author: Churchill, J.

text:
    William E. Thorne, App’lt and Resp’t, v. Harriet H. Garner and Francis M. Iselin, Impleaded, Etc., Resp’ts and App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Will—Legacy—When payable-—When it draws interest from DEATH OP TESTATOR.
    Ordinarily a legacy is not payable until the time fixed by the will for its payment or if no time be fixed until the period fixed by the statute has expired, and until payable, it draws no interest. But in the case of a legacy left by a parent to a child for whose maintenance no other provision is made and who, unless interest be allowed is without income intermediate the death of the testator and the legacy bee oming due, the legacy draws interest from the death of the testator. This rule is recognized and made to include one not a child, but to whom the testator stood in loco parentis.

      2. Same—When interest not payable from death of testator—On WHAT IT DEPENDS.
    A legacy given to an infant child by a will which makes other provision for its support does not draw interest from the death of the testator. The presumption of the intention of the testator upon which the rule as to payment of interest rests depends upon the tact that the ch.ld is dependent and not otherwise provided for, and not upon the fact of infancy.
    3. Same—What fact sufficient to show intention that interest be PAID ON LEGACY FROM DEATH OF TESTATOR.
    Where it appeared that the legatee had been in feeble health wholly dependent upon his father for the means of support of himself, wife and chi d ; ■ that he had no other source of income, and that from the time he became of a<re until his father’s death, his father had regularly each year furnished him the money necessary for his support, which had been increased from year to year. Held, That the father must have understood the son’s dependance upon him, and that the legacy was a provision for the son’s maintainance, and as no other provision was made for his maintainance intermediate the testator’s death and the time at which the legacy was payable the testator would be presumed to intend that it draw interest from his death.
    4. Executors and administrators—Accounting—Decree—Not binding AS TO MATTERS NOT INCLUDED IN THE ACCOUNT
    Where at the time an executor rendered his account he did not include in said account certain moneys which should have been entered as assets in his hands and under his control. Held, that the decree is not conclusive against parties interest in said money.
    5. Same—When compound interest allowed against.
    Compound interest is allowed against an executor in cases of gross delinquency, or as a penalty for negligence, or wrong doing, or for some clear violation of trust. For mere neglect to invest, simple interest is generally imposed.
    Appeals by the plaintiff, and by the defendants above named, from parts of judgment entered on report of referee.
    ■ H. A. Nelson, for pl’ff, appl’t and resp’t; Joseph H. Choate, Duncan and J. Evarts Tracy, for def’ts, resp’ts and appl’ts.
   Churchill, J.

Thomas Garner, Sr., died October 16, 1867, leaving a large real and personal estate considerably exceeding $5,000,000 in value. He left two sons, Thomas Garner, Jr., and William T. Garner, and three daughters. He left a will dated April 12, 1866, by which he made provision for each of his children. That for his son Thomas Garner, Jr., was as follows:

“Sixth. I give and bequeath to my son Thomas the sum of $1,000,000, to be paid him within eighteen months after my decease.”

He made his son William T. Garner his residuary legatee, thereby giving him a share of the estate considerably exceeding that of any other child. He appointed his two sons, one of his sons-in-law and the plaintiff in this action, executors. William T. Garner alone qualified and acted as executor of his father’s will. The personal estate provecí sufficient to pay all the legacies of the will and debts of the testator and to leave a considerable sum for the residuary legatee.

Thomas Garner, Jr., came of age October 9, 1859; he was married June 6, 1860; his only child, Frances M. Iselin, one of the defendants, was born July 3, 1861, and he died March 23, 1869, leaving a widow, the defendant Harriet H. Garner, and their child above named. He left a will dated November 12, 1867, appointing as executors and trustees of his estate his brother, William T. Gamer, with the plaintiff, both of whom soon after Ms death qualified and entered upon their duties as such.

In the early part of 1871, William T. Gamer, with the plaintiff, applied to the surrogate of New York for a final settlement of their accounts as such executors, of which the defendants, Harriet H. Gamer and her daughter, then an infant, had notice. No appearance for the widow or her daughter appears to have been made, except that a special guardian was appointed for the infant. April 4, 1871, a decree was made by the surrogate, adjudging the balance in the hands of the executors to be $840,861.37» and directing them, after paying commissions and the expenses of the accounting, to hold and invest the same as directed by the will, which was done by them.

The account as presented and allowed, credited the legacy of $1,000,000 under the will of Thomas Gamer, Sr., as-having been paid April 15, 1869, or at the end of eighteen, months from the death of the testator; and included no interest upon the legacy for any part of that period. It included an item for $177,754.03, charged as cash paid by the executors to Gamer. & Co. for moneys advanced by Gamer & Co. to Thomas Garner, Jr., during Ms life and before the legacy of $1,000,000 was paid.

Gamer &'Co. was composed of William T. Gamer and a nominal partner, who received a salary for Ms services and had no interest in the property or profits of the firm, and the moneys advanced by Garner & Co. to Thomas Gamer, Jr., were in fact paid by WiMam T. Garner, who as executor of his father’s will at the time when such moneys were paid to Thomas Gamer, Jr., and also at the time when said legacy was credited as paid had in Ms hands ample funds from which to pay the interest upon said legacy, if Thomas Gamer, Jr., was entitled to interest thereon from his father’s death.

William T. Garner died July 20, 1876, and the plaintiff has ever smce been sole executor and trustee under the wiE of Thomas Gamer, Jr. This action is brought by the plaintiff to obtain permission to resign those positions and for the appointment of a new executor and trustee; for an accounting subsequent to that before the surrogate in 3 871, and. for his discharge from further responsibility or accountability for the estate of Thomas Garner, Jr.

A previous action by the defendants, Harriet H. Garner and her daughter, against the plaintiff, was brought soon after the death of William T. Garner, asking, with other relief, for the removal of the plaintiff as trustee and the appointment of a new trustee, for an accounting, and particularly that he be required to pay and make good the said sum of $177,754.03 as having been improperly allowed upon the accounting before the surrogate.

That action was discontinued upon a stipulation providing that a proceeding should be commenced by the plaintiff to obtain the results sought in this action, and that upon the accounting to be had in that proceeding the decree made by the surrogate, above referred to, should be final, conclusive and binding upon the parties, except as to certain items the adjustment of which was agreed upon in the stipulation, and also except as to “certain moneys amounting in the aggregate to $177,754.03, which were paid by Garner & Co. on drafts of Thomas Garner, Jr., deceased, and for his account between the death of Thomas Garner, Sr., and the death of Thomas Garner, Jr., the question being not as to the fact that the money was paid to and for the account of Thomas Garner, Jr., but as to whether such payments are properly chargeable against against the legacy left by the said Thomas Garner, Sr., to the said Thomas Garner, Jr.” This action is not the proceeding contemplated when the stipulation was made, but is in the same direction, and the stipulation is conceded on both sides to be binding upon the parties to it in the accounting had in this action.

This action was referred, and the referee by his report has found that Thomas Garner, Jr., was entitled to interest upon his legacy from his father’s death, and that the payments of cash in the item of $177,754.03 should be treated as made by William T. Garner on account of that interest to the extent of it, and the excess only treated as a payment on the principal of the legacy, and he has readjusted the account to conform to those findings. By such readjustment he finds the sum of $109,860.54 to have been on deposit with Garner & Co., in the hands or under the control of the executors of Thomas Garner, Jr., and uninvested on the 31st day of January, 1871, beyond the amount accounted for in the accounting before the surrogate, and he allows simple interest upon that amount from that date.

The plaintiff insists that interest was improperly allowed by the referee upon the legacy of $1,000,000 from the death of Thomas Garner, Sr., and also that certain sums paid to William K. Thorne, as attorney for the executors of Thomas Garner, Jr., were allowed only in part.

The defendants, Harriet H. Garner and Frances M. Iselin, insist that compound and not simple interest should have been allowed upon the sum of $109,860.54, above mentioned.

These are the principal questions raised by the appeals, and the only ones necessary to be considered.

Ordinarily a legacy is not payable until the time fixed by the will for its payment, or, if no time be fixed, until the period fixed by the statute has expired; and until payable it draws ho interest.

To this general rule there are several exceptions; the most important Of which is the case of a legacy left by a parent to a child for whose maintenance no other provision is made, and who, unless interest be allowed, is without income intermediate the death of the testator and the legacy becoming due.

In such case the legacy draws interest from the testator. Green v. Belchier, 1 Atk., 505; Heath v. Perry, 3 id., 101; Hearle v. Greenbank, 3 id., 695, 716; King v. Talbot, 40 N. Y., 76; Brown v. Knapp, 79 id., 136; Redfield’s Surrogate Courts, 601.

The rule is thus stated by Lord Hardwicke (1 Atk., 506, A. D. 1737): “It being a constant rule in equity that whenever a legacy is given by a father to a child as a provision for such child, though the legacy be payable at a future day, yet the child has an immediate right to the interest of the money.”

