author: Bradley, J.

text:
    George Rice, App’lt, v. John D. Rockefeller et al., Resp’ts.

      (Court of Appeals, Second Division,

      Filed October 1, 1892.)

    1. Associations—Transfer of certificates.
    The Standard Oil Trust is a voluntary association created by agreement of the stockholders of various corporations and others with a supervisory power in nine trustees, whose certificates of the trust are taken in place of the stock and bonds of the several corporations. By the terms of said certificates the shares were issued “ upon condition that the holder or any transferee thereof shall be subject to all the provisions of the agreement cr ating said trust and of the by-laws adopted in pursuance of said agreement as fully as if he had signed the said agreement.” Defendants having refused to transfer upon its books the shares plaintiff had purchased from a member of the association, Held, that there was no substantial distinction as to the transferable quality of such shares and those of a corporation' and that a court of equity had the power to compel such transfer to be made.
    2. Same.
    Defendants claimed that plaintiff was a competitor and enemy of said association and made said demand for the transfer of his shares on the books of defendants, not in good faith, but with the intention to vex and harrass them. Held, that there were no discretionary powers vested in said trustees as to who should purchase said stock, and such purchase was open to the plaintiff and fairly made by him, and he was entitled to be recognized as such by the trustees.
    3. Same.
    While there may be an inherent power or discretion in the trustees of a corporation or company, when its due protection requires or justifies, to decline to perfect title to stock by transfer on its books, it cannot be supposed, unless the power is duly reserved to or conferred upon them, that they are for that purpose permitted to discriminate between bona fide purchasers who are owners and holders of its stock- by assignment duly and in due form made to support application for such transfer.
    Appeal from order of the general term of the supreme court in the first judicial department, reversing judgment entered upon decision of the special term in favor of the plaintiff and granting a new trial.
    The main purpose of the action was to require the defendants to transfer to the plaintiff upon their books six shares of stock in the Standard Oil Trust on the surrender of the certificates of such shares held by him. The Standard Oil Trust was created in January, 1882, by agreement in writing made or adopted by the stockholders and members of certain corporations and limited partnerships and certain individuals therein named or that might thereafter join in it at the request of the trustees. The stockholders and most of the other individuals making or adopting the agreement were interested as stockholders or otherwise in the mining, manufacturing, refining and dealing in petroleum and its products, the materials used in the business and the business in some manner relating thereto. The trustees pursuant to the trust, as provided for by such agreement, received from the parties making or adopting it certain bonds and stocks in trust and issued to them therefor Standard Oil Trust certificates transferable on the books of the trustees. And by virtue of the agreement the parties so surrendering their bonds and stock for such certificates became the beneficiaries under the trust, as did also the transferees of such certificates. The par value of the certificates which have been so issued from time to time by the trustees exceeded ninety million dollars. And they have a 'regular market value and are dealt in in the open market in the city of Hew York, and were at the time of the commencement of this action held in considerable amounts by many persons who were transferees thereof and not parties to such agreement. One of the objects of the agreement creating the trust was to secure to the trustees the general supervision, so far as practicable, of the affairs of the various corporations, limited partnerships and manufactories coming within the adoption of the agreement.
    The above is a statement substantially of facts alleged in the complaint and admitted by the answer. It further appears by the evidence and was . also found by the court that on or about October 14, 1886, the plaintiff purchased in the open market in the city of Hew York Standard Oil Trust certificate Ho. 1987, for five shares of stock, duly issued to one L. B. Mallaby by the trustees, and paid for it $190 per share in cash, and the certificate was thereupon transferred, to him by Mallaby.
    The following is a copy of the certificate and of the transfer endorsed upon it, to wit:
    “ S hares $100 each.

    “ Standard Oil Trust.
    “ Humber 1987. Shares 5.
    ‘‘ This is to certify that L. B. Mallaby is entitled to five shares in the equity to the property held by the trustees of the Standard Oil Trust, transferable only on the books of said trustees on surrender of this certificate. This certificate is issued upon condition that the holder or any transferee thereof shall be subject to all the provisions of the agreement creating said trust and the by-laws adopted in pursuance of said agreement as fully as if he had signed the said trust agreement.
    “ Witness the hands of the president, secretary and treasurer of the board of trustees this 25th day of August, A. D., 1885, at the city of Hew York.
    “ Wm. Rockefeller, V. President.

      “ J. F. Freeman, A. Treasurer.

    “ H. M. Flagler, Secretary."

    Upon the back of it is the following, to wit:
    “ For value received I hereby sell and transfer to George Rice of Marietta, Ohio, five shares of the Standard Oil Trust, standing in my name on the books of said trust. And I hereby irrevocably appoint said George Rice my attorney to make the necessary transfer upon the books of said trust in accordance with the regulations thereof and upon the conditions expressed on the face oi; this certificate. Dated August 26, 1885.
    “L. B. Mallaby.
    “ In presence of 0. F. Streightoff.”

      After this purchase and prior to June 20,1887, a stock dividend was declared by the trustees amounting to one share of stock for every live shares outstanding, and certificate No. 3057 for one share of the Standard Oil Trust stock was thereupon issued to Mallaby who, about June 20, 1887, transferred it to the plaintiff. This certificate and transfer endorsed upon it are in form the same as those above set forth. And on January 20, 1888, the plaintiff at the office of the trustees in the city of New York made a formal written demand for the transfer to him of such six shares upon surrender of the certificates, which with the transfers thereon endorsed he then exhibited. The following is a copy of the written demand:
    “ To the Standard Oil Trust, No. 26 Broadway, New York, and its trustees, officers and agents.
    “ You will take notice that I am the legal owner of certificate number 1987 for five shares, and certificate number 3057 for one share in the equity to the property held by the said trustees of the said Standard Oil Trust, and that each of said certificates was issued to L. B. Mallaby, and has been duly transferred by him to me, said original certificates and transfers being herewith exhibited to you. I hereby offer to surrender to you said certificates on receiving the new certificate hereinafter referred to, and do demand that you forthwith transfer said six shares to me on the books of said trustees of the Standard Oil Trust, and issue to me a new certificate therefor in my name.
    “ George Rice.
    “Dated New York, January 20, 1888.”
    The transfer to the plaintiff on the books was refused, and this action followed.
    Further facts appear in opinion.

      Edward T. Bartlett, for app’lt; Joseph H. Choate, for resp’ts.

       Reversing 31 St. Rep., 760.

   Bradley, J.

—The defense is founded upon the propositions, (1) that the plaintiff failed to prove that he was a beneficiary under the Standard Oil Trust agreement, or entitled to become such by means of transfer upon the books of the shares represented by the certificates held by him, and (2) that he is not seeking such relation in good faith, but for purposes hostile to the trust, and for that reason is not entitled to the aid of the equitable powers of the court in that behalf.

The Standard Oil Trust represents a voluntary association. It was created by agreement of the stockholders of various corporations and others engaged or interested in a certain enterprise, and the several branches of business connected with and incidental to it. The effect of its creation is the concentration of supervisory power in nine trustees whose certificates of the trust are taken in place of the stock and bonds of the several corporations. The characteristic feature of it is in the voluntary surrender of the control and management of the business of those corporations and in the fact that for its continuance it has the capacity of succession.

