author: PRATT, J.

text:
    Lewis R. Stegman, Sheriff, Resp’t, v. Henry S. Hollingsworth, App’lt.
    Sup. Ct., 2 D.,
    June 16, 1896.
    Fernando Solinger, for app’lt. .A. M. & G-. Card, for resp’t.
   PRATT, J.

The appellant relies chiefly upon three points, viz.: (1) That the money, being received by Hodgkinson after the term of Stegman had expired, was taken by him in his private capacity, and not'as undersheriff ; (3) that the bond sued upon did not cover money received after the sheriff's official term was ended ; (3) that the action will not lie until the sheriff has in fact paid over the money to those entitled to receive it. The action has been before the general term on various occasions. At the December term, 1891, it was held that Hodgkinson received the money in his official capacity, as under-sheriff. See Stegman v. Hollingsworth. (Sup.) 16 N. Y. Supp. 820. When next before the general term (reported without opinion, 62 Hun, 620, 16 N. Y. Supp. 820), it was held that the bond covered money received after the sheriff’s official term was ended, and that the surety is bound by a failure to pay over the money, even if the sheriff he not called upon to pay the same (citing Willet v. Stewart, 43 Barb. 98); that the undersheriff has no right to keep money for which the sheriff is liable, until assured that the sheriff will pay it over to the party entitled to receive it. Under these decisions the trial judge was clearly hound to rule those points in favor of the plaintiff. Nor do we think this court should now reconsider the decisions. So to do would bring needless confusion into our practice, and if errors were committed they should "be set right by the court of ultimate resort. That was apparently the view of the general term (Dec. 1894), as these points were not then considered, but the judgment in fav- or of plaintiff was reversed upon another point. See report of this case,— Norcross v. Hollingsworth, 83 Hun, 127, 31 N. Y. Supp. 627. Judgment affirmed, with costs. All concur.


source: Caselaw Access Project

author: McCARTHY, J.

license: Public Domain

text:
    Dora Steinberg, Resp’t, v. Samuel Rosenthal, App’lt.
    N. Y. C. Ct.,
    May 23, 1896.
    A. H. Berrick, for app’lt. E. Bosenthalj for resp’t.
   McCARTHY, J.

This is’an appeal from an order allowing plaintiff to sue as a poor person. While it is true that the equities may he with the defendant, yet, the conrt having the right to grant the order, the only question for us to determine is, was there an abuse of judicial discretion, Order affirmed. No costs. All concur.


author: INGRAHAM, J.

text:
    William J. Stenson, Resp’t, v. Joseph Koch, App’lt.
    Sup. Ct., 1 D.,
    April, 1896.
    George Hoadley, for app’lt; Daniel Clark Briggs, for resp’t.
   INGRAHAM, J.

The question presented in this case is as to the constitutionality of chapter 601 of the laws of 1895, and as we have held in the case of Koch against the mayor, decided herewith (39 N. Y. Supp. 164), that such act is constitutional, it follows that the judgment in this case must be affirmed. There seems to be an appeal taken from the decision of the court upon which the judgment sustaining the demurrer was entered. As no appeal from such a decision lies, that appeal must he dismissed. All concur.


author: PARKER J.

text:
    Priscill Stoddard, Resp’t, v. Jane D. Brazell, App’lt.
    Sup. Ct. 4 D.,
    December, 1895.
   PARKER J.

It is imposible to determine from the evidence just how the justice made up his judgment of $60.49 damages against the defendant, hut it sterns very clear that no such amount is warranted by the proofs before him. The plaintiff swears that on August 25, 1891, there was a balance due her of $84.04; and she put in evidence Exhibit A, as showing the items of debit’ and credit upon which she based that claim. Conceding that all such items are correct, and properly proven, yet that balance falls short of the amount allowed by the justice, and-his right to add to that balance must he found in the plaintiff’s evidence, wherein she claims that there were certain other items, not in-eluded in that account, and to which she was not entitled. Upon none of these additional items, save, perhaps, the item of interest, has sh'e made proof sufficient to entitle her to recover for them. Thus no evidence is given of any fact showing that defendant owned §8.80 for surplus prid her for the use of her-for use of her premises. The only evidence is that a charge was made for that amount, which, of course, is no proof of a liability to pay it. Also, the plaintiff shows no facts whatever tending to prove the defendant liable for any injury her horse may have sustained in defendant’s barn. There is a total failure of any evidence of negligence, or of liability for such injury, yet she has added an item of §12 for such damage. So the evidence does not show that the defendant had anything whatever to do with the pitcher broken at plaintiff’s house, and for which she was charged §5. Nor could she be charged ninety cents for a jar left by plaintiff at her house. It was left there with butter in it, and there is nothing to show hut that it is still awaiting plaintiff’s call for it, or, indeed, that it was not sold with the butter. As to the jar and the whip and the rubbers and measure aud bags, there is no proof that defendant took them; nothing whatever to connect her with their loss; nothing to show that she was under the slightest obligation to protect. The item of §3 for keeping defendant’s family and horse at plaintiff’s house is not sufficiently proven to show any liabiality on defendant’s part to pay it. The plaintiff merely swears that-she made the charge, and that it was worth that to keep them. She does not tell how many there were, how long they were kept, nor any fact upon which she bases her conclusion that it was worth that sum. Nor does she give any fact showing why defendant, a married woman living with her husband, should pay for the keep of his family. The credits which plaintiff allows against these additional items, and which are not on her bill, Exhibit A, amount to §6.60. These stand conceded as items for which she should have been credited. They are so much of defendant’s counterclaim, which plaintiff concedes to be correct. Clearly, giving defendant the benefit of these credits, there are no items proven that should run up the balance of §48.49. We do not attempt to modify this judgment by adjusting the account between those parties. The evidence is very conflicting as to defendant’s counterclaims, aud as to the amount she claims to have paid upon the account, and for which she has received no credit. Several items of the account, Exhibit A, are also disputed by her, and the proof as to the accuracy of the account is also very slight on plaintiff’s part. Neither does it very clearly appear why defendant, and not her husband, should be liable for the items of such account. We think the merits of the case can he more certainly determined by a new trial, and, since the judgment appealed from is evidently not warranted by the proof, it must be reversed. The judgment of the justice and that of the county court, with costs. All eoncur.


text:
    Andros B. Stone v. Georgiana C. Stone et al.
    Sup. Ct. 1 D.,
    June 19, 1896.
   No opinion. Motion denied, upon payment of $10 costs.


text:
    Rutherford Stuyvesant v. New York El. Ry. Co.
    Sup. Ct. 1 D.,
    June 5, 1896.
   No opinion. Motion denied, with §10 costs.


text:
    Helen H. Sunderlin v. Alfred N. Hollister et al.
    Sup. Ct. 4 D.,
    June 17, 1896.
   No opinion. Motion denied, with §10 costs. ADAMS, J., not sitting.


text:
    Adelaide Tagliabue, Resp’t, v. Manhattan Ry. Co. et al., App’lts.
    Sup. Ct. 1 D.,
    June 5, 1896.
   No opinion. Judgment affirmed, with costs.


text:
    Franklin C. Thomas v. Dora M. Thomas.
    Sup. Ct. 1 D.,
    June 19, 1896.
   No opinion. Motion denied upon payment of $10 costs.


text:
    Town of North Hempstead, App’lt, v. John Gallagher, Resp’t.
    Sup. Ct. 2 D.,
    June 2, 1896.
   No opinion. Judgment affirmed, without costs, and without prejudice to the plaintiff’s right to bring an action at law for damages. All concur.


text:
    Alida S. Ulbricht, App’lt, v. New York Recorder Co., Resp’t.
    Sup. Ct. 2 D.,
    June 23, 1896.
   No opinion. Order reversed absolutely so far as it strikes from the bill of costs the item of $40 jfor depositions of witnesses. Order reversed so far as ifc confirms the clerk's taxation in respect to objections 22 and 23 set out in Mr. Slayton’s affidavit, and clerk directed to retax the mileage of 125 miles. Order reversed so far as it aflims the clerk’s taxation in respect to objections 3, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 18, 24, 25. 26, 27, 28, 29, and 30, and a relaxation of these items ordered to be made by the clerk, who shall allow but fifty cents a day for the attendance of each witness, and the mileage but once for the trial; and he shall not allow the fees for any witness who was not sworn, except upon additional affidavit showing wliat the witness was expected to prove or disprove, and why he was not called to the stand. The defendant to have $10 costs, and disbursements of this appeal. All concur, except PRATT, J., not sitting.


text:
    In re Benjamin E. Valentine.
    Sup. Ct. 2 D.,
    June 9, 1896.
   No opinion. Application for order to show cause denied. Respondent may appear before the court on Monday, June 15, 1896, at 10 a. m., and will be heard orally, and may then produce such exhibits as were produced before the referee, and which he has in Ms possession. The hearing is set peremptorily for that day.


text:
    Joshua Van Cott v. Donald Mackey.
    Sup. Ct. 2 D.,
    June 16, 1896.
   No opinion. Motion to dismiss appeal denied, without costs.


text:
    Fannie L. Vanderhoff, Resp’t, v. Charles A. Erickson et al. (Emily Hoffschmidt, App’lt).
    Sup. Ct. 2 D.,
    June 2, 1896.
   No opinion. Judgment affirmed, with costs. All concur, except CULLEN, J.. not sitting.


text:
    James Van Dyke, Resp’t, v. Charles A. Merritt, App’lt.
    Sup. Ct. 2 D.,
    June 9, 1896.
   No opinion. Order affirmed, with $10 costs and disbursements. All concur.


text:
    James Van Tassell, App’lt, v. Peter Adriance, Resp’t.
    Sup. Ct. 2 D.,
    June 9, 1896.
   No opinion. So much of the order appealed from as denied the application of the plaintiff tó limit the examination directed to he had to the physical injuries and condition of the plaintiff reversed, and order granted so limiting the examin.ilion of plaintiff. In other respects, order appealed from affirmed, without costs, to either parly. All concur.


author: PER BUCIAM.

text:
    Augustus S. Van Wickle et al., App’lts, v. Clara R. Bacon, Resp’t.
    Sup. Ct. 1 D,
    June, 1896.
    W. P. Knapp, for app’lt; A E. Blackmar, for resp’t.
   PER BUCIAM.

