ás he might in equity be entitled to. The answer alleged that the relation between defendant and plaintiff was that of employer and employee, and that plaintiff’s compensation was to be a fixed weekly sum and a percentage of the profits, but not the same as was alleged in the complaint.

      John L. Hill, for app’lt; LJdipard P. Lyon, for resp’t.

       Affirming 57 St. Rep.

   Andrews, Ch. J.

Whether the relation between the parties was “ in the-nature of a general partnership or quasi partnership," as alleged in the complaint, or was that of employer and employee, as alleged in the answer, will not probably be a question of much importance in the determination of the controversy. The real issue is as to the amount which the plaintiff was to receive in addition to a specific sum per week out of the net profits, and whether the alleged settlement of the plaintiff’s claim was procured by the fraudulent representations of the defendant. Both, parties in their verified pleadings assert that the compensation or interest of the plaintiff was to be a fixed weekly sum and a percentage of thé net profits of the business. They disagree as to the amount. In either view of the relation the plaintiff has a right to demand an accounting to ascertain the sum to which he is entitled, unless concluded by payment or discharge.

The facts presented to the court upon the application for the order of reference tended to show that the accounting would involve the examination of many transactions and items, and that ■no difficult question of law was involved. If the action is to be regarded as equitable, which is the claim made by the defendant, it was referable by order of the court under § 1013 of the Code of Civil Procedure. In equity actions the right of trial by jury never existed, and no constitutional right is involved in a compulsory reference of equity actions. Camp v. Ingersoll, 86 N. Y., 433; Thayer v. McNaughton, 117 id., 111; 26 St. Rep., 843. If the action was legal and not equitable, which is the claim of the plaintiff, then the action being upon contract was, under the circumstances shown, referable.

The allegation in the complaint, made apparently in anticipation of the defense of accord and satisfaction, that an alleged settlement had been procured by fraud, did not affect the jurisdiction of the court to refer the case. It showed the right of the plaintiff to have an accounting, notwithstanding such settlement. People v. Wood, 121 N. Y., 522; 31 St. Rep., 860, and cases cited; King v. Barnes, 109 N. Y., 267-290; 15 St. Rep., 52.

The order should be affirmed.

All concur.

Order affirmed.


text:
    The Goshen National Bank, App’lt, v. The State of New York, Resp’t.

      (Court of Appeals,

      Filed February 27, 1894.)

    1. Bills and notes—Fraudulent drawing by cashier.
    Where the state has no knowledge of the fraud, a hank cannot compel it to refund the proceeds of a draft, fraudulently drawn by its cashier for taxes received by him as tax collector.
    2. Same—Notice.
    The fact that the draft was drawn directly to the order of the state and sent to it by the cashier, does not constitute notice of fraud.
    Appeal from an award of the board of claims, made September 13, 1893, which awarded the claimant nothing.
    The nature of the claim and the facts, so far as material, are stated in the opinion.

      Henry Bacon, for app’lt; T. B. Hancock, attorney-general, for the state.
   Peckham, J.

In the month of May, 1892, and for several months prior thereto, one William M. Murray was county treasurer of Orange county. He had received the taxes collected from that county for state purposes in January and February, 1892, and had neglected to pay over the amount thereof at the time fixed by law, and on the 5th of May, 1892, the comptroller of the state had demanded payment from him of the balance due for such taxes, which amounted to the sum of $2,567.37. At the time of this demand Murray was, and for ten years prior thereto had been, cashier of the claimant bank. For the purpose of paying such taxes Murray, on the 7th of May, took a blank draft addressed to the Importers and Traders’ National Bank in the city of New York, filled it up for the above amount, and making it payable to the order of the comptroller of the state of New York, signed his name to the draft as cashier. The bank had funds in the New York bank upon which the draft was drawn. Murray then, in response to such demand, forwarded the draft by mail to the comptroller as payment for such taxes. The comptroller received the draft, indorsed it as payable to the order of the state treasurer, who then indorsed it and procured it to be forwarded to the bank upon which it was drawn in New York, and that bank paid the same upon presentation, and on the 9th or 10'th of May charged the amount thereof to the Goshen National Bank as the drawer of such draft. The draft was taken by Murray when he filled it up out of a book containing a large number of other blank drafts of the same form and which were used as occasion demanded by the claimant in drawing upon its funds on deposit in the Importers and Traders’ Bank in New York. When Murray drew and signed the draft he paid no money to the claimant therefor and made no entry upon its books showing the drawing of the draft or his use of it, and he had not then and never has had since any money to.his credit on deposit with the claimant. He was largely insolvent and a debtor to the bank at the time independently of this transaction, and in June,'1892, he absconded and has ever since remained a defaulter. He kept the fact of his drawing this draft concealed from the other officers of the hank until he absconded, and that fact was unknown until it was discovered in July following.