The agreement constituted not a partnership, but a trust in behalf of the beneficiaries. And while it is not a corporation, it by the agreement took some of the attributes of a corporation in so far that through its trustees certificates of shares in the equity to the property held by them were issued and were transferable-in like manner apparently as are those of corporations. They are transferable on the books of the trustees, and until that is done it is said that the holder is not a beneficiary of the trust.. And it, is further urged that it does not appear that the plaintiff is entitled to that relation because the right to transfer upon the books-depends upon the provisions of the agreement and by-laws, and compliance with them in that respect, and as they were not put, in evidence, the conditions requisite for the purpose do not appear. It is true that the burden was with the plaintiff to show that he was entitled within the meaning of the agreement and bylaws to the relation of a transferee or beneficiary, and to have it perfected by transfer on the books. The fact that the shares were transferable, and were for sale in the open market, enabled the-plaintiff to become the holder of those he did purchase. It may be observed that by the terms of the certificates the shares appear to have been “ issued upon condition that the holder, or any transferee thereof, shall be subject to all the provisions of the agreement creating said trust and of the by-laws adopted in pursuance of said agreement as fully as if he had signed the said agreement.” This relation of holder was given the plaintiff when he became such by taking the transfer from Mallaby. It is said that this does not constitute him a transferee, and that transfer on the books was essential to that relation, and to make - him a beneficiary. By the terms of the certificate the holder and transferee are alike subject to the provisions of the agreement upon which the trust is founded. But to give him the character of transferee for the purposes of recognition by the trust, the transfer on the books is requisite inasmuch -as the shares are-transferable only upon them. This is for the benefit and protection of the trust. Bank of Utica v. Smalley, 2 Cow., 770. The-holder, as between him and his assignor, having the title, would seem in some , sense to be a beneficiary of the trust since he is-subject to all the provisions of the agreement on which it' is founded and its by-laws.

The allegations in the complaint of what purport to be the nature, pxirpose and effect of the agreement, are by the defendants’ answer admitted. The fact thus appears that the shares are transferable on the boobs of the trustees. From that arises the-inference that the conditions were applicable alike to all purchasers and holders. And this quality of the shares is recognized by the terms of the certificate and of the blank endorsement for transfer upon the back of and accompanying it, in which when filled out appears the name of the person designated by the transferor as his attorney to make the necessary transfer upon the books of- the trust in accordance with the regulations thereof and upon the conditions expressed in the certificate. Those conditions are that the transferee shall be subject to all the provisions of the agreements creating the trust and of the by-laws adopted pursuant to it. The quality of transferability given to the shares would seem to import the right to make it effectual by transfer on the books, as that is treated as essential to accomplish it. And when the plaintiff applied to have it done it may, in view of what appears in the endorsement upon the certificate as well as in it, be assumed that he sought to have the transfer made to him upon the books of .the trust “ in accordance with the regulations thereof,” and upon the conditions in the certificate. They seem to relate to the manner and effect of doing it, and not to the right to have it done. And therefore when the'essential fact of the transferability of the shares and the general nature and purpose of the trust as created by the agreement were made to appear, as they did by the admitted allegations of the complaint, there was nothing wanting in the evidence to establish the right of a holder of shares to effectually become a transferee. And it cannot be presumed that there were in the agreement any negative provisions qualifying such apparent right. If there were any such it was for the defendants to make it appear.

In Burrall v. Bushwick R. R. Co., 75 N. Y., 211, the question arose upon demurrer to the complaint, which did not allege any facts tending to show that transfer of shares of stock on the books of the company was requisite to perfect it; and it was held that if it was not, no transfer upon them was necessary for such purpose. Defendants here claim that the holder of the shares in the trust is not entitled to recognition as such or as transferee until transfer is made on their books, and accordingly it appears that they declined to treat him as a beneficiary for the purpose of- receiving dividends upon the shares he had purchased, but paid them to Mallaby who was named in the certificate as such, and as the consequence the plaintiff was not permitted to take any dividends upon or- rights as holder of the shares otherwise than through him.

The denial of the right to transfer upon the books is not consistent with the transferable quality of the shares, which imports that the purchaser taking an assignment of them in a duly formal manner has the right to become a transferee within the meaning of the agreement upon which the trust was founded. And it is difficult to see any substantial distinction in that respect between a holder of such shares and of those of a corporation which are transferable only upon its books. In such case it is within the equitable power of the court to compel such transfer to be made. Cushman v. Thayer Mfg. Co., 76 N. Y., 365. And unless some further reason appears for the denial of such right, the plaintiff was entitled to such relief in this action.

It is evident from what appears that the ground of the refusal of the defendants to grant the plaintiff’s request to make the transfer on the books was personal to him. And they, amongst other matters, by their answer charge in effect that the plaintiff as competitor of the companies whose stock is held by the defendants in trust, in the business of manufacturing and dealing in oil products, is hostile to them, and that his demand for transfer of his shares on the books of the defendants is not in good faith, but that he seeks it to vex and harrass them. Upon that subject the trial court found that since in 1876 the plaintiff has been a competitor and rival of the constituent corporations of the Standard Oil Trust, and since its creation he has been such of the trust in the business of oil refining and has maintained a hostile attitude and been engaged in hostile transactions and proceedings towards those companies, the trust and the defendants as trustees, that he believes an oil trust ought not to exist, and is opposed generally to trusts of that character, and that since ■that time to the commencement of this action he has been prosecuting or aiding in prosecuting litigations and proceedings in in courts as well as before the interstate commerce commission and before an investigating committee in congress directed mainly and in effect against such corporations or the trust for the purposes of securing from the railroads what he considered equal rates with those corporations and such trust for carrying his products.

The court also found that the plaintiff “having for ten or more years been engaged in the oil refining business at Marietta, Ohio, had suffered from discrimination in freight rates for the transportation of oil by various railroad companies against him and in favor of his competitors in the trade; that the litigations instituted by him before the interstate commerce commission against a number of railroad companies were conducted by the plaintiff in good faith and for his protection from unjust discrimination against him on freight charges by them in such transporation; and that in quo warranta suits of the state of Ohio against certain named railroad companies it was found as a fact and determined by the referee in each of them that a discrimination in freight rates for transportation of oil existed greatly to the injury of the business of the plaintiff in this action; and that his connection with those suits “ was in good faith, wholly justifiable and in the protection of his legal rights.” The facts so found by the court in the present action had the support of evidence. And it also appears that the plaintiff proposed and offered to sell his oil property and works to the defendants for a sum greatly in.excess of their value, and that in December prior to the creation of the trust be published a severe pamphlet against the Standard Oil Company, which became one of the constitutent companies of the trust. In this publication he manifested his hostility to that company for reasons, as expressed in it, having relation to its rival business methods which he charged were conducted in a manner and with a purpose to injure and oppress him in his business of like character. In view of all these facts it is urged by the defendants that the motives of the plaintiff in seeking to become a recognized member of the association and beneficiary of the trust, were such as to justify the refusal to permit him by transfer of his shares on its books to take such relation to it. The question of motive of the plaintiff so far as it had any essential bearing in the case was one of fact. And upon that subject the plaintiff testified that he had no hostile purpose in purchasing the shares and in seeking a transfer of them on the books, but that it was his “ idea, if possible, to become a record stockholder in order to enjoy the ordinary legal rights of a stockholder.”

And the trial court determined that there was nothing in the relations of the plaintiff to the defendants and the trust that should prevent such transfer on the books of the defendants. The plaintiff purchased the shares in the trust with his own money; .and he represents no interests or purposes other than his own in this action. His claim is founded upon a right of property lawfully acquired. He, as holder, became subject to the agreement by which the trust was created and its by-laws, and if the transfer to him is perfected he will necessarily continue in such relation of subjection to them. When no discretionary power is reserved to that effect there is not, nor .should be any rule of law which will enable a corporation or company whose stock is on sale in the open market to so discriminate between bona fide purchasers who invest money in it for their own benefit as to deny to some of them the right to make their title effectual for recognition by the company in the manner provided by it for that purpose. The perfection in such case oí the transfer is one of apparent right incident to the purchase and which the holder who thus acquires the stock in the market is permitted to assume will be effectuated. Weston’s case, L. R., 4 Ch. App., 20.

