author: In&alls, J.:

text:
    SARAH CURRIN and others, Appellants, v. PATRICK S. FANNING and others, Respondents.

      Surrogate of New Yorh —power to construe wilts — chap. 359 of 1870 — derise to corporation — power to hold in trust.

    A testator devised certain real estate to the trustees of Manhattan College, in the city of New York, and their successors forever, in trust to receive the rents, etc., and to apply the same to the use of said Manhattan College for the following purposes, to wit, to found and maintain a Latin professorship. The foregoing devise was made to the trustees on the express condition that out of the rents, etc., the said trustees and their successors should pay to the testator's wife an annuity of $1,500 per annum, and authorized them, after the death of the wife, to sell and reinvest the proceeds, the income to he applied to the maintenance of the professorship.
    Upon an application to the surrogate of New York to admit the will to probate, held, that under chapter 359 of 1870 the surrogate of New York had power to pass upon the validity of any of the provisions of said will which should be contested, and pass upon their construction or legal effect when called in question by any of the heirs, next of kin, legatees or devisees as amply and conclusively as the Supreme Court might do.
    That such jurisdiction should not be exercised, except so far as it might be necessary for the purpose of passing upon the probate of a will, until all the parties in interest were brought into court.
    That the devise of the real estate was, in legal effect, to the Manhattan College and not to the trustees as individuals.
    That the college being capable of taking real estate by devise was authorized to take the property, although charged with a subordinate trust in favor of the widow of the testator.

      Semble, that the act (chap. 319 of 1848) restricting devises and bequests to certain corporations to one-fourth of the testator’s estate, and to such as are made two months before the death of the testator, is not applicable to an institution such as Manhattan College. If it were applicable, the prohibition is repealed by chapter 360 of 1860.

      Semble, that in determining the one-half of the estate which under the act of 1860 can be devised to charitable or educational corporations, the widow’s dower and the debts are to be first deducted.
    Appeal from tbe decree of the surrogate of the city and county of New York admitting to probate the will of Edward Isidore Sears, and giving a construction to certain portions thereof.

      J). McL. Shaw, for the appellants.
    The devise was to the trustees, as individuals, for the benefit of the college and is, therefore, void. It contravenes the statute forbidding the suspension of the power of alienation for more than two lives in being; in other words it creates a perpetuity in trust. (Owens v. Missionary Society, 14 N. Y., 380; Harris v. Clark, 3 Seld., 242; Holmes v. Mead, 52 N. Y., 332; Van Schwyven v. Mvdford, 59 id., 426; Leroy v. Levy, 33 id., 131.) The trustees may or may not, after Mrs. Sears’ death, execute the power. That they may not do so is as fatal as if they were expressly forbidden to do so. (Jennings v. Jennings, 1N. Y., 541; Amory v. Lord, 9 id., 403; Schettler v. Smith, 41 id., 328; Scott v. Monell, 1 Redf., 431; Tucker v. Tucker, 5 N. Y., 408.) There is nothing in the character of the devise which prevents the statutory condemnation from attaching to it. The rule applies to devises and bequests to charitable uses {Adams v. Perry, 43 N. Y., 499 ; Bascomv. Albertson, 34 id., 584), and to trusts {Coster v. Lorik lard, 14 Wend., 265; Tucker v. Tucker, 5 N. Y., 108; Yates v. Yates, 9 Barb., 324) and to powers in trust {Hone v. Van Schaick,
      •20 Wend., 564). The trust being void the whole devise falls with it. It is impossible to sustain it for the benefit of the widow and to destroy it for the benefit of the college. The one cannot be separated from the other. (Craig v. Hone, 2 Edw. Ch., 554; Thompson v. Glendinming, 1 Sahdf. Ch., 387; Moore v. Moore, 47 Barb., 257; Beelcmam v. Bonsor, 23 N. Y., 298, 575; Knox v. Jones, 47 id., 389.) The whole devise fails because the court cannot substitute a trustee. Here the trustee is in being but cannot take. There is no valid investiture of the legal title and so no use can be raised at all, for the devise is coupled with a condition which makes it impossible for the estate to vest where the testator intended it should be vested. (Sherwood v. American Bible Society, 1 Keyes, 566; Owen v. Missionary Society, 4 Kern., 406; Downing v. Marshall, 23 N. Y., 366; Harris v. Clank, 3 Seld., 242; Holmes v. Mead, 52 N. Y., 332.) The devise being an entire one and void there is vested in the heirs a fee subject to the widow’s right of dower. There is no residuary clause in the will. (Coster v. LorillanE, 14 Wend., 364; Ransom v. Lampmcm, 5 N. Y., 456; Yan Kleeck v. Ref. Dutch Oh., 20 Wend., 469.)

      Ghas. K. Miller, for the respondents.
    The devise in the seventh clause of the will to the trustees of Manhattan College, in the city of New York, and their successors forever, is a devise to the college itself. (N. Y. Inst, for the Blind v. How’s Ex., 10 N. Y., 84, and cases cited; Bailey v. Onondaga County Mut. Ins. Go., 6 Hill, 476; N. Y. African Society ^.Yarick, 13 Johns. R., 38; Manice v. Mcmiice, 43 N. Y., 387; Atty.-Gen. v. Tamcred, Ambler R., 351; Christ’s College, Cambridge, 1 Wm. Blackstone R., 90; Consistory Ref. Dutch Oh. v. Bramdow, 52 Barb., 228; Atty.-Gen. v. Tamcred, 1 Eden., 10.) The college has the legal capacity to execute the trust in favor of the widow contained in the will. (In the Matter of Howe, 1 Paige, 214; Tinkham v. Erie Railway Oompamy, 53 Barb., 393, 395; Perry on Trust, § 44; 12 Mass. Rep., 564; Yidal v. Girand, 2 How. [II. S.] R., 127:)
   In&alls, J.:

This is an appeal from the decision of the surrogate in regard to the last will and testament of Edward Isidore Sears.

The controversy arises upon the seventh clause thereof, which is as follows:

“ Seventh. I give and devise all my real estate, consisting of two brown stone houses and lots on which they are erected, namely: The house and lot No. 244, East Eorty-ninth street, between Second and Third avenues, and the house and lot No. 106, East Sixty-first street, between Lexington and Fourth avenues, in the city of New York, to the trustees of Mcmhattcm College, in the city of New Tork, and their successors forever, in trust, to receive the rents, issues and profits thereof, and to apply the same to the use of said Manhattan College, for the following purpose, to wit, to found and maintain a Latin professorship. The foregoing devise is made to the said trustees on the express condition that, out of the rents, issues and profits of the said real estate, the said trustees and their successors shall pay to my wife Catharine Irvine Sears, an annuity of $1,500 per annum, for and during the term of her natural life, the same to be paid to her in monthly or quarterly payments, as the said Catharine Irvine Sears may elect.”
After the death of my wife, but not before, I authorize and empower the said trustees and their successors, in their discretion, to sell any or all the real estate hereby devised in trust, namely, the two houses and lots above mentioned, and invest the proceeds thereof, and from time to time to change the said investments as they may be advised, and to receive the rents, profits, issues, interest and income thereof arising from such investments, and to apply the same in the same manner and upon the same trusts as those on which said real estate is devised.”

This devise is in legal effect to Manhattan College, which is a corporation, and as such competent to take and hold the property in question. The purpose to which the same is devoted is clearly defined by the will and is legitimate. This provision may be construed to be a devise of the property to the corporation, subject to the payment of the annuity to the widow of the testator during her natural life. We perceive no valid objection to a devise of property to a corporation, for a purpose clearly defined, and proper in itself, even though charged with the payment of an annuity out of the rents and profits. What objection could there be to a corporation accepting a devise of real estate, subject to the payment of rent upon a lease thereon ? How does the devise in question differ in legal effect? ¥e do not discover wherein the devise in question contravenes any statute or settled legal principle.

The opinion of the surrogate contains an ample collection of the decisions bearing upon the questions involved in this controversy, and he has ably discussed them in their bearing upon such questions.

The conclusion at which he has arrived is entirely satisfactory, and we adopt such opinion without further discussing the case.

The following is the opinion of Hon. Delano C. Calvin, surrogate:

After the evidence of the subscribing witnesses was taken in this matter — which evidence shows satisfactorily that the will in question was, in all respects, duly executed, conformably to the statute, the counsel for the contestant stated that he made no objection to the admission of the will to probate as a will of personal property, but objected to its admission as a will of real estate, upon the ground that the seventh clause of the will, which assumes to dispose of the testator’s real estate, is void, on the grounds :

First. That it is a devise to the trustees of Manhattan College and their successors.

Second. That if the devise shall be held to be to the college, it is void because the college has no capacity to take and hold the property in trust.

