author: Stover, J.

text:
    In the Matter of the Application of Henry Bradley, Resp’t, to Compel Delivery of Books, Papers, etc., by William H. Sullivan, App’lt.

      (Supreme Court, General Term, Third Department,

      Filed December 8, 1892.)

    Supervisors—Qualification—Bond.
    A person elected to the office of supervisor becomes such officer on filing the constitutional oath. The prior incumbent of the office thereupon ceases to be supervisor and is not entitled to notice of the meeting of the town board to approve the undertaking of the new official.
    Appeal from order requiring the delivery of the books and papers pertaining to the office of supervisor of the town of Min • erva, Essex county, by William H. Sullivan to Henry Bradley, his successor in office.
    Said Sullivan was the supervisor in office prior to March 1st last. At the town meeting on that day there were 209 votes cast for the office of supervisor, of which Sullivan received ninety-nine and Bradley (the petitioner) 110. All of the latter were cast by means of “paster ballots," and were not allowed to Bradley upon the canvass for the alleged reason that he had not been nominated to the office, but it was ascertained and determined that he had a majority were it proper to allow votes for him, to wit: if he had been put in nomination at a primary meeting.
    Thereupon Bradley and others upon the same ticket with him applied for a mandamus, directed to the officers who canvassed the votes, and a peremptory writ was issued directing them to reconvene and declare the result of said election, allowing such paster ballots, and to issue a certificate of election to the persons voted for having the greatest number of ballots cast for them, including such paster ballots. From the order allowing such writ appeal was taken to this general term, where it was affirmed, 64 Hun, 356; 45 St. Hep., 533, and from thence to the court of appeals, where the order of this court was affirmed. 133 FT. Y., 493 ; 45 St Bep., 866. On July 1st last, after judgment in the latter court was rendered, said canvassers reconvened and declared such result, allowing all said votes, and declared said Bradley duly elected to the office of supervisor, and issued to him a certificate of his said election. Thereupon Bradley took and filed the constitutional oath of office as such supervisor; executed with two sureties and filed the bond or undertaking, and also a separate bond for school moneys which was filed with the county treasurer, and qualified himself generally, as prescribed by law, to perform the duties of such office, and demanded of his said predecessor the books and papers pertaining thereto, and delivery being refused, presented his petition herein setting out all said facts to said justice, who thereupon proceeded in the manner pointed out by statute, 1 B. S., m. p. 125, such proceeding terminating in the order appealed from.
    The objections made to the granting of the order were :
    1. That Bradley was not legally elected to the office because of marked ballots being cast for him.
    2. That if elected he did not qualify in the manner prescribed by statute to entitle him to possession of the books and papers in that his oath of office filed as aforesaid was not “ certified ;” that there was no legal approval of his official bond by the town board since Sullivan (who was still supervisor until Bradley’s bond had been acted upon and approved, as it is alleged,) was not notified of the meeting at which action was taken on the bond and did not act upon it; that one of the sureties was insolvent; that the amount in which the sureties justified was insufficient; that Bradley did not file an itemized statement of his election expenses within ten days after the election; that his bond to the county treasurer (for school moneys) was not approved by that officer; that the sureties thereon did not justify in double the amount or penalty of the bond.
    3. That the statute to compel delivery of books and papers was not intended to apply to a case where the title to the office is put in issue and delivery refused, because the delinquent’s claim of possession is based on the right to the office.
    The following is the opinion at special term:
   Stover, J.

The application is to compel delivery of books and papers belonging to the supervisor of the town of Minerva, in Essex Co. The question as to the election of the supervisor has been finally passed upon by the court of last resort, and cannot be raised now.

Of the other questions raised, the only one entitled to serious consideration is, whether the bond of the incoming supervisor has been properly approved.

The statute provides that the supervisor shall serve until his successor is elected and qualified. Section 13, chapter 569, Laws of 1890.

Supervisors are required to take the constitutional oath of office.

Section 60 of the law above cited requires every supervisor elected or appointed, “within thirty days after entering upon his office,” to file an undertaking, such bond to be approved by the town board. •

The defendant in this proceeding sets up that he was not notified to attend the meeting of the town board at which the undertaking of the petitioner was approved. The papers show upon their face that the town board approved the bond.

There can be no doubt of the correctness of the rule that all the members of the board must be notified of the meeting, and a majority must be present.

if, therefore, the defendant was a member of the town board and was not notified of the meeting, the action of the board is of no effect.

I am of the opinion that the defendant was not a member of the town board. The doubt grows out of some seeming inconsistencies and ambiguities of the statute.

The language is, that the supervisor shall hold “ until his successor is elected and qualified.” What is meant by qualification? Does it mean the filing of the oath only, or the filing of the oath and the giving of the undertaking ?

It would seem in the case of the supervisor that “ qualification,” ■ referred to in §§ 12 and 13, meant the filing of the oath of office, because the language of § 60, under which the undertaking is required, is as follows:

Every supervisor hereafter elected or appointed shall, within thirty days after entering upon his office, make and deliver to the town clerk of the town his undertaking, etc.”

Evidently this section contemplated the new supervisor in office, and that he became supervisor upon the acceptance of the office by filing the constitutional oath. Section 51.

It follows, therefore, that the defendant ceased to be supervisor upon the filing of the oath of office by the petitioner herein, and, of course, was not entitled to notice of the meeting of the town board. .

The objection that the bond was not properly approved, therefore fails. Any vacancy occurring after the acceptance of the office by the petitioner would be a vacancy of the new term, and would not give the defendant any right to the office.

We need not discuss the question further. The objection raised is that the defendant did not have notice of the meeting of the town board, and if I am right in my interpretation of the statute above quoted, the objection is not a valid one.

As to the failure to file the itemized list of expenses, I do not think the question can be raised in this proceeding. That question ought not to be adjudicated, except by a judgment of the court in an action properly brought.

The petitioner is entitled to the order asked for.

Robert Dornburgh, for app’lt; Foley & Wing, for resp’t.

Order affirmed, on opinion of special term, with ten dollars costs and printing disbursements.

Mayham, P. J., Putnam and Herrick, JJ., concur.


source: Caselaw Access Project

author: Pee Curiam.

license: Public Domain

text:
    Andrew A. Davis, Resp’t, v. The Town of Rochester, App’lt.

      (Supreme Court, General Term, Third Department,

      Filed December 8, 1892.)

    Towns—Negligence—Evidence.
    In an action against a town.for injuries alleged to have been caused by its negligence, it is not competent to prove conversations of the plaintiff with the highway commissioner or with the members of the town board in relation to a settlement..
    Appeal from a judgment of the Ulster county court, affirming a judgment of a justice’s court, entered on the verdict of a jury.
    The complaint was for damages to plaintiff’s horse, sustained while traveling one of defendant’s highways, by breaking through a bridge, and alleges negligence on the part of defendant and its commissioner of highways. It also contains an allegation of an agreement for a settlement.
    No evidence of negligence was given on the trial. The only testimony on this branch of the case was that the horse broke through the bridge and hurt his hind leg. After the accident it was discovered that the broken plank was rotten, but there was-no attempt to prove that the highway officers knew, or ought to-have known, of its condition.
    But the plaintiff endeavored to make out his case by proving a settlement with the officers of the town. He proved, under defendant’s objection, that, in company with the commissioner of highways, he went before the town board and made a claim for damages; that, at the suggestion of members of the board, the commissioner accompanied him to his residence and agreed to settle the matter with him for the sum of seventy-five dollars. This proof was made by oral testimony of what took place, con-

      sisting of conversations between the plaintiff and members of the board; between members of the board themselves; between members of the board and the commissioner, and between the plaintiff and the commissioner; and also of a letter written by the commissioner to the plaintiff after the alleged settlement.
    At the close of the plaintiff’s testimony a motion was made for nonsuit, which was denied, and the motion was renewed and denied at the close of all the evidence. The jury rendered a verdict for the plaintiff for seventy-five dollars, the amount of the alleged settlement.

      Linson & Van Buren, for app’lt; John E. Hardenbergh, for resp’t.
   Pee Curiam.

Without passing upon the position taken by'the appellant that there was no sufficient evidence of negligence given upon the trial, on the part of the highway commissioner, to sustain the judgment, we are of the opinion that a new trial will be necessary because of the reception of improper evidence by the justice.

He allowed the plaintiff to show conversations and negotiations had with the individual members of the town board and with Enderly, the highway commissioner; and also received a letter of Enderly’s written to the plaintiff. All this evidence was properly objected to by the defendant.

The plaintiff might have shown the presentation of his claim to the defendant’s board of auditors, and that it was not allowed. But it was not competent to prove his conversation with Enderly, the highway commissioner, or with the members of the town board. Certainly the objection to the evidence of the conversation between plaintiff and Enderly prior to the presentation of the plaintiff’s claim to the town board should have been sustained and the testimony so objected to may have influenced the result.

The judgment should be reversed, with costs.

Mayham, P. J., Putnam and Herrick, JJ., concur.


author: Herrick, J.

text:
    Helen E. Porter et al., Resp’ts, v. Jabez M. Lyle et al. App’lts.

      (Supreme Court, General Term, Third Department,

      Filed December 8, 1892.)