A'discretion in that respect when given or reserved by the articles under or pursuant to which the company is organized, or in any manner requisite to vest the power in those charged with its executive duties, may be effectually exercised. In re Stranton Iron & Steel Co., L. R., 16 Eq., 559; 7 Moak, 581; Moffatt v. Farquhar, 7 Ch. Div., 591: 23 Moak, 731.

In the present case no such discretionary powers seem to have been vested in the trustees. And the purchase of the stock was open to the plaintiff and fairly made by him. Attached to it was the quality of transferability, and with it was presumptively the right of the beneficial bolder to have recognition as such by means of transfer to him on the books of the trust. And this was essential to the protection of his rights derivable from the title. The remedy sought by the plaintiff is within the equitable powers of the court, and is founded upon an indubitable title, as between him and his vendor, and a right in property. In such case it is difficult to see that motive legitimately becomes a subject of consideration unless the relief in view may for that reason result unjustly to others in whose behalf it is resisted, or to the prejudice of their legal rights. Bloxam v. Metropolitan Ry. Co., 3 Ch. App., 337; Ramsey v. Gould, 57 Barb., 398, and cases there cited. And how that could be the consequence is not evident. The transfer on the books to the plaintiff does not change the identity of the shares, but merely substitutes for one another beneficiary; and the latter is subject to the trust agreement and by-laws.

It is true that equitable considerations not recognized in courts •of law may control results in courts of equity. And while the granting of relief there is in some sense matter of discretion, it is not an arbitrary or capricious, but a sound judicial discretion controlled by established principles in equity and exercised in view of the circumstances in each case. 3 Pom. Eq. Jur., § 1404. The party seeking relief must come into court with clean hands, as such maxim is understood in its application to that relation. If, for instance, he appears' there under false colors his complaint may for that reason be dismissed. Such was the case of Forrest v. The Manchester, etc., Ry. Co., 4 DeG., F. & J., 126. There a party filed his bill in behalf of himself and all other shareholders of the defendant company to restrain it from running its vessels, etc. It appeared at the trial that he was also a shareholder in a rival company; that by its direction he instituted the suit and by it was indemnified against costs. The bill was dismissed. And on review the lord chancellor, in holding that the bill was an imposition on the court and sustaining its dismissal, said, “ it is not that they persuaded him to institute the suit, nor that they instigated the suit, but that the directors of the other company have directed the suit and are to indemnify the plaintiff against the costs of it. To use a familiar expression the plaintiff is the puppet of that company.” And he added, “I have nothing to do with the motives of plaintiffs suing in this court If they come here in a bona fide character, the reason for their coming here is a matter beyond the province of a court of justice to inquire into.” In the present case the plaintiff’s claim to relief is founded upon his own title to the shares in question, and the action was instituted and prosecuted solely for his own benefit. The relief by way of transfer of his stock upon the books of the trust is not of itself unconscionable. Hor is it seen how it can be prejudicial to any legal rights of the defendants or any other beneficiary.

It is not so much to the perfected title in the plaintiff of the shares that the defendants object as it is to the relation which he will as the consequence of the transfer on the books take to the trust Hor so much to relief in his behalf as in the alleged appre- ■ hension of consequences which may follow its execution. And those are dependent upon the manner he may conduct himself in that relation, whether offensively or otherwise. Whether the plaintiff would seek to do anything other than that which legitimately pertained to the rights of a stockholder is entirely speculative ; and it is not seen that anything more than that could be accomplished by him in such relation. The objection before mentioned might be made against any holder of stock, and the reason for its support would be one of degree. It has no relation to the plaintiff’s legal right founded upon his title; but the court is called upon to make inquiry beyond that and into his motives or purposes by which his conduct and actions towards the trust may 'be influenced if he becomes its recognized beneficiary. As said by a learned text writer: “ When a court of equity is appealed to for relief it will not go outside of the subject matter of the controversy, and make its interference to depend upon the character and conduct of the moving party in no way affecting the equitable right which he asserts against the defendant, or the relief which he demands,” 1 Pom. Eq. Jur., § 399. Assuming that there may be reasons for denial of relief in an action within equitable jurisdiction there sought, and founded upon unquestionable title fairly obtained, they must be such as to make it appear that the relief may result oppressively or to the undue prejudice of the defendant.

In the case at bar the plaintiff’s title to the stock derived from his purchase is not challenged by the evidence, but the ground of the defense is in the standing of the plaintiff in his relation to the trust of which the defendants are trustees. And this is based upon the fact that his was an attitude of hostility to the Standard Oil Company, and after its creation to the Standard Oil Trust, arising out of rivalry in business. This may be a reason for making his recognition as a beneficiary undesirable. But while there may be an inherent power or discretion in the trustees of a 'corporation or company when its due protection requires or justifies it to decline to perfect title to stock by transfer on the books, it cannot be supposed, unless the power is duly reserved to or conferred upon them, that they are for that purpose permitted to discriminate between Iona fide purchasers, who are owners and holders of its stock by assignment duly and in due form made to support application for such transfer. And in view of the facts found by the trial court and the preponderance of evidence, as we view it, there seems to be no sufficient reason founded upon the plaintiff’s relations to the defendants or to the trust, or otherwise, to fairly justify a denial to him of the rights of any holder in good faith of the stock of the trust.

The suggestion that the plaintiff should not have equitable relief because he has an adequate remedy at law for damages requires no consideration, as that question does not appear to have been specifically raised upon the trial or for determination of the trial court.

And in view of the fact that the shares of the trust were unqualifiedly transferable, there seems, for the purposes of the relief, to be no practical or substantial reason to distinguish between them and those of a corporation. There are no exceptions requiring special consideration. These views lead to the conclusion that the order of the general term should be reversed and the judgment entered on the decision of the special term affirmed.

All concur.


source: Caselaw Access Project

author: Vann, J.

license: Public Domain

text:
    The Greenwood Lake & Port Jervis Railroad Co., App’lt, v. The New York & Greenwood Lake Railroad Co., Resp’t.

      (Court of Appeals, Second Division,

      Filed October 1, 1891.)