The seventh clause of the will reads as follows:

“ Seventh. I give and devise all my real estate, consisting of two brown-stone houses and the lots on which they are erected, viz.: The house and lot number two hundred and forty-four (244) East Forty-ninth street, between Second and Third avenues, and the house and lot number one hundred and six (106) East Sixty-first street, between Lexington and Fourth avenues, in the city of New York, to the trustees of Manhattan College in the city of New York and their successors forever — intrust to receive the rents, issues and profits thereof, to apply the same to the use of said Manhattan College for the following purposes, to wit, to found and maintain a Latin professorship in said college, to be called the “ Sears Professorship.” The foregoing devise is made to said trustees on the empress condition, that out of the rents, issues and profits of said real estate the said trustees and their successors shall pay to my wife Catharine Irvine Sears an annuity of fifteen hundred dollars per annum, for and during the term of her natural life; the same to be paid to her in monthly or quarterly payments, as the said Catharine Irvine Sears may elect.
“After the death of my" said wife, but not before, I authorize and empower the said trustees and their successors, in their discretion, to sell any or all the real estate hereby demised in trust, viz., the two houses and lots above mentioned, and invest the proceeds thereof, and from time to time to change the said investments as they may be advised, and to receive the rents, issues, profits, interest and income thereof arising from such investment, and to apply the same in the same manner and upon the same trusts as those on which said real estate is devised.”

The first question to be considered in this matter is whether this court has the power to determine this question.

Prior to the statute of 1810, chapter 359 (applicable to the surrogate of this county only), the surrogate had no authority to construe wills, except so far as it became necessary on the final accounting, and the proponent’s counsel objects to the jurisdiction of the surrogate to pass upon the questions sought to be raised by the counsel for the contestants.

This inquiry must be answered by the language of the act, and the reasonable inferences to be drawn therefrom, as this court is one of peculiar and special jurisdiction, and can only exercise the jurisdiction and powers which, by a favorable construction of the statute, are found to have been conferred upon it. (Cleveland v. Whiton, 31 Barb., 544; Sibley v. Waffle, 16 N. Y., 180; Seaman v. Duryea, 11 id., 324; Wilcox v. Smith, 26 Barb., 316.) And many other authorities to the same effect might be cited.

Redfield, in his Treatise on Surrogates, says, at page 22:

“ The principle is now fully established by authority and practice that, although where the statute directs the surrogate to proceed in any certain way he must proceed in that way and no other, yet, if justice demands that, in regard to some subject that is within his jurisdiction, he should exercise an incidental power which has not been expressly given to him by the statute he should not for that reason decline to exercise it.”

The learned chief justice of the Court of Common Pleas, in The Matter of Bricks Estate (15 Abb. Pr. R., 12), holds that in all matters submitted to tbeir cognizance surrogates are authorized to proceed according to the course of the court having, by the common. Jaw, jurisdiction of such matters, • except so far as they are restricted by statutes, and they have such incidental powers as are necessary to carry those which are necessary into effect; and the eleventh section of the act of 1870, above referred to, provides that in any proceeding before the surrogate of the county of New York, to prove the last will and testament of any deceased person as a will of real or personal estate, or both, in case the validity of any disposition contained in such will is contested, or their construction or legal effect called in question by any of the hebra or next of kin of the deceased or any legatee or devisee named in the will, the surrogate shall have the same power and jurisdiction as is now vested in and exercised by 'the Supreme Court, to pass upon and determine the true construction, validity and legal effect thereof; and the same section provides for the entry of 'his decision in his minutes and for the review by appeal by any of the heirs, next of kin, legatees or devisees, in the same manner and with the same effect as appeals may be taken from his decision admitting or refusing probate.

The effect of this statute has been the subject of considerable discussion on the paid of the profession, but it seems never to have been judicially determined.

The principal objections which have been urged against the general authority of the surrogate of this county, to entertain proceedings for the construction of wills, ’are :

First. That that jurisdiction has hitherto been exclusively vested in the courts exercising equitable authority; and,

Second That there is no provision in the- act in question, or otherwise, for the citing of legatees or devisees for the purpose of such construction.

When these questions were first raised I was inclined to the opinion that, in consequence of these defects or omissions of the statute, it would be unwise for the court to entertain jurisdiction for the purpose of a construction of a will, except so far as such determination became necessary in passing upon the probate of the will; but upon a more careful examination of the terms of the section, it is quite clear to my mind that the legislature intended by it to confer on the surrogate of this county full power, authority and jurisdiction, upon probate, to pass upon the validity of any of the dispositions of said will which should be contested, and upon their construction or legal effect when called in question by any of the heirs, next of kin, legatees or devisees, as amply and conclusively as the Supreme Court may do; and I am of the opinion that it is my duty to accept that jurisdiction and responsibility whenever presented ; and that when the act in question confers that jurisdiction and defines • its effect upon the parties interested, I entertain no doubt of my authority, as an incident to the performance of that duty, to bring in all the parties interested for that purpose; but I am equally clear in the opinion, that when a case has been submitted to me without such parties being called in, I should refuse to exercise the jurisdiction, except so far as it may become necessary for the purpose of passing upon the probate of the instrument in question, as a will of real and personal property, until such parties shall be brought in.

It is conceded by -the counsel for both parties, that Manhattan College in question is incorporated by the Regents of the University, under the authority conferred upon them by chapter 184 of the Laws of 1853; and reference to that chapter shows that such organization is under the authority of trustees who have the management of the college; and the act provides for such college holding and possessing real and personal property to an amount specified.

The next question to be determined is, whether the will in question devised the real estate, by the seventh subdivision thereof, to the trustees as individuals rather than to them as constituting the corporation of Manhattan College; and it is claimed by the learned counsel for the contestant that the devise in question was to the trustees as contradistinguished from the college, the college being a beneficiary, together with the widow ; to which he cites the case of The New York Sailors’ Snug Harbor (3 Pet., 99), where it is said, that a testator in appointing trustees, may designate them by official titles instead of by name; in which case they take as if they had been designated by proper names. Rut in that case the devise was to the chancellor of the State of New York, mayor and recorder of the city of New York, president of the Chamber of Commerce in the city of New York, president and vice-president of the Marine Society of the city of New York, senior minister of the Episcopal church in said city, and senior minister of the Presbyterian church in said city, in trust, to erect and build an asylum or marine hospital to be called “ The Sailor’s Snug Harbor, for the purpose of maintaining and supporting the aged and decrepit; and wherein our sailors,” etc. There is a very wide distinction between that and the devise in question, for in that case there was no such corporation as “ Sailors’ Snug Harbor,” and the trustees named occupied no relation to any such corporation or enterprise; while, in this case, the trustees named are executive and corporate officers of the college.

In The New York Institution for the Blind v. How’s Executors (10 N. Y., 84) it was held that a bequest “ to trustees ” of an institution was a bequest to the institution, although those having charge of it were in the charter called managers. They are still defined and treated as trustees and known in law as such. (See 1 R. S. at Large, 600 [marg. p.], §§ 9, 10; 2 id., 462, § 33.)

In The Consistory of the Reformed Dutch Church v. Brandow (52 Barb., 228) the devise was to the consistory of the Reformed Dutch Church of Prattsville, that is, to the ministers, elders and deacons and their successors in office, to be held, used or invested for the benefit and use of the said church, in such manner as they may deem best for the interest of the church, etc. It was held that the testator clearly intended that the Reformed Dutch church mentioned should have the benefit of the bequest made by him to the consistory, provided the consistory could control the bequest; and at page 233 Mr. Justice Miller says: “ The bequest to the consistory was, in effect, a bequest to the church corporation itself, and was not the less so because it was devised to those officers.”

In Bayley v. Onondaga County Mutual Insurance Co. (6 Hill, 476) a bond executed by an agent for the faithful performance of his duty, was to the directors of the company, to be paid to them, their successors and assigns, and was held to be in legal effect made to the company; and that the company might maintain an action upon it in their corporate name, and that the board of directors, being the only legal agents of the corporation, were to be regarded as its representatives in all their official acts and doings. To the same effect see The African Society v. Varick (13 Johns., 38).

In The Attorney General v. Tancred (Ambler, 351) a conveyanee was made to the use of the masters of Christ and Caius College, the Presbyterian College, the College of Physicians, the treasurer of Lincoln’s Inn, the master of the Charter House, the governor of Ghelsea and Greenwich Hospital for Seamen, in trust, it was held that the conveyance was for the benefit of the bodies corporate of the said colleges, and not for the fellows in their natural capacity. (See case of Christ's College, Cambridge, 1 Wm. Blackstone, 90.)

In Manice v. Manice (43 N. Y., 387) the testator, among others, directed his trustees to pay $5,000 unto the treasurer, for the time being, of Yale College, in New Haven, and requested the trustees of the college to invest in New York securities or on bond and mortgage and accumulate the interest, etc., it was held, at page 387, that the direction to pay the treasurer was a good gift to the college, the college having been shown to be capable of taking it.

From these authorities, and such consideration as I have been able to give the terms of the will, I am of the opinion that the testator used the term trustees of the Manhattan College and the Manhattan College as synonymous, and both as designating the corporation.