Notice of these facts was then given the comptroller, and he was requested to refund the moneys, thus collected by him upon the draft, which he declined to do, saying that he had no power without legislative authority. The officers of the state applied the proceeds of the collection of the draft to the uses of the state, and in payment of its obligations and expenses. There is no claim that the comptroller, or any state officer, had any actual knowledge of the wrongful acts of the cashier before the comptroller was informed thereof in July, 1892. The board of claims has found that the comptroller received the draft in good faith, and without actual knowledge that it was issued by Murray wrongfully or without authority of the claimant. It was also proved on the trial that the cashier had the custody and possession of the blank drafts for the claimant, and that he had the right to sign drafts drawn by the claimant on its corresponding banks, and that he had the right to draw a draft on the corresponding bank of the claimant for himself upon the same terms that he had to draw a draft for a stranger.

The claimant upon these facts founds the legal liability of the state to pay back the moneys which it has received as payment of the taxes as above stated. It is alleged that the state was not a holder of the draft for value, inasmuch as it was received upon a precedent debt, and no value was parted with by the state when it received the same. It is also contended that the form of the draft was itself notice that the cashier was using the funds of the bank to pay his individual debt, and as the state had such notice it could not be a bona fide holder of the draft, and was, therefore, liable to refund the moneys received in payment of it.

First. We think the question as to whether the state was a holder of the draft for value or not does not arise in this case. Murray, as county treasurer, was behind in his payment of the taxes due from Orange county to the state. In order to discharge his obligation he transmits the draft in question. The state, through its officer, receives it and presents it to the bank upon which it is drawn, and that bank pays it, and the state having received the money thereby discharges the obligation of Murray, and the taxes due from Orange county are thereby paid. The transaction is plosed, and it cannot be that the drawer of the draft that has thus been paid can open up the whole matter, and claim to recover back the money which the state received in payment of the taxes due it. If the cashier, instead of sending this draft, had taken the money directly from the bank and paid the same to the state in satisfaction for the amount due for the taxes, I think no one would contend that the bank could recover it back from the state on the ground that the act of the cashier in taking the money was a fraud upon it or even a felony, and that the state had parted with no value at the time of the receipt of the money. I do not see that in this respect the case is altered by' the interposition of the draft instead of the payment of money in the first instance. The state receives in good faith (as we must assume on this point) the written direction of the claimant to a third party to pay the money to the state upon demand, and the state makes the demand accordingly, and the money is paid and the debt extinguished. The interposition of the draft makes no difference in principle after it has been paid. It is then the same as if the money had been originally paid instead of an order given for its payment. The order having been complied with and the original debt thereby satisfied, the transaction is closed, and may not be reopened on this ground. This general principle may be gathered from the cases here cited. Justh v. National Bank, 56 N. Y. 478 ; Stephens v. Board of Education, etc., 79 id 183, 187; Southwick v. First National Bank, 84 id. 420, 436, 437.