    Basement—License.
    A strip of land in the “Storms Tract” was conveyed in 1877 to “Michael A. Myers,trustee,” and subsequenty deeded to “Henry A.Thorpe, trustee,” and then to Traphagen, and subsequently through mesne conveyances in form absolute to the plaintiff. The original owners in 1877 conveyed to the Greenwood Lake Ice Co. fifteen acres of the Storms Tract subject to the deed theretofore “ given for a right of way through said premises, seventy-five feet in width, for railroad purposes,” and the grantee built an ice house on its land and a railroad track was laid on said strip. In 1878 Traphagen granted a right of way over the strip to the ice company for its ice business, and in 1880 the latter conveyed all its said property including its rights from Traphagen to U. and H., who have ever since conducted an ice business on the fifteen acres. Held, that the grant from Traphagen to the ice company was an easement and not a license and was not revocable by plaintiff.
    Appeal from a judgment of the general term of the supreme court in the second judicial department, affirming a judgment entered upon the decision of the court at circuit after a trial without a jury.
    This was an action to recover damages for a series of trespasses alleged to have been committed by the defendant upon part of a strip of land 3920 feet long and seventy-five feet wide, known as a part of the Storms Tract, situate in Orange county on the west side of Greenwood Lake.
    Prior to March 17,1877, the Storms Tract belonged to Weston & Burt, who on that day conveyed the strip in question, “ to be used only for railroad purposes,” to one Michael A Myers, Trustee. who on the 22d of December following conveyed the same to “ Henry H. Thorpe, Trustee,” and five days later Thorpe conveyed to William C. Traphagen. Hone of the deeds to or from said persons described as trustees disclosed any beneficiary of a trust, or contained any limitation upon the power to convey. May 3, 1886, said Traphagen conveyed the strip to William O. McDowell, who on the 10th of September following conveyed to the Hew England, Hew York & Pennsylvania Eailroad Company and May 21, 1888, said railroad company conveyed to the plaintiff.
    March 20, 1877, said Weston & Burt conveyed to the Greenwood Lake Ice Company fifteen acres of the Storms Tract, situate on the easterly side of the lake, subject, however, to the deed theretofore “ given for a right of way through said premises, seventy-five feet in width, for railroad purposes.” During the same year the ice company built' an ice house on its said land and a railroad track was laid on said strip. April 11, 1878, said Traphagen granted to the Greenwood Lake Ice Company a right of way over said strip for the purpose of its ice business, and on the 18th of July, 1880, the ice company conveyed all its said property, including its rights under the grant from Traphagen, to Cooper & Hewett, who have ever since conducted an ice business upon the said fifteen acres. The defendant transported ice and supplies for Cooper & Hewett over the railroad track on said strip; changed the location, curvature and grade of the track somewhat in order to improve it, and to some extent used said track for purposes not connected with the ice business of Cooper & Hewett.
    The plaintiff, claiming that the grant from Traphagen to the ice company was a license, revocable at pleasure, assumed to revoke the same. This action was brought mainly to recover damages for entering upon said strip and changing and using the track after such attempted revocation.

      The plaintiff sought to recover for the alleged wrongful use of the land during the period of its own ownership and also during, that of its three immediate predecessors in title, who had assigned their rights to it.
    The trial court dismissed the complaint upon the ground, among others, that the grant from Traphagen to the ice company was irrevocable, and the general term affirmed upon the same-grounds, one of the judges dissenting.
    Further facts appear in the opinion. .

      Charles S. Noyes, for app’lt; Lewis E. Carr, for resp’t.

       Affirming 28 St. Rep., 739.

   Vann, J.

-—The only evidence tending to show that either Myers or Thorpe was a “ trustee ” was the addition of that word to their names, respectively, in designating them as the respective grantees in the conveyances of March 17 and December 22, 1877. As there was no declaration of trust and no deed to either “ as trustee,” the addition to the name of the party of the second part, in the absence of other evidence, might be regarded as merely descriptio personce. Towar v. Hale, 46 Barb., 364; People v. Board of Stock Brokers, 49 Hun, 349; 17 St. Rep., 584; affirmed, 112 N. Y., 670; 20 St. Rep., 979. But if either was a trustee, the conveyance to him “ and to his successors and assigns forever ” was absolute, with no limitation upon his power to convey, and no disclosure of the nature or object of the trust. While he-might be required to account for the proceeds in a proper proceeding, and upon adequate proof, his grantees took a good title, which neither party to this action can question, as both claim under it. Mr. Traphagen, therefore, took the entire estate, and during his ownership he granted a certain right in the land under consideration to the Greenwood Lake Ice Company. The nature of that right is the main question to be determined • upon this appeal. The instrument by which the right was created was under the hand and seal of Mr. Traphagen, and, after reciting his ownership of the strip of land in question, it proceeded as follows : “ And whereas the Greenwood Lake Ice Company desire to use said property as a way of ingress, egress and regress for themselves, their agents, servants and laborers over and upon which they may pass and repass railroad cars containing ice and materials for use in said ice business, now, therefore, in consideration of one dollar to me in hand paid, I do hereby grant to the said ice company, and to their assigns and successors in said ice business, the right to use said property for the purpose of a way of ingress, egress and regress over and upon which they may pass and repass railroad cars containing ice and materials, said supplies for use in said ice business, together with themselves, their employees and servants,' but it is expressly understood that this license to use said railroad is not an exclusive right to the said company. And it is further agreed that the right hereby conveyed is not to be assigned by the said company except to the successors in and assigns of said ice business, and'only for the purpose of said business.”

It is contended by the plaintiff that this was a license, revocable at the will of the grantor, or his assigns, and by the defendant that it was an easement, irrevocable without the consent of both parties or their successors and that it ran with the adjoining land of the grantee, upon which its ice business was conducted, and for the benefit of which the grant was made. While the instrument creating the right is termed in the body thereof a license to use said railroad,” this is not conclusive for the court must look at the nature of the right rather'than to the name that the parties gave it, in order to learn its true character.

An easement is a right without profit, created by grant or prescription, which the owner of one estate may exercise in or over the estate of another for the benefit of the former. Washburn Easem., 2; Goddard Easem., 2; 3 Kent’s Com., 452; Nellis v. Munson, 108 N. Y., 453; 13 St. Rep., 825; Pierce v. Keator, 70 N. Y., 419, 421; Hills v. Miller, 3 Paige, 254, 257; Ritger v. Parker, 8 Cush., 147; Morrison v. Marquardt, 24 Iowa., 35; Big Mountain Imp. Co.’s Appeal, 54 Penn. St., 361; Hewlins v. Shippam, 5 Barn. & C., 221; Rowbotham v. Wilson, 8 Ellis & B., 123.

A license is a personal, revocable and non-assignable privilege, conferred either by writing or paroi, to do one or more acts upon land without possessing any interest therein. Wiseman v. Lucksinger, 84 N. Y., 31; Mendenhall v. Klinck, 51 id., 246; Pierrepont v. Barnard, 6 id., 279, 286; Jackson v. Babcock, 4 Johns., 418; Mumford v. Whitney, 15 Wend., 380; Cook v. Stearns, 11 Mass., 533; Prince v. Case, 10 Conn., 375; Washburn Easem., 6, 7; Goddard Easem., 3; 18 Am. & Eng. Encyc., 539.

Although originally revocable at the will of the licensor, it may become irrevocable through the expenditure of money by the licensee. Wiseman v. Lucksinger, 84 N. Y., 31, 41; Dempsey v. Kipp, 61 id., 462; Pierrepont v. Barnard, 6 id., 279; Risien v. Brown, 10 S. W. Rep., 661; Rogers v. Cox, 96 Ind., 157; Russell v. Hubbard, 59 Ill., 335; Morse v. Copeland, 2 Gray, 302; Drake v. Wells, 11 Allen, 141.

The right in question was created by deed, and is made assignable, because it runs to the “ Ice Company and to their assigns and successors,” with a limitation upon the power of assignment, restricting it “ to the successors in and assigns of said ice business.” It was without profit, as nothing was to be taken from the land of the grantor. It was not personal, because succession in title was provided for. Its nature indicates that the parties intended it to be a permanent interest in the land of the grantor, for it was a right of way over a railroad for the purpose of enabling a corporation to carry oh a business requiring transportation upon an extensive scale. The business was of such a character that a revocable right might result in irreparable injury to the grantee. The express mention of successors and assigns of the business shows that the parties had in contemplation something more than a temporary expedient or a merely revocable user. Moreover, the right of way was the only means of communication by land with the railroad upon which the ice company depended for the transportation of its ice to market and of supplies to its ice house. The track was laid upon the strip of land leading to the railroad, the right to use it granted and the-ice house built, all at about the same time, and apparently for-the same purpose, as there was no other use for the track. While it is true that no dominant estate is expressly named in the grant, yet one in fact existed and was named by implication. The-grant was to an ice company, for use in its ice business of the-right to use a railroad track for the purpose of ingress and egress. Ingress to what and egress from what ? Obviously, the adjoining land on which the ice company had constructed an ice-house and was conducting its ice business at the date of the grant and to which it acquired title only three days after the original conveyance of the strip of land in question. All of the deeds-were on record, and the creator of the right under consideration expressly mentions the ice business five times in the instrument, creating it, thus showing that he knew of its existence and contracted with reference to it as it was then conducted.