    Yehue—Change op.
    Where it appears that one of the plaintiffs and ore witness reside in the county where the venue is placed and the other plaintiff, the defendants and many of the witnesses reside in another county where the transaction in question arose, the place of trial should be changed to the latter county.
    Appeal from order denying defendant’s motion for a change of venue from Ulster county to Kings county.
    This action is brought to recover, on eight separate causes of action, certain moneys claimed to have been paid to defendants by mistake, or through fraud. The defendants deny the allegations of payment by fraud or mistake, allege that accounts including the items in controversy were made and stated between the parties, and that settlements were made between them on the basis of said accounts.
    The plaintiff, Helen E. Porter, resides in Ulster county. The plaintiff Albert V. Porter and both defendants reside in Kings county, where the transactions in controversy were had.

      Charles S. Taber, for app’lts; John C. Gray, for resp’ts.
   Herrick, J.

The transactions giving" rise to this litigation arose in Kings county. One of the plaintiffs, both the defendants, and many of the witnesses, reside in Kings county; one of the plaintiffs and one witness reside in' Ulster county, where the venue now is; it is doubtful whether the plaintiff, who resides in Ulster county, is a necessary or material witness.

Under such circumstances, the place of trial should be in Kings county. Ho opinion is necessary.

The order of the special term should be reversed, the place of trial changed to Kings county, with ten dollars costs of motion and ten dollars costs of this appeal, with printing and other disbursements.

Putham, J., concurs; Mayham, P. J., not sitting.


text:
    William Clark, Resp’t, v. Ellsworth McDuffie, App’lt.

      (Supreme Court, General Term, Third Department,

      Filed December 8, 1892.)

    Chattel mortgage—Delay m filing—Purchaser with notice.
    A chattel mortgage given for a good consideration was not filed for four days. During that time a judgment was recovered against the mortgagor, but the execution was not issued until after the filing and defendant became the purchaser at the sale, with notice of the existence of the mortgage. PlaintifE subsequently took possession under his mortgage, but defendant afterwards took the property and converted it to his own use. Held, that the measure of damage for such conversion was not the value of the property, but the amount of plaintiffs debt, with interest and expenses of caring for the property.
    Appeal from judgment of the Montgomery county court in favor of plaintiff, directed by the court, and from order denying motion for a new trial.
    Action for conversion of hay and buckwheat of the value of $532.50, which was covered by a chattel mortgage given to plaintiff by one Wessels to secure payment of rent to come due, amounting to $275.
    Defendant was the-purchaser of the property at a sale on execution against Wessels. Thereafter plaintiff took possession of the property under the mortgage, but subsequently defendant-went to plaintiff’s farm and took away and converted the hay and buckwheat.

      H. M. Eldredge (Westbrook & Borst, of counsel), for app’lt; Weller & Moore, for resp’t.
   Herrick, J.

The chattel mortgage was given on the 31st day of August, or the 1st day of September, 1891; it was filed on the 5th day of September, 1891. A judgment was obtained against the mortgagor_ September 4, 1891, in the justice’s court: on the 7th an execution was issued against the property of the mort-

gagor. A levy was made on the mortgaged property September 9, and it was sold September 28, 1891, and the defendant became the purchaser at such sale; Before the property was sold the defendant was notified of the existence of the plaintiff's mortgage upon the property, and the plaintiff’s agent forbid the sale because of the existence of such mortgage.

The mortgage was given for a good and valuable consideration.

The only attack upon its validity is that it was not filed.

■The court submitted the question to the jury as to whether the mortgage was filed within a reasonable time after its execution, and they found that it was not; as a question of fact, I doubt very much whether the jury reached a correct conclusion in that respect; the mortgagee lived some three miles from the town clerk’s office, and it does not seem to me that the delay was unreasonable ; be that as it may, however, there are other questions presented here which determine the case.

The indebtedness for which the judgment was obtained was incurred prior to the execution of the mortgage; the execution was not issued until after the mortgage was filed; the defendant had notice of its existence prior to his purchase, and having actual notice of its existence, it was as against him a valid mortgage. Gildersleeve v. Landon, 73 N. Y., 609; Lewis v. Palmer, 28 id., 271; Mach v. Phelan, 92 id., 20.

It is true that none of the above cited cases were cases where parties had purchased at a sale under an execution, but I can see no difference in principle between one who purchases direct from the mortgagor with notice, and one who purchases at an execution sale with notice.

The object of the statute, as was said in Mack v. Phelan, 92 N. Y., 25, “is to prevent imposition upon subsequent mortgagors and purchasers,” and “notice stands in the place of filing,” and the purchase would “be subject to the hen of the mortgage.” Here no imposition is practiced upon the purchaser, he has actual notice, and before the execution under which he purchases becomes a lien the mortgage is filed. This is not the case of one who gives credit to the mortgagor after the execution of the mortgage and before it is filed. Neither is it like the case of Best v. Staple, 61 N. Y, 71, where the execution was issued and levy made before the mortgage was filed or the mortgagee had taken possession, so that the lien of the judgment creditor was perfected before that of the mortgagee; in that respect it will be seen that it differs from the case now before us. Here the indebtedness was a preexisting one, and before a levy was made and a lien acquired, the mortgage was filed.

I do not think the sale to the defendant divested the plaintiff of his right of possession under the mortgage; but it did pass to, the purchaser all the interest which the mortgagor had in the property. The mortgagee not having taken possession, and the debt which the mortgage was given to secure not being due, the mortgagor had an interest which he could sell or assign.

After the sale under the execution the plaintiff took possession of the mortgaged property, under a clause in the mortgage authorizing him so to do; the mortgage authorized him to take possession, to sell and dispose of the same at either public or private sale and out of the proceeds of the sale to retain the amount of the mortgage with interest and all expenses and charges, and to pay the surplus, if any, to the mortgagor, his executors, administrators and assigns. All the plaintiff could claim then on his mortgage was the amount of his debt and interest; all beyond that would belong to the defendant, who stood in the place of the mortgagor. And when the defendant converted the mortgaged property, as claimed by the plaintiff, it seems to me that the damage done to the plaintiff was not to be measured by the value of the property, but by the amount of his debt with interest and his expenses, if any, in caring for the property, and that the trial court erred in charging the jury that the plaintiff could recover for the full value of the property, and for that error the judgment should be reversed and a new trial granted, costs to abide the event; it is unnecessary to determine whether there was a mis-trial in the manner of submitting the case to the jury.

Mayham, P. J., and Putnam, J., concur in result.


text:
    August Schwemmer, Resp’t, v. Peter Stratton, App’lt.

      (Supreme Court, General Term, Third Department,

      Filed December 8, 1892.)

    Appeal—City court op Albany—Costs.
    The attorney’s fee allowed to the prevailing party in actions tried in the city court of Albany by chap. 439, Laws 1881, are a part of the costs which must be paid before an appeal can be taken. |
    Appeal from order of the county court of Albany county, denying motion to dismiss an appeal from the city court of Albany made on the ground that the attorney’s fee included in the judgment had not been paid as part of the costs. Plaintiff brought an action in the city court to recover for work alleged to have been done and material alleged to have been furnished to defendant.
    On the trial judgment was rendered for defendant for twenty-five cents costs and five dollars attorney’s fee. Plaintiff appealed from the judgment to the county court, and paid the twenty-five cents, but did not pay the attorney’s fee, claiming that it was no part of the costs. Defendant moved to dismiss the appeal on the ground that the costs had not been paid, which motion was denied.

      Stedman, Thompson & Andrews, for app’lt; J. W. Ecker, for resp’t.
   Order reversed, with ten dollars costs, printing and other disbursements, and motion granted, with costs.

Mayham, P. J., Putnam and Herrick, JJ., concur.


author: Putnam, J. Mayham, P. J.

text:
    William Thompson, Resp’t, v. Cornelius P. Vroman, App’lt.

      (Supreme Court, General Term, Third Department,

      Filed December 8, 1892.)

    1. Reference—Finding s—Conversion.
    Where the complaint states facts showing a wrongful deposit of plaintiff’s funds by defendant in his own name and a conversion by a withdrawal

      thereof from the bank, and the referee distinctly finds that defendant was • guilty of a conversion, it is not error to refuse to find that the complaint alleged a cause of action in ton, as th s would be only a refusal to repeat the finding.
    S. Conversion—Fiduciary* capacity.
    Where an agent takes money from a principal to deposit in bank in the principal’s name, it cannot be said that he was “ not in any way acting in a fiduciary capacity,” and it is not necessary for the complaint to use the word “fiduciary.”
    3. Same—Demand.
    Where there was a wrongful deposit of the money by defendant in his own name and a wrongful withdrawal and conversion of the fund,- no demand is necessary before action.
    4. Same—Absence oe consent.
    In such a case, it is competent for plaintiff to establish the fact that the withdrawal was not done with his consent, and he may properly be allowed to testify that he did not consent.
    (Mayham, P. J., dissents.)
    Appeal from judgment in favor of plaintiff, entered upon report of referee.

      D. S. Mayham, for app’It; Hinman & Dugan, for resp't.
   Putnam, J.

This action is brought for the wrongful conversion ■of $1,000. The complaint alleges that on the 26th day of May, 1867, plaintiff delivered to defendant the sum of $1,000, with directions to place the same on deposit with H. R. Pierson & Son, -bankers, in Albany, N. Y., to remain there on interest for the benefit of plaintiff. Defendant receiving and agreeing to so deposit said money, in fact deposited the same to his own credit. He was not the owner of and had no interest in said money. That the same belonged to plaintiff. That thereafter, and prior to October 5, 1888, defendant, without the knowledge or consent of plaintiff, unlawfully withdrew said money and unlawfully appropriated and converted the same to his own use.