And again (3 Atk., 102): “How far a legatee who is not entitled to the payment of his money immediately shall have interest in the meantime depends upon particular circumstances-. But all these cases are subject to this exception if it is in the case of a child; for then, let a testator give it how he will, either at twenty-one or at marriage, or payable at twenty-one, or payable at marriage, and the child has no other provision, the court will give interest by way of maintenance, for they will not presume the father inofficious or so unnatural as to leave the child destitute.” And this was a rule coming down from a much earlier period. In re George, 22 (Moaks’) Eng. Rep., 507, 510.

This rule is recognized and made to include one not a child, but to whom the testator stood in loco parentis in Brown v. Knapp, supra, where it is said (p. 142)- “ This rule is based upon the presumption that the testator in such case must have intended that the legatee should in meantime be maintained at his expense, thus discharging his moral obligation or carrying out his benevolent design. It is not needed for the application of this rule that the testator must have been under a legal obligation, at the time of his death, to support the legatee. Such obligation of a testator to support his own child continues only during his life. The duty of a testator in this case to provide for and support his infant grandchild was almost, if not quite, as strong as that of supporting his own child, and it must be presumed that he meant to discharge that duty-. This legacy, therefore, carried interest from the death of the testator.”

It is said that the rule is limited to legacies to infants. Most of the cases in which the question has arisen have been those of legacies to infants, and the language used in stating the rule has frequently been limited accordingly. But the moral obligation of a parent to make provisions for the support of a dependent child includes adult as well as infant children, and is certainly as great in the case of such adult child .as in that of one not a child, but to whom the testator has assumed the place of a parent. This moral or natural obligation is frequently referred to as the foundation of this rule, and upon it rests the provision of the Revised Statutes which makes the parent hable for the support of an indigent child, whether adult or infant. In re Rouse's Estate, 9 Hare, 649, 653; Brinkerhoff v. Merselis, 24 N. J. (law), 680; 1 R. S., 614, § 1; 2 Kent’s Com., 190.

A legacy given to an infant child by a will which makes other provision for its support is held not to come within the rule, showing that the presumption of the intention of the testator upon which the rule rests, depends upon the fact that the child is dependent and not otherwise provided for, and not upon the fact of infancy. '

The case of Bradner v. Faulkner (12 N. Y., 472), is cited as settling this question favorably to the plaintiff. In that case, the testator gave to one of his two daughters (both adult and married) a farm valued at $15,060, and a legacy of $16,000; to the other a farm valued at $31,060. The will declared it to be the intent of the testator to .give his daughters equal advantages in the disposition of his property. .The surrogate allowed interest upon the legacy from the father’s death. This was affirmed at general term but reversed by the court of appeals. The latter court said that the predominant intention of the testator was to give equality of benefit to his daughters, and considering the various provisions of the will in the light of that intent held interest upon the legacy to have been improperly allowed. That the interest was necessary to the maintenance of the legatee was not claimed. Indeed the contrary appeared, since she had a husband, presumably able to maintain her; and also the will gave her a valuable farm to the possession of which she would be entitled immediately upon her father’s death. The question involved here is not hinted at in the opinion of the court.

In this case the evidence showed Thomas Garner, Jr., to have been in feeble health ; that he was wholly dependent upon his father for the means of support of himself, wife and child ; that he had no other source of income ; and that from the time he became of age until his father’s death, his father had regularly each year furnished him the money necessary for his support.

The amount so furnished in 1864 was $3,012.91; in 1865, $8,088.35; in 1866, $9,336.48, and in 1867 to October sixteen, the date of his father’s death, $10,526.48.

From the regular increases of these annual amounts the father must have understood at the time of making his will and at the time of his death that his son was dependent upon him, and that that dependence was not diminishing. The legacy was a provision for his son’s maintenance. Unless interest be allowed, the son was without income intermediate the death of the testator and the payment of the legacy. The case furnishes the strongest ground for presuming the testator to have intended that his son’s legacy should draw interest from his death and the judgment in that respect should be affirmed.

It is claimed for the plaintiff that the surrogate’s decree on the accounting of the executors of Thomas Garner, Jr., made April 4, 1871, prevent the recovery by the defendants of interest on the legacy from the death of the testator. The stipulation made by the plaintiff with the defendants in consideration of which they discontinued the action commenced by them in the superior court, furnishes an answer to this claim.

Had the question raised here been raised before the surrogate, and interest on the legacy of $1,000,000 been allowed by him from the death of the testator, the payments of cash included in the item of $177,754.03 would undoubtedly have been held first to apply in payment of that interest, and to that extent to have been extinguished, and the remainder only to apply in payment of the principal of the legacy* and the same result would have been arrived at as to the balance due at the time of that accounting, as has been arrived at by the referee in this action. But the stipulation was obviously intended and understood by the parties as giving to the defendants the right to raise every question as to the allowance of that item or any part of it (except the fact of payment), which might have been raised on the hearing before the surrogate, and it was so treated on the trial of this case.

Besides, the interest upon this legacy, if legally allowable, must, under the facts of this case, be regarded as assets in the hands or under the control of the executors of Thomas Garner, Jr., at the time of rendering their account in 1871, and not having been included in that account, the decree is not conclusive against the claim now made by the defendants. Brown v. Brown, 53 Barb., 217; President, etc., Bank of Poughkeepsie v. Hasbrouck, 6 N. Y., 216, 221; Wurts v. Jenkins, 11 Barb., 546.

The plaintiff complains that part of the sums paid William K. Thorne for legal services and charged to the estate of Thomas Garner, Jr., were disallowed by the referee. The charges were for services in keeping down taxation on the Garner estate. The whole amount of taxes on personal property paid for that estate, as well as these charges for legal services, were charged against the estate of Thomas Garner, Jr., and his sister Anna James Garner, who was also left a legacy of $1,000,000 by her father’s will.

Upon the trial of this action it was stipulated by the parties that but one-fourth of the faxes so paid should be allowed against the estate of Thomas Garner, Jr., and the referee has adopted the same rule as to the sums paid for the legal services of William K. Thorne. This upon the evidence is quite as favorable to the plaintiff as he had a right to expect.

As to the claim of the defendants Harriet H. Garner and Frances M. Iselin that the plaintiff should have been charged with compound interest upon the sum of $109,860.54 with which the executors of Thomas Garner, Jr., were held to be chargeable and which had remained uninvested from January, 1871, the referee was justified in rejecting it.

Compound interest is allowed in cases of gross delinquency, or as a penalty for negligence or wrong-doing, or for some clear violation of a trust. For mere neglect to invest simple, interest is generally imposed. Clarkson v. DePeyster, Hopk., 424, 427; Hannahs v. Hannahs, 68 N. Y., 610; Utica Ins. Co. v. Lynch, 11 Paige, 520; Barney v. Saunders, 16 How. [U. S.], 535, 542.

In this case there is no evidence to show that the executors of Thomas Garner, Jr., supposed themselves chargeable with interest on this legacy until the question was raised in this action, or that they did not believe in good faith that they had invested for the benefit of their cestuis que trust, as directed by the surrogate, the whole trust fund with the care of which they were charged. There is no uniform rule of redress in cases of this kind, but each calls for the exercise of the judicial discretion of the court, and in this case that judicial discretion was properly exercised.

The judgment should be in all respects affirmed, without costs or the appeal to either party Barrett and Daniels, JJ., concur.


source: Caselaw Access Project

author: Davis, P. J.

license: Public Domain

text:
    Christopher A. Wyatt, Resp’t, v. James B. Brooks et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    Pbactice—Venue—What is a local action—Whebe tbiable undeb section 982, Code Civ. Pbo.
    An action was brought in New York county to set aside an assignment, on the ground that it was fraudulent and void, etc., and made to delay and defraud creditors. Amongst the property assigned was a parcel of land belonging to one of the assignors, which was situated in the city of Syracuse. A demand to change the place of trial was made, on the ground that the place of trial was not laid in the proper county, etc. The plaintiffs offered to stipulate that they “will not attempt to reach the real estate of said assignor assigned to said assignee or to make any claim, of title or interest therein or thereto.” Held, that within Code Civ. Pro., § 982, this is a local action, and that it must be tried in the county where the subject of the action or some part thereof is situated. That the right of the defendants to change the place of trial could not be disposed of by such a stipulation, because it would not be binding upon a receiver or others who might be interested in the land after judgment.
    Appeal from order of the special term denying defendants motion to change place of trial from New York to Onondaga county.

      Louis Marshall, for app’lt; S. R. Stern, for resp’t.
   Davis, P. J.

This is an action in the nature of a creditor’s bill to set aside an assignment made by the defendants Silberstein and Shovelsohn to the defendant Brooks on the alleged grounds that the assignment was fraudulent and void on its face, and improper and illegal in form, and was made and executed with intent to hinder, delay and defraud the creditors of the assignors. Amongst the property assigned was a parcel of land situated in the city of Syracuse, county of Onondaga, which belonged to the defendant Silberstein, and which, as appears oy his affidavit, is of the value of about $8,000, encumbered for about $6,400, leaving a margin, as he states, of at least $1,500 over and above the incumbrance. A demand of change of place of trial was made in due form, on the ground that the place of trial was not laid in the proper county, and the motion is based upon such demand, and the grounds stated therein, and also upon affidavits tending to show that the place of trial should be changed for the convenience of witnesses.