The sole object of the grant was to benefit the ice business by giving it a right of way from its ice house to the railroad, and by necessary implication from the language used under the circumstances surrounding the grantor when he used it the term “ ice business ” was intended to designate the land where that business-was carried on, as the land to be benefited by the grant. That, land, therefore, was designed to he, and is indirectly referred to, as the dominant estate, or that to which the right belongs, whil& the servient estate, or that upon which the burden rests, is directly-mentioned.

We think that the grant from Mr. Traphagen to the ice company, when construed with reference to what the parties bad in contemplation, satisfies every element in the definition of an easement and conflicts with nearly every element in the definition of a- license.

After examining all of the exceptions to which our attention, has been called we find nothing that should reverse the judgment, which should, therefore, be affirmed, with costs.

All concur.


author: Martin, J.

text:
    Herman F. Inderlied et al., App’lts, v. Nicholas Whaley, Resp’t.

      (Supreme Court, General Term, Fourth Department,

      Filed September 30, 1892.)

      1. Trespass—Title sufficient to maintain action.
    In an action for trespass in removing and converting personal property, it appeared that plaintiffs contracted to purchase a lot of land and to go-into possession at once, with a reservation to the first party of all timber standing on the land which he could remove within four years, and the right to go upon the land and cut and remove the same, and also the use of certain buildings and of their removal at the expiration of the four years, at which time all timber cut and not removed was to become the-plaintiffs’ property. Field, that plaintiffs had such a special property in and right of possession of the lumber not removed at the time set as to-enable them to maintain the action.

      2. Same—Estoppel.
    In such action it appeared that the four years ended January 13th, and' that on January 12th plaintiffs, supposing it to be the last day, forbade defendant from going upon the land and removing the lumber cut and then remaining on it. Held, that the assertion of their supposed rights by plaintiffs did not estop them from afterwards claiming the timber which remained.
    Appeal from a judgment entered in Delaware county on the decision of the judge, on a trial without a jury, a jury having been duly waived by the parties.
    In March, 1881, Dwight F. Morss was the owner of about 900 acres of land situated in the town of Tompkins, Delaware county, N. Y. On the 29th of that month he entered into a contract in writing and under seal with one Chace, whereby he agreed to peel all the hemlock bark on said premises and to deliver the same on the cars at Eock Eift station, for which Morss was to pay three dollars per ton. Chace also agreed to cut and manufacture all the hemlock, bass-wood and chestnut timber on the premises into lumber and deliver the same on the cars at the same station, for which he was to receive six dollars per thousand, and was to cut and manufacture into lumber and load on the cars at the station all the birch, ash and cherry timber thereon for seven dollars a thousand.
    On November 18, 1881, while the contract between Morss and Chace was still in force, the plaintiffs, one Shufelt and Morss entered into a written contract under seal, wherein it was recited that Morss was the owner of the premises mentioned; that he had entered into a contract with Chace for cutting the timber and peeling the bark thereon; that Chace had erected buildings on the land and was in occupation of part of it in performance of his contract; and that Morss desired to sell and the plaintiffs to purchase the said lands subject to the performance by said Chace of the contract first mentioned and to the rights of Chace in and to his erections thereon.
    The contract then contained an agreement by Morss to sell, and by the plaintiffs and Shufelt to purchase, the premises described, being the nine hundred acres above referred to, “ excepting and reserving unto the first party (Morss) all the hemlock, ash, basswood, cherry and chestnut timber now standing or being on the said land, and reserving also unto first party the right either for himself or his agents to go upon the said land and cut and peel the said timber and remove the said timber and bark therefrom, using such teams, men or machinery as may be necessary therefor, and reserving also unto said Chace the use of the buildings and erections now on said land and of the mill yard and suitable space for piling logs and timber during the carrying out of this contract with said first party, and the right also unto said Chaco at the completion of his said contract to remove from said land all of the erections that may be on said land for the purpose of carrying out his contract with first party, including dwelling house, sheds, barns, saw-mill and mill fixtures.”
    It then provided that the contract with Chace should be modified by excepting therefrom so much “ as provides for the cutting and manufacture of the hard wood on said land, which hard wood, except as above provided, it is intended to convey unto second parties (plaintiffs and Shufelt.) ” It also provided that the plaintiffs and Shufelt should pay therefor four thousand dollars, eight hundred dollars of which was to be paid on the delivery of the contract, and the remainder in six equal annual payments from date, with interest annually on all sums unpaid, payable at the time of each annual payment At the time of the last payment Morss was to execute to plaintiffs and Shufelt a deed with covenants against all acts on his part. The contract provided in express-terms that the plaintiffs and Shufelt were to have the immediate possession of the premises, the contract, however, not to take effect or be operative unless Chace consented to modify his contract to- conform to that contract, and to continue his contract as-modified. Then followed this provision : “ It is further agreed that said first party or said Chace shall have the period of four years in which to cut and remove the timber herein reserved, at-the end of which time said reservation of timber shall cease to be-operative. It is also agreed that said Chace shall have the right, to continue all erections on said land made by him and to enjoy the use of the mill yard, piling ground, and garden and yard - adjoining said dwelling house so long as he shall use the mill for saw-mill purposes and shall then have the right to remove said erections from said land, it being expressly understood that said erections are not and shall not become fixtures on said land.’” Subsequently Chace agreed to modify his contract with Morss sons to make it correspond with the contract between h'im (Morss)* and the plaintiffs and Shufelt, and agreed to carry out and continue the performance of the contract as modified
    On January 13, 1882, Chace having previously consented in writing to modify his contract with Morss to conform with the-contract between Morss and plaintiffs and Shufelt, the plaintiffs paid Morss $800, whereupon the following paper was made and signed by Morss:
    “ Syracuse, Jan. 13, 1882.
    “ Rec’d on contract between D. F. Morss and H. F. Inderlied &» Co., the sum of eight hundred dollars, being first payment on said contract, the said Inderlieds and Shufelt, however, to pay whatever tax has been levied on the land mentioned in the contract, since Fovember 18, 1881, and the contract is this day delivered to and accepted by the parties thereto with the above understanding. ” To this was added the following: “ The above receipt, witnessed and agreed to at above date,” which was signed by the-plaintiffs and Shufelt.
    On the trial the court in substance found that, on January 13, 1882, when the agreement between the plaintiffs and Shufelt and Morss was finally executed and delivered, Chace was and had for some time been in possession of the mill, mill yard and piling ground reserved in that contract; that in October, 1884, Chacesurrendered his contract with Morss to the defendant, who was-acting for Morss, and surrendered to him the possession of the mill, mill yard and piling ground, consented that he might use and occupy the same as he (Chace) had previously, and defendant used and occupied them, to and after April 12, 1886'; that on January 12, 1886, there was a quantity of hemlock lumber, telegraph poles, railroad ties and fence posts on the mill yard that the-defendant had caused, to be cut on the premises and manufactured and stored there; that at the same time there were 14,000 feet of basswood lumber and 1,500 feet of hemlock logs on said premises outside of the mill yard and piling ground; that at about four o’clock P. M., on January 12, 1886, the plaintiffs forbade the defendant and persons in his employ from removing such logs or timber as were outside of the mill yard or to interfere with them in any manner whatever; that the plaintiffs’ forbidding the removal of the same deterred persons then employed by the defendant from continuing their work upon the premises, by reason of which the defendant was unable to remove such timber and logs to the mill yard or piling ground, as he had intended and might-have done before the end of January 13, 1886, if he had not been, forbidden ; that the premises were fully paid for before April 10, 1888 (the last payment was made January 24, 1888); and on that day (April 10th) a deed of the premises was duly executed and delivered to the plaintiffs; and that the defendant, between January 12,1886, and March 24,1887, removed the most of the timber and lumber mentioned as on the mill yard and piling ground, and the 14,000 feet of basswood and 1,500 feet of hemlock on the premises outside.
    As conclusions- of law the court in substance held: 1. That the defendant had a right to occupy the mill yard and piling ground for storage, and was not liable for removing timber or lumber therefrom. 2. That by reason of the plaintiffs’ having forbidden the defendant from moving the timber and logs outside of the mill yard and piling ground, and thus prevented him from completing his work within the time specified in the contract, they were estopped from recovering in this action for the removal of such logs after the time mentioned in the agreement. 3. That the plaintiffs had no title to the timber and lumber in question. 4. That the contract was executory and the title to the premises and timber thereon and severed therefrom was in Morss, and after his decease in his executors, and such title did not become vested in the plaintiffs. 5. That the action being-for the conversion of the property in question, the plaintiffs could only recover by showing title in themselves, which they failed to-do. 6. That the action could not be maintained and the complaint should be dismissed, and ■ judgment was directed accordingly.