This is not the case of the diversion of commercial paper signed by one for the accommodation of another. In such case where accommodation paper has been diverted from the particular purpose for which it was made, the accommodation maker or indorser can defend when sued upon it by one who took the paper as security or to apply upon an antecedent debt without parting with any value at the time, by showing that the paper had been diverted from its intended purpose. The holder of the paper brings his action upon it, and the accommodation maker or indorser shows that the plaintiff is not a holder for value, and that as to him the defense of dirversion is available. Here the paper was not diverted, and in addition it has been paid according to its terms, and the payment has extinguished the debt for which the draft was given. No action is brought upon it and no defense is interposed. It has been paid and canceled, Nor is this like the case of Comstock v. Hier, 73 N. Y. 269, cited by the counsel for the claimant. In that case the defendants had become the holders of a note upon which plaintiff was an accommodation indorser, but they became such under circumstances which showed they were not bona fide holders for value. Before the maturity of the note, the defendants sold it to one who by his purchase became a bona fide holder for value, and by reason of that sale the plaintiff was compelled to pay the note. He commenced his action against the defendants to recover the amount which he had thus been, compelled to pay, and he obtained a judgment therefor which was affirmed in this court. The right to recover was based upon the fact that the defendants, by the sale of the note to one who became a bona fide purchaser, thereby wrongfully converted the note, and so became liable to the plaintiff for the amount of damage he sustained by reason of such conversion. And it was held that defendants could acquire no title to the proceeds of the note by the sale and transfer of it to a third person. And this upon the principle that a wrongdoer cannot better his title to property by a sale, for the proceeds of the sale will be the same as the property before the sale.

In this case the state was no wrongdoer, and in forwarding the draft for payment and receiving the money upon such payment, committed no wrong, was guilty of no conversion and created ho cause of action against it for the recovery of the money it thus received. There is nothing in the case of Comstock v. Heir which affirms in any degree the right of the claimant to treat the money received by the state in payment of the draft as if it simply represented the draft and the state were endeavoring in some form to-enforce payment of the draft itself.'

Second. Upon the question whether the form of the draft constituted notice to the state or its officers that the funds of the claimant were being used by the cashier to pay his private debt, .we think that no notice of such fact was conveyed to the comptroller by this form of draft.

It is the right and duty of the cashier of a bank to sign the-drafts drawn in its behalf upon its corresponding bank. This is-part of the ordinary duties of such an officer, and affirmative evidence of his power to sign drafts appears in this record, and it-also appears that he had the right to draw such draft for himself upon the same terms that he would have had in case of a third party, which means, I assume, upon payment to the bank of the-amount of the draft.

There was an apparent authority to draw the draft; it appeared-to have been drawn in the course of the employment of the cashier, and it was an act which was within the scope of his general powers.

We do not think, in the case of a bank draft so drawn, the party receiving it would be charged with the duty of inquiry or-with notice of the fact that the cashier had not paid for the draft, and that he was, therefore, using the funds of the bank to pay his private debt. He would only be so using them in case he did not pay for the draft, and its form might be the same even if he-had paid for it in full. We think there is nothing unusual or suspicious in this form of making the draft payable direct to the-creditor of the cashier, nor any notice that in so doing the bank’s-funds have been improperly used. Bank or cashier’s drafts are used so enormously at the present time in the payment or settlement-of debts and in other commercial transactions that they have almost acquired the characteristics of money. So long as they are drawn on behalf of a solvent bank and upon a solvent drawee, and signed by one of the officers usually signing such instruments, they are regarded by the commercial community as so much cash, and the fact that the draft was drawn by a cashier directly in favor of his own creditor and sent to that creditor by him, would not naturally give rise even to the suspicion that there was anything irregular, fraudulent or wrong in the conduct of the cashier. The presumption would be that he had performed his duty and paid for the draft, and that it, therefore, was his property.

In Phillips v. The Mercantile National Bank, 56 St. Rep., 499, we held the bank represented by the plaintiff responsible for the drafts drawn by its cashier and duly paid by the defendant, although the cashier drew them for his own purpose and made them payable to the order of certain customers of the bank, whose names he forged, and who in truth were in no manner connected with the drafts and whose names were thus inserted by the cashier in order to give more semblance to the drafts as business paper. They were treated as fictitious payees, and the drafts were held good as against the bank because drawn by an officer who had apparent authority to sign them and in the usual course of business.