To meet the claim that the city of New York is not the proper place of trial, on the ground that the action affected the question of title or interest in real estate, the plaintiffs made a stipulation that they “ will not attempt to reach the real estate of said assignors assigned to said assignee, or make any claim of title or interest therein or thereto.” The special term denied the motion upon the affidavits and the stipulation referred to.

The construction given by the court of appeals in Acker v. Leland (96 N. Y., 384), to sec. 982 of the Code of Civil Procedure, requires us to hold that this action is local within the provisions of that section. It must be tried in the county in which the subject of the action, or some part thereof, is situated. The defendants were, therefore, .entitled, upon their demand, to have the place of trial changed, and the order should accordingly have been made unless the stipulation given by the plaintiffs had the effect to take the case out of the provisions of sec. 982 of the Code.

The object of the action is to have the assignment declared absolutely void because made in fraud of creditors. The assignment conveys certain real estate to the assignee. A decision that it is void will affect the title to that real estate and it is difficult to see how the stipulation that the plaintiff will not pursue the real estate or claim any interest therein will prevent the effect of a judgment, if they succeed in obtaining one declaring the assignment void, from affecting the title to the land. A receiver appointed under such a judgment would take title to the land and the refusal on the part of the plaintiffs to reap any benefit therefrom would only impose on the receiver the obligation of applying it to other creditors who might come in and be made parties to this action or commence other actions. The right of the defendants to change the place of trial cannot we think be disposed of by such a stipulation.

tin the subject of witnesses the question presented to the court was one' addressed to its discretion and it may be that the stipulation to admit on the trial what a portion of the defendant’s witnesses would testify to, together with the witnesses sworn to on the part of the defendant to reside in the city of New York, was an answer to that branch of the motion. But we are not inclined to examine particularly the disposition made of this part of the motion because the order changing the place of trial should have been granted on the ground already considered.

The order should, therefore, be reversed and the motion granted with costs of the motion and of this appeal to abide the event.

Daniels and Brady, JJ., concur.


author: Beady, J.

text:
    Nicholas Kilroy, Appl’t, v. Wilmer S. Wood, individually and as trustee, etc., Resp’t.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    Trusts and trustee—When judgment creditor can reach surplus INCOME OE CESTUI QUE TRUST—WlIAT MUST BE SHOWN.
    An action was brought for the purpose of reaching certain alleged accumulations of income of the judgment debtor, constituting a surplus over a d above the amount which should be allowed to the beneficiary, Wilmer S. Wood, for his'necessary expenditures, he being a beneficiary under a clause in his father’s will, which provided for the appropriation of a part of the income of his estate, without the power of anticipation of any surplus income until the son should attain full age, when the trustees were authorized to advance such accumulations or to keep them invested or give them to him from time to time as they thought best. Held, that in determining what is a proper amount to be allowed said son for his expenditures, the manner in which he has been brought up, the habits acquired by him and his ability to take care of his property must be considered. That it was the duty of the plaintiff to show in order to succeed that there was a surplus of income.
    Appeal from a judgment at the special term dismissing the complaint upon the merits. ■

      P. & D. Mitchell, for appl’t; F. B. Candler and M. L. Erlanger, for resp’t.
   Beady, J.

This action was commenced for the purpose of reaching certain alleged accumulations of income constituting a surplus over and above the amount which should be allowed to the beneficiary, Wilmer S. Wood, for Ms necessary expenditures. He was the beneficiary under a clause in the will of his father, which provided for the appropriation of a part of the income of his estate without the power of anticipation of any surplus of income until he should attain full age, when the trustees were authorized to advance such accumulations or to keep them invested, or give them to him from time to time, as they thought best.

The evidence establishes that the beneficiary is in receipt of a handsome income, which the learned justice in the court below thought was not more than sufficient to support him in the manner in which he had been accustomed to live and was not beyond what his father intended to provide for Mm.

It has been held in a series of cases that a judgment creditor is entitled to the appropriation of the income beyond what is necessary for the suitable support and maintenance of the cestui que trust and those dependent upon them. Williams v. Thorn, 70 N. Y., 270; Graff v. Bonnett, 31 id., 9; Craig v. Hone, 2 Edwards’ Ch., 376, 554; Tolles v. Wood, 99 N. Y., 616; Sillick v. Mason,, 2 Barb. Ch., 79. And in determining what is a proper amount to be allowed for his expenditures, it seems to be regarded as proper to consider the manner in which he has been brought up, the habits acquired by him, and his ability to take care of his property. It was said in the case of Sillick v. Mason (supra): “It certainly was the misfortune of the defendant that he was brought up in idleness, under the idea that he was to inherit a large estate, and that it was unnecessary that he should acquire any business habits, so as to fit him to acquire property or to enable him to take care of it if given to him by others.” And in the same case the chancellor, after determining the amount which should be allowed the beneficiary, said: “And they should not, upon a fair construction of the statute on this subject be permitted to indulge in extravagant expenditure whilst the defendants’ creditors remain unpaid.”

The same observation applies in this case. But the difficulty in disturbing the judgment arises from the fact that there is not sufficient evidence to show—indeed it may be said that there is no evidence on the part of the plaintiff tending to show what would be a proper amount to allow the beneficiary for his support. He is, as claimed in the defendants’ points, a gentleman of high social standing whose associations are chiefly with men of leisure, and is connected with a number of clubs, with the usages and customs of which he seems to be in harmony, both in practice and expenditure, and it is insisted on his behalf that his income is not more than sufficient to maintain his position according to his education, habits and associations, and this may be so, yet it would seem that evidence might have been adduced which would establish his ability to live upon a smaller sum than the whole income, and thus relieve himself from the burden of a debt which seems to have been justly contracted. But the evidence is wholly insufficient on this subject on behalf of the plaintiff.

In the case of Sillick v. Mason, supra, a reference was made to a master to ascertain and report what would be a reasonable amount of the income for the support- of the defendant and his family.

It was the duty of the plaintiff to show in order to succeed, that there was a surplus of income, and which, as already suggested, he has failed to do.

An examination has been made of the exceptions presented upon the record, and it has been found that none of them is sufficient to change the result which must be declared, the inherent difficulty in the plaintiff’s case being, as already suggested, the failure to show by proper and sufficient evidence that there was a surplus of income.

For these reasons the judgment must be affirmed.

Davis, J., concurs.


text:
    John Hayes, v. Catherine E. Rabold.

      (Supreme Court, General Term, First Department,

      Filed December 30,1886.)

    Practice—Order—When one order vacates another obtained ex parte.
    One M. was appointed receiver in a certain action by consent on _ his stipulating to charge no fees for services as such receiver, and as receiver he collected forty-nine dollars rent. The action in which M, was appointed was on trial dismissed and the rent was thereupon demanded of the receiver by defendant and not paid, and thereafter an order was made upon notice to said M, requiring him to pay the money to defendant in said action. Whereupon M, obtained an ex parte order in another county ordering him to resist the payment of the money during the pendency of the action, etc., when no action had been in fact commenced. Held, that the court had a right to treat the order obtained by M, ex parte as vacated by the order directing him to pay the money to defendant.
    Appeal by Andrew J. Moore, as receiver from two several orders dated respectively August 4 and 16, 1886, the former directing said receiver to pay to the defendant the sum of forty-nine dollars, rents collected by him as receiver, and the latter denying a stay upon such appeal.

      Samuel J. Crook, for app’lt; G. W. Carr, for resp’t.
   Davis, P. J.

Moore, the appellant, who is an attorney of this court and was one of the attorneys for the plaintiff in this action, was appointed receiver therein of the rents of certain real estate affected by the action. His appointment was made by consent of the parties on the stipulation of Mr. Moore that he would charge no fees whatever for his services as such receiver provided no bond was required. Moore collected forty-nine dollars rent. The action on trial was dismissed, and the rent was thereupon demanded of the receiver by the defendant but was not paid, and a motion was then made upon due notice to Moore for an order requiring him to pay over such rent to the defendant or her attorney.

In answer to this motion Moore produced an ex parte order in an action between the same parties made in Kings county by special term, which, amongst other things, ordered that Moore, the receiver appointed in this action, resist and refrain from paying over to the defendant, or any person claiming the same, the rents above mentioned during the pendency of the action, and until the determination thereof or the further order of the court. No action had been in fact commenced, but a copy of this' order had been served on Moore. The special term, it would seem, regarded the order obviously as collusive, and made an order directing Moore to pay over the amount to the defendant or her attorney, and discharging the receiver on such payment from all further liability. After this order was duly entered application was made at a special term upon an order to show cause, for an order staying proceedings therein pending this appeal. This application was denied, with costs, and an appeal was taken from the order denying the motion for the stay.

We see no reason for interfering with either of the orders. It was the duty of Moore, the receiver, to have paid over the money on the final disposition of the action in which he was appointed. He had expressly stipulated that no fees should be charged provided no bond was required, and it became his duty, he having collected forty-nine dollars, to hand the same over to the defendant upon the order of the court, in full settlement of his account as receiver.

The court had the right to treat the order obtained in Kings county in an action not in fact- commenced as no protection to the receiver. The effect of the order made on the motion was to vacate that order, and the appellant was in no danger of being punished for contempt in obeying the order to pay over the money. The stay of proceedings was purely discretionary, and the court evidently regarded the application as without merit and not made for a proper purpose, otherwise it would not have imposed costs.