This appeal presents the same questions as were considered in the case, of Van Wickle v. Barron (decided at the May term of this court) 39 N. Y. Supp. 85, and that decision must control. The considerations presented by the defendant in this case which were not referred to in the case cited are insufficient to require a different result. The order appealed from should be reversed, with $10 costs and disbursements to the appellants, and the motion for leave to amend the complaint granted, upon payment by the plaintiffs of $10 costs of motion, and all the costs of the action after notice of trial.


text:
    Frank L. Vosburgh, Resp’t, v. George A. Armstong et al., App’ts.
    Sup. Ct. 4 D.,
    December, 1895.
   No opinion. Judgment and order affirmed, with costs.


author: PARKER, J.

text:
    Walter Walrath et al., App’lts, v. William H. Abbott, Resp’t.
    Sup. Ct. 4 D.,
    December, 1895.
   PARKER, J.

We do not think that the facts of this case are materially changed from those which appeared when the case was before ns on a former appeal. See 75 Hun, 445; 27 N. Y. Supp. 529. It is true that it now appears tii.it the defendant did give the mortgage upon the premises required by order of the court to be given by him upon receipt of his conveyance^ the lunatic’s lands. It, also appears that such mortgage passed into the.custody and control of Walrath, the committee, and that the $500 mortgage against Nelson was given to and received by him as a payment thereon; that subsequently the balance due upon such purchase-money mortgage was paid to the committee in cash, and such mortgage discharged. But the question still remains whether the receipt by such committee of the worthless §500 mortgage against Nelson must be deemed a payment, to that extent, upon the purchase price which the defendant contracted to pay. It is conceded that such purchase-money mortgage must be treated as real estate in the custody of the committee, and it is also plain that a committee has no authority to sell or dispose of a lunatic’s real estate except by order of the court. Code, 8 3339. For that reason any act of the committee which practically operated to exchange the purchase-money mortgage so in his custody, or any portion thereof, for - another and a worthless one, was without authority, and in excess of his powers. It would hardly be contended that if the committee, without any order of the court, had conveyed a farm of the lunatic’s to the defendant in exchange for such mortgage, a title could be so acquired by the defendant which he could hold against the lunatic or his heirs, nor that such a title could be sustained upon the theory that defendant had the right to presume that the committee had procured the proper order. And, inasmuch as the committee no more authority to dispose of this mortgage than he had to sell a farm, it is difficult to see how he could lawfully accept the transfer of any property in exchange for, or as a satisfaction of, it. It is because this mortgage in the committee’s hands must be considered as real estate that the case of Pickersgill v. Read, 5 Hun, 170, is not applicable. It was said by Justice Martin when the case was here before that Walrath, the committee, being at most a mere agent of the court, had no power to discharge the defendant's indebtedness without actual payment. It was also there said that it was not apparent “how the defendant co.uld discharge his liability to pay the purchase price by an assignment of a mortgape to Walrath, who was not authorized by the court to receive it.” These remarks seem as applicable to the case now as they were then, and seem decisive of this appeal. 75 Hun, 452; 27 N. Y. Supp. 529. Moreover, it is apparent from the facts now before us that both the defendant and the committee were ignorant of the worthlessness of the Nelson mortgage; hence the case is one of a mutual mistake of facts, and the receipt of the Nelson mortgage under such circumstances cannot be considered as payment on defendant’s original debt. Such was the decision when the case was here before, and it is as applicable now as it was then. See 75 Hun, 453; 37 N. Y. Supp. 539, and cases there cited. As to the right of these plaintiffs to maintain this action, that question was settled in their favor when the case was here before, and is not now an open one. • We therefore conclude that the court below erred in holding that the purchase price had been fully paid, and for that reason dismissing the plaintiff’s complaint. The judgment should be reversed, and a new trial granted, with costs to abide the event. MERWIN, J., concurred. HARDIN, P. J., not voting,


text:
    Mary Walsh, Resp’t, v. New York Cent. & H. R. R. Co., App’lt.
    Sup. Ct., 4 D.,
    June 17, 1896.
   No opinion. Judgment and order affirmed, with costs.


text:
    Roswell Warner, Resp’t, v. Walter S. White, App’lt.
    Sup. Ct., 3 D.,
    May 21, 1896.
   No opinion. Judgment affirmed, with costs. All concur.


text:
    L. Starr Wartman, App’lt, v. Elizabeth J. Seaman, Resp’t.
    Sup. Ct., 3 D.,
    May 4, 1896.
   No opinion. Judgment affirmed, with costs. All concur.


author: PER CURIAM.

text:
    Irene Weber, Resp’t, v. Etta Forgotston, App’lt.
    Sup. Ct., 1 D.,
    June 5, 1896.
    J. O. De la Maro, for app’lt; W. J. Lippman, for resp’t.
   PER CURIAM.

So far as the questions of law are concerned, they are disposed of by the case of Palmer v. Jones, 69 Hun, 240. So far as the facts are concerned, we entirely agree with the conclusion reached by the justice at the special term. The judgment should be affirmed, with costs.


text:
    Alphonse Weil et al., Resp’t, v. George Christie et al., App’lts.
    Sup. Ct., 3 D.,
    April 27, 1896.
   No opinion. Judgment affirmed, with costs. All concur.


text:
    Frederick Weiler v. Equitable Aid Union.
    Sup. Ct., 3 D.,
    May 21, 1896.
   No opinion. Motion for leave to appeal to the court of appeals denied, without costs.


text:
    Thomas H. Welch, Resp’t, v. George A. Greene et al., App’lts.
    Sup. Ct., 4 D.,
    June 17, 1896.
   No opinion. Judgment affirmed, with costs.


text:
    Maggie S. Weller, App’lt, v. Elizabeth S. Cooke, Resp't.
    Sup. Ct., 1 D.,
    June 29, 1896.
   No opinion. Order affirmed, with $10 costs and disbursements.


text:
    Wheeler & Wilson Manuf’g Co., App’lt, v. Joseph W. Elberson, Resp’t.
    Sup. Ct., 2 D.,
    June 9, 1896.
   No opinion. Order affirmed, with costs, on the ground that due diligence was not shown in searching for the correspondence prior to the trial, and because it does not seem probable that the writings subsequently recovered would produce a different result. All concur.


text:
    Robert Whitehill, Resp’t, v. Merchants’ Refrigerating Co., App’lt.
    Sup. Ct., 2 D.,
    June 23, 1896.
   No opinion. Order affirmed, with $10 costs and disbursements. All concur, except PRATT, J., not voting.


text:
    In re Eliza T. White’s Estate.
    Sup. Ct., 2 D.,
    June 9, 1896.
   No opinion. Order reversed. All concur.


text:
    Clara G. Whitney, App’lt, v. W. Wallace Whitney, Resp’t.
    Sup. Ct., 4 D.,
    April, 1896.
   No opinion. Interlocutory judgment affirmed, with costs, on the opinion of ADAMS, J., delivered at special term.


text:
    August Wicke, Resp’t, v. Albany Ry., App’lt.
    Sup. Ct., 3 D.,
    May 5, 1896.
   No opinion. Judgment and order affirmed, with costs. All concur. HERRICK and LANDON, JJ.. not sitting.


text:
    In re Deborah P. Williams’ Will.
    Sup. Ct., 3 D.,
    April 27, 1896.
   No opinion. Appeal dismissed, without costs. All concur.


text:
    In re Charles Wolff’s Estate. Morris S. Lewis, App’lt, v. Rider, County Treasurer, Resp’t.
    Sup. Ct., 4 D.,
    December, 1895.
   No opinion. Decree or order reversed, with $10 costs and disbursements, payable out of the estate. Held, that the petitioner was a creditor of the deceased, within the provisions of section 2660 of the Code of Civil Procedure, and as such entitled to letters of administration in preference to the county treasurer.


text:
    Anthony D. Woods, Resp’t, v. Patrick J. Gleason, App'lt.
    Sup. Ct., 2 D.,
    June 6, 1896.
   No opinion. Order so firmed, with $10 costs and disbursements. All concur.


author: PATTERSON, J.

text:
    James Roosevelt, as Trustee, etc., Resp't, v. Land and River Improvement Company et al., App'lts.

      (Supreme Court, Appellate Division, First Department,

      Filed April 10, 1896.)