While the complaint does not characterize the deposit of this money by defendant in his own name as a conversion, yet it states all the facts showing that such deposit by defendant was a wrongful appropriation of the fund. And the complaint also alleges a conversion by the wrongful withdrawing and use of the said money.

Defendant, in his answer, alleges that the deposit of the said money in his own name was done with the knowledge and consent of the plaintiff, and denies any wrongful appropriation of the same.

The case presents a question of fact, which the referee has determined in favor of the plaintiff. I have examined the testimony given upon the trial "and the briefs submitted by counsel with care. " The evidence was conflicting, and the referee might have reached a different conclusion from that arrived at. There was testimony in the case from which he could have determined that the money in suit was deposited in the defendant’s name with the consent of plaintiff. But I think there was sufficient evidence given to sustain the referee’s finding on the question presented for his decision. The rule is familiar that on questions of fact the appellate court will not reverse, unless the evidence in favor of the appellant greatly preponderates. Authorities sustaining this rule, are cited by respondent, and need not be discussed here. I think that this case does not present such a preponderance of evidence in favor of the defendant as will justify a reversal of the judgment. On the contrary, if it were my duty to pass upon the testimony as an original question, I should hesitate before coming to a different conclusion from that reached by the learned referee.

Counsel for appellant suggests that the referee erred in declining at defendant’s request to find that, “ The complaint alleged a cause of action in tort, not contractand also in refusing to find that, “ In order to maintain the action in its present form it must affirmatively appear that the defendant has been guilty of conversion.” These errors, if they should be deemed such, are harmless. The complaint clearly alleges a cause of action in tort, and I see no reason why the referee should characterize it. The defendant has suffered no injury by his declining to find that a complaint plainly alleging a conversion contains a cause of action in tort. Again, in his findings the referee distinctly determines that the defendant was guilty of a conversion of the money in suit, and a refusal to repeat the finding can produce no injury.

The referee did not err in declining to find that “ defendant was in no way acting in a fiduciary capacity.” He did find properly on the evidence in the case, that the defendant received $1,000 as the agent of plaintiff to deposit; hence, defendant was acting in a fiduciary capacity. But it is suggested that there was no allega-j tian in the complaint that a fiduciary relation existed. It is truel that the complaint does not use the word “ fiduciary.” But facts are stated showing that defendant received the money to deposit, and hence that the relation of principal and agent existed. Where an agent takes money from a principal to deposit in a bank in the principal’s name it cannot be said that the agent was “ not in any way acting in a fiduciary capacity.” See Flagg v. Ely, 1 Edmonds, 206. Hence the above request of the defendant to find was properly refused by the referee.

I think the error of the court below, if any, in overruling the objection to this question asked of plaintiff, viz.: “Did you make an application for a pension on account of your son being killed in the war?” harmless. The error could not possibly produce any injury to the defendant.

The statement from the books of the bank was properly received in evidence under the stipulation. That stipulation provided that the statement might be read as original evidence ; that it was correct as to the amount of deposits to the credit of defendant and the amount drawn out by him.

As we have seen, the evidence in the case is sufficient to sustain the findings of the referee that there was a wrongful deposit of the money in suit by defendant in his own name and also a wrongful withdrawing and conversion of said fund. Hence no demand prior to the commencement of the action was necessary to be made by the plaintiff and, therefore, the exception to the rulings of the referee admitting exhibit D. are not well taken.

It is insisted that the referee erred in overruling objections to the following question asked of plaintiff, viz. : “ Did you consent that Mr. Vroman should draw the $1,000 from H. R. Pierson ¿5 Son’s bank? Objected to. * * * No, sir; no, I didn’t consent that he might use it; I didn’t know that he had done so I knew nothing about it until the bank had failed.’’ I think the question was properly allowed to be answered as calling for a fact. That the case was one where the plaintiff could properly show a negative. It was competent for the plaintiff to establish the fact that the withdrawal of the funds by the defendant was not done with his consent This fact could only be shown in the way allowed by the referee. See Crane v. Baudouine, 55 N. Y., 263 ; Huggans v. Fryer, 1 Lans., 277; People v. Tubbs, 37 N. Y., 589; Crouse v. Garlock, 45 How., 85.

There are other exceptions taken not necessary to be considered.

The judgment should be affirmed, with costs.

Herrick, J., concurs.

Mayham, P. J.

(dissenting.)—The complaint in this action alleges that the plaintiff delivered' to the defendant $1,000, with direction to him to deposit the same with the firm of H. B. Pier-son & Son, to remain there on interest for the benefit of the plaintiff, and that the defendant did deposit the same with said firm.

1 That defendant had no interest in the money, but the same belonged to the plaintiff. The complaint charges that the defendant afterwards wrongfully withdrew this money from said firm, and wrongfully converted the same to his own use, and demands judgment for $1,000 and interest.

The answer denies, in substance, that the defendant agreed to deposit this money for plaintiff, and alleges that the plaintiff directed that defendant should deposit the same to his own credit, as his own, and that the plaintiff was to look to him for the same.

The answer also alleges that from time to time the plaintiff called upon the defendant for payments on account of said money and received from the defendant various payments on account of the same. The answer also sets up offsets and counterclaims. The main question litigated in this action was whether the money was received by the defendant in the nature of a loan to be deposited with the defendant to be accounted for by him to the plaintiff, or was received by him solely for the purpose of being by him deposited with Pierson & Son in the name of, and to the credit of, the plaintiff, and subject only to his check.

If the latter, then his withdrawing it from the bank in his own name was a conversion ; if the former, then the title to the money vested in the defendant, and he became the debtor of the plaintiff in that amount, and was liable only for money had and received, and an action for a conversion of this money would not lie.

To constitute a conversion by one person of the property of another, the title to, or right of possession of the money converted must be in the plaintiff, and the possession of the same must be wrongfully taken or detained by the defendant.

Ordinarily, where a party seeks to recover for the conversion of a chattel, he must show his right to the identical chattel which he claims has been converted.

If the money was loaned, so that the claim of the plaintiff against the defendant was for the value of the money, and not the identical money itself, then the title to the same vested in the defendant, and trover would not lie. In McNaughton v. Cameron, 44 Barb., 409, the court say : “It all depends upon the question whether the title to the money passed to the defendant” If, therefore, this money, or this check, was delivered by the plaintiff to the defendant to be deposited in his name, to his credit, the title to the same passed to him, and he became the debtor of the plaintiff, and on its deposit in the bank by the defendant to his credit the title vested in the firm of bankers, and they became the debtors of the defendant

As this money was not held by the Piersons as a special deposit, they did not take it as bailees, but as owners; and the relation of debtor and creditor was established between them and the defendant, and the same was true as between the plaintiff and defendant, Com. Bank of Albany v. Hughes, 17 Wend., 94, unless the defendant fraudulently converted the pension check by procuring the same to be deposited to his credit, without the knowledge or consent of the plaintiff.

If this money was properly in the Pierson Bank to the credit of the defendant, then, as we have seen, it became the general property of the Piersons, who became the general debtors of the defendant, who alone could draw it from them on his own checks, and he, in like manner, became the debtor of the plaintiff, and liable to him only in an action for money had and received, and could not be charged in trover for an unlawful conversion of the same.

But it is not charged in the complaint that the defendant wrongfully converted this money by wrongfully depositing it to his credit with Pierson & Son, but that he wrongfully withdrew •'$1,000 of this money and converted it to his own use.

The first question presented by the case is, was there any unlawful taking of the check deposited in the bank of Pierson & Son ? Second, was there a conversion of said property by withdrawing this money from the bank by defendant

The whole tenure of the evidence seems to be that the plaintiff delivered the pension check to the defendant to be deposited by him in his name in the Pierson Bank as he had already accounts with that bank, and as the plaintiff could not draw checks for the same in his own name, the money was to be deposited in the name of the defendant and the plaintiff was to look to him for .money when he wanted the same. This appears directly from the testimony of the defendant and his theory is strongly corroborated by the testimony of William J. Yroman, Mead J. Yroman, John F. Shafer and Albert 0. Judson, as well as the reasonable inference to be drawn from the fact that whenever plaintiff wanted money he called on the defendant; for the same, instead of the bank, and never applied to the bank for any money.

The case shows that he asked for and received from time to time different amounts of money from‘$100 to fifty cents, consisting of nearly fifty items at different times from the time of the deposit of this money in the bank down to near the time of the commencement of this action.

From these facts it seems to me to be conclusively established that the title to this money, deposited to the credit of the defendant, passed to him and from him to the bank and that the defendant’s subsequent withdrawal of the same or any part of if, was not a conversion, but was a lawful exercise of dominion over a debt due him from the bank, and that the payment made by him to the plaintiff was in no sense a return of money which he had wrongfully converted ; but was payment upon a debt which he owed the plaintiff.