      Marvins & Hanford, for app’lts; W. H. Johnson, for resp’t.
   Martin, J.

—This action was for trespass in removing and converting personal property, consisting of lumber, telegraph poles, railroad ties and fence posts. No other cause of action was set-forth in the complaint. The main controversy between the parties was, whether the plaintiffs had sufficient interest in the property in question to enable them to maintain the action.

By virtue of their contract with Morss the plaintiffs became-the equitable owners of the land described therein, together with all the timber and trees growing thereon, except so far as the same was therein reserved and excepted. Moore v. Burrows, 34 Barb., 173; Adams v. Green, id., 176; Hathaway v. Payne, 34 N.Y., 103.

The exception contained in the contract reserved to Morss, his agents or Chace only such timber as was cut and removed within four years. If any was not removed within that time, although cut, it did not fall within the exception, and the equitable title with the absolute right of possession passed to the plaintiffs. McIntyre v. Barnard, 1 Sand. Ch., 52; Boisaubin v. Reed, 2 Keyes, 323; Kellam v. McKinstry, 69 N. Y., 264; Lacustrine Fer. Co. v. L. G. & Fer. Co., 82 id., 476.

If it be admitted that Morss had title to the lumber and timber which had been cut and removed to the mill yard and piling ground, it by no means follows that he had the right to remove the portion left upon other parts of the premises of which the plaintiffs had actual possession, and to all of which they had an equitable title.

When Morss, or those claiming or acting under him, failed to remove the timber cut within the time provided, as we have seen, it passed under the contract to the plaintiffs, who thereupon acquired an equitable title to it with a legal right to its possession, which was expressly given by the contract. Before the trial of this action the plaintiffs’ equitable title had ripened into a legal title. When the action was commenced, the plaintiffs, by virtue of their equitable interest and legal right to the possession of it, had, we think, such a special property in and right of possession of the lumber not removed as would enable them to maintain an action for its conversion against any person wrongfully taking the same, and even against a person holding the naked legal title in trust as security for the payment of the unpaid purchase price of the premises, especially where, as in this case, the whole purchase price had been tendered. 4 Am. & Eng. Enc. of Law., 117; Moak’s Underhill on Torts, 589; Edwards v. Frank, 40 Mich., 616; Hoyt v. Van Alstyne, 15 Barb, 568; Stowell v. Otis, 71 N. Y., 38; Wheeler v. Lawson, 103 id., 40, 45; 2 St. Rep., 791. We, therefore, conclude that the court erred in holding that the plaintiffs had not sufficient title to maintain this action.

But it is contended that the plaintiffs were estopped from insisting upon their right to the timber not removed within the time mentioned in the contract, because the plaintiffs forbade the defendant from removing it on January 12, 1886, when the defendant had all of the 13th day of that month in which to remove it. While the defendant’s claim as to the time within which he might remove it may be correct, Cornell v. Moulton, 3 Den., 12, still, if so, it is difficult to discover any ground upon which the defendant’s claim of estoppel can be upheld.

As to what occurred between the parties, the defendant testified : “ On the 12th day of January, 1886, I remember being forbidden by the plaintiff to go on and do anything further. I was on the track where we run lumber out of the mill; the mill was running at the time; plaintiff wanted to know if I knew our time was out; I told him. I did not; I supposed we had the 13th, on which the contract was signed and delivered. He said, 1 Ho, your time expires to-day.’ ‘Well,’ I said, 1 you will give us the benefit of this evening.' ‘Ho,’he said, ‘your time expires with the setting sun to-day.’ I took out my watch and looked at the time; it was four o’clock, and as soon as he left I made a memorandum of the day and hour; I done some work that evening; cleaned the snow out of the chute; I did nothing on the 13th, as I could not get help; * * * had I not been fprbidden I think I could have got all this lumber into the mill yard by the evening of the 13th of January; think I had or could have got force enough to put them all on.”

As to what occurred upon this occasion there is substantially no dispute. From the evidence it is manifest that the plaintiffs were of the opinion that the time in which the defendant could remove the timber, excepted or reserved in the contract, expired at sundown on January 12, 1886, and that they in substance so informed the defendant, and refused to extend the time to remove it. In this we can find nothing sufficient to establish an estoppel against the plaintiffs. We are aware of no principle or authority which would sustain us in holding that the plaintiffs’ assertion of their supposed rights, at that time and in the manner stated, estopped them from afterwards claiming the timber which had been cut and not removed. We do not think the judgment can be sustained upon that ground.

We are of the opinion that the learned trial judge fell into an error in holding that the plaintiffs had not sufficient property in the lumber cut but not removed to enable them to maintain this action, and in holding that they were estopped from claiming such timber. For these errors we think the judgment should be reversed.

Judgment reversed, and a new trial granted, with costs to abide the event.

Hardin, P. J., and Merwin, J., concur.


text:
    George N. Crounse et al., App’lts, v. Hector B. Johnson, Sheriff, et al., Resp’ts.

      (Supreme Court, General Term, Fourth Department,

      Filed September 30, 1892.)

    1. Chattel mortgage—What not a riling.
    An unsuccessful attempt to file a chattel mortgage when the office of the town clerk is closed in office hours, or depositing a mortgage on the clerk’s desk in the office when no one is present, does not constitute a filing within the requirements of Laws of 1833, chap. 279, § 2.
    2. Judgment—Invalid—Constable protected by regular process.
    Even though a judgment confessed is invalid by reason of the words “ not taken ” being omitted from the affidavit accompanying it, a constable levying on chattels by virtue of an execution regular on its face, issued by a justice upon the judgment, will be protected by the process as against third parties.
    Appeal from two judgments, entered in the office of the clerk of Onondaga county, one on May 22, 1891, in favor of the respondent Johnson, and the other on the 12th day of June, 1891, in favor of the respondent Ylilson, and from an order denying a motion for a new trial, made on the minutes of the trial judge.
    On the trial, at the close of the evidence, the court held, that'so far as the executions in the hands of the respondent Wilson, as constable, were concerned, there was but one question, and that was the amount of his special lien on the property, and that •so far as the respondent Johnson, the sheriff, was concerned, that the only question was as to the value of the property taken by liim. The-case was thereupon submitted to the jury, who found for the defendants.