We think both orders should be affirmed with ten dollars costs, besides disbursements.

Daniels and Beady, JJ., concur.


text:
    Bernard Reilly, late Sheriff, etc., Resp’t, v. Rufus Dodge et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    Sheriff—Boiro by deputy—Liability of sureties.
    The defendant Dodge, was a deputy sheriff under the plaintiff Beilly, and while such deputy; gave a bond for the faithful discharge ofhis duties to the sheriff. In an action to recover on this bond by said sheriff : Held, that such a bond speaks only from its delivery; that the delivery is presumptively at its date, but when the time of actual delivery is shown, the date becomes unimportant. Sureties on such a bond do not become liable for past tiansactions.
    Appeal from judgment entered on report of referee.

      Louis M. Doscher, for app’lts; P. Mitchell, for resp’t.
   Davis, P. J.

The appellant Dodge was a deputy sheriff under the respondent. He had given a bond for the faithful discharge of his duties to the sheriff, but one of the sureties in that bond refused to be longer liable upon it and a new bond was required by the sheriff. The bond in suit was subsequently given. It was signed and acknowledged by Dodge and the defendant Sauer on the thirtieth day of January, 1878, and by the defendant Dobelman on the fifth day of February, 1878, at which latter date it was delivered to the sheriff. The date of the bond, as found by the referee, was altered from January 80, 1878, to December 1, 1877, before its signature and delivery.

In December, 1877, an execution was placed in Dodge’s hands as deputy sheriff for collection. He made a levy by virtue of such execution. on certain property supposed to belong to - the defendant in the execution, and sold the same on the seventh of January, 1878. The sheriff was afterward sued for this levy and sale by a third party, who claimed to be the owner of the property, and a recovery was had in the suit against the sheriff, who having paid the same brings this suit on the bond against Dodge and his sureties.

The only question is whether the bond covers the liability.

The well established rule is that such a bond speaks only from its delivery. The delivery is presumptively at its date, but when the time of actual delivery is shown, the date becomes unimportant.

In this case the signing of the bond by Dodge and Sauer took place on the thirtieth of January, 1878, and by Dobleman, the other surety, on the fifth of February afterwards.

The liability for the acts of Dodge under the levy occurred by the sale several weeks before the delivery of the bond in suit. It was not the intention of the sureties to become liable for past transactions, and the language of the bond does not subject them to any such liability.

The rules of law controlling the case are settled in Draper v. Snow (20 N. Y., 331), Weller v. Hersee (10 Hun, 431), Bissell v. Saxton (66 N. Y., 55), Thomson v. McGregor (81 N. Y., 593). The case is not to be confounded with those in which a bond or undertaking has been given to indemnify the sheriff for proceeding with a levy previously made, in which case the surrounding circumstances show the intention to indemnify against a liability previously incurred. Griffiths v. Hardenburgh, 41 N. Y., 464.

The judgment in this case must be reversed and a new trial ordered, with costs to abide the event.

Brady, J„, concurs.


author: Daniels, J.

text:
    Isaac Hamburger et al., Resp’ts, v. Rudolph Moeller, Appl’t.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    Attachment—Assignment fob benefit of cbeditobs—What sufficient EVIDENCE OF FBAUDULENT INTENT TO SUSTAIN ATTACHMENT.
    On an application to discharge an attachment issued in favor of the plaintiff against goods in the hands of an assignor for the benefit of creditors, the affidavits on which the attachment was issued and those used by plaintiff on the application showed that large amounts of goods were purchased shortly before the failure and not paid for, and that judgments were confessed to the preferred creditors and preferences made in favor of of the assignor’s wife and other near relatives exceeding in amount the value of the assets transferred hy assignment. Held, that there was sufcient to indicate fraudulent intent in making the assignment, and that the refusal to vacate and set aside the attachment was proper.
    Appeal from an order denying a motion to vacate an attachment.

      JS. F. Kneeland, for app’lt; George Id. Yeaman, for resp’t.
   Daniels, J.

It will not be necessary to decide whether under sections 682 and 683 of the Code of Civil Procedure an application to discharge an attachment may as a matter of course be made upon affidavits, after a preceding motion has been heard and denied on the affidavits on which the attachment itself was issued, for the affidavits produced on behalf of the defendant, ánd those added to the case by way of answer, leave no ground for substantial doubt as to the right of the plaintiffs to the attachment which was issued in their favor. It is true that the affidavit of the defendant himself makes a reasonably fair case in his favor, and indicates that his conduct and management in his business, were actuated by good faith, and that his assignment was the result of circumstances beyond his control. But this affidavit has been overcome in its effect by others produced by way of answer to the motion, establishing as they do, a state of facts at variance with those asserted by him. The amount of goods purchased shortly before the failure and not paid for, the condition of his stock at the time of his assignment, and his conduct in the business, together with the probable amount of sales, leave no serious ground for doubting, but that he was actuated by a fraudulent intent in the purchase of the plaintiffs’ goods, and afterwards disposed of them in part, as well as other goods purchased by him, intending thereby to defraud his creditors. The manner in which the assignment was made and judgments afterwards confessed to the preferred creditors further support this conclusion, for by the assignment preferences in favor of his wife and other near relatives were made exceeding in amount the probable value of the assets transferred by the assignment. Preferences to persons in his employment were also made, in one of which there is quite a decided probability that the amount of the actual indebtedness was exceeded. And the fact that judgments were confessed in favor of his wife, and the firm in which her brothers were members, and to a brother of his own, indicate the existence of a conviction upon the part of the assignor that the assignment probably could not be sustained, and that these judgments were confessed for more effectually providing for the apportionment of his property to the use and benefit of his relatives.

The amount of the alleged indebtedness to his wife is still left so -far unsupported as not to entitle the fact to be assumed in the disposition of this appeal, for the check stated to have been issued to ■ her is denied to be the one exhibited by him near the time of his marriage, which he alleged had been given to him in consideration of such marriage. The entry in the books relating to the alleged indebtedness to his wife subjects his claim to still further suspicion, for that appears under a date preceding the date of the check produced and annexed to the affidavit of Max Schoenfeld. The defendant’s conduct in the purchase of the tobacco from Levy in the latter part of September, 1885, also very manifestly exhibits the disposition on his part of obtaining property and disposing of it out of the course of business to realize its value and appropriate such value to his own use. As to that his representations were that he required the tobacco because he had made a sale of a large portion of it, while there is reason to believe that this was entirely untrue, as he, early in the following month, pledged nearly all of it to obtain money upon it. The case is one reflecting no credit upon the defendant in his dealings, for it indicates that his purpose through the fall was to obtain more goods than he previously had purchased, to defraud the vendors out of the price, and to appropriate the property, or its value, in a large degree to his own benefit and the benefit of his near relatives. It has been objected that what he said in the way of representations is not admissible in this proceeding, but as the application was by himself to vacate and set aside the attachment there is clearly no ground for this objection to rest upon. The case was disposed of as it should be by the special term, and the order appealed from should be affirmed, with ten dollars costs and also the disbursements.

1 Davis and Brady, JJ., concur.


text:
    William H. H. Sanger, Resp’t, v. James M. Seymour et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    Practice—Examination of parties before trial—Sufficiency of affidavit.
    In an action brought to recover $7,500 upon an instrument held hy the plaintiff, and upon wnich he alleges the defendants to have bee. me liable to him, but which liability they deny, an order was made for the examination before trial of a party defendant as a witness for the plaintiff. The affidavit of the plaintiff upon which the order was made stated that without an examination of the defendants to be used upon ihe trial, he had no means of ascertaining the language of an instrument, signed by himself and another person and given to the defendants, and has no knowledge of the state of the accounts, etc., and “has no means of obtaining such knowledge except through an examination of defe. dont before triar ” & Jrield, that the order was properly granted, that the fact that the evidence obtained may have a leuden y to defeat the defense of the defendants, is not a reason for denying plaintiff the right to take the testimony.
    Appeal from an order requiring the defendant James A. Baker to appear before a referee and be examined as a witness for the plaintiff in this action.

      Joseph H. Choate, for app’lts; B. F. Watson, for respit.
   Daniels, J.

The objections upon which the appeal has been taken depend upon the sufficiency of the affidavit to support the order under which the testimony of the defendant Baker is proposed to be taken. It has been urged and insisted that the affidavit is not sufficient, and that it discloses rather the purpose to discover and inquire into the' defense than to obtain evidence to make out and sustain the plaintiff’s cause of action, which is for the recovery of the sum $7,500 upon an instrument held by the plaintiff, and upon which he alleges them to have become liable to him, but which liability they dispute and deny in the action. The object of the examination proposed to be taken is to obtain evidence to sustain the plaintiff’s right to maintain this action. That appears by repeated statements contained in the affidavit upon which the order has been made. Upon the subject the plaintiff has sworn that without an examination of the defendants to be used upon the trial he has no means of' ascertaining the language of an instrument signed by himself and another person and given to the defendants, and has no knowledge of the state of his accounts kept with him on the books of the defendants while he was in their employment. And “has no means of obtaining such knowledge except through an examination of said defendants to be used on the trial.” The general object and expectation of the examination, as that has been disclosed by those and other portions of the affidavit, are to fortify and maintain the plaintiff’s right to recover this sum of money upon this instrument. And while it is true that the evidence obtained may have an equal tendency to defeat the defense of the defendants, still this is not a reason for denying'the right of the plaintiff to take the testimony when, as a matter of fact, it is made to appear that it will be material and necessary for himself as he states it to be in the prosecution of his action. This, within the provisions of the Code, entitled the plaintiff to the testimony of the defendant Baker, as it has now been directed that it shall be taken. And the cases of Sweeney v. Sturgis (24 Hun, 162), and Fourth National Bank v. Boynton (29 Hun, 441), sanction this course of proceeding, which is not opposed in any manner to what was held in Crooke v. Corbin, 28 Hun, 176, and Sprague v. Butterworth, 22 id., 502.