Conversion is a tortious act by which the defendant deprives the plaintiff of his goods. Spencer v. Blackman, 9 Wend., 168. And the plaintiff in this action assumed the burden of proving the wrongful taking or detention of this $1,000, and the court cannot relieve him of that burden by presuming, in the absence of proof or against the weight of evidence, that the defendant has been guilty of a wrong. Presumption is always in favor of honesty and fair dealing, and remains available to the party in whose favor it arises until overcome by countervailing evidence. 1 Rice on Evidence, 96 Louisville, N. A. & C. R. Co. v. Thompson, 5 West. Rep., 833; 107 Ind., 442.

As we have seen, the complaint does not allege the conversion of the pension check, but charges the wrongful withdrawance and conversion of $1,000 from Pierson & Son, bankers, and for that amount plaintiff is allowed to recover. The evidence shows that at the time of the commencement of this action the defendant had standing to his credit in this bank $1,426.31 out of which at that time he had drawn the sum of $1,253.05, leaving a balance in the bank of $182.26. If the conversion of this money consists in its withdrawal from the bank as charged in the complaint, then the sum remaining in the bank was the money of the plaintiff, and the defendant could only be charged with the conversion of the $1,000 less the sum of $182.26, so that the recovery upon the plaintiff’s theory should have been only for the sum of $817.74 and interest from the time of drawing the same by the defendant.

The plaintiff cannot properly charge that the defendant drew out plaintiff’s money and left his own in the bank, especially in the absence of proof upon that subject. Nor can he, for the purpose of assuming that position, recover for the conversion of this check when he claims in his complaint to recover only for money improperly drawn out of the bank and not for the conversion of the check or of the money by depositing it in the bank in his own name.

If this action had been prosecuted for the conversion of this money by the defendant by depositing it in the bank in his own name, and no charge had been made for the withdrawal of it by the defendant, the plaintiff would most signally have failed upon, the proof, and hence the plaintiff makes no charge of the conversi on of the money by the defendant by depositing the same in his own name, and as the wrong charged consists in the withdrawal of the money, the defendant could in any event only be charged with so much as the proof clearly established was withdrawn by him, and as he was permitted to recover for ^182.26 in excess of the amount actually drawn by him, the judgment is erroneous even if it can be held that the withdrawal of any of this money from the bank was a conversion of the amount so withdrawn.

The referee in this case holds that the defendant in effect received this money in a fiduciary capacity, and that his depositing the same in his own name was a conversion of the same. Mo such allegation is contained in the complaint, and, as we have seen that the conversion charged was for withdrawing the same from the bank, the recovery is based upon a state of facts and legal conclusions not set ou t in the complaint, and no motion has been made to conform the complaint to the facts proved or found by the referee.

This cannot be done under the Code any more than it could under the system of pleadings existing before the Code. In Southwick v. First Nat. Bank of Memphis, 84 N. Y., 429, Earl, J., in discussing the question uses this language: “ Pleadings and a distinct issue are essential in every system of jurisprudence, and there can be no orderly administration of justice without them.

“If a party can allege one cause of action, and then recover upon another, his complaint will serve no useful purpose, but rather to ensnare and mislead his adversary.”

In Romeyn v. Sickles, 108 N.Y., 650; 13 St. Rep., 864, the court say: “ It is a fundamental rule that the judgment shall be secundum allegata et probata, and as was said in Day v. Town of New Lots, 107 N. Y., 148; 11 St. Rep.,'361, any departure from that rule is certain to produce surprise, confusion and injustice.”

This fundamental and elementary rule was clearly departed from by the referee in this case. The defendant was not charged in the complaint either in direct terms or by implication with receiving this money in a fiduciary capacity, and yet the referee expressly refuses to find, on the request of the defendant, that the same was not so received and held by the defendant, and thus in effect held that the defendant received and held this money in that capacity.

In Hillis v. Bleckert, 53 Hun, 500; 25 St. Rep., 553, which was an action for the conversion of money, Bradley, J., says: “ There is no allegation in the complaint that the money mentioned was received by the defendant in a fiduciary capacity, and it is, therefore, deficient in an essential element A statement of facts and circumstances which might justify the legal conclusion of money received in a fiduciary capacity does not comply with the statute, inasmuch as it requires such allegation to be made in the complaint, and declares that the plaintiff cannot recover unless he proves the same on the trial.”

It is true that this was said when an order of arrest was applied for, but it at the same time illustrates the rule of pleading in actions of tort for the conversion of money which comes to the possession of the defendant with the consent of the plaintiff.

I am also of the opinion that the referee in this case erred in the admission of copies of the bank books in evidence. The stipulation, at most, only made the copy evidence if the books themselves were competent under the proof. This made it incumbent on the plaintiff first to prove in the regular way the authenticity and correctness of the books, before the transcript could be received in evidence. That was not done in this case. It can hardly be claimed that the bare production and proof of identity of the books of the bank would authorize them to be read in evidence against the defendant. In 2 Rice on Evidence, 894, the learned author says : “ The books of a bank, like those of a merchant or shop-keeper, must be proved by the suppletory proof, oath of some officer or agent of the bank.” And “ before the books of a bank can be received it must be proved or admitted that the entries were made by an authorized clerk or agent.”

No such proof was given or offered in this case, and the proper foundation for the introduction of the books not having been laid the transcript was not by the stipulation made evidence. I am also of the opinion that the question put by the plaintiff’s counsel to the plaintiff: “Did you consent that Mr. Vroman should draw this one thousand dollars from H. R. Pierson & Son’s bank ? ” was not proper and that the admission of the answer under defendant’s objection was error.

Whether or not he consented, and what amounted to a consent, was the principal question to be litigated in this case. That question was to be determined by the referee from the facts, circumstances and conversations relating to the entire transaction, and while it was competent for the plaintiff as a witness to tell what was said, it was not, I think, competent for-him to give a sweeping conclusion determining the whole theory of the defendant’s defense. He should have been confined to giving the conversations and the referee should make his deductions from the same. In Teerpenning v. Corn Exchange Ins. Co., 43 N. Y., 281, Allen, J., says: “As a rule witnesses must state facts, and not draw conclusions or give opinions. It is the duty of the jury or the court to drawn conclusions from the evidence and form opinions from the facts proved.”

I am, therefore, of the opinion that the judgment should be reversed and the referee discharged and a new trial.granted, costs to abide event

• Judgment affirmed, with costs.


author: Merwin, J.

text:
    Anson B. York et al., Resp’ts, v. William W. Conde et al., App’lts.

      (Supreme Court, General Term, Fourth Department,

      Filed December 9, 1892.)

      1. Assignment — Claim against general government—U. 8. R. S., § 3477.
    An assignment of a fund to become due from the United States government is not void, under § 3477, U. 8. R. 8., as between the parties, but only when set up as against the government.

      3. Same—Lien xjpon two funds.
    In an action brought to determine conflicting claims to a fund, it appeared that defendants had received from the wife of G., one of the assignors of the fund, as collateral security for their indorsements, a mortgage upon two houses, that they afterwards foreclosed the same and bid in the property, and thereafter sold one house for $800 and applied it on the balance due on the indorsements, the other house being worth about $900. The court in its charge having referred to the equitable doctrine that a party having a lien upon two funds will, upon the application of a party having a lien upon one of them, be compelled to exhaust his remedy on the other security in the first instance, refused defendant’s request to charge that the doctrine had nothing to do with the case. Held, error.
    Appeal from a judgment entered in Jefferson county, December 24, 1891, upon a verdict at the Jefferson circuit, in favor of the plaintiffs for $2,737.50 ; also from an order denying a motion, on the minutes for a new trial.

      Brown & Adams, for app’lt Conde; Watson M. Rogers, for app’lt, Streeter; Henry Purcell, for resp’ts.
   Merwin, J.

In the fall of 1889 the firm of Witherby &- Gaffney entered into a contract with the United States government for the construction of certain buildings at Madison Barracks at Sacketts’ Harbor, and thereafter they purchased of the plaintiffs materials for use in the erection of said buildings to such an extent that on the 27th March, 1890, they were indebted to the plaintiffs thereon in the sum of $3,000. At that date they executed and delivered to plaintiffs an instrument in writing which, after reciting the indebtedness and that there would be due and payable to them from the government considerable sums of money before and on the completion of the work, proceeded as follows : “ Now, therefore, of the moneys due and to become due us from the said government, we do hereby, for value received, assign and transfer to said York & Starkweather, the sum of three thousand dollars, and do hereby authorize, empower, request and direct Lieut. J. E. Macklin, R Q. M., Eleventh Infantry, U. S. A., through whom payments are made for such construction, to pay to said York & Starkweather on our account for such construction the full sum of three thousand dollars, as follows: First, $500‘ from the next estimate and payment due or to become due usr and the sum of $2,500 on the completion of said work by us and when the balance of our contract with the government becomes-due and payable to us.”