    1. Trust—Investirá in individual name.
    Where a trustee, who has funds of a trust estate in his possession, invests them in mortgages taken in his own name, with the consent of his co-trustee, the estate is the equitable owner of the mortgages.
    3. Same—Third parties.
    Where a trustee, who is also an officer of a corporation, assigns for value to a party who has knowledge or notice, trust securities, which he has taken in his own name, as security for a loan for such corporation, equity will compel the latter to take up the securities and release the lien on them.
    Appeal from a decree of plaintiff.
    Alfred Jaretzki, for app’lt. Jas. R. Soley, for resp’t Roosevelt ; Chas. E. Miller, for resp’t Williams.
   PATTERSON, J.

In the subject-matter of this action are involved the ownership of and claims upon a fund paid into court, being the amount due on three mortgages on real estate in the city of New York, which were made by Max Danziger, as mortgagor, to Francis H. Weeks, as mortgagee. When the suit was instituted the mortgages were still outstanding leans, and Mr. Danziger was made a defendant; but on his application they were paid off, the money placed in a court depository to await the determination of the suit, and Mr. Danziger was allowed to retire from litigation. The case has been much simplified since the "^hearing and decision at special term. There, the court was called upon to ascertain, adjust, and administer the rights and equities of many parties who claimed the mortgages or some one or more of them. The plaintiff, as executor of and trustee under the will of William E. Howland, claimed them all, as the equitable owner thereof. Other parties claimed in the right of estates of which they were the trustees or representatives. The defendant Williams claimed to hold them by assignment from Weeks, for value, and without notice of the claims or equities of any third party ; and his claim has been recognized and sustained by the decree as paramount to all others. The Land & Improvement Company is brought in as a party defendant, because of its relation to the mortgages, 'growing out of a transaction presently to be mentioned. All the defendants, claimants, except the land company and Williams, have disappeared from the suit as it comes before us, by failing to appeal* from the decree; and 'the contest is now narrowed down to one between the plaintiff, the Land & River Improvement Company (the appellant), and Mr. Williams, who has not appealed, but who urges that the.full and proper relief to which he was entitled was not awarded him, and that hence a modification of the. decree must be made in his behalf. We will therefore confine our consideration of the case to the material matters involved, as affecting the’rights of the parties now before us, except so far as incidental reference may be necessary to other matters not immediately concerning such parties.

Prior to October, 1885, Francis H. Weeks, a lawyer in the city of New York, was the adviser, attorney, and agent of many clients, who reposed in him unbounded confidence. He was the trustee of estates, the attorney in fact as well as at law of many persons, and the custodian of their money securities. Among those to whom he stood in the latter relation was Mr. W. E. How-land, who resided in France. Mr. Howland died in February, 1885, and by his last will and testament appointed Weeks and the plaintiff executors thereof, and trustee of a trust for the benefit of his (the testator's) widow. Weeks and the plaintiff, Roosevelt, qualified as executors, and entered upon the duties of their trusteeship. Weeks had in his possession, at the time of Mr. How-land’s death, and in October, 1885, shares of stock of a railroad corporation and certain consolidated stock issued by the city of New York. In October, 1886, those stocks belonged-to the trust of the Howlapd estate.. It was about that time agreed between Mr. Roosevelt and Weeks that the investments of the amounts then represented by the stocks referred to, should be changed, for which purpose they were sold by Weeks, and the proceeds, amounting to something over $74,000, were deposited by him, to-the credit of his personal account in the National Bank of Commerce of the city of New York. That was done on the 22d day of October, 1885. Before the sale of the stocks was made, the-nature of the security in which the proceeds of-sale were to be invested was agreed upon. Bonds and mortgages were the selected-securities, and it was agreed that loans of $60,000 should be made to Max Danziger, to be secured by mortgages upon four pieces of real estate belonging to him, each piece to be separately mortgaged' for $15,000. Roosevelt examined the premises to be covered by, the mortgages, and assented to the loans being made upon them. All this was done, of course; before the mortgages were made. Some of the money was not actually advanced until a month.! after the bonds and mortgages were delivered. Thus we have, to start with, in the investigation, the facts that in October, 1885,, the Howland trustees resolved to make the investment in the Danziger mortgages, and, further, that they sold securities of their trust to provide the money to advance to Danziger, and that, in their inception, those mortgages were connected exclusively with a transaction in which the trustees of the Howland estate were alone concerned, on the one side, as investors of money of that estate. Weeks attended to the arrangement of the details of the loans, and, instead of having the mortgages drawn to Mr. Roosevelt and himself as trustees, he procured them to made out in his own name as mortgagee. This fact he concealed from Roosevelt, who did not become aware of it until some time in 1893, when Weeks became a fugitive from justice, and was brought back from foreign parts to be tried on an indictment for felony. Meantime, from 1885 until 1893, Weeks perpetrated a series of fraudulent acts in connection with these mortgages and the bonds to which they were collateral, using them from time to time for his own purposes, but never parting with the legal title to but one of them, which he assigned, by formal instrument, in 1888, to a Mr. Stevenson, and thus removed it beyond the reach of the true owner. He stated■ to the beneficiaries of the different trusts that the mortgages were securities of the particular estates in which those persons were interested, and in all his juggling with these securities he always eluded detection, and retained the confidence of those whose interests he had in charge, until, late in April, 1893, when, upon his absconding, his long-continued nefarious deeds came to light. We are now concerned with the ramifications of but one of Weeks’ fraudulent transactions,—that one which brought into business relations the trustees of the Howland trust (Weeks was displaced in the summer of 1893 by order of the court) and the defendant Williams and the land company. Weeks was the president, treasurer, and active executive officer of that company. Some time previous to December 12, 1892, he represented to Williams that the company was in need of funds, and he made application to Williams for a loan. By an arrangement made between Weeks, as the representative of the company, and Mr. Baxter, one of its directors, and Williams, the latter loaned to the land company certain bonds of railway companies belonging to him (Williams) ^individually, to be used as collateral to enable the land company to borrow elsewhere the sum of $30,000, and it vías also agreed that the three Danziger mortgages should be assigned to Williams, to hold as security for the return of his railway bonds. The transaction was evidenced by a writing delivered to Williams as follows, viz.:

“ December 12, 1892.

“ Received from James B. Williams, as a loan, thirty thousand dollars of the consolidated five per cent, mortgage bonds of the Northern Pacific R. R. Co. Nos. 18,707 to 18,733, inclusive, and 18,735 to 18,737, inclusive; and also eighteen thousand dollars Northern Pacific & Montana R. R. Co. first-mortgage bonds Nos. 4,967 to 4,974, inclusive, and 4.978 to 4,989, inclusive. Said bonds to be returned to said Williams within ninety days from date, and as collateral security for said loan three bonds and mortgages for fifteen thousand dollars each, made by Max Danziger to Francis H. Weeks, all dated November 2, 1895, have been assigned by said Francis H. Weeks to said Williams.

“ [L. S.] Land & River Improvement Co.,

by F. H. Weeks, Presd’t. ” I

This agreement tells the whole story of the transaction of which it is the evidence, and shows, without the need of construction, what each party did, and what relations were constituted between them. No question can be raised for Week’s authority to borrow the securities, nor of the loan being made directly to the company. The Williams bonds were in terms borrowed by the company, and, as the instrument shows, the company pledged the mortgages to Williams; for, although to be assigned by Weeks to Williams, that was to be done to make them available as a pledge for the obligation of the company, and not for a private indebtedness of Weeks' in any manner. The land company, not constructively, but actually, used the mortgages for its own purposes, and received the benefit of them. They were in due form assigned by Weeks to Williams, who took them without the knowledge or notice of Week’s true relation to them; and, as an innocent holder, they are not impressed with a trust in his hands, whereby his lien or claim upon them could be affected. William’s securities were never returned to him, nor has he ever been satisfied, in whole or in part, for their value. Week’s subsequent dealings with Williams’ securities were in some respects as dishonest as most of his conduct. He took them to the Bank of Commerce and borrowed $30,000-on them, giving the bank his individual note for that amount. He also borrowed $10,000 from a Mr.' Oakes, which he added to the $30,000 obtained from the bank. He deposited the $40,000 thus raised to the credit of the defendant land company in its bank account. Thus this money is followed into the land company’s possession. But Williams did not know that Weeks borrowed it on his personal note, nor is there anything in the evidence to justify an inference that he had any information or notice that Weeks, at any time, was using these securities for any other purpose than the particular one for which they were originally loaned. The subsequent history of this transaction with the bank is important. Weeks’ note for $30,000 was at ninety days, and fell due March 13, 1893. Thirty days before that due date, Weeks, as treasurer of the land company, drew a check for $40,-400 to his own order, individually, but entered on the check-book stub or counterfoil .that it was drawn to pay the bank its $30,000 and,Oakes his $10,000 and interest on both sums. That this was a mere deception and concealment of an abstraction of money seems Undeniable. The bank’s note had still a month to run, and it was not paid. On the contrary, when it matured, $5,000 was paid on account, and the balance renewed for thirty days, the securities still continuing in pledge to the bank, and Weeks made them the basis of another transaction at a latter date with the bank. What has thus far been said is sufficient to indicate upon what facts the rights of the three parties now before the court were adjudicated, and upon them the learned justice at special term held that the plaintiff, as trustee, was the owner, in equity, of three bonds and mortgages described in' the complaint; that he was entitled to receive them (or their proceeds paid into court), subject to the right of the defendant Williams to them (or to the fund), as collateral security for the return by the defendant land company of his securities loaned by him for the benefit of that company; that there should be judgment directing the land company to pay to Williams the value of such bonds on the 13th day of March, 1892, to wit, the sum of $86,803.50, with interest thereon to the date of such payment; that Williams have judgment against the land company for that amount; and that, upon the payment of that amount to Williams, the plaintiff was entitled to the fund in court. Thus the rights and equities of the parties were finally disposed of, except that one matter was left open, to which reference will be made hereafter.