And I am unable to perceive any good reason for his selecting the trustees, instead of the college to be his trustees for the benefit of the college, as cestwis que ti'ust, particularly as there is no evidence to show that he had any particular acquaintance with or confidence in them; and it seems to me that if he had intended to vest the title of the estate devised in the trustees, instead of the college or corporation, he would have made some of his confidential friends appointed as executors and trustees for the purpose. And I am therefore of the opinion that the estate devised by the seventh clause of the will was intended to and did vest in the Manhattan College as a corporation.

This conclusion renders it unnecessary that I should consider the question so exhaustively and ably presented by the learned counsel, for the contestants that the devise is void as a contravention of the 2 Revised Statutes (Bank’s 6th ed., p. 1101, § 15) upon the subject of the unlawful suspension of the absolute power of alienation, though I have examined the authorities upon the subject in detail with special interest, nor is it necessary that I should enter into the much-debated and vexed question whether charitable uses are abolished by our statutes, wbicb seems to have been set at rest by the case of Holmes v. Mead (52 N. Y., 332), as it is conceded by the respective counsel that our statutes upon uses and trusts (2 R. S. [Bank’s 6th ed.], §§55, 56, p. 1106, and § 60, p. 1107) authorize such a devise to the college in question, for the purpose named in the will.

The next question to be considered is whether the trust in behalf of the widow renders the devise void, because of the incapacity of the college to take the same incumbered by that trust.

The counsel for the contestant claims that the devise is void, because the college has no power, under chapter 318 of the Laws of 1840, to receive real estate in trust for another, as enlarged by chapter 261 of the Laws of 1841, and cites section 3 of 2 Revised Statutes at Large, marginal paging 57; but that section, as it seems to me, does not sustain this construction. Its provision is that no devise to a corporation shall be valid unless such corporation be expressly authorized by its charter or by statute to take by devise. That section does not attempt to limit the purpose for which a devise may be received.

In Tiffany & Ballard, in their “ Treatise on the Law of Trusts and Trustees,” the case In the Matter of Howe (1 Paige Ch., 214) is cited with approbation, and in “ Perry on Trusts,” (§ 44,) it is said : “A corporation may take and hold in trust for another, or for a stranger or for an individual, as where one gave a legacy to a church corporation in trust, to pay the income to his housekeeper for life and after her death to apply it to church purposes, it was held that the corporation might well execute the trust, on the principle that when property is given to a corporation partly for its own use and partly for the use of another, the power of the corporation to take and hold for its own use candes with it as a necessary incident the power to execute that part of the trust which relates to others.”

In The Matter of Howe (1 Paige, 214), above cited, a legacy was given to St. George’s church in trust, to pay the income to the testator’s housekeeper for life. After her death the income thereof to be applied to the purchase of a church library and support of the Sabbath school in the church, and other church purposes to which church contributions might be applied according to the tenets of the Episcopal church, and the chancellor, at page 214, says:

“ It is a general rule that corporations cannot exercise any powers not given to them by their charters or acts of incorporation; and for that reason they cannot act as trustees in relation to any matters in which the corporation has no interest. But whenever property is devised or granted to a corporation partly for its own use and partly for the use of others, the power of the corporation to take and hold the property for its own use, carries with it, as a necessary incident, the power to execute that part of the trust which relates to others. In this case the substantial part of the legacy is for the benefit of the corporation; and the-income thereof, after the death of the housekeeper, is to be applied to some of the purposes to which the rector, church wardens and vestrymen are authorized to apply the general funds or temporalities of the church committed to their management. The testator had a right-to limit his bounty to a part of the objects to which they might appropriate the general funds of the corporation. He also had a right to direct when the income should be applied for that purpose. If the corporation receive the legacy, it must be received charged with the payment of the interest or income to the housekeeper for life. The legacy must, therefore, be paid over to the rector, church wardens and vestrymen as the representatives of the corporators, who are bound to carry into effect the testator’s will in respect to the same.”

In the case under consideration it is equally true that the substantial part of the legacy is for the benefit of the corporation, and it seems to me that it would be a very illogical as well as inequitable construction, that because a subordinate trust was created in favor of the widow that the intention of the testator to give the college the principal benefit of the devise should be defeated. In The Trustees of Phillips Academy v. King’s Executor, it was held that a corporation is capable of taking and holding property as trustee. (12 Hass. R., 564.)

In Vidal v. Girard (2 How. [U. S.], 127), the corporation of the city of Philadelphia had power by its charter to take real and personal estate by deed and devise, and it was held that, having this power, it might also take and hold property in trust in the same manner and to the same extent that a private person might do. Hr. Justice Story, in delivering the opinion, at page 187, says: “Now, although it was in early times held that a corporation could not take and hold real or personal estate in trust, upon the ground that there was a defect of one of the requisites to create a good trustee, viz., the want of confidence in the person; yet that doctrine has been long since exploded as unsound and too artificial; and it is now held that where the corporation has a legal capacity to take real or personal estate, there it may take and hold it upon trust, in the same manner and to the same extent as a private person might do. “ It is true that if the trust be repugnant to, or inconsistent with the proper, purposes for which the corporation was created, that may furnish a ground why it may not be compellable to execute it, but that will furnish no ground to declare the trust itself void, if otherwise unexceptionable, but it will simply require a new trustee to be substituted by the proper court possessing equity jurisdiction, to enforce and perfect the objects of the trust.” In Tinkham v. Erie Railway Company (53 Barb., 393), where the question was determined as to the right of the defendants, a corporation, to take real estate subject to the condition that a portion of the land should be kept open as public streets, it was adjudged that such condition was valid and that the corporation could hold the real estate; and Mr. Justice Balcom, in delivering the opinion of the court, at page 395, recognizes the full authority of the case of Howe's Executors, above cited, as applicable to real estate as well as personal, wherein he says:

The true rule applicable to the question was stated by Chancellor Walworth, in the matter of Howe's Executors, etc. (1 Paige’s Chancery, 214), which is, wherever property is devised or granted to a corporation partly for its own use and partly for the use of others, the power of the corporation to take and hold the property for its own use, carries with it as a necessary incident the power to execute that part of the trust which relates to others.”

It is urged by counsel for the contestants that the authorities above cited are not applicable to a case where there is a devise in trust, while he recognizes the soundness of the rule as laid down in respect to personal property; but I am unable to appreciate any substantial distinction between a bequest and a devise in respect to the question of the authority of the corporation to take and execute the trust.

The fifty-sixth section of 2 Revised Statutes, at page 1106, above cited, authorizes incorporated colleges, together with the sixtieth, section, on page 1107, to receive and bold in trust real and personal property, to found and maintain professorships and scholarships, among other things, which seems to put real and personal property upon the same footing; and, I think, the devise in this case is in strict conformity to that ‘ authority, and the fact that the devise is incumbered by a subordinate trust, ought not to deprive the college of the benefit of the devise or defeat the obvious intention of the testator.

If the principle be admitted, which seems to be inevitable from these authorities, that a corporation may receive property in trust and that its functions are dependent upon its charter and the statutes relating to it, it must be admitted that there is no statute expressly authorizing a corporation to receive and execute a trust outside of the legitimate purposes of its organization, nor is there any thing in the statute of uses and trusts which forbids the taking, by a corporation, of real estate by devise in trust for a third party, except such as are implied by the statutes of 1840, above cited, and it seems to me that if the case of Howe’s Executors, above cited, is good law in respect to the taking and holding personalty in trust, partly for the benefit of the corporation and partly for the benefit of a third person, the principle is equally applicable and reasonable when a devise of real estate is received subject to a subordinate trust to the widow, as in this case, and it is impossible to conceive that the learned chancellor in that case, and Mr. Justice Balcom, in Tinkham v. The Erie Railway Company, and Mr. Justice Story, in Vidal v. Girard's Executors, above cited, and the learned authors in Perry on Trusts and Tiffany & Ballard on the same subject, should have used language applicable alike to a devise of real estate and a bequest of personal property, when they intended only to embrace a bequest.

Upon the best consideration that I have been able to give the subject, I am unable to appreciate any such distinction as is sought to be made in this case, or to perceive any good reason for denying the college in question the benefit of the devise, because coupled with a subordinate trust to the widow as a condition subsequent. I am, therefore, of the opinion that the devise to the trustees of Manhattan College in trust for its legitimate purposes, though subject to the trust in behalf of the widow, is valid and vested the title in the corporation, and that it has full power and ample authority to execute the trust in behalf of the widow as well as for its own benefit.

The next and final question to be considered in this matter is the effect of chapter 360 of the Laws of 1860, which provides that no person having a husband, wife, child or parent, shall, by his or her last will and testament, devise or bequeath to any benevolent, charitable, literary, scientifi c, religious or missionary society, association or corporation, in trust or otherwise, more than one-half part of his or her estate after the payment of his or her debts; and such devise or bequest shall be valid to the extent of one-half and no more; and chapter 319 of the Laws of 1848, which provides that no person leaving a wife, child or parent, shall devise or bequeath to a benevolent, charitable, scientific or missionary society or coi’poration more than one-fourth of his estate after payment of his or her debts, and such devise and bequest shall be valid to the extent of one-fourth, and no such devise or bequest shall be valid in any will which shall not have been made and executed at least two months before the death of the testator; and the earlier portion of the same section limits such a devise or bequest the clear annual income of which shall not exceed $10,000; but the counsel for the contestants, in his argument, does not raise any question under this latter section — whether because as to the prohibition respecting the annual income of the devise he regards the remedy as resting exclusively in the attorney-general against the corporation as to the question of the excess over one-fourth, and the time of executing the testament is repealed by chapter 360 of the Laws of 1860, above cited, does not appear.