On the 12th May, 1890, Witherby & Gaffney completed the work, and on the 14th May the agent of the government delivered to them a draft for $4,428, that being the balance due. This was-payable to their order, and they upon the same day indorsed and delivered it to the defendants, who upon the following day obtained the money thereon. The plaintiffs have received upon their debt $500. The balance of $2,500 and interest they seek to recover' in this action. They claim that they were the owners of the proceeds of the draft to the extent of such balance, and that defendants, when they received the draft, had notice of their claim. The defendants concede that they had notice of plaintiffs’ claim, but they insist that the instrument under which plaintiffs make their claim is void under § 3477 of the Revised Statutes of the United States, and also that prior to its date there was a verbal agreement between the defendants and Witherby & Gaffney, by which the latter, in consideration that the defendants would indorse their paper and enable them to raise money to carry on the work, agreed that such paper should be paid from the moneys to become due on the contract, and that they would turn over to defendants the check or draft which they should receive upon the final settlement, so that the defendants might be fully paid for what they indorsed for them or furnished them. Yrhether there was such an agreement was a question of fact for the jury to determine, under the ruling of this court upon a former appeal. See 61 Hun, 26; 39 St. Rep., 945.

Upon the trial under review it appeared that at the time the defendants received the draft they were liable as indorsers for Witherby & Gaffney to the amount of $4,900, of which $4,200 existed prior to March 27, 1890. Witherby & Gaffney were also indebted to the defendant Conde, individually, in the sum of $450, of which $205 was incurred after March 27,1890, and they were also indebted to the defendant Streeter, individually, $350, and there is evidence that none of this accrued after March 27, 1890. These individual accounts were for moneys or supplies furnished to Witherby & Gaffney in connection with the work. It also appears that the defendants, in disposing of the proceeds of the draft, applied $3,200 in payment of notes, $250 on the individual account of Conde, $350 on the individual account of Streeter, and the balance of $628 they returned to Witherby & Gaffney. The court held that the United States statute did not apply and charged that the plaintiffs were entitled, as matter of law, to recover the sum of $1,183, being the items of $628 and $350, above named, and also $205 of the item of $250. As to the balance of the plaintiffs’ claim, its recovery, as the court charged, depended on whether the jury found an oral agreement, as claimed by defendants, prior to plaintiffs’ agreement. The verdict was for plaintiffs for the full amount, thus negativing the existence of any prior oral agreement with defendants.

By § 3477 of the U. S. Rev. Statutes, it is provided that “ all • transfers and assignments made of any claim upon the United States, or of any part or share thereof, or interest therein, whether absolute or conditional, and whatever may be the consideration therefor, and all powers of attorney, orders, or other authorities for receiving payment of any such claim, or of any part or share thereof, shall be absolutely null and void, unlesss they are freely made and executed in the presence of at least two attesting witnesses, after the allowance of such a claim, the ascertainment of the amount due, and the issuing of a warrant for the payment thereof.” The defendants, in support of their contention that this statute applies here and strikes down the instrument upon which plaintiffs Base their rights, rely mainly on the case of Spofford v. Kirk, 97 U. S., 484. In that case, Kirk employed Hosmer to prosecute for Mm a claim against the United States for supplies furnished to the army during the late war and for damages sustained by reason of the military occupation of his property. Before the allowance of the claim he drew in favor of Wharton an order on Hosmer for a certain amount payable out of any moneys coming into his hands on account of the claim. Hosmer accepted the order and Spofford became its holder in good faith. An award was afterwards made to Kirk and. a warrant issued in his favor. The latter then refused to recognize the validity of the order or indorse the warrant in the hands of Hosmer. Spofford then filed a bill against Kirk and Hosmer to enforce compliance with the order. It was held that the accepted order was void and gave the holder no interest in the claim against the United States and no-lien upon the fund arising out of the claim, although in the absence of the statute there would be an equitable assignment pro ianto. It was said that such an order was not only invalid when set up against the government, but also as between the parties.

It is, however, claimed by the plaintiffs that subsequent adjudications in the same court have materially modified the rule laid down in the Spofford case. In Goodman v. Niblack, 102 U. S., 556, it was held that the statute did not apply to a transfer by means of a general assignment for the benefit of creditors. It also seems to have been held that in case the government recognized the validity of such an agreement, the parties to it, or those claiming under them, would be precluded from setting up that the contract was not assignable. And it was said of the Spofford. case that it was a case of the transfer or assignment of a part of a disputed claim, then in controversy, and it was clearly within all the mischiefs designed to be remedied by the statute, and that a consideration of those mischiefs, as well as a careful examination of the statute, “ leave no doubt that its sole purpose was to protect the government and not the parties to the assignment.” In Hobbs v. McLean, 117 U. S., 567, one Peck, having put in a bid for a contract which he expected to and did after-wards receive, made an agreement with other parties by which, in consideration of moneys to be advanced and services performed by them, he agreed to divide with them a fund he expected to receive from the government on the contract. This agreement was held not to be affected by the statute, and was enforced against the fund in the hands of the assignee of the contractor, and it was said that the purpose of the statute “ was not to dictate to the contractor what he should do with the money received on his contract after the contract had been performed.” In Freedmans Saving Co. v. Shepherd, 127 U. S., 494, it was held that the statute-did not apply to the assignment of a lease and the rents to become due thereunder from the government, and, the government having recognized the assignment and paid the rent to the assignee, it was held that the other parties could not complain, and that the provisions made in the assignment for the application of the rents should be carried out.

In the light of these cases, the ruling of the court below on this-subject should not, I think, be disturbed.

In the course of the trial it appeared that, on. the 26th March, " 1890, the defendants received from the wife of Gaffney, as collateral security for their indorsements, a mortgage upon two houses owned by her; that afterwards they foreclosed the mortgage and bid in the property, and had since then realized from the sale of one of the houses $800, which they had applied on the balance remaining of the $4,900 indorsements; that they still held the other house, which was encumbered by a mortgage of $700, and was worth $1,500 to $1,600. The court, in its charge, having referred to the equitable doctrine that a party having a lien upon two funds will, upon the application of a party having a lien upon one of them, be compelled to exhaust his remedy on the other security in the first instance, the defendant’s counsel asked the court to charge that that doctrine had nothing to do with this case.

To this the court replied, “ I can’t say that; it is broad enough tp engraft upon every case in order to do justice between the parties where the question arises.” The defendants duly excepted. This exception was, I think, a good one. The jury were permitted to infer that the right of the defendants -to receive the proceeds of the draft at the time they did receive them was diminished or affected by the fact that the defendants then held other security which had not since then been fully exhausted, or that defendants had no right to the proceeds of the draft until such exhaustion. This would naturally lead the jury away from the true question for them to decide, which was whether the agreement with the defendants was prior to that with the plaintiffs. If it was, it was not affected or diminished by the fact that when the draft was received the defendants had other security. The rights of the plaintiffs in respect to such security cannot be determined in this action. ¡Nothing had been realized therefrom at the time the draft was paid.

The court charged that the plaintiffs in any event could recover the sum of $628 which the defendants after they received the proceeds of the draft paid back to Gaffney, and declined to charge that if the jury found that there was a prior equitable lien or assignment in favor of defendants to the extent of the whole $4,400 in the check or draft, and it came rightfully to the bands of defendants, it was immaterial to plaintiffs what use it was put to. This should have been charged. For if the defendants had a lien to the full amount, they were entitled to receive the whole and that would necessarily exclude the right of plaintiffs to recover any part of it in this action. Whether the defendants, after they gave back a portion of the fund, could still hold for the same amount other security which they may have had, is a question that does not here arise. Upon that question the plaintiffs have a full remedy elsewhere.

The court also charged that the plaintiffs were in any event entitled to recover $205 of the amount allowed upon the individual debt to Conde. The full amount of his debt was $450. Of this $205 was incurred after the date of the agreement with plaintiffs.' The $250 was applied generally upon the account.' There was evidence tending to show that the agreement between defendants and Wither by & Gaffney covered the individual account of Conde as well as the indorsements. If so, I fail to see how, as matter of law, it should be said that plaintiffs could recover the $205. Exception was duly taken to the charge and refusal to charge above referred to.

The plaintiff York, being upon the stand as a witness in his own behalf, was allowed to testify what he told the defendant Conde that he would take rather than have any suit about it; in other words, his offer of compromise. Objection and exception were duly taken. This was immaterial, and in a close (¡ase might have an improper effect upon a j ury.

It follows that there should be a new trial.

Judgment and order reversed upon the exceptions and new trial ordered, costs to abide the event.

Hardin, P. J., and Martin, J., concur.


text:
    Daniel Crouse et al., Resp’ts, v. Walter Whittlesey, App’lt.

      (Supreme Court, General Term, Fourth Department,

      Filed December 9, 1892.)

    1. Bankruptcy—Discharge.
    Bankruptcy proceedings were commenced against defendant’s firm in June, 1875, in Kentucky; on September 7, there was an adjudication of bankruptcy; in August, 1876, the defendant filed his petition for a discharge, and this was granted in August, 1880. Plaintiffs obtained a judgment against defendant in the supreme court of this state on September 7, 1875, and in April, 1880, instituted proceedings supplementary to ex-
    ecution, which were stayed pending the determination of defendant's application for discharge. Plaintiffs claimed that defendant purposely omitted to file a schedule of his debts, so that plaintiffs would not have any notice of the proceeding, and introduced an aifidavit of the present clerk of the U. S. court that he could not find such a schedule" on file. Defendant testified that he made such schedule and delivered it to his attorneys, and afterwards saw it in the register’s office. Reid, that the evidence was not sufficient to show that the defendant in obtaining the discharge was guilty of any fraud upon plaintiffs.
    2. Same.
    The fact that a clerk of a court cannot find on file in his office proof of notice by publication required to be given of application for a discharge in bankruptcy, is not proof sufficient to overthrow the presumption raised in favor of such publication by reason of the discharge having been granted.
    Appeal from an order of the Onondaga special term, entered in Oneida county ón June 22, 1892, denying an application by defendant under § 1268 of the Code of Civ. Pro., for the cancellation and discharge of a judgment obtained by plaintiffs against defendant on September 7, 1875.
    Upon a former appeal, 40 St Rep., 133, a reference was ordered. The order now appealed from was made upon a hearing after the coming in of the report of the referee. The case contains the proof taken by the referee.