If this draft had been made payable to the order of one of the customers of the claimant and signed by the cashier and the customers’ names forged by the cashier and the draft then sent to the comptroller (the customer never having any connection with ■the paper and his name being used the same as if it were a fictitious name) we should have here the case of Phillips.

That no fictitious name was used and that the draft was made payable directly to the comptroller and was sent him by the cashier, does not in our judgment call for a different decision. The ease of Claflin v. Farmers & Citizens Bank, 25 N. Y. 293, was nothing like this case. In that the president of the defendant bank certified his own check and negotiated it. In an action upon such certification this court held that the by-law gave the president no right to certify his own check, nor was there anything in the position of a president of a bank which could be supposed to give any such authority. Judge Selden said the acceptance was void irrespective of the fact whether the drawer of the check had or had not funds ; the certification was nothing more than an acceptance, and from the nature of the case the president could not occupy the antagonistic position of accepting as agent of the bank his own check drawn upon it. When the comptroller.received this draft he had the right, in the absence of any other notice than its form, to regard it as the property of the cashier, regularly in his possession, and proper to be used in the payment of the taxes due at that time.

We think the decision of the board of claims was right and it should be affirmed, with costs.

All concur.

Award affirmed.


text:
    In the Matter of the Probate of the Will of Adeline D. Bernsee, Deceased.

      (Court of Appeals,

      Filed February 27, 1894.)

    1. Evidence—Section 829.
    Beneficiary under will is an incompetent witness for proponent, to testify to any conversation or transaction in the presence of testator at the time of the execution and publication of the will.
    2. Will—Execution.
    The court may find due publication of a will, though hut one of the subscribing witnesses testifies to, and the other denies, the essential facts.
    3. Appeal—Technical error.
    A judgment will not be reversed for a technical error which did not affect the result.
    Appeal from judgment of the general term of the supreme court in the second judicial department, entered upon an order made July 28, 1893, which affirmed a judgment entered upon a decree of the surrogate’s court of Kings county admitting to probate the will of Adeline D. Bernsee, deceased.
    Upon the hearing of the application for the probate of said will, it was objected to as not executed according to law; that the testatrix was not competent to make a will and unduly influenced. These objections were overruled and the will admitted to probate. Upon appeal to the general term the decree was reversed and issues framed which were ordered to be tried at circuit. The trial there resulted in a verdict under which a decree was entered in the surrogate’s court again admitting the will to probate.
    Upon the trial Christian D. Bernsee, a son of the testatrix, and also one of the beneficiaries under her will, was called as a witness by the proponent and interrogated as to a conversation, in which he took no part, between the testatrix and the attesting witnesses, at the time the will was executed. This was objected to by the contestants and the objection sustained. Said witness was permitted to testify to a conversation occurring at another time, 'the substance of which, as well as the other material facts, are stated in the opinion.

      William G. De Witt, for app’lt; George G. Reynolds, Daniel Daly and William R. Syme, for resp’t.

       Affirming 53 St. Rep. 872.

   Andrews, C. J.

Christian D. Bernsee was under our decisions an incompetent witness to testify to any conversation or transaction in his presence at the time of the execution or publication of the will. He is one of the chief beneficiaries thereunder, and was directly interested "in establishing due execution. What occurred at that time was a transaction between the testatrix and the witness, within the meaning of § 829 of the Code, although he took no actual part in the conversation and it was wholly between the testatrix and the attesting witnesses. If active participation in the conversation was necessary to exclude a witness, and he should as an observer be permitted to testify to transactions in form between the deceased and third persons, although such transactions were in his interest, it would furnished an easy and convenient method in every case of evading the statute. The. decisions have enforced the spirit of the statute by excluding such evidence, and have treated transactions between the deceased and third persons in the presence of interested parties as if the witness actually participated therein. Holcomb v. Holcomb, 95 N. Y. 316; Matter of Eysaman, 113 id. 62; 22 St. Rep. 136; Matter of Dunham, 121 N. Y. 575; 31 St. Rep. 858.