■ I think there is no reason to doubt that the act of 1848, which seems to be confined to benevolent, charitable, literary, scientific, missionary, mission or other Sunday-school purposes, or mutual improvement in religious knowledge, or the furtherance of religious opinions, does not apply to an institution like Manhattan College; but if it did, the act of 1860 would seem to be a repeal of the prohibition contained in the sixth section of the act of 1848. In Bascom v. Albertson (34 N. Y., 616) Mr. Justice Porter, in referring to the act of 1860, says :

The purpose of the law is not only expressed in its title, but apparent upon its face. It was designed to regulate and restrict the power of testators. It was neither conceived nor framed in a spirit of hostility to charitable societies; on the contrary, it enlarged the proportion of a testator’s estate which he might dedicate to charitable uses in exclusion of the claims of his own immediate family.” And in Chamberlain v. Chamberlain (43 N. Y., 440), Mr. Justice Allen treats the act as applicable to an educational institution incorporated by the Regents of the University and as a subsisting prohibitory act upon the subject.

The act of 1860 was doubtless made for the purpose of protecting the rights of husband, wife, child or parent. If the academy is covered by the act of 1860, there seems to be no doubt that it covers the cohege in question, and the term “ literary and scientific association or corporation,” would seem fully to define the character of the Manhattan College, and I have no doubt of its application to the college in question.

The point is not raised in this case, that there is no one but the widow interested in this question, and that she desires the enforcement of the devise according to the terms of the will; but in Harris v. American Bible Society (4 Abb. [N. S.], 421), Mr. Justice Fullerton, in discussing this question, at page 427, says:

“ The General Term held, and I think, properly, that the prohibition is peremptory, and may be insisted on by any person who would derive a benefit therefrom; the language is absolute, and if the courts have power in any such case to judge concerning the probable motives of the legislature, and may imply, accordingly, an exception to the positive terms of a- statute (on which no opinion need now be expressed), I am unable to discover any safe ground for such a proceeding in this instance.”

And in that case it is held that the prohibition is peremptory and that the half is to be computed with reference to the estate at the time of the testator’s death. And in Chamberlain, v. Chamberlain (above cited) it is decided that in ascertaining the estate, only one-half of which can be devised to charitable or educational corporations, under the act of 1860, the widow?s dower and the debts are to be first deducted, and the latter case seems to leave no doubt as to the right of the contestants in this matter to raise the question growing out of the prohibition of the act of 1860. But as the Manhattan College, the legatees under tbe disputed devise, is not a party to these proceedings, I am of the opinion that I ought not to assume to make a reference as to the amount of the estate, under the statutes of 1860, or take any further proceeding in respect to it until said college shall be brought in, and when brought in, if the counsel for the contestants shall so elect, a reference may be made to take testimony and report upon the question of the amount of the devise to said college over and above the widow’s dower and the debts of the estate, and until the coming in of the referee’s report and the determination of the question under section 11 of chapter 359 of the Laws of 1870, the probate should be suspended.

This case will present a fit opportunity for the ultimate determination of the question as to the jurisdiction of this court over the validity of dispositions by will, on a contest, and their construction or legal effect when questioned by any of the heirs or next of kin of the deceased, or legatee or devisee under the eleventh section aforesaid.

Davis, P. J., and Beady, J., concurred.

Decree affirmed, with costs.


source: Caselaw Access Project

author: Ingalls, J.:

license: Public Domain

text:
    ADOLPH HEILBRUN, Respondent, v. EDWARD A. HAMMOND, Impleaded with AMANDA A. RACEY and others, Appellant.

      Recording acts — assignment — latent defect in acknowledgment — effect of —Discharge of mortgage by moi'tgagee, after assignment of.

    In March, 1873, one R. was the owner of premises subject to a mortgage for $8,000 held by one Aymar. R. desiring to raise more money, a mortgage for $7,000 was executed to one Pardee, dated March 25, 1873, and recorded April 4, 1878, but Pardee having refused to make the loan the plaintiff agreed to advance the money and took an assignment of the mortgage from Pardee, dated April 16, 1873, and recorded April 17, 1873. The acknowledgment to this assignment, though regular upon its face was, in fact, taken by a notary x>ublic of New York county out of his county, to wit, in the State of New Jersey, Subsequently Aymar desiring to have his .money a search was made by the Seaman’s Savings Bank, which had agreed to furnish the money, and the Pardee mortgage discovered; thereafter by an arrangement between Pardee and R. tbe former executed a satisfaction-piece of tbe mortgage and an entry was made by tbe Register to tbe effect that tbe same was discharged of record; tbe assignment to tbe plaintiff being then on record. Subsequently another mortgage was given upon tbe premises and tbe same was thereafter assigned to defendant H. In an action to foreclose plaintiff’s mortgage it was, claimed that tbe acknowledgment to tbe assignment from Pardee to plaintiff was void and its record was not notice to subsequent mortgagees.

      Held, that tbe plaintiff having acquired title to tbe mortgage which was recorded, and tbe assignment and certificate of acknowledgment being in due form and recorded, notice was thereby given to all subsequent purchasers or mortgagees that be was the owner thereof, and bis rights were not affected by tbe discharge of tbe mortgage by tbe Register;
    That tbe recording of tbe assignment to plaintiff, as a notice to subsequent mortgagees, was not invalidated by proof that tbe acknowledgment was taken in New Jersey by a notary public of New York county, when bis certificate was in due form and purported to have been taken in New York.
    Appeal by tbe defendant Hammond from a judgment in tbe above action, entered after a trial by the court without a jury.
    The action was brought to foreclose a mortgage.

      James O. Hoyt, for the appellant.
    The recording of a mortgage is notice to all the world that such an incumbrance exists. The discharge of the record must be an official destruction of such notice. {Frost v. Beekmam, 1 Johns. Oh., 288; Peck v. Mallams, 10 N. Y., 519, 520.) The respondent had a right to rely upon the records. (Yam Kewren v. Oorkms, 66 N. Y., 77.) Even if the record of an assignment of a mortgage be notice to one dealing subsequently with the equity of redemption the record of respondent’s assignment was not notice to the appellant since it was not entitled to record. This rests upon the principle that a conveyance not entitled to be recorded, though written upon the record, is no notice of such conveyance. {Herman v. Cameron, 24 Wend., 89 ; Johnson v. Humphrey, 1 Johns. K., 498; Jackson v. Shoemaker, 4 id., 161; Jackson v. Perhims, 2 Wend., 137.) The whole current of authorities of text writers and of adjudged cases upon this point runs in one direction, holding that the record of instruments not entitled to record is of no force or value and notice to no one. (2 Sugden on Yendors [14th ed.], 540; 4 Kent Com. [12th ed.], 174; Frost v. Beekmam, 1 Johns. Ch., 300; Pechv. Mallams, 10 N. Y., 518-520; Oa/rter v. Chamypion, 8 Conn., 550; Johnson v. Stater, 11 Gratt., 321’; Yirginia Code, p. 897, § 5, and p. 904, § 2 ; De Witt v. Moulton, 17 Maine, 418; Brown v. Inmt, 37 id., 427; H&wma/n v. Srnales, 17 Iowa, 528; John v. Richamdson, 3 Md. Cli. Dec., 57; Ni. c/bAn v. Conger, 40 111., 535; Jackson ex dem. Wyoltoff v. Humphrey, 1 Johns. R., 498.)
    Nsi&s Ba/rnard, for the respondent.
    The assignment and certificate of acknowledgment being in due form, and the acknowledgment appearing on its face to have been duly taken in the city and county of New York before a proper officer, the presumption of law is that it was actually taken within ’ said city and county and it was receivable as evidence of its own genuineness, and the plaintiff had a right to rely on the legal presumption that the acknowledgment was taken within the city and county of New York. (The People v. Snyder, 41 N. Y., 397, 402; Thumma/n v. Cameron, 24 Wend., 87; Morris v. Wadsworth, 17 id., 113.) The assignment being on record before the- execution-of the satisfaction-piece by Pardee the plaintiff’s lien and rights could not be, and were not, affected by such satisfaction-piece. (Belden v. Meeker, 47 N. Y., 307, 312; Vcmderkeoryp v. Shelton, 11 Paige, 28 ; Ely v. Scofield, 35 Barb., 330 ; St. Jolms v. Spandding, 1 N. Y.- Sup. Ct. [T. & O.], 483.) Pardee having no right to execute a satisfaction of the mortgage the plaintiff had a right to treat the mortgage as a valid and subsisting security, notwithstanding the fraudulent satisfaction which had been entered of record; and this right is enforceable not only against the mortgagors but’ against the defendant ITammond, even if he advanced his funds on the faith of the supposed satisfaction. (The Eammer's Loa/n a/nd T. Co. v. Wal/worth, 1 N. Y., 433, 443 ; GilUg v. Maas, 28 id., 210; Swamthout v. Cumins, 5 id., 301.) Where the discharge of a mortgage 'has been obtained by fraud equity may treat the discharge as a nullity. (Washburn on Real Prop., 562; Bamnes v. Cormack, 1 Barb., 392.) And the cancellation of the mortgage may be declared void where it is made in violation of the rights of third persons. (1 Hilliard on Mortgages, 335; Bruce v. Bormey, 12 Gray, 113 ; Briggs v. Da/ois, 20 N. Y., 15; Swamthout v. Gurtis, 5 id., 301.) It was unnecessary for plaintiff to record his assigmnent except to protect himself against a subsequent assignee of tbe same mortgage from Pardee. It is not necessary for a person to record an assignment of a mortgage in order to protect himself against a subsequent conveyance or mortgage from the owner of the premises. (Greene v. Wa/rnich, 64 N. Y., 220, 226, 227; Raynor v. Wilson, 6 Hill, 469; Gillig v. Maas, 28 N. Y., 208, 211; W. Y. L. Ins. Go. v. Smith, 2 Barb. Ch., 82; Power v. Lester, 23 N. Y., 531.) A subsequent purchaser in good faith in the recording act means, as to this case, a subsequent purchaser of the mortgage assigned, not a purchaser or mortgagee of the premises. And an omission to record an assignment does not affect its priority, and subsequent purchaser or mortgagees of the premises are bound by a prior recorded mortgage, no matter who holds it. (Campbell v. Yeder, 1 Abb. Ct. App. Dee., 295 ; P'wrdy v. Hwnti/ngton, 42 N. Y., 334.)
   Ingalls, J.:

This appeal presents a question of considerable practical importance, and not free from difficulty. So much has been decided in regard to the recording acts and so much discussion indulged not strictly essential to the disposition of the particular case, that it is difficult to discover what is really settled by the decisions. The facts of this ease which bear upon the question involved in this controversy are substantially as follows : Amanda A. Bacey, in March, 1873, was the owner of premises described as No. 20 "West Thirteenth street, in the city of New York, which were subject to a mortgage for $8,000, held by one Augustus Aymar. Por the purpose of raising an additional sum of money, Mrs. Bacey joined with her husband, Joseph H. Bacey, in executing a second mortgage upon the same premises for $7,000, to Denis S. Pardee, dated March 25, 1873, which was recorded in the register’s office of said city, April 4,1873. A bond accompanied the mortgage. Pardee, for some reason, declined the loan, and the plaintiff advanced the money and took an assignment of the bond and mortgage from Pardee, which was executed by him April 16, 1873, and recorded in said register’s office April 17, 1873. Augustus Aymar required the payment of the money upon his bond and mortgage, and the Baceys applied to the Seaman’s Bank of Savings to loan the money to pay Aymar. Hpon searching the record the plaintiff’s mortgage was discovered, and by an arrangement between Pardee and tbe Eaceys tbe former was induced to, and did, execute a discharge of plaintiffs mortgage, which was recorded in the register’s office and an entry made by the register to the effect that such mortgage was discharged upon the record. The Seaman’s Bank of Savings thereupon made the loan, accepted and recorded the mortgage, and the money thus loaned was applied to the payment of the Aymar mortgage, which was discharged of record. Subsequently, the Eaceys executed another mortgage, upon the same premises, to secure a loan of $5,000 to Edward B. Terrell, which was recorded June 15, 1874, which was assigned by said Terrell to Edward A. Hammond, one of the defendants in this action. The plaintiff advanced his money in good faith, relying upon the bond and mortgage and the assignment thereof by Pardee. The mortgage and assignment were both recorded in due form, so upon the face of the record the plaintiff appeared to be the owner of the mortgage. The Eevised Statutes (vol. 1, p. 707, § 1 [Edm. ed.]) provides, that “ Every conveyance of real estate, within this State, hereafter made, shall be recorded in the office of the clerk of the county where such real estate shall be situated, and every such conveyance not so recorded shall be void as against subsequent pru'chasers, in good faith and for a valuable consideration, of the same real estate or any portion thereof, whose conveyance shall be first duly recorded.” This and the subsequent sections of the same chapter apply to mortgages and assignments thereof.

The assignment from Pardee to the plaintiff is assailed upon the ground, that it was acknowledged by Pardee in the State of New Jersey, and therefore the certificate of the notary public of New York, although regular upon its face, was void, and the registry of the assignment was also void. George W. Yulter, the notary public who took the acknowledgment of Pardee to the assignment, testified that he first took it in New Jersey, and, upon his attention being called to its irregularity he took another acknowledgment in New York. The court, for some reason, gave no effect to the testimony in regard to the second acknowledgment, and disposed of the case regardless of it.

It is therefore proper for this court in reviewing the decision, to follow the same course in respect to such evidence. Yulter was, at the time he took the acknowledgment of the assignment from Pardee to plaintiff, a notary public of tbe city and county of New York; and the records of tbe register’s office showed tbat fact. Tbe certificate of acknowledgment was in due form, and so far as tbe assignment and its execution indicated, upon tbe face of tbe paper, it was entitled to be recorded. Tbe record was perfect; showing tbe plaintiff to be tbe owner of tbe mortgage; and this was consistent with tbe fact, as tbe plaintiff bad advanced bis money upon tbe faith of the security. Tbe assignment, so far as it operated to transfer tbe title of tbe bond and mortgage, was effectual without an acknowledgment. Indeed, tbe transfer could be supported without even a written assignment. Therefore tbe question involved is only one of notice to a subsequent mortgagee, or rather, to an assignee of a subsequent mortgage. Tbe record, fully examined, disclosed tbe assignment to plaintiff in due form, properly recorded, and notified tbe inquirer tbat tbe plaintiff bad become tbe owner of tbe bond and mortgage prior to tbe discharge thereof by tbe register, and tbat tbe plaintiff was tbe proper person to be applied to for information in reference thereto. So it will be perceived, that as notice in regard to tbe ownership of such mortgage, it was as perfect in all respects as if tbe acknowledgment bad been taken in New York, as tbe certificate indicated. It is insisted by tbe appellant tbat tbe plaintiff’s mortgage was discharged by Pardee, and tbe record showed that fact, and therefore ITammond was protected. Tbe soundness of this proposition depends upon whether under all tbe facts proved, Pardee bad any authority to execute such discharge, and thereby affect tbe rights of tbe plaintiff, and whether tbe evidence of such want of authority was not furnished by tbe records in tbe register’s office, to a pai’ty who exercised tbe degree of care in making bis investigations which- tbe law requires. We are of tbe opinion tbat tbe record was ample notice; and when Mr. Hammond contented himself with merely ascertaining tbe fact that tbe plaintiff’s mortgage bad been discharged upon tbe record, without proceeding further in tbe search to ascertain whether tbe record disclosed an assignment of tbe mortgage, be acted at bis peril; and the consequences of such want of prudence and care should be borne by himself and not transferred to tbe plaintiff, who seems to have omitted no duty on bis part. It cannot be insisted tbat tbe plaintiff is chargeable with carelessness in regard to tbe manner Yulter, the notary public, discharged his duty, because the plaintiff had a right to assume that he acted properly and in accordance with the certificate.

It would be unjust, and in my judgment unsound, to hold that a register upon the bare presentation to him of a discharge executed and acknowledged by a mortgagee, can discharge such mortgage of record, and thereby deprive an assignee thereof of his lien, when, at the time, his assignment is on record, executed and acknowledged in due form.

So far as the question of notice is involved ■ — ■ and it seems to me that is the vital question • — ■ we cannot think it competent to controvert the record by showing that the notary public exceeded his authority in taking the acknowledgment, so long as it did not appear by the record which he made and was not an act which was intended to, or did in fact at the time affect Mr, Hammond or the actual title of the plaintiff to the bond and mortgage. A contrary rule would be disastrous in its effect, so far as the reliability of the public records is concerned; all confidence in their disclosures would be destroyed.

There is a class of cases to which our attention has been directed, of which Frost v. Beekman (1 Johns. Ch., 288) is an example, where a mortgage was executed for $3,000, but, by mistake, the clerk recorded it $300. The court held, that under the circumstances of that case it could only be regarded a mortgage for the latter sum. That decision was placed upon the express ground that as notice to a subsequent purchaser, or mortgagee, it disclosed upon the record a mortgage for only $300; that the mortgagee having trusted the clerk he must look to him for indemnity in case of loss. The mortgagee, in that case, had the original mortgage, by which he could have proved the accuracy of the record by comparing such original paper with the record, but he chose to depend upon the clerk; and as between himself and a T>ona fide purchaser or mortgagee who had not possession of the original paper, and therefore had no opportunity of making such comparison, but was compelled to rely upon the disclosure of the record, the latter should be protected. This case sustains the views which we have advanced upon the question of notice derived from an examination of the records.