      C. D. Adams, for app’lt; G. W. Adams, for resp’ts.
   Merwin, J.

There are two questions unon this appeal: (1) Whether the defendant in obtaining his discharge practiced a fraud upon the plaintiffs which is available to them under the doctrine of the case of Poillon v. Lawrence, 77 N. Y., 207 ;(2) whether the discharge is shown to be void by reason of want of jurisdiction in the court to grant it.

1. The bankrupt proceedings were commenced in June, 1875, in the United States district court of Kentucky, against the firm of C. C. Barker & Co., of which defendant was a member and was then a resident of that district. On September 7, 1875, there was an adjudication of bankruptcy. On tlie 23d August, 1876, the defendant filed his petition for a discharge, and this was granted on 10th August, 1880. The plaintiffs obtained their judgment in the supreme court of this state on September 7, 1875, the suit having been commenced in July, 1874, and in April, 1880, they instituted against defendant proceedings. supplementary to execution. Thereupon, on or about April 16, 1880, an order out of the district court in which the bankruptcy proceeding was pending was served upon the plaintiffs, staying the supplemental proceedings until the determination of an application by the defendant for his discharge from his debts.

In the Poillon case, the creditor had no knowledge of the discharge or of the proceedings in bankruptcy until more than two years after the discharge was granted, and the proceedings had been intentionally conducted by the debtor in such a maimer that notice should not reach the creditor. In the present case, the plaintiffs knew in April, 1880, of the pendency of the bankruptcy proceedings, and the discharge was not granted until August, 1880. They had the means of fully informing themselves as to what was being done in the matter and of opposing the discharge if they saw fit. So far as it appears, they took no steps in the matter until 1890, when they attempted to enforce their judgment. The case here differs very materially from the Poillon case. There the main feature was the concealment by the debtor of the fact that the bankruptcy proceedings were pending. Here the notice to plaintiffs before the discharge dispels any idea of an intentional concealment. The plaintiffs here had full opportunity to investigate the defendant’s proceedings. Their failure to do so indicates that they were then satisfied with the situation.

The plaintiffs claim as an element of fraud that the defendant purposely omitted to file a schedule of his individual debts so that the plaintiffs would not have any notice of the proceeding. The proposition that no such schedule was filed, aside from the testimony of the defendant himself, rests upon the affidavit of Mr. Finnell, the present clerk of the court, that he cannot find upon filé in the records of the clerk’s office any such schedule. Mr. Finnell became clerk in February, 1882. The defendant testified that at the proper time he made his individual schedules, containing the names of all his individual creditors, and sent them to his attornies for use in the proceeding, and that afterwards, at the time of his examinations before the register, he saw them in the register’s office, but whether they were marked filed or not he cannot say; that at the time of his last examination in April, 1876, the register spoke about his individual discharge and told him he had done everything necessary to get it, and that after-that he never saw his individual schedules.

By the statute, § 5030 of the U. S. Bevised Statutes, the defendant was required to make out his schedules and deliver them to the messenger. The fact that the clerk does not find them in the clerk’s office does not prove that they were not delivered to the messenger. If the testimony of the defendant is to be taken as true, and it don’t seem to be contradicted, the fair inference is that defendant’s schedules were delivered by defendant’s attornies to the messenger and by the latter delivered to the register. There is no evidence on the subject from the messenger. There is no evidence that he did not, in fact, receive them. If he did receive them and did not file them, it was not the fault of the defendant.

We think that the evidence is not sufficient to show that the defendant in obtaining the discharge was guilty of any fraud upon the plaintiffs within the Poillon case.

2. Upon the question of jurisdiction, the main point is that the notice required to be given by publication, upon the issuing of the warrant as well as upon the application by the defendant for his discharge, was not given. In order to prove that it was not given, it is shown by the affidavit of the present clerk that he cannot find upon file in his office any proof of such publication. There is no' proof that the publication was not in fact made. Under the statute, § 5019, U. S. B. S., the publication upon the issuing of the warrant is to be done by the messenger in such newspapers as the warrant specifies. The statute does not state who shall attend to the publication in case of application for discharge. § 5109. In the case before us there is a copy of the petition of defendant for a discharge, and a copy of the show'cause order of the court thereon, which directs the manner in which notice shall be served by publication and by mail, and directs that in case of no opposition the register in charge shall carefully examine the papers and steps in the case and give his opinion as to the regularity of all proceedings and whether the bankrupt should receive a discharge. Then appears a copy of an entry by the clerk that creditors were notified by letter and also a copy of the report of the register recommending a discharge.

By § 5119 of the Bevised Statutes, it is provided that “ the certificate shall be conclusive evidence in favor of such bankrupt of the fact and the regularity of such discharge.”

If the proper notice was not given, the discharge was not regular and it may, therefore, be questionable whether the matter of notice can be contested in a collateral action. See Campbell v. Perkins, 4 Selden, 436. The Ocean Nat. Bank v. Olcott, 46 N. Y., 12. The district court had jurisdiction of the subject matter and of the person of the bankrupt and plaintiffs’ debt was provable.

Assuming, however, that the plaintiffs have the right to impeach the discharge by disproving the giving of notice, is the certificate or affidavit of the clerk that no proof of publication is now on file sufficient to overthrow the presumption in favor of the decree and raise the presumption that no such notice was, in fact, ■given? Ten years and upwards have elapsed, a new clerk is in the office, and the record before us seems to indicate that in May, 1891, papers were found in the office that were not supposed to be there in February previous.

The legal presumption is in favor of the regularity and validity of the steps pursued prior to the decree. Lathrop v. Stuart, 5 McLean, 167.

We think that in the present case that presumption is not overthrown. It follows that the order should be reversed and the motion of defendant granted.

Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.

Hardin, P. J., and Martin, J., concur.


text:
    Clinton R. Keeler, by Guardian, Resp’t, v. The New York State Mutual Benefit Association, App’lt.

      (Supreme Court, General Term, Fourth Department,

      Filed December 9, 1892.)

    1. Benefit societies—Fobfeitube—Notice of assessments.
    In an action upon a life insurance policy, which provided that if any assessment was not paid within thirty days after notice by mail, it should be void, defendant pleaded non-payment of an assessment. S., guardian of the infant beneficiary, testified that, subsequent to the issuing of the policy, she and the insured went to defendant’s office, and requested its secretary to send notices of assessment to witness, which he agreed to do, and which was done for two years, when she heard that one V. had paid an assessment for the insured; she then went to defendant’s office and told its officers that V. had no right to pay assessments, and that something was wrong; they stated that they would not allow the policy to lapse, but if'any assessment was not paid they would telegraph her in time for her to pay it. No notice of the assessment in question was sent witness, and she did not learn of it until two days after the thirty days had expired, when she immediately tendered the money, which was refused. Defendant denied making any arrangement such as testified to by 8., and claimed that the insured had requested that all notices be sent to him. -The court left it to the jury to say whether this request was made, and charged that if they found it was made, the plaintiff could not recover. Held, that the ruling and charge were proper, though the testimony of defendant as to directions given by the insured was not contradicted.
    2. Same—Charge.
    The court properly instructed the jury that if defendant, knowing of the interest of 8. in the policy, agreed to give her ¿notice in time to enable her to pay and-prevent a lapse, and afterwards failed to do this, it could not violate the agreement and lapse the policy.
    3. Same—Evidence.
    One V., called for defendant, testified on direct examination that when the notice of the assessment in question -was received by the insured, he lived in insured’s family, and took care of him. Held, proper, on cross-examination, to inquire why witness had to take care of the insured.
    Appeal from a judgment entered in Onondaga county on the 21st of November, 1891, upon the verdict of a jury at the Onondaga circuit November, 1891, in favor of the plaintiff for $3,262.50 ; also from an order denying a motion on the minutes for a new trial.

      Hancock, Beach & Devine, for app’lts; Burdick, Jones & McGowan, for resp’t.
   Merwin, J.

This action is upon a certificate of membership issued by the defendant on the 30th August, 1883, to Nelson R Keeler. This provided that, upon the death of Keeler and the performance of certain conditions, the sum of $3,000 should be paid to Julia, his wife, if she survived him, otherwise to his son, Clinton R Keeler, if he survived, otherwise to his heirs or beneficiaries.

The certificate also contained a provision “ that the said member agrees to pay all assessments and annual dues at the office of the association, or to their authorized collector, within thirty days from the date of notice. A notice directed to- a member’s post office address, as appearing upon the books of the association, shall be deemed a legal notice.” Nelson R Keeler died on March 6, 1890, and his wife died February 12, 1886.