On this appeal, the first question raised was as to the plaintiff’s ownership, in equity, as trustee of the Howland trust, of the three mortgages. It was incumbent upon the plaintiff to establish, as against all the defendants on the record, that the bonds and mortgages were actually the product of the Howland moneys, or, in other words, that those moneys be traced directly into such mortgagees. There is no dispute concerning the rule in equity by which trust moneys are followed through a trustee’s mixed account under circumstances such as are disclosed here. That rule, which is generally referred to as the rule in Hallett’s Case (Knatchbull v. Hallett, 13 Ch. Div. 696), was announced, in substance, in Baker v. Bank, 100 N. Y. 31, and distinctly in Importers & Traders’ Nat. Bank v. Peters, 123 N. Y. 272; 33 St. Rep. 182. In the case at bar, the money of the Howland trust was satisfactorily traced into the bank account of Weeks with the Bank of Commerce, and out of that account into the Danziger mortgages. The defendant land company is compelled to admit that, by the 6th of November, 1892, there had been paid to Danziger, on his mortgages, out of the Howland money, at least the sum of $31,-931.51. An analysis of the testimony on this subject shows that $60,000 of the Howland money (within a small fraction) went into these mortgages. The $31,931.51 paid before November 6th is conceded. The subsequent payments to Danziger, or for him, extended over a- period from November 12th to December 19 th. The dissection of Weeks' bank account made by Mr. Ken worthy, the expert accontant, shows that, of the $60,000, all (but a few hundred dollars, possibly) went into the mortgages. The separation of the personal funds and moneys specifically drawn out for other purposes than to pay to Danziger seems to be complete, and we think the court below was right in so finding. For all money of other persons that may have gone into Weeks’ account he seems to have accounted to'the owners, and the court below was justified in treating these moneys in the same way that it did the personal funds of Weeks. Baker v. Bank, 100 N. Y. 31.

Our conclusion on this branch of the case may be summed up thus: The right of the plaintiff is based upon tracing the trust moneys into the mortgages at the outset, and not upon any theory oE the substitution of' the mortgages subsequently for the money Those mortgages constituted an investment originally contemplated by Roosevelt and Weeks, to make which railroad and mu-„ nieipal bonds of their trust estate were sold, and the moneys realized put into Weeks’ bank account, to be in readiness for that identical investment; and, upon an analysis of that account, ap-. plying the recognized rule of the application of drawings, the evidence shows that the $60,000 of mortgages were paid for by the Howland moneys. Thus we .ascertain that the Howland trustee is the equitable owner of these mortgages.

The second question relates to the lights of the defendant Williams and the obligations of the land company. Williams has the legal title to the three mortgages, as the assignee thereof, for value, without knowledge or notice of latent equities. He is in no way affected by any transactions of Weeks and the land company after he parted with the possession of his railroad bonds to the company. He is entitled to stand on his written agreement, and if Weeks' fraudulent acts as an officer of the land company have entailed loss apon that company, it is one for which Mr. Williams is no way responsible. It is suggested by the learned counsel for the appellant that, when Weeks took up the $30,000 note, the indebtedness of the. land company was paid, and any subsequent dealings of Weeks with the bank were on his own account. The inference sought to be dz'awn from that seems to be that, by the act of Weeks in retiring that note, the land company became dischai’ged from the transaction, and it was then left as a matter between Williams and Weeks individually.' It is said that Weeks drew his check for $30,000, and paid the note, and then made a new transaction with the bank, borrowing $25,000, and repledging the same securities, and that Williams was told of the reduction of the indebtedness. Whatever form the transaction assumed, it was, in fact, only a renewal of the loan by the bank to the extent of five-sixths of the first loan. It is claimed that, what may be considered as the proceeds of the mortgages, realized in the way stated, having, by the repayment of the loan, found their way back into Weeks’ hands as an individual, the land company is not responsible for what Weeks did afterwards, and that the transaction, so far as the company is concerned, ended. But that is not the situation. The $30,000 note was only paid in part. The rest of it was renewed. It was not an entirely new loan to Weeks. But, suppose it was; it then became the business and the duty of the land company to see that Williams’ securities were returned to him. Whether it may be said that the company converted the Williams securities is immaterial. It failed to return them. On the payment of the note he was entitled to them ; but there was nothing but a partial payment, and the securities were not released so tliat they might be returned. It was a transaction never closed between the land company and Williams. It remains open to this day, and the status of Williams 'has not been changed. He dedemanded the return of his bonds from Weeks, who, as said, was the financial officer of the compaziy, and the proper person to demand them from. There are no equities of the land company overriding those of Williams, nor is there an equality of equities ; and he cannot be turned from his direct, course in the pursuit of his rights by the effort to raise an issue based upon supposititious delations between him and Weeks individually. So far, then, as 'the rights and relations of the parties now before the court are 'concerned, we think they were equitably and justly ascertained .and defined by the justice at speial term; and, the parties being 'all before the court, and it being in full possession of the subject-matter of the action, plenary relief can be afforded by final decree. This was sought to be done by the provisions before referred to, but we think those provisions do not settle, as absolutely and thoroughly as should be, Mr. Williams’ rights. The modification he asks for should be made, without compelling him to apply for further relief at the foot of the decree, and thus leave open for further discussion the matter of what additional relief he may be entitled to. He has undoubtedly the first right, to the extent found by the court below. There is no reason why he should be indefinitely postponed in realizing the amount due him. His priority of lien entitles him to priority of payment, and therefore the decree should be reformed to this extent, viz., that a provision be added that Williams have execution against the land campany for the amount directed to be paid by it to him, and that, if such payment is not made, or Williams fails to collect the amount on execution, then he may apply to the court, on notice, to be paid out of the fund in the eburt depository, and shall be entitled to such payment, on assigning to the plaintiff all his rights under this decree, in manner and form to be approved by the court.

With this modification, the judgment appealed from must be .affirmed, with costs.

All concur.


author: O’BRIEN, J.

text:
    Charlotte A. Conselyea, App'lt, v. The Supreme Council, American Legion of Honor, Resp't.

      (Supreme Court, Appellate Division, First Department,

      Filed April 10, 1896.)

    1. Insurance—Benefit certificate.
    Where, under the rules of an association which require a member desiring to withdraw to pay all charges against him and surrender a certificate, with a written release of all claims against the. order, and make failure to pay assessments a cancellation of the certificate, a member, under a separation agreement, delivers to his wife his certificate, in which she is the beneficiary, upon an agreement that she pay the assessments and he not to change the beneficiary, and she thereafter retains the certificate and pays the assessments to the association, which has knowledge of the facts, the wife is vested with the title to the certificate, which cannot be defeated by the resignation of the husband without surrender of the certificate, or by his failing personally to pay the assessments.
    3. Same.
    In such case, the association cannot, in violation of its own laws, permit the husband, through .spite and malice, fraudulently to deprive the wife of her rights in and to the certificate which she has thus secured.

      Motion for a new trial on exceptions ordered to be heard by the general term in the first instance. -
    This action was brought to recover the amount due under a benefit certificate issued by the defendant on December 6, 1883,. to one William Conselyea, for the benefit of his wife, the plaintiff. No change was made of the beneficiary named in the certificate from the date of its issue until the deatli of the member, which occurred on the 21st day of August, 1893. All the dues- and assessments accruing under this certificate were paid up to-the assessment No. 237, due June 15, 1892.. The payment of that and of the subsequent assessments was however, tendered and refused. In February, 1889, a separation agreement was entered into between plaintiff and her husband, whereby they mutually agreed to live apart, the husband to pay a certain sum monthly for the wife’s support, and she, among other things, to have all-policies or certificates of insurance then held by him for her benefit, which were to be delivered to her, and thereafter such insurance to be maintained by her, he agreeing not to change the beneficiary named in such policies or certificates. Under this agreement the benefit certificate in question was delivered to plaintiff, who from that time retained it and paid all assessments and dues thereunder, amounting to over $100, up to the assessment of June-15, 1892, before referred to. The plaintiff and her husband continued to live apart, pursuant to the agreement; and this, together- with the further fact that the assessments and dues were being paid by the wife, was known to the local or subordinate council of the defendant. Notwithstanding the agreement, the husband endeavored to deprive the plaintiff of her rights under the certificate, and wrote a number of letters, not only to the subordinate council, but to defendant itself, two of which (selected), are as follows:
    “Dated, New York, June 6th, 1892.
    “Eece.ved June 7th, 1892.
    “ Comp. A. S. Warnock, Supreme Sec’y.—Dear Sir: Sometime ago I tendered my resignation to St. John’s Council No. 3, A. L. of H., as one of its members, desiring to withdraw from the order. Since then I received the following communication from the Sec’y., which you will find inclosed. The section and article referred'to is for those desiring to withdraw. When I became a member of the order my certificate was made payable to what was then my wife, since which time differences arose which caused a separation, she holding the certificate and.paying the assessments, which prevents my being suspended, and cannot furnish you with the certificate as demanded by this letter, but am perfectly willing to sign a release for all claims against the order. If this meets your approval, please advise, for if think the council is acting in a manner not sustained by any law in receiving from, one who is not a member of the order the assessments as they be-come due, thereby preventing my either withdrawing or suspension, and at the same time gratifying a desire of hers, as expressed,. that I may die, so that she may get the benefit. This I want to-prevent, as she is worthy of no consideration. Hoping to hear from you soon, I am,
    “Yours, fraternally,
    “WILLIAM COHSELYEA, Sect.”
    “ Dated, New York, June 10th, 1892.
    “Officers and Members of St. John Council Ho. 3, A. L. of H. —Companions: I have waited nearly a year for the acceptance of my resignation from your council and order, which up to the present time has not been granted. I again present it in the same spirit and meaning, and desire its immediate granting. I also give notice that you accept no more assessments on my account, and that no more notices of my assessments be mailed any one; and, inasmuch as I have received no notice from the council either for the election of officers or for other mattfers which have called for special notification by mail, it is my desire that my name be dropped from the roll of your council, and that you record me suspended for nonpayment of the first assessment due and unpaid subsequent to the date of receipt of my communication. Supreme secretary has informed me that the acceptance of my resignation by the council is compulsory.
    “ Yours, fraternally,
    “WM. CONSELYEA.”
    In addition,' letters were received from the husband, resigning-as a member, and voluntarily withdrawing.
    The by-laws relating to withdrawal and suspension are as follows :
    “ 146. A member wishing to withdraw permanently from the-order shall pay all dues, fines, and assessments charged against him, surrender his benefit certificate, with a written release of all claim thereto or against the order, and said release and benefit certificate shall be forwarded to the supreme secretary. * * * ”
    “ 65. Any member failing to pay the assessments required of him, and for • which he shall be liable, on or before the day limited for .the payment of the same, shall stand suspended from the order, and all rights and benefits therein; and his or her benefit certificate shall be void. * * * ”
    John Cummins, for pl’ff; Morris Goodhart and Sol M. Stroock, for def't.
   O’BRIEN, J.