The object of the examination is not to maintain a charge of fraud against the defendants, but it is to obtain evidence to sustain their liability upon the obligation forming the foundation, of the action. And as the order was for this purpose warranted by the affidavit, a mere denial of the plaintiff’s rights by affidavits presented on behalf of the defendants would not justify its reversal. For the plaintiff is entitled, if he shall be able to do so, notwithstanding their denials, to obtain evidence by their own depositions that the case alleged in his favor against them is well founded upon the facts. The order should be affirmed, together with the usual costs and disbursements.

Davis and Brady, JJ., concur.


author: Brady, J.

text:
    William H. H. Sanger, Resp’t, v. James H. Seymour et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Practice—Discovery and inspection of defendants’ books, etc.— When order for should not be. granted.
    Where the pleadings taken in connection with declarations made in open court prima facie proved the plaintiff’s claim by admitting the making of the alleged agreement, but set up that it was obtained by fear, duress, coercion and fraud, Held, that it was not necessary to establish plain iff’s case to examine defendants’ b ;oks, etc. That if the books can be obtained by subpoena, duces tecum, on the trial, an order for their-inspection will only be granted in extreme cases.
    3. Same.

      Held, That the books, etc., to be inspected must relate to the position taken by the applicant and not that of the opposite party. That, a discovery will not be granted unless the court is satisfied that the discovery is pertinent and material to the claim or defense of the party seeking the remedy.
    Appeal from an order directing an inspection of the defendants’ books of account.

      Joseph H. Choate, for appl’ts; B. F. Watson, for resp’t.
   Brady, J.

The parties to this action having had a variety of transactions, involving loans and purchases and sales of stock, finally and on the 26th of March, 1885, as alleged by the plaintiff, settled their accounts, and by mutual agreement in writing;, the defendants, yielding certain securities to the plaintiff and conceding that they were indebted to the plaintiff in the sum of $7,500.

The facts are very much involved and are somewhat striking in character. For the purposes of this appeal, however, it is not necessary to refer to them in detail.

The defense is that the settlement at the time mentioned, which resulted m an agreement creating the indebtedness already' stated, was obtained by fraud, duress and coercion, and the defendants asked that it be set aside.

The plaintiff applied for a discovery and inspection of certain books and papers, which was granted, and hence this appeal. The defendants take the broad ground in opposition that the sole issue here is whether the plaintiff’s case is a blackmailing scheme or not, and that the question to be tried, therefore, is whether the defendants gave up the securities and signed the agreement mentioned through fear, duress and fraud practiced on the part of the plaintiff.

It is not necessary, therefore, in order to establish the plaintiff’s case, that there should be any inspection of the books and papers. This concession on the part of the defendants settles all controversy about it, inasmuch as it is thus admitted that if it be not established that the agreement was obtained by fear, duress and fraud, judgment for the plaintiff must follow. The only object, under such circumstances, which can be contemplated by the plaintiff in seeking a discovery, is to prepare to meet the defense stated, and which may or may not be proved absolutely or apparently. From the facts and circumstances spread upon the record, it would appear to be impossible for the defendants to maintain their defense, without going into proof of the transactions which characterized the dealings with the plaintiff, and involving, to a certain extent at least, the books used by the defendants in conducting their business, and which, if such a necessity should exist, would expose them to the examination of the plaintiff as well.

It is not usual to direct a discovery and inspection of books and papers in anticipation of a defense and with a view to prepare to meet it. The rule as generally stated is that the objects to be inspected must relate to the maintenance of the position taken by the applicant and not that of the opposite party (Andrews v. Townshend, 2 Civ. Pro. Rep., 76); and again that a discovery will not be granted unless the court is satisfied that the discovery is pertinent and material to the claim or defense of the party seeking the remedy (2 Wait’s Pr., 531, and cases cited), and consequently where the plaintiff moved for an inspection of the defendr ants’ books to show payment or non-payment of a debt, it was held that the defense of payment is a fact to be shown by the defendant, and not .by the party applying for the inspection. Cutter v. Pool, 54 How., 311.

The result of an examination of the pleadings, taken in connection with the declarations, made in open court upon the submission of the appeal herein, is that the plaintiff’s claim is proved prima facie, and that the defendants have •the affirmative of the issue of fraud. In other words, they admit that the agreement alleged was made in March, 1885, as already indicated, and that they are hable under it unless they can show that it was obtained by fear, duress, coercion and fraud, and for which they assail it. It is not necessary, therefore, for the plaintiff’s presentation of his case in the first instance, to make any examination of the books and papers in the defendant’s possession, inasmuch as the claim is admitted and can only be destroyed by the affirmative defense set up. If that fail he is entitled to judgment. And it seems to be quite evident that if the defendants should establish the defense by proof of the acts charged, and the books and papers were not necessarily involved in it, they could be obtained by a subpoena duces tecum. And when that can be accomplished it is not usual, and will not except in extreme cases be so ordered, to require the party to make the discovery and inspection sought.

For those reasons the order appealed from should be reversed.

Davis and Daniels, JJ., concur.


author: Davis, P. J. Brady, J.

text:
    Wilhelmina Haack, App’lt, v. John H. Weicken, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Deed—Reformation of on account of mistake.
    A deed was executed to consummate an agreement of partition of lands devised by plaintiff’s father to his four children, of whom this plaintiff was one. By the agree cent it was arranged that one parcel should be conveyed to plaintiff and her husband H. as joint grantees, and that H. should pay to one of the devisees the sum of §10,000. The deed was by direction of H. made in such form as to convey the whole property to him, plaintiff’s name being wholly omitted, of which fact she was ignorant, as was also the grantor who executed it, assuming it to be in accordance with the agreement. Several years after the conveyance H. died, leaving a will, by which he devised to plaintiff property, which was declared to be in lieu of dower, devising all the rest of the property, after certain specific bequests, to his sisters and brothers. Plaintiff, after learning that her name was omitted in the deed, and that the whole property had been conveyed to her husband, received property under the bequest made to her in the will of H. In an action to reform the deed, Held, that it was executed under such mistake as would necessitate the reversal of findings adverse to plaintiff, if no other considerations entered into the case.
    2 Devise of property—Rights of devisee — Devisee must elect WHETHER TO TAKE UNDER WILL OR ASSERT HER TITLE TO PROPERTY— ESTOPPEL.

      Held, that plaintiff was put to her election whether to take under the will or to pursue her remedy by reformation of the deed, and that under the circumstances of the case, she must be held to have elected to accept the devise and thereby to have created an equitable estoppel to the prosecution of the action.
    Appeal from judgment of the special term dismissing the complaint, with costs,

      H. C. Place, for app’lt, Babe & Keller, for resp’t.
   Davis, P. J.

This action was brought to reform a deed executed by one John A. Ropke to the defendant, Pleinrich A. Haack. The deed was executed to consummate an agreement of partition of certain lands devised by the plaintiff’s father to his four children, of whom the plaintiff was one. One parceTof the land was situate in the city of New York, and that was considered to bo equal in value to one-half of the property devised, and was estimated at $20,000. It was arranged between the parties that this parcel should be.conveyed to Heinrich A. Haack, then the husband of the plaintiff, and the plaintiff, and that Heinrich A. Haack should pay to another of the devisees the sum of $10,000, half of its estimated value. It was satisfactorily shown to have been the intention of all the parties that the deed conveying this parcel of property should be made to the plaintiff and her husband as joint grantees, so that the interest of the plaintiff in her father’s estate should be represented in the grant as well as the interest which her husband acquired by the purchase of the share of another of the devisees. It was shown also that by the direction of the plaintiff’s husband the deed was made out to him in such form as to convey the whole of the property to- him, the name of the plaintiff, his wife, being wholly omitted from the deed. The fact of such omission was unknown to the plaintiff, and to the party who executed the deed as grantor, he having neglected to read it, but executed it assuming that it was in accordance with the mutual agreement. Heinrich A. Haack, the grantee, died June 5, 1883, several years after taking the above mentioned conveyance. It was proven also upon the trial that the plaintiff did not know of the fact that the deed had not been taken in the joint names of herself and husband until after his decease, and that that fact also was not known to the other parties to the partition agreement. Heinrich A. Haack left a will by which he gave and devised to the plaintiff a dwelling-house and property situated in Brooklyn, and in which they resided, and also the sum of $10,000; and these provisions were declared to be in lieu of dower. He gave certain specific bequests to other persons, and then gave, and devised all the rest, residue and remainder of his property, without other description, to his sisters; Wilhelmina Hopke and Mary Oest, and his brother, RoderickHaack. The plaintiff, after learning the fact that her name had been omitted in the deed and that the whole property had been conveyed to her husband, received under the provisions of his will a number of payments of portions of the legacy given to her, and also kept possession of the dwelling-house devised to her and demanded that the executor should proceed and pay off a mortgage existing thereon as a debt of the estate. She delayed to commence proceedings to reform the deed for a considerable period of time after her knowledge of the alleged mistake, and after the payments made to her under the will of her husband.