The contest in this case is over the question whether the certificate or policy lapsed by reason of the non-payment of an assessment of $10.44, made by defendant on May 1, 1888, and payable on or before June 5, 1888. The defendant showed that on May 1, 1888, a notice of the assessment was mailed by its officers to Keeler at No. 306 South Salina street, Syracuse, that being the address of Keeler as stated in his application for membership. The assessment was not paid at the time required, but on the 7th June, 1888, Mrs. Stalker, upon behalf of the plaintiff, went to the office of the defendant and offered to pay it, but the defendant declined to receive it upon the ground that it was too late and the certificate had already lapsed.

It appears that on the 16th July, 1885, Keeler and his wife, by an instrument in due form, under seal and acknowledged, committed to Mrs. Stalker the guardianship of their boy, Clinton R. Keeler, during his minority, he then being six years old, and Mrs. Stalker, upon her part, agreed to support and educate the boy during the term, with the understanding, however, that she should be compensated for such care and support out of any property or estate of the boy, and Mrs. Stalker, by writing duly acknowledged, accepted the trust. Mrs. Stalker testifies that soon after this she went with Mr. and Mrs. Keeler to the office of the defendant and saw Mr. Baxter, who was the secretary and general manager of the defendant: that Mr. Keeler then introduced her to Mr. Baxter, and told him that she was the guardian of the child and had the certificate, and he wanted them in the future to send the notices of the assessments to her, and Baxter replied that they would do so ; that Keeler then gave as his reason for this that because of his ill health he might not be able to attend to it himself, that it was difficult for him to walk, and he wished the assessments sent to Mrs. Stalker so that they would never lapse, and she should take care of the policy for the boy ; that her name and address were then taken down at the office; that in the spring of 1886, after the death of Mrs. Keeler, the witness and Mr. Keeler were again at the office, and Mr. Keeler again requested that notices of assessments should be sent to Mrs. Stalker, and they agreed to do so. These interviews are in the main denied on the part of the defendant, though it is conceded that notices were for a time sent to Mrs. Stalker. She testifies that from the time of the first interview until about September, 1887, notices were sent to her, and that she paid the assessments; that in September, 1887, she learnt that an assessment had been paid by one Yan Camp, who then lived with Keeler, and that she then went to the office and inquired about it, and was told that Yan Gamp paid it because it was too much trouble for \ her to come from Auburn, where she then lived; that she told them there was something wrong about it, and Yan Camp had no right to pay it, and they replied it was all right, they would not let it lapse, and that if any assessment was not paid before '‘the last da;y they would let her know by telegraph so that she could pay it in time; that no notice was sent her of the assessment of May, 1888, and she did not learn of it until June 7, two days after the expiration of the time for payment, and that then she immediately went to the office, and they then claimed a lapse.

The officers of the defendant denied the making of any arrangement such as testified to by Mrs. Stalker, and also gave testimony to the effect that in or about September, 1887, Mr. Keeler came alone to the office and requested the notices to be sent to him at his own residence, No. 306 South Salina street. The court left it to the jury to say whether this request was in fact made, and charged them that if they found it was made, the plaintiff could not recover. The defendant claims that upon this subject there was no question of fact for the jury, as the two witnesses for the defendant were not contradicted. Still the circumstances of the case were such that it was for the jury to pass upon the credibility of the witnesses, and the case upon that subject was properly left with the jury.

As to the arrangement between the defendant and Mr.Keeler and Mrs. Stalker, or between the defendant and Mrs. Stalker, the court left it to the jury to find whether there were any such arrangements, and in substance charged that if the defendant, knowing of the interest that Mrs. Stalker had in the policy as guardian for the beneficiary, agreed to give her notice in time to enable her to pay and prevent a lapse, and afterwards failed to do this, they could not then say that they were under no obligation to keep that agreement, and could lapse the policy while violating the agreement. The charge in this respect was not excepted to, but, under the motion for nonsuit and the exception to its denial, the defendant may raise the question that there is nothing-in the case to relieve the plaintiff from the effect of the non-payment of the assessment within the time limited by the notice.

The jury had a right to find upon the evidence that the defendant, knowing that Mrs. Stalker was the guardian for the beneficiary, and had the certificate, made with her an arrangement to notify her of any assessment in time for her to pay before the expiration of the limit, and that by reason of the failure of the defendant to perform this agreement Mrs. Stalker did not learn of the assessment in time to pay on or before June 5. If the jury so found, the defendant had no right to claim a lapse because the assessment was not paid at the exact date. Leslie v. Knickerbocker Life Ins. Co., 63 N. Y., 27; Ripley v. Ætna Ins. Co., 30 id., 164; Kenyon v. K. T. & M. M. A. Association, 122 id., 247; 33 St. Rep., 467; 2 May on Ins., 3d ed., § 360, C. In the Leslie case it was held that where a party to a contract, who is entitled to a forfeit • ure in case of non-performance by the other party of a condition fherein, by his own act induces such other to omit strict performance within the time limited, he cannot exact the forfeiture, if the party in technical default, with reasonable diligence, thereafter performs or offers to perform.

We think that the motion for nonsuit was properly denied.

The defendant claims error in two rulings in the admission of evidence. The defendant called as a witness James Van Camp, who testified among other things that in May, 1888, he resided in the family with Mr. Keeler, and took care of him, and that on May 1, 1888, a notice of assessment came there addressed to Nelson R. Keeler, No. 306 South Salina Street. Upon his cross-examination he was asked the question: “ What do you mean by taking care of him; was he sick enough so you had to ?” This was objected to as immaterial, and objection overruled and exception taken. The answer was: “ He was getting insane; he would-have fits once in a while and he needed care then.” The inquiry as put related to a matter the witness had testified to on his direct. He was also a member of the defendant and, therefore, had an interest in the impending liability. He had before paid one or more assessments for Keeler, but for some undisclosed reason failed to pay this. It was proper to learn then the situation of Keeler.

Mr. Garrett, a witness for plaintiff upon the rebuttal, was allowed to testify, over defendant’s objection and exception, that on the 5th July, 1888, he was appointed committee of Mr. Keeler as a lunatic. This was with the view of showing that on the 1st August, 1888, as soon as he had any funds from the estate, lie made to defendant a tender. The objection that the papers showing the appointment were not produced was waived. It may be that this evidence was not material, but no possible harm could come from it to the defendant. The complaint alleged that Keeler on the 18th May, 1888, was certified to be of unsound mind and taken to an insane asylum. The answer admitted that Keeler was taken to an insane asylum, and that Garrett, after his appointment as committee and on or about May 7, 1888, made a tender. Before any evidence was given by defendant, the answer was without objection put in evidence by plaintiff for the purpose of using the admissions in it.

At the close of the charge, the counsel for the defendant asked the court to charge “ that it was not necessary that this notice should be received personally by Nelson R. Keeler.” To this the court replied: “No, the only effect of that question as to whether it was received personally by him or not; if the notice was actually received by him, and he knew it was there, then I •do not think there would be a right to recover at all; because then, knowing that he had the notice, it was his business to look after it. Of course, if there were proof he actually received it in his hands, there might still be a question whether, on the evidence, he was in a condition of mind to appreciate and understand that he had it.”

The defendant duly excepted to the refusal to charge as asked, and to the modification of the request as stated by the court.

The counsel for defendant argues that his request was denied, and the proper service of the notice made to depend on the condition of Keeler’s mind. It is not clear that the request was denied. In view of the prior charge, the court, in effect, said: No, it was not necessary that Keeler should receive the notice personally; but if he did, and was able to and did understand it, then the plaintiff could not recover, although she may have had the agreements that she testified to. This was going farther in favor of defendant than the court had previously done; and of this the defendant cannot complain. Any iridefiniteness, however, about the answer to the request was removed, when the court, immediately thereafter, at request of defendant, charged that if Keeler came to the company’s office in 1887, and -directed that the notices of assessments should be sent to 'him at No. 806 South Salina street, and the notices of assessments were sent, then the plaintiff could not recover. This placed the matter of service in just the position the defendant desired. The court had, in effect, so charged before, and there was really no dispute about the completeness of the service, provided the defendant had a right to serve in that way and disregard any rights the guardian of plaintiff may have bad in the matter.

Our attention is not called to any other exceptions.

The judgment should be affirmed.

Judgment and order affirmed, with costs.

Hardin, P. J., and Martin, J., concur.


text:
    James T. Outterson, Resp’t, v. The Fonda Lake Paper Company, App’lt.

      (Supreme Court, General Term, Fourth Department,

      Filed December 9, 1892.)

    1. Corporations—Transfer of stock—Estoppel.
    Plaintiff representing 300 shares of stock of the defendant corporation, agreed -with one L. to transfer the same to him, the agreement containing a clause whereby the corporation should indemnify the stockholders whose stock was to be sold against the debts of the company, and a list of such debts made before the transfer. Plaintiff, as president of defendant, furnished such list, which did not specify certain debts due him, and which he now sues to recover. Defendant was not aparty to^the agreement, and L. was aware of plaintiff's claims. _ Held, that plaintiff was not estopped from asserting the existence of such indebtedness.
    2. Same—Salaries.
    A verbal agreement made by the trustees of a corporation at a meeting, that its treasurer should have a certain salary, although no written resolution entered on the minutes, is binding on the corporation
    8. Same.
    The fact that one is an officer of a corporation does not prevent his recovery of compensation for services rendered the corporation outside the scope of his official business with the knowledge and consent of the corporation.