The issue presented upon the trial was as to whether or not the husband, William Conselyea, was a member in good standing at the time of his death. The defendant contends that by his failure to pay the assessment Ho. 237, which was due on the 15th of June, 1892, he became suspended, pursuant to the laws of the association ; and, further, that, having resigned as a. member during his lifetime, pursuant to the by-laws, his membership had ceased. It will thus be seen that the claims advanced’ are that the husband was suspended for failing to pay his assessments, that he voluntarily withdrew as a member, and that, in either aspect, he had surrendered whatever right he had asa member ; and therefore, not being a member in good standing at- the time of his death, the beneficiary was entitled to no rights under the certificate which had been issued to him. In determining the weight to be attached to these contentions, the laws and rules of the defendant must be examined in the light of the facts here .appearing, because such, according to the terms of the benefit certificate and the application for membership, constituted the contract between the member and the society, and these must be taken and construed together as measuring the rights of the litigants. Upon the question of voluntarily withdrawing or resigning from the order, although the answer did not advance any such •claim, testimony was admitted which tended to show that the member was desirous of having his resignation accepted, with a view, in violation of his agreement, to cheating his wife out of any benefits under the certificate. The defendant and the subordinate council recognized that they could not accept his resignation, because the laws of "the order expressly provided that, to withdraw voluntarily or permanently, it was necessary for a member to pay all dues, surrender his benefit certificate, and tender a release of all claims thereto. In presenting his application for withdrawal the husband complied with none of these conditions, for the claim is advanced that he had not paid his dues and the assessment of June, 1892, and he was not in a position to surrender the certificate, which was then held by the plaintiff, and which he had parted with to her; nor did he tender a release of all claims thereto. She had secured the certificate under an agreement by which she was to pay the assessments; and' these she paid, with the knowledge of the defendant, and thereby she acquired a vested interest in the certificate, of which the member could not deprive her. And the very provision of the by-laws which required a surrender •of the certificate and a release by the members had in mind just such a contingency, because it provides that the-member’s liability should not cease so long as the dues were paid until the certificate was surrendered and a release given; and for the same reason the defendant’s liability must continue until the certificate is surrendered. In Ireland v. Ireland, 42 Hun, 212, the member took out a certificate, naming Jennie Ireland, a.sister, as beneficiary. After-wards he married the defendant. The court said:

“ One of the rules of the order, which was printed upon the back of the certificate, prescribed that any member desiring to make a new direction as to its payment might do so by authoriz^ ing such change in the form prescribed and printed upon the back of the certificate, to be attested by the recorder of the lodge, and reported to the grand recorder, paying fifty cents, surrendering the old certificate, and taking a new one. * * * ' What was needful to be done here, and what Mr. Ireland manifestly understood was needful, was to revoke the existing designation of the sister, and then make the designation of the wife. How this was to be accomplished the rules of the association instructed Mr. Ireland, and he had agreed to observe them. He sought to observe them. On the face of the certificate the sister remains the designated beneficiary. There was one way in which she could have been divested of her expectant interest. She insists that, since that way has not been observed, she has not been divested. It is plain that the association, bound by its contract to pay her, would have no answer to her demand.”

Our conclusion, therefore, is that, the certificate having passed into the possession of the plaintiff, and the title thereto having vested in her for value, and she having thereafter paid the assessments to the defendant, who, through its subordinate council, had knowledge of these facts, it could not, in violation of its own laws, permit the husband, through spite and malice, fradulently to deprive her of the rights in and to the certificate which she had thus secured.

The rights which the plaintiff secured in and to the certificate answer the further contention that by failure of the member personally to pay the assessment ,in June, 1892, he was suspended, and all rights under the certificate were lost. With knowledge of the relations between the plaintiff and her husband, the subordinate council had received from her the dues and assessments up to June; and it is admitted that from that time to the time of her husband’s death she regularly tendered the amounts of all dues and assessments levied, which were refused simply upon the ground that the council had been requested by the husband not to receive them. This was not a contest between the member and the order, but was one between a member and his wife; and where, as here, the latter had secured for value rights in and to the certificate, she could not be deprived of them, in the absence of any law of the order which, regardless of her equities and legal rights, would destroy the validity of the certificate. Mor could the husband deliberately make himself a member not in good standing so long as the plaintiff paid or tendered. The order, without objection, for a considerable time, had received moneys from her; and it was not, therefore, because no such right is given by its rules or laws, in a position to terminate arbitrarily her right to pay such assessments, and thus keep the certificate alive. We think that the beneficiary had the right to pay the dues and keep the certificate alive while the title and possession of the certificate was in her. Mor do we think that such title or possession was in any way impaired by the fact that it was originally secured pursuant to an agreement of separation which it is contended was, if not void, at least voidable; because prior to such agreement, and at the time the certificate was obtained, the plaintiff was named as the beneficiary, and she is not obliged to base her right of title upon the agreement assailed, but can predicate it upon the fact of her being the originally designated beneficiary, and upon the additional circumstance that for value its possession was subsequently delivered over to her, and that thereafter she made the payments until such time as the order refused to accept them from her.

In view, therefore, of both the equities and legal rights of the plaintiff in the certificate, we think that the direction of a verdict for the defendant was error, and that the exceptions should be sustained, and a new trial ordered, with costs to plaintiff to abide the event.

All concur.


author: CULLEN, J.

text:
    Daniel Mahoney, Resp't, v. James McWalters et al., App'lts.

      (Supreme Court, Appellate Division, Second Department,

      Filed April 14, 1896.)

    1. Feadddlent conveyances—Action to set aside.
    A person having a mechanic’s lien may maintain an action to set aside as fraudulent a mortgage of the premises by the owner.
    2. Same.
    Where a mortgage, fraudulent as against creditors, is assigned to the very persons or class of persons in whose interests alone it could be avoided, the title acquired by such persohs is not subject to be defeated.
    8. Mechanic’s lie.n—Pbiobity.
    A creditor, who may have a right to file a mechanic’s lien on property, has not until his lien is filed, any. superior equity over any general creditor, of any right to have the property or the amount due ¡from the owner of 'the property to the contractor applied to the satisfaction of his claim, in preference to those of other creditors.
    4. Same—Fbaddulent conveyance.
    Where a mortgage is void as to the lienors, the fraudulent mortgagee cannot give vitality'and effect by an assignment even to a bona fide creditor after the rights of the lienors become vested.
    Appeal from a judgment in favor of plaintiff,
    Charles L. Pashley, for app’lts Reddington and McWalters; Cannon & Atwater, for app’lts John C. Orr & Co.; Michael J. Scanlan, for app’lts Fitzpatrick & McCauley; A. M. & G. Card, for resp’t P. E. Mathews; Robert J. Mahon, for other resp’t.
   CULLEN, J.

The defendant Reddington made a contract with the defendant McWalters, by which the latter was to erect a house on the land of the former for the sum of $6,000. During the progress of the work, Reddington paid McWalters $2,000. McWalters performed his contract. Reddington, finding himself unable to obtain the remainder of the contract price, by an arrangement with McWalters, on September 26, 1894, executed to McWalters’ wife, the defendant Mary McWalters, a mortgage for $4,000, the balance due. On October 2, 1894, the defendants Orr & Co. filed a mechanic’s lien against Reddington, as owner, and McCauley, as contractor, for $849.72. At this time, McWalters owed Orr & Co. on another account, not connected with the premises in suit, $324.48. On October 10th, the defendant Mary, wife of McWalters, assigned the Reddington mortgage to Orr & Co., as security for the whole debt of her husband to them, $1,174.20. On. October 9th, the defendant Mathews filed a mechanic’s lien against Reddington and McWalters for $252.49. On October 17th, plaintiff filed his lien against the same parties for $521. On October 22d, MoWalters made a general assignment for the benefit of creditors to the defendant John Alexander; and, on the same day, Mary MoWalters assigned to the defendants Fitzpatrick and McCauley the Eeddington mortgage, subject to the lien of Orr & Co. Fitzpatrick and McCauley were creditors of MoWalters for moneys paid by them to discharge a mechanic’s lien on other property, and this assignment was made to secure such indebtedness. Thereafter the plaintiff instituted this action to foreclose his lien, and in it sought to have the Eeddington mortgage declared fraudulent and void. The trial court adjudged this mortgage and the assignments of it to Orr & Co. and to McCauley and Fitzpatrick void, and decreed a sale of the property, and that, out of the proceeds, Orr & Co., Mathews, and the plaintiff be paid the several amounts of their liens, according to their respective priorities, and that the surplus should be paid over to the general assignee. From that decree, Orr & Co., Reddington, and McWalters, and Fitzpatrick and McCauley appealed.