The court below found as matter of fact that there was no mistake in the omission of her name from the deed to her husband, and refused to find that there was any fraud on his part in having the deed prepared in that form, substantially, it is supposed, on the ground that no fraud was charged in the complaint. He found also, in substance, that the plaintiff, by her acts after she learned the fact, subsequently to her husband’s death, that the deed had been made to him alone, in receiving portions of the legacy and asserting other claims under the provisions of his will, had elected to take such provisions in lieu of any claim which she might otherwise have had to reform the deed.

We think the learned court ought to have found on the evidence in this case that the deed was made and executed under a mistake on the part of the grantor, who testified that he supposed it to be in accordance with the agreement that was made, and on the part of the plaintiff who supposed until after her husband’s death that her name as joint grantee was embodied in the deed, and he might well have found that the decedent made a mistake in giving his directions to the scrivener who drew the deed as otherwise his conduct would have been a palpable fraud. The findings of the court to the contrary would require a reversal of this judgment and a new trial if the other ground upon which the court also directed the judgment were not fatal to the plaintiff’s recovery.

It is a well settled principle of law and equity where a testator devises and bequeaths portions of his property to a beneficiary under his will and also by his will devises and bequeaths a residuary estate to other beneficiaries which necessarily embraces property claimed by him but in which the former benficiary owns or claims to own an interest, that the acceptance by such beneficiary of the provisions of the will with knowledge of the fact that the testator has thereby disposed of the property in which he claims an interest, will be held to an election by him to take under the provisions of the will instead of asserting and pursuing a hla.im to the property devised or bequeathed to the residuary legatees. In this case if the plaintiff takes under the provisions of the will and succeeds in asserting her title also to the real éstate deeded to her husband she will substantially receive the entire amount of her husband’s estate and thus cut off the residuary legatees from that portion which it is manifest the testator intended to devise and bequeath to them. As joint grantee of the deed to herself and husband ' she would take title to the whole of that property as survivor ; as devisee she would take the house and lots in Brooklyn and this comprises the whole of the real estate of which the testator died seized ; and her legacy of $10,000 together with the payment of the debt of $5,000 owing on the mortgage would substantially absorb the entire estate.

This state of facts, we think, did put her to her election whether to take under the will or to pursue her remedy by reformation of the deed and under the authorities cited by the learned counsel for the respondent, we think the case is one in which she must be held to have elected and, thereby to have created an equitable estoppel to the prosecution of this action. Thellusson v. Woodford, 13 Vesey, 210; Ker v. Wanchope, 1 Bligh, 21, 22; Tibbitts v. Tibbitts, 19 Vesey, 663; Havens v. Sackett, 15 N. Y., 365, 369. In this last case, at page 369, Denio, C. J., states the rule as follows:

“One who accepts a benefit under a deed or will must adopt the whole contents of the instrument, conforming to all its provisions and renouncing every right inconsistent ■ with it.
“For example, if a testator has affected to dispose of property not his own, and has given a benefit to the person to whom that property belongs, the legatee or devisee accepting the benefit so given to him must make good the testator’s attempted disposition.”

Our conclusion is, therefore, that the judgment must be affirmed upon the ground last considered in this opinion, but under the circumstances, without costs.

Daniels, J., concurs.

Brady, J.

I concur, as the authorities seem to force the result declared, although I do not understand why the plaintiff’s land should be lost by her acceptance of the provisions in lieu of dower, when there is nothing in the will which declares that it was thus intended by the testator to extinguish all other personal claims against the estate. She was entitled to dower by law.


text:
    Peter Bowe, Resp’t, v. Robert G. Brown et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

      1. Sheriff—Attachment—Sureties—Action on indemnity bond—Con SENT BY SHERIFF TO DISCONTINUE DOES NOT RELEASE SURETIES.
    In an action by a sheriff against the sureties on an undertaking to indemnify him against damage or liability by reason of levying, attaching or making sale under an attacl inent of personal property, it appeared that the property so attached by him was claimed by others not parlies to the attachment, and action was brought for its recovery. The sureties on the undertaking given by the attaching parties were excepted to and one failed to justify, and no additional surety was supplied in his place. That action» was discontinued and the costs of the sheriff were paid. After the discontinuance an action was brought against the sheriff to recover the value of the property attached, and notice of it was given 10 the attaching creditors. This resulted in a judgment against the sheriff, and this action is brought for the amount of his expenses therein. ■ Held, that the sheriff by consenting 10 the discontinuance of the first action by the claimant did not prejudice the rights of the defendants as sureties, and that they were not thereby released from their liability as such.
    2. Same—Disbursements—What are taxable.
    After defendants answered the complaint in this action an amended complaint was served which they made default in answering, and thereupon a reterence was ordered to ascertain the amount of plaintiff’s damages. On defendants’ application the default was subsequently set aside and defendants allowed to answer the amended complaint, no provision being made in the order for the referee’s fees, but on the final adjustment of costs they were claimed. Held, that they were disbursements incurred by plaintiff in the regular prosecution of the action, and should be included in the final costs recovered by him.
    Appeal from a judgment recovered on the verdict of a jury and from an order directing the allowance of seventy-five dollars for referee’s fees as a part of the disbursements in the action.

      Culver & Betts, for app’lts; Charles F. Maclean, for resp’t.
   Daniels, J.

The recovery was had under the condition of a bond executed by the defendants to the plaintiff as sheriff of the county of New York, to keep and bear him harmless, and indemnify him and all persons aiding and assisting him, from damage, liability, costs, counsel fees, expenses, suits, actions, judgments, etc., which should or might at any time arise, accrue, or happen to be brought against him, or them, for or by reason of the levying, attaching and making sale under or by virtue of an attachment of personal property. The plaintiff as sheriff had previously seized certain property under an attachment issued in favor of William Brown and another against Alfred Edwards. This property was claimed to belong to the Bussel & Hopper Manufacturing Company, and it was to protect the sheriff, his deputies and assistants against this claim that the bond was executed and delivered by the defendants. After that was done an action was brought by such claimant to recover the possession of the property seized under the attachment. The sureties in the undertaking were excepted to, and one of them failed to justify, and no additional surety was supplied in his place. And while the action of the company was in that condition, it was discontinued, and the costs of the sheriff were paid by it. After that discontinuance an action was brought against the sheriff by the same company to recover the value of the property attached, and notice of that was found upon sufficient evidence to have been given to the attaching creditors. This action was defended and resulted in a judgment against the sheriff for the value of the property and the costs of the action, and it was agreed that his own expenses incurred in the defense for services of counsel and disbursements, amounted to the sum of $300.

For these two items the judgment in this action was recovered, and the correctness of the recovery has been resisted chiefly upon the ground that the sheriff consented to the discontinuance of the first action brought by the company against him. But the case fails to establish any misconduct on his part in this respect which can be held to have been legally prejudicial to the rights of the defendants as sureties in the bond. The company by which the action was brought to recover possession of the property, had the right to discontinue it, if it chose so to do, and that discontinuance may very well have been induced by its inability to supply a surety in place of the one who was not able to justify as the law required that to be done. It is no answer to this position that the undertaking would have been good with one surety, for it had been made and executed by two, and the surety justifying had the right not only to expect, but insist upon it, thát he should only be hable upon the undertaking in the form in which it had been made, and that was for two instead of one surety. No «violation of any legal obligation whatever appears to have been made in the discontinuance of the action for the recovery of the possession of the property. But the order for that purpose was regularly entered and cannot be made the subject of complaint, or protection, on behalf of the. sureties in the bond. Neither this ground nor any other that has been taken in support of the appeal, inasmuch as it does not appear that the attached property was ever sold, or appropriated, by the sheriff, will justify the court in interfering with this judgment.

■After the defendants answered the complaint in this action an amended complaint was served which they made default in answering, and upon that default a reference was ordered by the court to ascertain the amount of the plaintiff’s damages. The court afterwards, on the application of the defendants, set aside the default and allowed them to answer the amended complaint. But in the order which was made at that time the fees of the referee in that reference were not provided for, but in the final adjustment of the costs they were claimed before, but rejected by the clerk. Upon an appeal from his decision an order was made directing the allowance to the plaintiff of the fees of the referee upon this reference. This order, as far as that was clearly right, for the expenses of the reference were disbursements incurred by the plaintiff in the regular prosecution of the action, and those disbursements he had. a right to include in the final costs recovered by him. But the amount which was claimed for these fees was larger than the law allowed to be" charged. What the referee was entitled to, and the plaintiff is to be permitted to include in the costs of the action, is the fees of six dollars for each day devoted by the referee to the business of the reference. That was neither complicated nor extended; it was merely to ascertain the damages sustained by the.plaintiff on the state of facts upon which this recovery has been had, and two or three days at the outside would be ample time for that purpose. Instead of the sum of seventy-five dollars charged by the referee for his services upon this reference, the fees should be limited to the statutory allowances for each day devoted to the subject of the reference. And, as already observed, there seems to be no reason whatever for believing that the reference could not be wholly completed and executed in the three days, and the allowance for referee’s fees should be restricted to the sum of eighteen dollars. With this modification the order and the judgment should be affirmed without costs.