The case of Vankeuren v. Corkins (66 N. Y., 77) does not affect the question which we are considering in this case. In that case a mortgagor made payments upon his mortgage without notice or knowledge that it had been assigned, and the court held that the recording act did not apply to that case; which appears very clearly by referring to the Revised Statutes (vol. 1, p. 715, § 41 [Edm. ed.]), which provides, tl^at “ the recording of an assignment of a mortgage shall not be deemed, in itself, notice of such assignment to a mortgagor, his heirs or personal representatives, so as to invalidate any payment made by them, or either of them to the mortgagee.”

The case of Greene v. Warnick (64 N. Y., 220) was decided upon a question entirely different from that involved, in this case. The question there decided is simply, that when two mortgages are executed at the same time, neither to have priority, the fact that one was placed upon record fifteen minutes before the other, did not have the effect to give to an assignee of the mortgage first recorded a preference under the recording act, because the assignee, under such a state of facts, could not be regarded a subsequent purchaser within the meaning of the act.

It would be an endless task to discuss the numerous cases which have been decided bearing upon the recording act. We conclude :

Eirst. That the discharge of the plaintiff’s mortgage, by the clerk, did not affect his rights.

Second. That the plaintiff having acquired title to the mortgage, which was recorded, and the assignment and certificate of acknowledgment being in due form and recorded, notice was thereby given to all subsequent purchasers or mortgagees, that the plaintiff had become, and was, the owner of such mortgage, and his rights were not affected by the discharge of the mortgage by the register. (Belden v. Meeker, 47 N. Y., 308; Ely v. Scofield, 35 Barb., 330.)

Third. That the recording of 'the assignment to plaintiff, as a notice to subsequent mortgagees, was not invalidated by proof that the acknowledgment was taken in New Jersey by a notary public of New York, when his certificate was in due form, purporting to have been taken in New York, the plaintiff having taken such assignment in good faith and based upon a sound and adequate consideration.

The appellant further insists, that the plaintiff could not recover because the transaction was tainted with usury; and in no event beyond tbe amount which he actually paid for the mortgage, as it had no inception previous to his purchase. The court decided correctly that the affidavit made by Alexander A. Bacey, and which .accompanied the bond and mortgage, and upon which the plaintiff relied, precluded the defense of usury and entitled the plaintiff to recover the whole amount secured by such bond and mortgage. (Mason v. Anthony, 3 Keyes, 609; Lynch v. Kennedy, 34 N. Y., 151; Payne v. Burnham, 62 id., 69.) Upon the question whether the recovery should only have been for the sum actually paid by the plaintiff, we think the entire amount was properly allowed.

The question does not seem to be presented in such form as to call for a review. The appellant asked the court to find as conclusions of law, as follows : First. That the bond and mortgage are usurious and void. If not void, they are security only for the amount paid therefor at the inception thereof, at the time of said alleged assignment.” The court refused to so find, and a general exception was taken to such refusal. The refusal was clearly sound in regard to the question of usury, and therefore the exception became unavailing to the appellant. When a request to find embraces two propositions, one of which the party is not entitled to, a general exception to such refusal to find the entire proposition is insufficient. (Graham v. Chrystal, 2 Keyes, 21.)

. The circumstances of this case are not such, as in my judgment, call for the application of the rule invoked by the appellant. Mrs. Bacey, the owner of the premises, did not appear in the action, nor does she ask this relief. Again, we perceive that the appellant Hammond was careful to provide himself with a similar shield, in the form of an affidavit, when he took the assignment of the Terrell mortgage, under which he claims; hence, this equitable principle is not claimed by the owner of the premises but by a party who purchased a security in the market.

We conclude that the decision of the Special Term was correct, and should be affirmed with costs.

Davis, P. J., and Brady, J., concurred.

Judgment affirmed, with costs.


author: Ingalls, J.

text:
    In the Matter of the DEPARTMENT OF PUBLIC WORKS, etc., relative to the opening of One Hundred and Fifty-sixth, One Hundred and Fifty-seventh, One Hundred and Fifty-eighth and One Hundred and Fifty-ninth Streets New York City.

      Commissioners of assessment — affidavit may be ordered Item'd, after report made

    The commissioners of estimate and assessment, acting under chapter 483 of 1862. had, after hearing the parties interested, prepared their report and a motion, to confirm the same had been duly noticed. At this stage of the proceedings, upon the application of certain of the parties interested, the court granted an order directing that certain affidavits should be submitted to, and considered by, the commissioners, or that the same should be used upon the motion to con- ■ firm the report of such commissioners as the corporation counsel should prefer.

      Held, that the order was proper and should be affirmed.
    Ahpeal from au order made at tbe Special Term.
    In these proceedings tbe commissioners bad, on tbe lYth day of July, 18Y6, published in tbe City Record a notice, as required by law, stating that they bad (1) completed their report and filed it with tbe department of public works; (2) that all parties interested and who objected to tbe report should present their objections to tbe commissioners on or- before tbe first day of September, 18Y6, and (3) that tbe commissioners would, for tbe ten week days following- tbe first day of September, bear tbe parties' so objecting, (4) designating tbe area of assessments, and (5) that tbe report would be presented to tbe court for confirmation on tbe fourth day of October, 18Y6.
    By that report it appeared that tbe sum of $6,228 bad been awarded to, and $52,328 assessed upon tbe adjoining property.
    Pursuant to tbe above notice, objections were duly filed, before tbe expiration of thirty days, and bearings were bad before tbe commissioners. A number of persons objected, that awards should not be made, on tbe ground that all tbe land in tbe street bad been dedicated to public use. Other persons demanded that substantial awards should be made, on tbe ground that tbe streets had not been dedicated to public use.

      The motion, to confirm the report had been adjourned from time to time, from the fourth day of October, 1876, to the 25th day of July, 1877.
    The commissioners had completed and signed their final report, and it was ready to be presented to the court for confirmation, on June 6, 1877. Changes had been made in the report, after hearing and considering objections as aforesaid, by the increase of certain awards and the decrease of certain assessments.
    On July 17, 1877 (eight days before the day on which the motion to confirm the report was to have been made), an order to show cause made by the court was served on the counsel to the corporation, requiring the commissioners to show cause why Mr. Deering, attorney for certain parties interested, and who had before filed objections to the report, should not have leave* to submit to the commissioners a certain affidavit made by him, dated June 9, 1877; and why the commissioners should not consider and examine the same before submitting their report to the court; or why the said parties should not have leave to read the same upon the coming in or presentation of the report of the said commissioners for confirmation.
    An order to that effect was made, from which this appeal was taken.

      Hugh L. Odie, for the corporation of New York.

      James A. JDeermg, for Grrinnell and others, owners assessed, respondents.
   Ingalls, J.

The report of the commissioners of estimate and assessment, although signed, had not been presented to the court for confirmation, when this motion was made. The court upon an order to show cause directed the affidavit in question, to be submitted to and considered by, the commissioners, or that the same should be used upon the motion to confirm the report of such commissioners, as the corporation counsel preferred. We perceive no substantial objection to such order. Over such proceedings the court possesses the power of supervision, with a view to prevent injustice or oppression. (In the Matter of the Opening of Canal Street, 8 Barb., 505.) In tbe case cited, this doctrine was carried further than is required to sustain this order. In proceedings of this nature, where so much machinery is involved, it not unfrequ'ently happens that irregularities occur which require the intervention of the court, and when the necessity arises great liberality should be exercised in directing and controlling such proceedings, to the end, that neither the public or the private citizen is subjected to wrong or injustice.

When such an order is made it should not be interfered with unless clearly irregular. Our attention is called to the case In the Matter of the Opening of Eleventh Avenue (49 How., 208). That ease is not in conflict with the views herein expressed.

The order should be affirmed with costs.

Davis, P. J., and Brady, J., concurred.

Order affirmed with costs.


text:
    JOHN FISHER, as Trustee, etc., Respondent, v. ROBERT MURDOCK, Impleaded with others, Appellant.

      Corpm'ation — discount of note given by an officer of— limitation of chm’ter as to.

    This action was brought by the plaintiff, as trustee in bankruptcy of the Citizens’ Savings Bank, upon two drafts drawn by a firm in New York upon a firm in Charleston, accepted by the latter firm and delivered to one Palmer who was a member of both firms. Upon his application the drafts were subsequently discounted by the bank, of which he was the vice-president, and of the stock of which he owned more than four shares. The drafts were drawn and accepted for the accommodation of Palmer.
    The charter of the bank provided that no director or officer of said corporation should borrow or use any portion of the funds thereof, and that no loan of money should be made by it to any stockholder owning more than four shares of stock therein. It was insisted by the defendant that the drafts were void because taken by the bank in violation of the provisions of its charter. Held, that the prohibitions of the charter did not apply to a case in which a loan was made to a firm, corporation or association in which an officer or stockholder of the bank was a partner,’stockholder or member, and that the plaintiff was entitled to recover.