We entertain no doubt that the plaintiff can maintain this action to set aside the mortgage to Mary McWalters. His standing is not that merely of a general creditor, who must first obtain a lien on the property of the debtor by the recovery of a judgment and issue of execution. The lien of the plaintiff is perfect on complying with the requirement of the statute, and it is a specific lien on the particular property, similar in all respects to a mortgage. This conclusion brings us to an examination of the merits of the judgment appealed from.

The trial court justly held that the mortgage was fraudulent and void as to the creditors of McWalters, both general creditors and those who might be entitled to file mechanics’ liens. McWalters was insolvent, and Reddington knew that MoWalters had not paid his creditors. It is not pretended that any consideration proceeded from McWalters. The mortgage was therefore fraudulent as to creditors, but was entirely valid as between the parties, for Eeddington owed the $4,000, and the mortgage was given for that indebtedness. Orr & Co. were nowise parties to this fraud. When, therefore, the mortgage was appropriated to the very persons or class of persons in whose interests alone it could be avoided the title acquired by such persons was not subject to be defeated. I think in this respect the case is the same in principle as that of Murphy v. Briggs, 89 N. Y. 451. At the time of the assignment to Orr & Co., neither the plaintiff nor the defendant Mathews had filed any notice of lien, and therefore the rights of no creditors had intervened. It is true that the assignment to Orr & Co. was to secure not only their claim for material furnished on this property, but for other indebtedness. . But it has been distinctly held that a creditor who may have the right to file a mechanic’s lien on property has not, until his lien is filed, any superior equity over general creditors, or any right to have the property or the amount due from the owner of the property to the contractor applied to the satisfaction of his claim, in preference to those of other creditors. McCorkle v. Herrman, 117 N. Y. 297; 27 St. Rep. 333; Stevens v. Ogden, 130 N. Y. 182; 41 St. Rep. 331.

We therefore conclude that the assignment to Orr & Co. was valid, and that those defendants are entitled to be first paid out of the proceeds the whole amount of their claim. Before the assign-' ment to the defendants Fitzpatrick and McCauley, the liens of the defendant Mattiews and the plaintiff had been filed. The mort-' gage, except so far as pledged to Orr & Co., being void as to these lienors, the fraudulent mortgages could not give it vitality and effect by assignment even to bona fide creditors after the rights of the lienors had become vested. Schafer v. Reilly, 50 N. Y. 61. These liens must therefore be paid out of the proceeds of the sale next after pavment to Orr & Co.

We do not see that we should now determine the respective rights of the general assignee and those of the defendants Fitzpatrick and McCauley. The question between those parties is not the same as between them and the lienors. The answers of the defendants do no raise, as between themselves, the issues the determination of which is necessary to decide their rights. Any surplus that may arise on the sale, after paying the claims of the plaintiff, of Mathews, and of Orr & Co., should be deposited to the credit of the action; and the rights of the other parties should be determined in proceedings to obtain the surplus. Of course, the property is not liable for any greater sum than $4,000 and interest, the amount due on the contract. If there should be a surplus in excess of that sum, it should go to Reddington, the owner of the fee, or any party claiming under him.

The judgment appealed from should be modified in accordance with this opinion, and, as modified, affirmed, with costs to defendants Orr ¿6 Co., payable out of the property.

All concur.


author: RUMSEY, J.

text:
    Austin Finegan, App'lt, v. Mayor, Aldermen and Commonalty of the City of New York, Resp’t.

      (Supreme Court, Appellate Division, First Department,

    Filed April 10, 1896.)

    1. Taxes—Recovery.
    Where a land owner by mandamus compelled the clerk of arrears to-receive payment of the arrears of taxes and water rents for which the land had been sold, on the ground that the tax sales were void, but in faet the taxes were valid, and the writ recited that they were liens on the property, neither the land owner nor his assignee can, after payment of 'such arrears, maintain an action against the city to recover back the money so paid.
    S. Same—Subrogation.
    A mere volunteer cannot acquire a right of subrogation. There must be either some duty on his part to pay, or some interest to be protected which gives him the right to pay the debt.
    8. Same—Payment.
    The purchase at a void tax sale does not operate as a payment of thee tax.

      Appeal from a judgment in favor of defendant
    John Townshend, for app’lt; George L. Sterling, for resp’ts.
   RUMSEY, J.

The action was to recover a sum of money which had been paid by the owner of certain premises to extinguish the lien of taxes upon them. The facts are that, taxes and Croton water rents upon the premises having been unpaid for several years, the clerk of arrears, in 1866, put the property up for sale for the arrears of taxes, and upon such sale one John L= Brower offered to take such premises for a term of 1,000 years. The first sale was made in January, 1866, and the premises were struck off to Brower, and he paid $38.91. The second sale was made in November, 1866, and Brower again bought a like term in the premises, and paid $6Í.10 for it. The lot was again sold for subsequent taxes on the 6th of December, 1871, and a term of 1,000 years was sold to Peterkin, and he paid $132.89. The certificates were duly issued by the clerk of arrears, and they were subsequently sold to John Townshend, who bought the last of them in October, 1881. Subsequently, and on the 12th of April, 1882, Townshend sold and conveyed the property to Bernard Finegan, and at the same time delivered the leases to him. lit April, 1893, Bernard Finegan, then being the owner of the fee,, sued out a writ of mandamus requiring the clerk of arrears to receive the payment of the arrears of taxes and water rents upon which it had been attempted to sell these premises many years before, as stated above. ; The writ recited the fact that the tax sales were void, and required the clerk, upon receiving the amount of taxes and interest, to mark the taxes and rents as paid, and cancel the records in his oifice of the three several sales of the said lots for the nonpayment of said taxes and water rents. This money was paid in April, 1893, pursuant to the writ of mandamus, and the amount so paid was $534.26. Some time in March, 1893 Bernard Finegan assigned his interest in the leases to the plaintiff,, and, thereupon, after the money had been paid by him, the plaintiff brought this action to recover the money from the city. The foregoing facts, with some others, were found by the judge who tried the case. As the result of the trial, the complaint was dismissed, and from the judgment dismissing the complaint this appeal is taken.

It is claimed, on the part of the plaintiff, that these tax sales were void, and this, he says, is the theory upon which his action is brought. While there is no finding on that subject by the court, yet it was clearly shown by the writ of mandamus, which was put in evidence by the plaintiff as the foundation of the right of Bernard Finegan to pay these taxes, and that fact may fairly be considered in the examination of this appeal, especially as the plaintiff insists upon it here, and bases his cause of action upon it. Although the writ of mandamus proceeded upon the theory that the sales were void, and the writ is accepted by the plaintiff as an adjudication upon that point, yet it is to be noticed that the writ does not adjudge that the taxes themselves were illegal; but, on the contrary, the court finds that the taxes were valid, and the writ recites that they are still liens on the lot. That being so, the lien of the taxes had not been affected by the attempt of the clerk of arrears to sell the property by reason of them, Neither was the payment of the money upon the bid a payment of the taxes by the purchaser. Clementi v. Jackson, 92 N. Y. 591. It had no effect whatever upon them, and so the writ recited. Then, in April, 1893, the taxes still remained unpaid, and the lien was not extinguished or affected. In the case of Mayor v. Colgate, 12 N. Y 140, in which it was held that the tax sales were void in consequence of defects, the court say that the owner lost nothing, the purchaser gained nothing, and the corporation received nothing which it could legally retain. So far as the taxes were concerned, the whole transaction was a mere nullity. The purchaser, by his bid, did not attempt to pay the tax. He did not make the bid for any such purpose. He simply stood in the attitude of a man who was willing to buy what he supposed the corporation had to sell. He stood in no privity with the owner, but his position was, rather, hostile. He certainly cannot be said, when ne paid the amount of his bid, to have paid anything in satisfaction of the debt which the owner owed to the city by reason of the assessments levied upon his land, and such seems to have been the opinion of the court in Mayor v. Colgate and Clementi v. Jackson, supra. The mandamus, viewing the attempt to sell as void, required the clerk of arrears to accept the arrears of taxes and of water rents for the years mentioned therein, with the interest accrued on the taxes and water rents, to the time when the payment was offered by Bernard Finegan in 1893, and that was the sum which he received by virtue of the compulsion of the writ which Bernard Finegan put upon him. The amount thus paid was not paid for the benefit of anybody else; but, as found by the court, the payment was made to pay the taxes upon the property by the person who paid what he was bound to pay to relieve his property from the lien of the taxes and water rents. This sum was clearly not paid for redemption under the provisions of the consolidation act. The amount to be paid for redemption consisted of the several sums which were paid upon the several bids, being $38.91 paid January 15, 1866, $61.10 paid November 2, 1866, and $182.39 paid December 16, 1871, with interest on each of these payments at fourteen per cent, annually from the time of the payment. Consol. Act, §§ 941, 947. This sum was very much greater than the amount actually paid pursuant to the mandamus, and, as is conceded on all hands, and recited in the mandamus, it was paid upon the taxes because the sale was void. What was received, then, was the tax. If the sale was void, the tax lien still existed, as we have seen, and it was an incumbrance upon the property, which the owner was interested to remove. But the payment of the tax in 1893 gave the purchaser at the sale no right to the money then paid for that purpose. His right is only to receive from the city-the money paid, under section 941, for redemption, and there is: no pretense that this money was paid for that purpose. It is quite true that one of the findings of fact says that the money was paid to redeem the premises from the lien of said taxes and water rents, and from said sales therefor; but it must be remembered that the sales had been adjudged to be void, and there was no sale to redeem from. The only thing of that nature which existed was the record of the illegal sales which was in the office of the clerk of arrears, and which, unless canceled, stood as an apparent lien upon the title of the owner of the fee, and the clerk of arrears was directed to cancel them. Under the facts stated in the mandamus, it might well be said that the money was paid to relieve the land from the apparent lien of that sale, which was, in fact, void; and interpreting the finding in that way, there is no inconsistency between the two findings of fact by the court.