Churchill, J., concurs; Brady, P. J.—I agree, but think referee’s fees allowed are not enough.


text:
    Edward C. Perkins, as general guardian of the estate of Emily L. Middleton, an infant, v. John Stimmel and Samuel McCreery.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Guardian—Bond of—Omission of date is unimportant—Date is determined BY DELIVERY AND FILING.
    In an a' tian upon a bond given by a guardian of an infant upon his appointment by the surrogate’s court. I-leld, the omission of the date was of no importance, that the time of delivery determined the date, and the delivery and filing of such a bond in the surrogate’s court controlled the question of date where it is not inserted, and also where it is, when the question of date becomes important.
    2. Same—Penalty of bond—May be filled in by clerk—Must be fixed BY SURROGATE.
    The penalty of the bond was filled in by a clerk of the surrogate’s court at double the valuation of the infant’s property as stated in the petition. Held, that this did not establish an omission by the smrogate to “fix the amount of the bond” as required by statute.
    3. Same—Action on—By whom brought.
    Such an action may properly be brought in the name or the infant by her guardian, but some authorities in this state allow it to be brought by the guardian as suc'i. An objection as to this may be raised by demurrer, but ought not to be fatal at the end of the trial.
    4. Same—When accounting of guardian necessary and when not.
    Before an action can be brought against sureties on the bond the court will require an accounting where it will be necessary or availing to establish the extent of tlieir liability, if practicable, hut "where it is of no use or advantage to the sureties it will not be required.
    6. Same—Conditions in bond—What deemed independent.

      Held, that an accounting was one of the conditions of the bond for a breach of which pie sureties were liable, but that the primary condition being that the guardian “will in all things faithfully discharge the trust re posed in him,” the conditions of the bond were independent and divisible"
    Motion for new trial on exceptions directed to be heard at the general term in the first instance.

      H. H. Davis and E. P. Wilder, for deft’s; John C. Gray, for pl’ff.
   Davis, P. J.

This case bristles with objections and exceptions, but they are mostly of a technical and unimportant character and need only the most cursory notice. The action is upon a bond given by a guardian upon his appointment by the surrogate’s court, and many of the exceptions relate to its form, and to the manner in which it was drawn, arid its penalty inserted and its date omitted, etc., on and before the filing of it in the surrogate’s court. The omission of the date is of no importance. The time of delivery determines the date and the delivery and fifing of such a bond in the surrogate’s court controls the question of date where it is not inserted, and also where it is when the question of date becomes important. A clerk of the surrogate’s court filled out the bond, and in doing so inserted the penalty at double the valuation of the infant’s property as stated in the petition. It is insisted for this reason that the surrogate did not “fix the amount of the bond,” as required by the statute. This objection is a non sequitur. It does not follow because the scrivener filled in the penalty in the blank that the surrogate did not fix it. The bond was afterwards duly filed, and upon it and the other proceedings in the case, the surrogate in due form ordered and issued the letters of guardianship in which he recites that ‘ such guardian has duly executed and delivered a bond pursuant to law for the faithful discharge of his duty, and we being satisfied of the sufficiency of such bond,” etc., etc., do constitute and appoint him such guardian.

This sufficiently answers all objections to the bond, so far as they relate to its execution, filing and penalty.

Nearly or quite all the other objections touching the bond itself and the proceedings preliminary to the letters are answered in the same way.

There are two questions raised by the exceptions more serious in their nature. The first is whether the suit upon the bond should have been brought in the name of the infant by the plaintiff as her guardian, instead of by the plaintiff as guardian of the estate of the infant.

There is no doubt under the authorities that the action might properly have been brought in the name of the infant by her guardian. Code, §§449, 468, 469, 470; Segelken v. Mayer, 94 N. Y., 473; Buerman v. N. Y. Produce Exchange, Daily Register, 1886, 785; Bradly v. Amsdon, 10 Paige, 235.

Probably that would have been the better practice, but there are authorities which allow the suit in its present form on such a bond. Thomas v. Bennett, 56 Barb., 197; Hauenstein v. Cull, 59 How. Pr., 24; Coakley v. Mahar, 36 Hun, 157. The question has no substantial merit. The cause of action is precisely the same in either case, and the object and result are the same if a recovery be had. The guardian in fact recovers as such in either action and takes the property as guardian, and is bound to account to the infant for the judgment and its proceeds. The question could have been raised at the beginning of the suit by demurrer as well as at the end of a trial. When raised at the trial it ought not to be fatal. Every element is present by which the formal change can be made by amendment, if necessary, and the interests of justice demand it. Nobody has been misled to his prejudice, and no good reason exists why the amendment should not be ordered even now if the plaintiff elects to make it.

In such a case as this, although the bond is in form to the infant, it becomes on default an asset of her estate which her guardian is entitled to possess and control, sue for and recover, and is bound eventually to account for. On recovery, as has already been said, he takes the pro-' ceeds as his, in his relation as guardian, and is entitled to keep and defend possession, and to invest and control and finally account for the same. There is no sound reason why he may not sue in his capacity of guardian, the question being precisely the same, and the result the same as when he sues in the infant’s name by himself as guardian. In the conflict of authority we shall hold the suit properly brought as it is, but with leave, however, if the plaintiff elect to do so, to change the title by a transposition of names, which seems to be all that is necessary.

The other and still more difficult question is whether an action will he on the bond against these defendants who were sureties without an accounting before the surrogate. The guardian who was the principal in the bond is dead. He died intestate, and the public, administrator of the city of New York was appointed to administer upon his estate. He was able to find nothing except six dollars and forty-one cents and a,n old desk containing a quantity of stationery and papers. He found none of the assets belonging to the infant. To have called the public administrator to an account would have been an idle expense, and there was no one else to account. The guardian died about the 23rd of October, 1884, as the pleadings admit. He filed his sworn account with the surrogate January 3, 1884, showing $12,137.40 then in his hands. It was proved that in September, 1884, he converted twenty-five shares of the Mercantile Trust Co., valued in his inventory at $3,500, by transferring from himself as guardian to himself as an individual and selling it afterwards.

To require an accounting under such circumstances would be a futile and idle ceremony, a vain thing, and vain things are condemned by legal maxims. Yet if the language of the bond demands it, the law must respect the demand.

An accounting is one of the conditions of the bond for a' breach of which the sureties are liable; but it is not the only condition; the primary condition is that the guardian “will in all things faithfully discharge the trust reposed in him.” This condition was broken in this case, and so broken that the performance of the other conditions are rendered nugatory by the misconduct of the guardian.

Where that state of things clearly appears to require the infant to demand and compel a legal accounting before the surrogate or some other court, which it plainly appears will result in no benefit to her or to the sureties, seems not merely unnecessary but unjust. The conditions are divisible, and unless all must be broken before the sureties can be sued, then it is enough that the primary one is broken in such form as to show that the others are of no value.

In Girvin v. Hickman (21 Hun, 316), in a somewhat similar case, it was held that an accounting before suit brought on the bond was not necessary, and the court after reviewing the cases said: “It is obvious from these cases that an accounting by the guardián is not always a prerequisite to an action against the sureties upon the bond, and there are many special circumstances in which it may be dispensed with. * * * But if the case is such that

the extent of the guardian’s liability appears without an accounting, why should an accounting be required befere suit against sureties.”

And Chancellor Walworth, in Cuddebach v. Kent (5 Paige, 92), said: “The prosecution of a suit against him alone in the first instance would, therefore, be worse than useless as respects the sureties, and would subject them to the expenses of a double litigation.”

The upshot of the authorities seems to be that the court will require an accounting by the guardian where that will be necessary or availing to establish the extent of the sureties’ liability and is practicable to be- had; but where it is a proceeding of no use or advantage to the sureties, and can only result in subjecting them to the burthen of a double litigation, it will not be required. This is equivalent to holding that the conditions of the bond are independent and divisible, and may be so treated in the class of cases referred to.

We think, therefore, as there seems to be no substantial reason why the amount of the verdict is not correct, judgment should be ordered for the plaintiff on the verdict.