The main controversy on the trial related to the question whether the will had been signed by the testatrix when it was attested by the subscribing witness. It is essential to the due publication of a will either that the witnesses should see the testator sign the will, or that such signature should have been affixed at some prior time and be open to their inspection. Matter of Mackay, 110 N. Y. 611; 18 St. Rep. 558. In the will in question the names of two persons are signed as attesting witnesses at the end of a full and complete attestation clause, reciting all the facts necessary to due publication under the statute. Both were sworn on the probate. One testified to a compliance in full with all the requirements to a due execution ; that the testatrix signed the will in the presence of both witnesses, declared it to be her will, and that witnesses signed it in her presence and at her request. The other subscribing witness did not recollect that the testatrix signed the will, or that he saw her signature to the instrument at the time he subscribed it as a witness. It perhaps may be said that in the end the witness denied without qualification that the will was signed by the testatrix when he affixed his name, or that her signature was upon the paper witnessed by him. This made at most a conflict of evidence upon an essential fact, and it was competent for the court to find that there had been a due publication, although but one of the witnesses testified to the essential facts, and they were denied by the other. In re Cottrell, 95 N. Y. 329, and cases cited.

The proponent sought to introduce the testimony of Christian D. Bernsee in aid of the testimony of the subscribing witness, who had testified that the will was signed by the testatrix in the presence of the attesting witnesses. But, upon objection by the counsel for the contestants, this evidence was excluded. Upon the main controversy, therefore, as to the publication of the will, the contestants cannot complain because of his being sworn in the case.

The contestants also opposed the probate on the ground of mental incompetency of the testatrix and of undue influence. The will unexplained, which practically disinherits two daughters in favor of two sons, seems unnatural, and this was doubtless a circumstance to be considered on the question of undue influence alleged to have been exerted by the sons. But circumstances are shown, not necessary now to 'detail, which the surrogate had a right to find influenced the testatrix in making her will, and to justify the conclusion that the will was the deliberate and intelligent expression of the will of a competent testatrix, uninfluenced by any improper interference on the part of the two beneficiaries. It is claimed that the testimony of Christian D. Bernsee bore upon the issue of undue influence. There is very little, if any, evidence which would have justified a finding that the will was procured by undue influence. Dr. Bellows, one of the subscribing witnesses, who failed to recollect the facts sworn to by the other subscribing witness as to the signing of the will by the testatrix, testified, among other .things; in substance, that the son, Christian D. Bernsee, came to his office with his mother to get him to sign the will as witness; that the son, during the interview, had the will in his hands and conducted the ceremony of publication, and that the son asked the witness to sign the paper as a witness, and when it had been signed by the witness, took it away with him. The testimony of Christian D. Bernsee contradicts that of Dr. Bellows as to some of the details of the transaction. The main contradiction is that his mother, and not himself, asked the witness to sign. The only bearing of the evidence of Dr. Bellows on the issue of undue influence consisted in his statements' that the testatrix seemed nervous and excited, and his evidence that the son Christian took an active part in the ceremony of publication. But it clearly appeared from the other testimony, as well as by the testimony of Christian himself, that he accompanied his mother on this occasion for the purpose of having her will executed, and that he produced and read formal instructions for the execution of the will prepared by the lawyer who drew it. His action and participation was fully shown, and it is impossible to suppose that the matters of variance between his testimony and that of Dr. Bellows could have had any influence in the decision of the case. It would be contrary to the general rule to reverse a judgment for a technical error which did not affect the result. The witness was not permitted to testify as to the main matter for which he was called, and the other matters as to which he testified did not prejudice the contestants. The judgment should be affirmed.

All concur.

Judgment affirmed.