      J. E. Newell, for app’lts; J. Charles Meldram, for resp’t Johnson; Charles R. Milford, for resp’t Wilson.
   Martin, J.

—This action was replevin. The plaintiffs claim title to and the right of possession of the property in question under and by virtue of a chattel mortgage executed and delivered to them by James Thurlow, Jr. The defendants claim to have a special property in the goods and the right of possession under and by virtue of levies made thereon under executions in their hands against Thurlow. The defendant Johnson was sheriff of Onondaga county and Wilson was a constable of the town of Skaneateles.

On March 10, 1890, to secure the payment of a debt of $400, Thurlow made and delivered to the plaintiffs a chattel mortgage on certain personal property, consisting of goods and fixtures in what was known as the brick store, and also on certain other goods and fixtures in a saloon, both of which were in the village of Mottville. At that time Thurlow resided and the property in question was located in the town of Skaneateles. On March 10th the plaintiffs’ mortgage was sent by mail from Syrabuse to George Barrow, Esq., at Skaneateles, to have it filed in the'office of the town clerk of that town. It was received by Barrow in the forenoon of March 11th. He went to the office of the town clerk at about twelve o’clock M. and about four o’clock P. M., and on both occasions found the office closed. At half-past seven o’clock p. M. he again went to the clerk’s office, found it open, but no one present. He then placed the plaintiffs’ mortgage on a desk in the office of the clerk, with his fees for filing, and left the following memorandum on the face of the paper: “ File for George Barrow.”

There was no evidence that the mortgage came to the notice of the town clerk until the next morning at about eight o'clock, when he took it from his table and marked it as filed at that time. The clerk testified that he first saw the mortgage when it was filed by him.

On the 11th day of March, at three o'clock and forty-five minutes p. 2£., the sheriff, under and by virtue of an execution or executions issued against Thurlow, duly levied upon the goods and fixtures in the brick store, and took possession of them. On the evening of the same day Thurlow confessed judgments to three of his creditors before a justice of the peace of the town of Skaneateles, and executions were issued thereon in due form and delivered to the defendant Wilson, who, by virtue thereof, levied upon and took possession of the goods and fixtures in the saloon.

The most important question in this case relates to the filing of the plaintiffs’ chattel mortgage. That it did not in fact come to the hands of the clerk until after both defendants had made their levies upon the property in question is not denied. If it was not filed until the clerk actually received it, and made the endorsement required, it seems to be conceded by all that the judgments appealed from were proper, unless the judgments confessed and under which the defendant Wilson levied were void. The latter question will be separately considered. Hence, the precise question we are to consider first is whether the attempt of the plaintiffs to have their mortgage filed amounted to a filing within the requirements of the statute. Laws 1833, chap. 279, § 2.

While it has been held that it was not a sufficient filing of a chattel mortgage to deliver it to the town clerk when absent from •his office, although he endorsed the same as filed when he received it, Hathaway v. Howell, 54 N. Y., 97, and that if there be no clerk, or if he be absent, the mortgage may be filed with the person in charge of the office, Bishop v. Cook, 13 Barb., 326; Dodge v. Potter, 18 id., 193, still we have .been cited to no case, and have found none, that would justify us in holding that an unsuccessful attempt to file a chattel mortgage when the office was closed, or depositing a mortgage on the clerk’s table in the office when no one was present, would constitute a filing within the requirements of the statute. The statute requires clerks to file all chattel mortgages that are- presented to them for that purpose, and enter thereon the time of receiving the same, and to deposit them in their office for inspection. To constitute a proper filing requires the act of the clerk or some person in charge of the office. To hold that an unsuccessful attempt to enter the office, or the leaving of a paper therein constitutes a filing, is not we think justified by the statute. A chattel mortgage is filed within the meaning of the statute when it is delivered to, received and kept by the proper officer, or some one in charge of the office, for the purpose of the notice the statute intended should be given. 7 Am. & Eng. Encyc. of Law, 961; Appleton Mill Co. v. Warder, 42 Minn., 117. We think the court properly held that the plaintiffs’ mortgage was not filed until received by the clerk.

This leads us to the consideration of the question of the validity of the judgments confessed, and, if invalid, whether such invalidity affects the parties to this action. The Code of Civil Procedure, § 3011, provides that where a judgment confessed before a justice of the peace is for a sum exceeding fifty dollars, the confession must be accompanied with an affidavit of the defendant and plaintiff that the defendant is honestly and justly indebted to the plaintiff in the sum specified therein over and above all just demands which the defendant has against the plaintiff, and that the confession is not made or taken with intent to defraud any creditor. The affidavits accompanying the confessions involved in this case all omitted the words “ or taken,” so that the affidavits were simply that the confessions were not made with intent to defraud. We are disposed to think the omission may be fatal to the validity of the judgments confessed, except as against a purchaser in good faith of property thereunder and the defendant making the confession. Code, § 3012.

Assuming that the judgments confessed were invalid except as to the defendant and purchasers in good faith, the question as to the effect of such invalidity upon the rights of the parties to this action becomes important It must be remembered that the defendant Wilson, who alone is affected by this question, was a constable, and had levied upon and then held possession of the goods taken by him under and by virtue of executions issued by the justice, which were in all respects regular upon their face.

To sustain his right of possession to the goods taken by him, the defendant Wilson invokes the rule that ministerial officers are protected in the execution of process regular upon its face issued by a court or officer having general jurisdiction of the subject matter, or jurisdiction to issue it under special circumstances, although in fact jurisdiction of the person or subject matter did not exist. Woolsey v. Morris, 96 N. Y., 311, 315; Bodine v. Thurwachter, 34 Hun, 6; Livingston v. Miller, 48 id., 232; 16 St. Rep., 71.

The foregoing rule seems to be well settled in this state, and is, we think, applicable to this case. Hence, it follows that the defendant Wilson was entitled to the possession of the property in question as.against the plaintiffs, and the court properly disposed of the case at the trial.

If these views are correct, the judgments and order appealed from should be affirmed. Judgments and order affirmed, with costs.

Hardin, P. J., and Merwin, J., concur.


text:
    Thomas M. McLoghlin and John J. McLoghlin, Ex’rs, Resp’ts, v. The National Mohawk Valley Bank, App’lt.

      (Supreme Court, General Term, Fourth Department,

      Filed September 30, 1892.)

    1. Banks—Modification ok agbeement as to intebest.
    In 1853, plaintiffs' testator opened an account with defendant, the latter agreeing to pay interest on his account. In 1867, defendant’s officer said to testator: “ We can pay no interest now” and that he must withdraw his money." Two years later defendant’s cashier said to testator: “ We do not pay anybody interest now,” and that if he wanted interest he should take his money to a savings bank. Testator never withdrew his deposit and after his death his executor brought an action to recover the amount with interest. Held, insufficient to show that the agreement to pay interest was either terminated or modified by a subsequent one.
    2. Same.
    Evidence of circumstances which tend to make a proposition at issue between the parties improbable, is admissible to aid the court in correctly determining such issue.
    (Mebwin, J., dissents.)
    Appeal from a judgment entered in Cortland county December 4, 1891, on the report of a referee, for $5,122.04 damages and costs.