Daniels and Brady, JJ., concur.


text:
    FORSTMAN v. SCHULTING.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Contempt—Costs—Restitution oe when ordered—Code. Crv. Pbo., § 1323.
    Where an order is modified upon appeal the appellate court or general term of the same court as the case may be, may make or compel a restitution of property or of a right lost by means of the erroneous order, Code Civ. Pro., § 1323, and the restitution of costs erroneously awarded may be so ordered.
    2. Same—Disobedience to the obdeb—Not punishable as contempt Code Civ. Pbo., § 16.
    An attorney so ord red to make restitution of costs is not punishable for contempt because of disobedience to the order, Code Civ. Pro., § 16.
    3. Same—Remedy fob—Execution against pebsonal property—Code Crv. Pbo., § 779.
    The remedy in such a case is provided by Code Civ. Pro., § 779, which declares that where costs of a motion, or any other sum of money, directed by an ord r to be paid, are not paid within the time fixed for that purpose by the order, or if no time is so fixed, within ten days after the service of a copy of the order, an execution against the personal property only of the person íequired to pay over may be issued by any party or person to whom the costs or sum of money is made payable.

      William Watson, for pl’fif; C. Brainbridge Smith, for def’t.
   Daniels, J.

The application is made on behalf of the plaintiff to punish the defendant’s attorney for refusing to pay over money received by him as the costs of opposing a motion for a new trial, which it was held should not have been allowed by a modification of the order on appeal]5 and the attorney has been ordered to pay over to the plaintiff or his attorney the amount of costs so received by him, which was ascertained and declared in the order. He has failed to make such payment after the service of a copy of the order upon him; the original certified by the clerk being at the same time exhibited, and for that failure it is insisted on behalf of the plaintiff that he may be punished for a contempt.

That the order was right directing the restitution of the money so received, follows from sec. 1323 of the Code of Civil Procedure. For that has prescribed where an order is modified upon an appeal, the appellate court or general term of the same court, as the case may be, may make or compel a restitution of property, or of a right lost by means of the erroneous order, and the plaintiff was so deprived of the amount directed to be paid by the order in consequence of an erroneous determination as to the amount of costs which the defendant’s attorney was entitled to receive upon the denial of the motion for the new trial. But while the plaintiff is entitled to this restitution it has not been provided that the attorney, or party failing to make it, shall be punished for such failure by way of proceedings for a contempt. It has been provided on the contrary, by sec. 16 of the Code, that a party shall not be arrested or imprisoned for disobedience to a judgment or order requiring the payment of money due upon a contract express or implied, except where it is otherwise specially prescribed by law. There is no special provision of law subjecting a party or an attorney to arrest or imprisonment for the nonpayment of money under these circumstances, and, as the obligation to pay is one that is derived by implication of law, it is upon a contract, and this provision forbids the imprisonment of the party in default. Where money has been received under an erroneous decision as this was, and that decision has been reversed, the party receiving it is equitably bound to refund it, and the law will imply a promise on his part to pay it over, as it. will ordinarily in cases where' one person receives money belonging to or for the use of another. The remedy for the case has been provided by sec. 779 of the Code, which declares where costs of a motion, or any other sum of money directed by an order to be paid, are not paid within the time fixed for that purpose by the order, or if no time is so fixed within ten days after the service of a copy of the order, an execution against the personal property only of thé party required to pay over may be issued to any party or person to whom the costs or sum of money is made payable by the order. This section plainly includes the application now before the court, and has prescribed the remedy which must be followed for the recovery of the money, and that is by issuing an execution against the personal property of the party required to make the payment.

The motion which has now been made must, therefore, be denied, but- as the case has been presented it should be, without costs.

Brady, J., concurs.


author: Brady, P. J.

text:
    Henry Knickerbocker et al., Resp’ts, v. Charles W. Gould, App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Pleadings—Account stated set forth in complaint—When evidence MAY BE INTRODUCED TO ESTABLISH ANOTHER LIABILITY.
    The complaint alleged the employment of plaintiffs as brokers by defendant to make purchases and sales of stock on his account and at his risk, the advancement of money for that purpose and consequent purchases, and the earning of commissions, which upon a closing of an account rendered showed a balance due for which plaintiffs were entitled to credit; it also alleged an account stated between the plaintiffs and defendant, which was received and accepted without opposition. All the allegations of the complaint were sustained by proof. Upon plaintiffs resting their case defendant moved for a nonsuit, on the assumption that plaintiff's must recover secundum o,l (gata, and not having established an account stated, the complaint being on an account stated, must fall. Held, that the complaint was broad enough to warrant the reception of evidence, independent of an account stated, and that evidence sufficient, in the absence of contradiction, to establish a liability on the part of defendant having been brought forward and remaining uncontrovertcd, plaintiffs were entitled to a recovery..
    2. Liability—What not sufficient to terminate.
    Defendant’s statement that after the margins placed by him in plaintiff’s hands were exhausted, he did not consider himself liable for any further losses, does not relieve him of liability, no circumstances being proved sufficient to put an end to the liability at that time.
    Appeal from a judgment in favor of the plaintiffs, entered upon direction of a verdict in their favor.

      T. F. Hamilton, for app’lt; Delos McCurdy, for resp’t.
   Brady, P. J.

The plaintiffs during the years 1883 and 1884 were stock brokers engaged in the purchase and sale of stocks and other securities upon commission, in the city of New York. The defendant was a resident of BaUston Spa, in this state. The complaint alleged the employment of the plaintiffs as brokers to make purchases and sales of stock on his account and at his risk; the advancement of nioneys for that purpose and consequent purchases, and the earning of commissions, which upon a closing of the account rendered showed a balance due them over and above all sums for which he was entitled to credit.

It appeared on the trial that from time to time statements were rendered showing the transactions, and that no objection was made to them or any of them. The complaint also alleged that on or about the 26th of December, 1884, an account was stated between the plaintiffs and the defendant which was received and accepted by the latter without objection, and by which account the sum of §1,122.80 was shown to be due the former.

The defendant by his answer denied any knowledge or information as to the sum advanced or whether any statements were ever rendered showing an indebtedness on his part, and also that an account was ever stated, and set forth an affirmative contract to the effect that the plaintiffs, by arrangement with him, were to buy stock upon a margin, carry it until the margin was exhausted ana then notify the defendant, in which case, if he did not elect to supply more margin, the stock should be sold. And further, that the plaintiffs failed to notify him and did not sell out the stock when the margin was exhausted.

The plaintiffs seem to have sustained all the allegations in the complaint having shown the purchase of stock and the transmission of the statements to which reference has already been made through the mail; and further, by Mr. Knickerbocker, one of the plaintiffs, that the defendant had never complained to him or found fault with the account, but on the contrary, had told him that he expected to be down to settle up the account, i. to go to New York either for that purpose or to call while there.

The defendant’s counsel upon the plaintiffs resting, moved for a non-suit upon the ground that the plaintiffs had failed to make out a cause of action. This motion was denied and the defendant excepted.

It is quite apparent from what has already been stated, although not wholly in detail, on the evidence given on behalf of the plaintiffs, that the motion could not with any propriety be entertained. The defendant doubtless predicated the motion on the assumption that the plaintiffs must recover in a secundum allegata and not having established an account stated the complaint being on an account stated, must fall. But there was some evidence independent of the account stated which was received without objection— indeed the complaint was broad enough to warrant its reception, and the testimony tending to establish an account stated was sufficient to call upon the defendant at least for a response, and which in the absence of any contradictory evidence, was quite sufficient to sustain the allegation in that respect made.

The defendant, when called, did not deny the receipt of any one of the statements, nor did he deny or repudiate any of the transactions as to which the statements were made or the conversatisn related by Mr. Knickerbocker. What he did say was, that he met Mr. .Knickerbocker at Saratoga, in July or August, 1884, and when asked by him, “What are you going todo about tiffs stock?” said: “I don’t consider myself responsible for it after the margin was used up;” to which Knickerbocker said: “You know that is not the way we treat our customers;” whereupon the defendant said: “I told him I didn’t consider myself responsible; that when I put up ten per cent margin, if I didn’t make up my mind that I wanted to continue, it would be sold out.” And further that he was given to understand that his margin was absorbed when the conversation took place, asserting that he never asked Mr. Knickerbocker to renew anything.

It will have been observed that this is a mere assertion by the defendant of his legal liability, according to his own judgment. He does not state any facts of which that judgment might be predicated. He merely stated his opinion. He did not show by that method of expressing himself that he had made any agreement whereby he was to be relieved from all responsibility as set up in his answer, when the margin was exhausted, and that the plaintiffs must protect themselves by a sale of the stock when that event occurred. The consequence was that there was nothing really to go to the jury, and the learned justice “was justified, indeed, could not with propriety have done anything else, in directing a verdict for the plaintiffs.

The consideration of the various cases relating to the legal rules which govern actions updn an account stated, indulged in by the counsel for the defendant, and clearly and succinctly presented in an able brief on that subject, is really not necessary for the disposition of this case. The defendant put himself upon the broad ground that he was not responsible, and the case in that respect resembled Quincey v. White (63 N. Y., 370), in which the court of appeals, in discussing the effect of an account rendered to which no objection was made, said: “When, for some independent reason, a person disclaims all liability, he is not bound to examine the items, or be taken to have assented to them, if he does not object. In such a case he puts himself upon higher ground. He says in effect, I have nothing to do with this account, and I deny all liability for anything.

When he takes that ground, however, he must establish it, if the facts and circumstances shown on behalf of the plaintiffs warrant the conclusion and establish a liability, which was done in this case.

An examination of the record shows no reason why the judgment should be disturbed, and it must therefore be affirmed, with costs.

Daniels, J., concurs._