But it is said that, the sales being void, the receipt of the money upon the bids by the city, and the issue of the certificates upon the sale, operated as an assignment to the purchaser of the right of the city to collect the tax, or, at least, operated to give him a right to receive the tax when it was paid to the city. In other words, the plaintiff claims that the purchaser, by paying his money upon the bid at the void sale, became subrogated to the right to receive the tax from the owner of the premises. To this proposition there are several answers. Subrogation is the substitution of another person in the place of a creditor, to whose rights he succeeds in relation to the debt. This may come about when one who is bound as a surety to pay a debt advances the amount of it to a creditor, in which case he receives everything that the creditor has to enforce the collection of the debt. It may come about, also, when one who has any interest to protect pays some lien or incumbrance upon property for -the purpose of protecting that interest, in which case he will be deemed the equitable assignee of the debt which he pays. Cole v. Malcolm, 66 N. Y. 363. But no one who is a mere volunteer can acquire a right of subrogation. There must be either some duty on his part to .pay, or some interest to be protected which gives him the right to pay the debt. Acer v. Hotchkiss, 97 N. Y. 395 ; Shinn v. Budd, 14 N. J. Eq. 234. In this case there was nothing of the kind. The purchaser at the sale was a mere volunteer, who bought an interest in the land, but paid no incumbrance. It is expressly held, in Clementi v. Jackson, supra, that the purchase at a void tax sale did not operate as a payment of the tax; and, certainly, if the tax was not paid to the city, then there was nothing to which the purchaser could be subrogated. For this reason, alone, the theory of the plaintiff fails.

The plain situation of the case is this: When an attempt is made to sell these premises upon these legal taxes, the purchaser, for his own interest, and not at the request of the owner of the premises, invested his money in what he supposed to be a good speculation. This was done without intent to pay the debt or obligation of the owner, but simply to become the owner himself of an interest in these premises. He got nothing by the investment which he made. It may be that he might recover back the money which he has paid this void sale, that is doubtful Coffin v. City of Brooklyn, 116 N. Y. 159 ; 26 St. Rep. 421; 25 Am. & Eng. Enc. Law, 719, and cases cited. But the money which he paid was not for the benefit of the owner. It did not relieve him from the payment of the tax, not did it relieve the lands from the incumbrance; and, so far as the owner and the-city were concerned, the situation remained precisely as it was before. No reason can be perceived why the city should be made-liable to pay back the money which was received on a valid tax, because it has previously received other money upon an illegal sale of the taxed premises, and may possibly be liable to pay back the money so received to the person who paid it or his assignee.

The judgment must be affirmed, with costs.

VAN BRUNT, P. J., and BARRETT and PATTERSON, JJ., concur; WILLIAMS, J., concurs in result.


text:
    Philip Zimmerman, as Administrator, etc., App'lt, v. Union Railway Company of New York City, Resp't.

      (Supreme Court, Appellate Division, Second Department,

      Filed April 7, 1896.)

    1. Appeal—Cask—Certificate.
    Where the appellant seeks the review of a question of law only, no certificate that the case contains all the evidence is necessary.
    2. Negligence—Contributory.
    Where wagon is being driven across and not within tracks, trolley car has no paramount right of way at street crossing.
    3. Same.
    If wagon is prior in' time at crossing, it is prior in right.
    4. Same.
    In such case, the driver is not bound to get out of way of car, nor is it negligence on his part to proceed to cross on a walk.
    5. Same.
    In this case, question of contributory negligence was held tobe for jury.
    Appeal from a judgment in favor of defendant, entered on a verdict directed by the court.
    Ralph Hickox, for app’lt; William N. Cohen, for resp’t.
   CULLEN, J.

A preliminary objection is made that we cannot review the decision of the trial term granting a nonsuit, because the record before us does not show that the case contains all the evidence. The statement in the record is that the case contains all the Testimony taken on the trial. Assuming that the term “testimony” is not the equivalent of “evidence,” as has been held in the First department, which, however, we are not prepared to concede, it does not affect the question before us. As the plaintiff seeks review of a question of law only, no certificate that the case contains all the evidence is necessary. Halpin v. Phœnix Insurance Co., 118 N. Y. 165; 28 St. Rep. 788; Englehardt v. Benjamin, App. Div., 2d Dept., unreported.

The evidence on the trial tended to show that the plaintiff’s intestate was riding in a wagon, with three other men, on the Southern Boulevard, across Boston avenue, upon which latter street the defendant operated a trolley railroad. The wagon was driven by one Madden, and the deceased was riding in it as Madden’s guest. When the wagon reached the railroad, the trolley car was approaching the crossing, being then at a distance of some 150 yards from it. Madden slowed his horse to a walk, and proceeded across the tracks. Before he had cleared the tracks, the trolley car struck the hind wheel of the wagon, and overturned it. The deceased was thrown out and killed. We think that these facts presented a proper case to be submitted to the jury to pass upon. The wagon was being driven across the railroad, not within its tracks. The defendant’s car had no paramount right of way at the crossing. O’Neil v. D. D., E. B. & B. Railroad Co., 129 N. Y. 125; 41 St. Rep. 107. The distance from the car to the crossing at the time Madden sought to cross, was such as to enable the wagon to pass safely if the defendant’s car had been properly managed; and this Madden and the deceased had a right to expect. The wagon was prior in time at the crossing, and therefore prior in right. The driver was not bound to get out of the way of the car, nor can it be said to be negligence on his part that he proceeded to cross at a walk. There are doubtless some improbabilities in the testimony given by plaintiff’s witnesses. These were for the consideration of the jury. They were not such or so gross that the court could say as a matter of law that the truth of the narrative was impossible. On the facts testified to, the case falls within that of Buhrens v. D. D., E. B. & B. Railroad Co., 53 Hun, 571; 25 St. Rep. 191; and the question of contributory negligence was for the jury.

The judgment appealed from should be reversed, and a new trial ordered; costs to abide the event,.

All concur.


author: HATCH, J.

text:
    Margaret A. Howard, as Surviving Partner, etc., Resp't, v. Elizabeth De Witt Leonard et al., App'lts.

      (Supreme Court, Appellate Division, Second Department,

      Filed April 7, 1896.)

    1. Trust fund—Liability.
    In an action in the nature of a creditor’s bill, to reach surplus income, plaintiff must show that surplus income exists.
    2. Same.
    Where the income of the trust fund has been paid, its source and amount explained, and its permanent basis established with certainty, an action to reach it is not premature.
    8. Same.
    In determining the amount of income necessary in a given case, due regard must be had for the station in life, the social standing and the accustomed manner of living, of the party, both before and since the income was provided.

      4. Same. "
    The beneficiary of such income may not, at the expense of her creditors, support and furnish spending money to an able-bodied husband. _ ,
    Appeal from a judgment in favor of plaintiff, entered on the report of a referee.
    Edward B. Hill, for app’lt Leonard; Owen, Gray & Sturges, for app’lt Robinson; Amasa A. Redfield, for resp’t.
   HATCH, J.

The defendant Leonard is a of Jeremiah P. Robinson, who died leaving a large estate. By the terms of his will, so far as essential to any question arising in this case, the devise to his duughter was in trust as follows:

“Her share shall be held and kept invested for the life of my said daughter, by my executors, or the survivor or survivors of them, and the net interest and income thereof shall, as it accrues, be paid to her, or applied to her use so long as she shall live.”