      Appeal from a judgment in favor of the plaintiff entered upon a verdict directed by the court, and from an order denying a motion for a new trial made upon the minutes of the justice before whom the action was tried.'
    This action was brought by plaintiff, as trustee in bankruptcy of the Citizens’ Savings Eank of South Carolina, against the defendants, who composed the firm of Courtney, Everett & Go., at New Yprk, and the firm of W. C. Courtney & Go., at Charleston, to recover upon two bills of exchange drawn by said Courtney, Everett & Co. upon W. C. Courtney & Go., and accepted by the latter film and delivered to the defendant Palmer, who obtained the same to be discounted by the Citizens’ Savings Bank aforesaid, said Palmer being a member of both of said firms and also vice-president of said bank and a holder of more than four shares of the stock therein. It was claimed by the defendant that the Citizens’ Savings Bank violated its charter in discounting ■‘lie bills of exchange and could not, therefore, recover thereon.

      Gimball <& Rimes, for the appellant.

      R. F. Watson, for the respondent.
   Ingalls, J.:

This action was brought by the plaintiff to recover of the defendants, who composed the firms of Courtney, Everett & Co., at New York and W. O. Courtney at Charleston, the amount of two bills of exchange drawn by said Courtney, Everett & Go., upon W. C. Courtney & Co., and accepted by the last-named firm, and delivered to John B. Palmer, who is one of the defendants. Palmer procured the same to be discounted by the Citizens’ Savings bank. Palmer was a member of both said firms, and vice-president of said bank which was located in Charleston, South Carolina. The defendant Murdock alone answers, defends and appeals.

At the close of the evidence the defendant requested the court to direct a verdict- in favor of the defendant on the grounds:

Eirst. That the bills are illegal; that the bank under which the plaintiff claims, and in whose shoes he stands has violated its own charter (§§ 5 and 6) by loaning money on paper on which one of its officers was directly liable, and by loaning money to a stockholder owning more than four shares of the stock of the bank, and by loaning money on paper, not secured by collateral security of any kind, and therefore, the very act by which the bank, and, through the bank, the plaintiff acquired title to the bills in question, was prohibited by statute, hence the bills founded on an illegal consideration are void and cannot be enforced.

Second. Also upon the second ground upon which the motion to dismiss was based ; such second ground was the‘following :

“ On the ground that it being in evidence that there was an agreement between John B. Palmer and the firms of Courtney, Everett & Co., the drawers, and W. C. Courtney & Co., the acceptors, that the said Palmer would individually take care of the bills at maturity. The bank having full knowledge of such agreement took the bills subject to the legal effect of such knowledge, that the agreement made Palmer the primary debtor for the money loaned on the bills, they being in the nature of security for Palmer. Hence, when the bank extended the loan, or renewed the bills at Palmer’s request, without the knowledge or consent of Courtney, Everett & Co., or ~W. O. Courtney & Co., that, vpso facto, released those firms from liability.”

The foregoing are the only questions insisted upon by the defendants upon the trial, so far as I can perceive. In regard to the last-mentioned question, the evidence does not sustain the position assumed by the defendants. These facts are not shown to have been brought to the knowledge of the officers of the bank, and therefore, they did not become chargeable with notice or knowledge of any such agreement or understanding.

Palmer’s knowledge not acquired while transacting, as an officer of such bank, any of its legitimate or ordinary business, would not be sufficient to charge the bank with knowledge. The mere fact that he was its vice-president, was not sufficient to charge the bank with knowledge of transactions in which Palmer participated. (Story on Agency, § 1406, p. 173; Angelí & Ames on Corporations, § 308.) The evidence indicates that the bank became a purchaser of the bills of exchange for value, before thpir maturity, and without knowledge of any prior equities. The witness Sawyer, who was the assistant cashier of the bank, states that the bills were discounted in the ordinary course of business; that he did not, nor did any other officer of the bank, to his knowledge, know or assent to any agreement between Palmer and the acceptors, that he, Palmer, should pay the drafts at maturity, and that the drawers and acceptors should not be liable thereon. Palmer’s evidence is to the same effect, in regard to any knowledge by the bank of any such agreement.

The remaining question is, whether the plaintiff was prevented from recovering in this action in consequence of the violation of sections 5 and 6 of the charter of the bank.

Section 5 provides, no director or officer of said corporation shall borrow or use any portion of the funds thereof.”

Section 6 provides, “ no loan of money shall be made by said corporation to any stockholder owning more than four shares therein.”

This presents a grave question and one not without difficulty. Every statute should receive a reasonable interpretation, with reference to the evil intended to be remedied or prevented, or the purpose sought to be attained. The spirit and intention governs, rather than the letter, when they are in conflict. Obviously these provisions of the charter were intended to prevent the stockholders and officers of the bank from using the money of the institution for speculation or other private purpose, upon their individual responsibility. Certainly they were not intended to embarrass the bank by restricting its powers in regard to its ordinary and legitimate business. The other provisions of the charter negative any such intention. It would seem unnecessary to hold, in order to maintain this charter in its integrity, that where an officer or stockholder of the bank, was a partner in a firm, a stockholder in a corporation, or a member of an association that a loan to such partnership firm, corporation or association, by this bank, would be void, as a violation of such, charter, in consequence of the interest of such stockholder or officer in such other firm, corporation or association. Now in regard to the bills of exchange in question, they were received by other parties, and discounted upon the faith of such security. In my judgment it was not a loan to Palmer in such a sense as to render it necessarily obnoxious to the provisions of such charter. So far as the evidence discloses, the bank acted in good faith, and discounted this paper in accordance with its ordinary custom and method of transacting such business. We discover no substantial reason for interfering with the decision at the Circuit.

The judgment should be affirmed with costs.

Davis, P. J., and Brady, J., concurred.

Judgment affirmed with costs.


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    CHAUNCEY SMITH, Respondent, v. ADOLPH FRANKFIELD, Appellant.

      Judgment based upon former judgment against defendant — rem'sal of such foi'mer judgment — effect iherreof.

    In an action brought to recover damages for a breach of a covenant of seizin the plaintiff, to prove the breach, put in evidence a judgment recovered hy one Smith against the defendant establishing a lien in favor of Smith upon the property and a lis pendens filed at the commencement of that action. After a recovery of judgment by the plaintiff the* judgment recovered hy Smith was reversed, upon appeal, by the General Term.
    Upon an appeal hy the defendant from the judgment recovered by the plaintiff, and from an order denying a motion for a new trial, held, that a new trial should he granted upon payment hy the defendant of the costs of the first trial and of this appeal, and of ten dollars costs of opposing the motion below.
    Appeal from a judgment in favor of the plaintiff entered upon the trial of this action by the court without a jury, and from an order denying a motion for a new trial made at Special Term.
    This action was brought to recover damages for a breach of a covenant of seizin contained in a conveyance of certain real estate bearing date April 15, 1873, from the defendant to the plaintiff.
    A notice of Us pendens describing the property in question had been filed April 2, 1873, in an action brought for the foreclosure of a mechanic’s lien. In the latter action judgment in favor of the plaintiff and sustaining the lien was rendered in January, 1875.
    This action on the covenant of seizin was prosecuted to judgment and judgment rendered in favor of the plaintiff in July, 1876, the notice of Us pendens and judgment in the mechanic’s lien case being received in evidence on the trial thereof for the purpose of establishing a breach of the covenant. Erom this judgment of July, 1876, defendant appealed. After the recovery of the judgment in the action brought on the covenant of seizin, and pending the appeal therefrom, the judgment in the mechanic's lien case was reversed on appeal at the General Term.
    A motion for a new trial in this action was thereupon made at Special Term pending the appeal to the General Term, which motion was denied.

      Chernies Tracy, for the appellant.

      Wm. P. Fiero, for the respondent.
   Ingalls, J.:

This cause comes before this court, under circumstances somewhat peculiar. The defendant conveyed certain land to the plaintiff by deed, containing a covenant of seizin. The plaintiff was entitled to recover by establishing a defect in the title without waiting until he should be dispossessed. ITe brought an action in this court against the defendant to enforce such covenant, and recovered a judgment. Upon the trial to establish a breach of the covenant the plaintiff put in evidence a judgment-roll, in an action prosecuted in this court by one Sarah H. Bostwick against the defendant herein, to enforce an equitable lien which she claimed to have against the said premises. A notice of lis pendens was also put in evidence, which was filed at the time of the commencement of the last-mentioned action. The judgment-roll showed a recovery by Mrs. Bostwick, in that action. Smith, the plaintiff in this action, relied upon the trial, mainly upon the judgment recovered by Mrs. Bostwick against the defendant Frankfield, and the notice of Us pendens, to establish a breach of such covenant.