      Appeal from a judgment entered in Jefferson county on 7th March, 1892, upon the report of a referee in favor of plaintiff against defendant, for $1,777.63, with interest from February 18, 1891, besides costs.
    In the complaint there are three counts. In the first it is alleged that the defendant is indebted to plaintiff in the sum of $346.09 for a balance due to the plaintiff from the Fonda Lake Pulp & Paper Company, which the defendant assumed and agreed to pay. In the second, it is alleged that plaintiff, on or about December 15,1888, was duly elected treasurer and manager of defendant, and from that time performed the duties of such positions until October 1, 1889, when he resigned, and was duly ' elected president, and that he performed the duties of president and financial manager to October 1, 1890 ; that defendant agreed to pay him for his services as treasurer and manager at the rate of $1,000 a year, and that his salary as president should be at the rate of $200 a month, and that his services were worth such sums ; that during that time plaintiff made divers advances to the defendant in money or property, and received divers sums, and the balance on such account, including said services, was $1,685.30. In the third count it is alleged generally that, prior to October 1, 1890, there were divers dealings between plaintiff and defendant, and that, on or about October 1, 1890, there was an accounting between them, and a balance found due plaintiff of $2,031.39. Judgment was demanded for that amount.
    The referee allowed the plaintiff the item of $346.09, also, the sum of $791.63, for salary and services as treasurer from December 15, 1888, to October 1, 1889, the sum of $2,146.66, for salary and services while president from November 9, 1889, to October 1, 1890, and the sum of $1,626.63, for divers moneys and expenses paid and advanced, and charged the plaintiff with moneys received, to the amount of $3,Í33.37. That left a balance due plaintiff of $1,777.63, for which judgment was ordered.

      Henry Purcell, for app’lt; F. B. Pitcher and Watson M. Rogers, for resp’t.
   Merwin, J.

The contest here is over the allowance to the plaintiff of the debt originally against the partnership, and oí the items for services of plaintiff while he was treasurer and president of the defendant.

It appears that in 1887 the plaintiff and three others formed a copartnership under the name of the Fonda Lake Pulp & Paper Company for the manufacture and sale of wood pulp. This continued until December 12, 1888, when the defendant was duly incorporated, the incorporators and trustees being the same persons who composed the partnership. The capital stock was $55,000, of which $30,000 was issued to the incorporators for the real estate and plant of the partnership. Josiah E. Stone was elected president, and the plaintiff was elected treasurer, and bylaws were adopted, which provided among other things that the treasurer, subject to the control of the trustees, should have charge of the funds of the company, hire and discharge such agents and servants as the business of the company should require and have the general management of the business and affairs of the company. At the meeting at which plaintiff was elected treasurer, it was agreed by the trustees that the plaintiff should receive a salary of $1,000 a year for his services, but no resolution to that effect was passed' or entered in the book of minutes. Thereafter the plaintiff performed the duties of treasurer and manager from December 15, 1888, to October 1, 1889. At the latter date, Charles Lennig purchased and paid for $4,000 of the stock of defendant, and Emil Schalk subscribed for $12,000 of the stock, which was issued to him but not fully paid for. Lennig also made a loan to defendant of $24,000 upon a mortgage on its real estate and plant. Thereupon, at a meeting of the stockholders and trustees on October 3, 1889, Schalk, who was the agent of Lennig, was elected a trustee, and plaintiff resigned as treasurer .and Schalk was elected in his place. At a similar meeting on November 9, 1889, Stone resigned as president and the plaintiff was elected in his place and served as such from that date to October 1, 1890. During this time the plaintiff supervised the manufacture of pulp, the construction of a paper mill and the manufacture of paper therein after the same was constructed, and had the general management of defendant’s business at the pulp and paper mill. These services, the referee finds, were outside of his official duties as president, and were of the value of $200 a month. The referee also finds that these services were not intended to be gratuitous and were rendered and performed with the knowledge and consent of the defendant. This finding is not excepted to.

On the 3d September, 1890, the-plaintiff, representing 300 shares of the stock of the defendant, and being all that were issued except those held by Lennig and Schalk, made an agreément with Lennig by which for a certain price he agreed to transfer to Lennig on or before October 10, all the stock he represented. In this agreement was the following clause: “At the time of the transfer of said stock said Fonda Lake Paper Company, or its successors, shall indemnify said stockholders, whose stock is hereby contracted to be sold, against the debts of said company, a list of which is to be made up on or before the 10th day of September, 189°.’’

The list of debts that was furnished by plaintiff under this provision of the agreement did not contain the debt or debts he now sues for and the defendant, therefore, claims that the plaintiff is now estopped from asserting the existence of such indebtedness. This defendant did not execute that agreement and was not a party to it Besides it is clear from the evidence that Schalk, the agent of Lennig and the treasurer of defendant, knew then of the plaintiff’s claim for services, and knew that there was an unsettled account between the plaintiff and the defendant, and the books showed that a part of that account was the item of $846.09, which on the 21st December, 1889, had been entered in the account of plaintiff with the defendant, and in the account of the partnership with the defendant, upon the books of the defendant. If the plaintiff in his dealings with Lennig misrepresented as to the extent of the debts or said nothing about his own claims, it would not be the basis for an estoppel here, although it might be evidence on the subject of the existence in fact of the claim. We think that an estoppel is not shown.

Coming then to the claim of the plaintiff on the partnership debt, there is no doubt upon the evidence that the partnership owed the plaintiff that amount and the plaintiff had authority from the partnership, so far as it was concerned, to enter it in the account kept between the defendant and the partnership and provide for its payment out of any funds that the defendant had belonging to the partnership. Upon the formation of the defendant, stock supplies of the partnership to the amount of $1,605.39 were transferred by the partnership to the defendant, and credit given to the partnership therefor upon an account then opened with the partnership on the books of defendant. Thereafter the defendant from time to time collected accounts belonging to the partnership, and gave it credit therefor on the account, and also paid debts of the partnership, and charged them in the account. This course of proceeding continued until December 21, 1889, when the item of $346.09 was credited to the defendant in the partnership account, and charged to defendant and credited to plaintiff in his individual account. No further entries seem to have been made in the partnership account, and as it then stood, there was a balance due the defendant thereon of $513.99. This remained until the time of the sale and transfer to Lennig by plaintiff of the stock owned or represented by him in the defendant. It was then paid by plaintiff to defendant, it being received by the treasurer Schallc m the deduction of so much from the purchase price of the stock transferred. No question then seems to have been made as to the correctness of the account on the books between the partnership and the defendant. Nor is any question now made as to the correctness of the charges made in that account to the defendant. It must, therefore, be assumed that the defendant has received funds of the partnership sufficient for the payment of all the items for which it has received credit, and that in the settlement of that account it has received credit, among others, for the item in controversy. It, therefore, cannot complain that plaintiff has been credited with this item in his account with the corporation. That is the only way it has paid it to the partnership. It is in fact part of the account that seems to have been running between plaintiff and defendant up to the time he left its employment. It is not important whether the officers now representing the defendant knew of this particular entry. It had the money, and the item has not been paid except as it entered as a credit to plaintiff in his account. I see no defense to this claim of plaintiff.

The question whether the plaintiff should be allowed his claim for salary as treasurer of defendant depends on whether a verbal agreement by the trustees, at the meeting at which plaintiff was elected treasurer, that he should have a salary at the rate claimed, should, in the absence of a written resolution entered on the minutes, bind the corporation. It has been held that in such a c ose the corporation would be bound. Sheridan Electric Light Co. v. Chatham Nat. Bank, 52 Hun, 582; 24 St. Rep., 622 ; Melledge v. Boston Iron Co., 5 Cushing, 179; Angell & Ames on Corporations, § 284. It should be so held here.

The main question in this case is over the services of plaintiff while he was president. Without that there is a balance against him, although no counterclaim is set up. The referee has found upon sufficient evidence that the services which plaintiff performed during this time were outside his official duties as president. In fact, under the by-laws the duties of the president, as such, were merely nominal. It is also found that the services were not intended to be gratuitous and were rendered with the knowledge and consent of defendant. What he did was necessary to be done in the extended business of the corporation. There is evidence tending to show that he was employed by Mr. Schalk, the treasurer, who had authority to employ such agents and servants as the business of the corporation should require. If the services were outside of his official duties and he was actually employed by the corporation, or the circumstances were such as to authorize the inference of an actual employment by the corporation, the fact that plaintiff was an officer would not prevent his recovery of compensation. Jackson v. N. Y. Cent. R. R. Co., 2 T. & C., 653 ; affirmed 58 N. Y., 623; Talcoti v. Olcott Mfg. Co., 11 Week. Dig., 141; Barril v. Calendar Water Proofing Co., 50 Hun, 258; 19 St. Rep., 877.

The conclusion is, I think, warranted in this case that the plaintiff was entitled to compensation. There was, however, no agreement as to the amount that was binding upon the corporation. It seems to have been so understood by plaintiff. Evidence was given upon both sides as to the value of the services. The referee found them to be worth at the rate of $200 a month. There was evidence tending to show the value to be at that figure, and while I think the amount as allowed was large, I am not prepared to say that we have any right to interfere.

Our attention is called to a number of exceptions. We have examined them, but find nothing that would justify a reversal.

Judgment affirmed, with costs.

Hardin, P. J., and Martin, J., concur.