The will also devised to his wife, Elizabeth Robinson, certain personal property and one-fourth of his estate. His wife has since died, leaving a will, which, so far as affects any interests here, makes the same disposition of her property as was made by the will of her husband. Since the death of both husband and wife, the property has been kept together and managed by the executors,' who are the testators’ children, as trustees. The business as it was carried on during the lifetime of Jeremiah P. Robinson has been substantially conducted by the executors in the same manner, the son Jeremiah having its active management. The income of the estate, from August 31, 1892, to the same date in 1894, was, respectively, $119,789.30, $117,007.89, $59,694.91; making a total income for that peroid of $296,-492.10, and the net income $79,319.24. The average income during this time to which Mrs. Leonard was entitled is $6,609.93. From September 1,1894, to July 1,1895, the net income was $13,-190.39. The falling off of income since 1892 was due to the appropriation of a part to the completion of certain unfinished buildings, and making other improvements, and did not represent any loss or impairment of the estate, but added to its value, and will ultimately increase its productiveness. Mrs. Leonard’s family consists of herself, her husband, an unmarried daughter and son. She has two married daughters, who live with her, and are supported by their husbands; but one daughter defendant has been accustomed to assist to a limited extent. Neither the unmarried son or daughter is self-supporting. Mrs. Leonard’s husband is about forty-five years of age, and is in sound bodily health. Since the death of' "Jeremiah P. Robinson, he has engaged in no business, and during this period has been entirely supported, clothed, and furnished by his wife, from her income, as a gentleman of leisure, Mr. and Mrs. Leonard and the unmarried daughter now live in a boardinghouse in West Fifty-Eighth street, in the city of New York, for which Mrs. Leonard pays $60 a week. The son receives $3 a week, and is fitting himself for business. During the lifetime of Mrs. Leonard’s father, she lived for the greater part of the time at his home, and was supported by him, her expenditures being $10,000 or $12,000 a year. For about three years she kept house, the house being furnished by her father, and then she expended from $12,000 to $15,000 a year. The husband was then in business with the testator, and contributed something of this sum; what proportion does not appear. After she abandoned housekeeping, she returned to her father's house, before his death, where she lived as before, and continued therein until some time after her mother’s death, drawing, after the latter event, $11,000 a year. This sum was not entirely devoted to her individual use, but was expended in keeping up the house, an expensive establishment. The plaintiff is a judgment creditor of Mrs. Leonard’s, and the basis for the judgment is the purchase price of clothing furnished for her personal use. The present action is in the nature of a creditor’s bill to reach surplus income. The allegations of the bill are, among other things, that the income received from the trustees by Mrs. Leonard is more than sufficient to provide for her suitable support and maintenance, and that the surplus is properly applicable, in equity, to the payment of the judgment; and plaintiff asks, in her prayer for judgment, that the court determine how much of Mrs. Leonard’s income is necessary for her suitable support and maintenance, and to direct judgment that the surplus of said income be applied to the satisfaction of plaintiff’s judgment. The referee has tried the case carefully, and disposed of it intelligently, and we might safely rest on the learned opinion with which he maintains his conclusion; but defendant so fiercely assails it that we may contribute somewhat in answer thereto. The referee has found that $5,000 is an amount which will be sufficient to meet the expenses of Mrs. Leonard and of those members of her family naturally dependent upon her. Reference to his opinion shows that the basis of this conclusion is the sum of $2,080, for the board of herself and daughter, $1,000 for the maintenance of her son, leaving $1,920 for clothing for herself and daughter, and incidental expenses. It is therefore readily discerned that, in the opinion of the referee, the luxury of supporting and furnishing spending money for an able-bodied husband, in sound health, ought to be denied the wife, for the benefit of creditors who have 'furnished her with clothing.

The conclusion is first assailed upon the ground that there has never existed any basis of legal right to maintain this action. The defendant assigns as reason for this claim that it was necessary for plaintiff to show that a surplus income existed. To this we agree. Examination of the argument of the learned counsel for Mrs. Leonard, however, shows that this is not precisely what he means; and, in the light of further statement, we learn that what is intended to be conveyed is that there must have been an accumulation of some income, and that, with the sum which .might be received, must be beyond the needs of the cestui que trust before equity can lay hold of it.

The Revised Statutes provides:

“ Where a trust is created to receive the rents and profits of lands, and no valid direction for accumulation is given, the surplus of such rents and profits, beyond the sum that may be necessary for the education and support of the person for whose benefit the trust is created, shall be liable, in equity, to the claims of the creditors of such person, in the same manner as other personal property, which cannot be reached by an execution at law.’’ 4 Rev. St. (8th ed.), p. 2438, § 57; Code Civ. Proc., § 1871.

Und»r this statute, which is authority for this action, we understand that the precise claim which is urged here was made and condemned in Williams v. Thorn, 70 N. Y. 270. And the court said, in answer thereto :

“I find no authority for this proposition except a single special term decision (Hann v. Van Voorhis, 15 Abb. Pr. [N. S.] 79); nór any reasonable ground upon which it can be sustained. It is only where the surplus is sought to be reached, as property of the debtor, or as a debt due from a third person, by supplementary proceedings, that such doctrine has been held; and, as has already been shown by the cases cited, these very cases concede that a different rule would prevail in a suit like the present one."

The court then reviews and condemns the case of Clute v. Bool, 8 Paige, 83, relied upon by defendant, reaching the conclusion that the decision was in violation of the express language of the statute, and further showing that the chancellor who wrote therein did not adhere to his own dictum when he came to the decision of Silleck v. Mason, 2 Barb. Ch. 79. In the Williams Case the allegation of the complaint that the income of the estate was much greater than was necessary for defendant’s support. Nothing appeared by it to.show that there-was any surplus of income in the hands of, the trustee. And the decision, which was supported, provided, among other things, “ that the surplus over and above such allowance (i. e. that provided in the judgment), whether accrued or hereafter to accrue, should be paid to the plaintiff,” etc.

It is suggested that in fact, in this case, there was an accumulation of income when the action was commenced. If this be so, it is evident that the decision was not made to depend upon that fact; and, as the point was raised and condemned, it may be assumed that it did not so appear. Nothing that appears in the report of this case when again appealed (81 N. Y. 381) lends color to the claim. On the contrary, the sum there commanded to be paid over had all accrued subsequent to the commencement of the action. In this connection, it is interesting to note that the Hann Case, which, as we have seen, was condemned, as reported on appeal (5 Hun, 425), shows that no surplus of income was alleged to exist at the time when the suit was commenced. It was with great reluctance, and evidently with a clear conviction that the court was wrong, in Campbell v. Foster, 35 N. Y. 361, that the supreme court sustained the demurrer therein. The confusion which arose out of the decision in the Campbell Case has now been set right. In Kilroy v. Wood, 42 Hun, 636; Moulton v. De Ma Carty, 6 Rob. (N. Y.) 533, and Card v. Meinecke, 72 Hun, 299; 54 St. Rep. 285, there was a simple failure of proof to show that the income, not the amount on hand at any special time, was more than was necessary for the needs of the cestui que trust; and nome of them are authority for the contention now urged. In Stow v. Chapin, 21 St. Rep. 38, nothing was before the court except the sufficiency of the papers upon which the injunction granted therein was based. The allegations were held insufficient, for the reason that there was no proof showing what would be a sufficient income for the defendant. There was no denial of the right to relief in a proper case, and the order provided for a future application upon sufficient papers. So far as the note of Mr. Abbott to the case of Tolles v. Wood (N. Y. App.) 16 Abb. N. C. 1, 29, 30, assumes that there must be surplus in the hands of the trustees before the action can be maintained, it is not in harmony with the decision in the Williams Case. Where the income has been paid, its source and amount explaimed, and its permanent basis established with certainty, an action to reach it is not premature, within the doctrine of any well-considered case. In this class of cases it is quite apparent that each must be "largely determined upon its particular facts, aided by such general rules as precedent has established. It is quite true that, in determining the amount of income necessary in a given case, due regard must be had for the station in life, the social standing, and the accustomed manner of living, of the party, both before and since the income was provided. It is quite proper in some cases to allow for the retention of servants and the maintenance of an equipage, while in others no such considerations would be allowed. In Silleck v. Mason, supra, it was said:

“ They should not, upon a fair construction of the statute on this subject, be permitted to indulge in extravagant expenditures while the defendant’s creditors remain unpaid.”

The proofs before the referee showed in detail about the method, style, and cost of living of Mrs. Leonard and her family before and since the death of her father. Her son is now twenty-one years of age, and the unmarried daughter eighteen. How the daughter lives is shown. Eespecting the son, it is objected that there is no basis upon which the referee could fix the arbitrary sum of $1,000 per annum as sufficient for his support. It did appear what business he was engaged in, what he received, and where he lived. The referee was authorized upon this evidence to determine what was a fair sum for the support of this son, and, in arriving at this determination, he could exercise his judgment and knowledge upon such matters. In Silleck v. Mason, supra, the chancellor, upon appeal, exercised an independent judgment in reaching a like conclusion; and we think the referee here was authorized to fix the sum which he did. If we eliminate the support of the husband from the fixed charges upon Mrs. Leonard’s income, the allowance made by the referee seems ample to meet all the reasonable expenditures which she is called upon to make for herself and those properly dependent upon her, making fair allowance for her method and style of living. Eespecting her husband, the primary liability is upon him to support his wife and áamily. He is not to he considered as a mere useless ornament. When he is of sufficient ability to discharge his obligations, the law regards him as a disorderly person if he fail therein. Upon the proof here, he is shown to be able-bodied and in sound health. Therefore, he must be presumed able to discharge the obligation which he voluntarily assumed when he entered the martial relation. It would be a gross perversion of equitable rules to fasten the support 'of this husband as a fixed charge upon this income, and thereby turn an honest creditor away empty-handed. There is nothing in the will showing an intention on the part of the testator, when he- provided the income, to make the husband an incumbrance thereon, and the wife may not do it at the expense of her creditors.

It follows from these views that the judgment was right, and should be affirmed, with costs.

All concur.