The defendant Frankfield appealed to the General Term from the judgment rendered in favor of Sarah FI. Bostwick against him, and the judgment was reversed. (See Bostwick v. Frankfield, 18 Sup. Ct. Rep. [11 Hun], 476, where the questions of law and fact are fully and ably discussed by Judge Brady.) Pending this appeal from the judgment in favor of Smith v. Frankfield, a motion was made at Special Term, by the defendant, for a new trial, on the ground that the reversal of the judgment in the case of Bostwick v. Frankfield, destroyed its efficacy, not only at the time of its reversal, but related back to the period of its rendition ; and therefore, the ground upon which the plaintiff in this action relied to establish a breach of the covenant of seizin in his deed, wholly failed; in other words, was blotted out by such reversal. In Hall v. Andrews (65 N. Y., 572), Judge Lott remarks: “ The reversal of the judgment in defendant’s favor destroyed its efficacy as a bar, as it thereby became a nullity. The reversal acted retrospectively, its practical operation being to declare, that when the judgment was interposed as a defense, it had no validity.” (Wood v. Jackson, 8 Wend, 10, 36; Briggs v. Bowen, 60 N. Y., 454.) It is proper to remark, that the decision at Special Term, denying the motion for a new trial in this action was denied fro forma, as the order shows. From an examination of the case upon this appeal, and of the decision of the' General Term, in Bostwick v. Frankfield, and the papers furnished upon the appeal from the order denying such new trial, we are convinced that this appeal can only be properly disposed of by reversing the ■ order of the Special Term and directing a new trial, but this should be upon terms. When the plaintiff recovered his judgment, the decision in Bostwick v. Frankfield, was in force, and he was entitled to rely upon it.

The defendant appealed to this court and thereby occasioned the costs upon this appeal. We perceive that the appellant’s counsel in his points, likens his application to that of a motion for a new trial on the ground of newly-discovered evidence. Such a motion is granted upon the payment of costs. (Bailey v. Park, 5 Hun, 41; 3d vol., Waite’s Practice, 511.) As a condition to granting such new trial the defendant should be required to pay the costs of the plaintiff upon the trial at the Circuit, and upon this appeal, and ten dollars costs of opposing the motion at Special Term. We deem this a just disposition of this appeal.

Davis, P. J., and Brady, J., concurred.

New trial granted upon defendant paying plaintiff’s costs upon the trial at Circuit and on appeal, and ten dollars costs of opposing the motion at Special Term.


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    WILLIAM HERRIES, Appellant, v. EDWARD B. WESLEY and THOMAS C. PLATT, Impleaded with others, Respondents.

      Ohap. 40 of 1848 — trustees of corporation rmst be stoclcholders — how the fact that a person is a stoclcholder may be proved,.

    Chapter 40 of 1848 requires that the trustees of the corporations created thereunder shall be stockholders of the company; defendant had signed and acknowledged the articles of association of a corporation created thereunder, and was named a trustee therein.

      Held,, in an action brought by a laborer under section 18 of said act to charge him individually with the payment for services rendered to the company, that he could not deny that he was, at the time of signing the articles, a stockholder thereof.
    Where one has been shown to be a stockholder at the time of the organization of the company, he will be presumed to continue to be one until the contrary is established.
    Section 35 of said act providing that the book containing the names of the stockholders which the company is required to keep "shall be presumptive evidence of the facts therein stated in favor of the plaintiff in any suit against any stockholder,” does not make such book the only or even the best evidence of the fact that the defendant was a stockholder.
    Appeal from a judgment in favor of the defendants, entered upon the report of a referee.

      Demis A. SjpelMssey, for the appellant.

      William H. Arnough, for the respondents.
   Ingalls, J.:

This action was brought by the plaintiff to recover for services rendered by himself and his assignors, as laborers of the “New York Republican Newspaper Association,” against the defendants as the stockholders of such corporation. It was established upon the trial that the services were rendered as claimed. That the above-named association was duly incorporated under the Laws of 1848, chapter 40.

The referee decided the case upon the ground that the plaintiff had failed to prove that the defendants, or either of them, were stockholders at the time the debts were contracted.. This presents the only question to be considered upon this appeal. The articles of association were put in evidence, by which it appears that the defendants signed and acknowledged them, and were therein named two of the trustees.

The referee in his report, finds as follows: “ Ninth, that the plaintiff has failed to prove that the above-named defendants, Wesley and Platt, or either of them, were stockholders in the “New York Republican Newspaper Association” at the time the debts were contracted, upon which this action is brought. The eighteenth section of said act of 1848 provides, “ the stockholders of any company organized under the provisions of this act shall be jointly and severally, individually liable for all debts that may be due and owing to all their laborers, servants, and apprentices, for services performed for such corporation.” The third section of the same act provides: “ The stock, property and concerns of such company shall be managed by not less than three, nor more than nine trustees who shall be stockholders m such conypamyP The articles of association furnish, at least, prima facie evidence that the defendants were stockholders at the time the company was organized. They are, in law, presumed to have understood the relation which they bore to the corporation, which they were instrumental in creating. To be trustees they were required to be stockholders, and in that capacity they presented themselves to the public, and should not be allowed to deny that relation to the corporation against persons who have rendered services as laborers for such association, upon facts such as were established upon the trial.

Having been thus shown to be stockholders at the time the corporation was formed, they will be presumed to continue such until the contrary shall be established. (Strong v. Wheaton, 38 Barb., 617, 622 ; 1 Greenleaf on Ev., 3d p., 106, § 41.)

The mere fact that the book offered showed that Wesley had resigned as trustee, did not destroy the presumption that he was a stockholder, which he might well continue to be, although not a trustee ; for while he could not, legally, be a trustee without being a stockholder, he might very consistently be a stockholder and not a trustee. The twenty-fifth section of the act provides for keeping a book to contain tbe names of tbe stockholders, and declares that “such book shall be presumptive evidence of the facts therein stated in favor of the plaintiff in any suit against any stockholder.” The statute does not declare that it shall be the only evidence, or even the best evidence. This provision of the statute cannot properly be held to exclude the evidence offered at the trial.

The complaint should not have been dismissed by the referee upon the facts proved by the plaintiff.

The judgment should be reversed, with costs to abide the event.

Davis, P. J., and Beady, J., concurred.

Judgment reversed, new trial ordered, costs to abide event.


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    JOHN SNAPE, Appellant, v. HENRY GILBERT, JAMES N. BROCK and JOHN F. BRODERICK, Respondents.

      Answer — retwrn of, because of a defective verification— notice must point out defect.

    Where an answer is returned on the ground that the verification of the same is defective, the notice must point out specifically the.particulars in which it is defective.
    Appeal from an order of the Special Term compelling the plaintiff to accept an answer served by the defendant Gilbert.
    This action was brought against the defendant Gilbert, as receiver of the assets of a firm, and against the other two defendants who were sureties upon his bond, to recover for a breach thereof.
    Each of the defendants served a separate answer and verified iu as follows, viz.:
    “City and County of New Yoek, ss. :

    Mathew H. Gilbert, being' duly sworn, says: That he is the son of this defendant.
    That he has read the foregoing answer and that the same is true to his own knowledge.
    That the reason this verification is made by deponent is that said defendant Gilbert is absent from home and not here to make the same.

      That said Gilbert resides at No. 627 West Fifty-first street, New York, and all the allegations contained in the foregoing answer are within the personal knowledge of this deponent.”
    The verifications differ from each other in the names of the defendants mentioned therein, but were all verified by M. H. Gilbert and were substantially alike. The plaintiff returned the answers, indorsing on each the following notice:

      “ To Daily, Jr., & Machín, Attorneys for Defendants:

    Please take notice that the plaintiff refuses to receive and hereby returns the within answer on the ground and for the reason that the same is not properly verified and will treat the same as a nullity.”

      Isaac L. Miller, for the appellant.

      Daily & Machin, for the respondents.
   Ingalls, J.:

The main objections to the verification to the answers are two :

First, That it is not therein stated that Matthew H. Gilbert was at the time the agent or attorney of the defendants.

Second, That it is not stated that the defendants were not, at the time, within the county of New York.

The verification is not a strict compliance with the statute, although for all practical purposes, it is a substantial compliance. It is therein stated by Matthew H. Gilbert, who verified the answers, that he is a son of one of the defendants, and had heard read the answer, and that the same was true of his own knowledge; that the reason why he made such verification was that the defendant Gilbert was absent from home, and not there to make the same; that all the allegations of the answer were'within his personal knowledge. In a case, where there is a substantial compliance with the statute, and no evidence of intentional evasion of its requirements, the court is justified in holding the party objecting to the sufficiency of a'verification, to strict practice on his part.

The notice which accompanied the papers, which were returned, is as follows: Please to take notice that the plaintiff refuses to receive, and. hereby returns the within answer, on the ground and for the reason that the same is not properly verified, and will treat the same as a utility.”

This notice was too general. "When a paper is returned on the ground of irregularity the objection must be stated explicitly, and the particular defect, or omission, should be pointed out, i o that the other party may understand wherein his papers are defective. The rule was intended to accomplish this result. (Chemung Bank v. Judson, 10 How., 133; Broadway Bank v Danforth, 7 How. 264; Sawyer v. Schoonmaker, 8 How., 198.)

The judge at Special Term made a proper order, which should be affirmed with costs.

Davis, P. J., and Brady, J., concurred.

Order affirmed with costs.