      The appellant, a national bank, was duly organized as such April 1, 1865. Prior to its organization as a national bank, and from the year 1852 until it became such, the appellant was a state bank, organized under the laws of the state of New York by the name of “ Mohawk Valley Bank." When the appellant changed its organization from that of a state bank to that of a national bank, it took and succeeded to all the business, property, assets, franchises and good will, and assumed and incurred all the liabilities of the said Mohawk Valley Bank.
    On July 8, 1853, the plaintiff’s testator opened an account with the appellant and became a depositor, depositing with it moneys from that time until about May 25, 1865, and from time to time drew checks, which were paid by the appellant.
    On the 25th of May, 1865, there was a balance due on said account to the testator, amounting to the sum of $2,511.31. Between the opening of said account and the 25th of May, 1865, the appellant and the Mohawk Valley Bank had allowed the testator interest upon his deposit and balance of account, and had at intervals paid' such interest, by entering the amount thereof in said account and giving the testator credit therefor. The testator’s deposits were made with the appellant and its predecessor upon the understanding and agreement that the testator should be paid interest thereon and upon the balance thereof. On the 25th of May, 1865, the appellant’s indebtedness to the testator was an interest-bearing account or indebtedness, bearing interest at the rate of three per cent per annum or upwards, which was payable to the testator upon demand or at the option of the appellant.
    In the year 1867 the testator had an interview with one Burgess, president of the appellant, in the presence of Lowell and Vickerman, who were directors of the appellant. On that occasion the president said to the testator, in substance : You must draw your money. We can pay no interest.’’ To which the testator replied that the bank would be crippled by the defalcation, and they could afford to pay him interest; that it was not necessary for him to have the money. The president answered that it was contrary to the rules of the bank to pay interest; that the bank did not pay interest on deposits, and he must withdraw his money; that they could pay no interest. After this, and about the year 1869, the testator said to the cashier, H. D. Alexander, that he had called there some time ago and talked about his deposits with the old gentleman in the back room, who said that they could not pay interest. Mr. Alexander replied: “ That is so; we do not pay anybody interest now. If you desire to deposit your money where they pay interest, you had better take it to a savings bank.” The testator said he would leave his money there until he could get some other place to put it. Mr. Alexander answered: “All right, you can have your money any time you want it.”
    The appellant never paid, tendered or attempted to pay to the testator, or to any one for him, during his lifetime, the balance of $2,511.31 or the interest thereon, or any part thereof. No contract or agreement was made between the appellant and the plaintiffs’ testator changing the account from an interest-bearing to a non-interest-bearing account or debt, nor was there any agreement by which the appellant wTas released from its obligation to pay interest upon the account. Before this action was commenced the plaintiffs duly demanded the balance of $2,511.31 and interest which had accrued thereon. The appellant offered to pay $2,511.31 in full of its indebtedness, but refused to pay more or to pay or allow any interest upon that sum.
    The foregoing facts were found by the referee, who held that the plaintiffs were entitled to recover the sum of $2,511.31 with $1,988.97 interest and costs, and directed judgment accordingly.

      J. B. Rafter, for app’lt; Wm. P. Goodelle and John Courtney, Jr., for resp’ts.
   Martin, J.

—The principal controversy between the parties related to the interest upon the money deposited with the defendant by plaintiffs’ testator. The referee found that thy money was deposited in pursuance of an agreement or understanding between the plaintiffs’ testator and defendant that interest should be paid on the testator’s account This finding was, we think, justified by the evidence.

The referee also found that there was no subsequent valid agreement changing the testator’s account from an interest bearing to a non-interest bearing account, or releasing the defendant from its obligation to pay interest thereon. A careful examination of the evidence contained in the appeal book has failed to disclose to us any such proof, that the agreement to pay interest was either terminated or modified by a subsequent one, as would justify us in disturbing the finding of the referee. While it may be said that the defendant evinced a desire, and perhaps a determination, to terminate the agreement to pay interest, still, we think the evidence was such as to justify the referee in finding that that desire or determination was never carried into execution, and that the original agreement between the parties continued in full force. We therefore find no error in his conclusion that the plaintiffs were entitled to recover interest on the' testator’s account at the rate allowed.

On the trial the plaintiff claimed and gave evidence which tended to prove that an agreement existed between the testator and defendant by which interest was to be paid on the testator’s account. The defendant, while substantially admitting that such an agreement had previously existed, gave evidence tending to show that that agreement was superseded or terminated by a subsequent agreement or understanding between the parties that no interest was to be paid. In answer to the evidence thus given by the defendant, the referee permitted the plaintiff to prove, by several witnesses, the value of the use of money in the vicinity of defendant’s bank; that the testator had money deposited in several other banks all of which paid interest on such deposits ; and that one of the banks offered him the usual rates (five per cent, when left on deposit three months or longer) for any money he might have to deposit. This evidence was objected to as improper, incompetent and immaterial. When the evidence was offered, the plaintiff stated that it was offered for the sole purpose of establishing that the testator’s account was an interest-bearing: account and rebutting the evidence of defendant’s witnesses as to a subsequent agreement. The objection was overruled, and the defendant excepted. The validity of these rulings is one of the-important questions in this case.

“It is relevant to put in evidence any circumstance which tends;' tp make the proposition at issue either more or less improbable.,p (1 Wharton on Evidence, 21.) In this case the defendant sought to-establish the fact that its agreement to pay interest had been terminated by a subsequent agreement that no interest should be paid. To rebut the evidence of defendant’s witnesses tending to establish that fact, the evidence objected to was admitted. Proof that during the time this deposit was held by the defendant the: value of the use of money was at least equal to that received by the testator under his first agreement, that all of his money was deposited in banks and drawing interest, and that he was offered interest at “ going rates ” on all the money he would deposit in a bank where he resided, tended to show the improbability of the-defendant’s claim that the testator left the money in question on. deposit in its bank for twenty years and more, under an agreement that he should receive no interest therefor.

In Burlew v. Hubbell, (1 T. & C., 235) the defendant, being pressed for money, applied to plaintiffs’ testator for a loan, which was promised if defendant would give a note signed by himself and one E. Afterwards another person brought to testator a note, signed with the names of E and the defendant, and received the money thereon. In an action upon such note defendant denied the execution thereof, and it was held that evidence showing that the defendant about the time he applied for the loan procured) from another source the amount he desired to borrow, was admissible to rebut the presumption arising from the circumstance that, he was pressed for money.

In Hotchkiss v. Germania Fire Ins. Co., (5 Hun, 90), where an-action brought on a policy of insurance was defended on the-ground that insured had set the building on fire, it was held that evidence as to what had been offered for rent for the property was: properly received as tending to show the value of the building,, and that it was greater than the amount insured.

In Pomeroy v. Pierce (5 Hun, 119) the action was for legal services. One B. was the attorney in the suit. It was claimed that plaintiff was employed by B,. with the consent and approval of the defendant This was denied by the defendant, and he offered) on the trial to show an agreement between himself and B., that B. should take charge of the case and conduct it for a sum agreed upon. The evidence was excluded. On appeal, the court held that the evidence was admissible as bearing upon the probability of the employment of the plaintiff by the defendant.

In Nicholls v. Van Valkenburgh (15 Hun, 230), which was an action-on a note made by defendant’s testator, payable to the order of plaintiff’s testator, and the defense was that the note was not used, and was without consideration, it was held that evidence of the financial situation of the parties at the time the note was made, and at its maturity, was admissible to sustain the defendant’s version of the transaction, and to show the improbability of its remaining overdue without a demand for its payment.

In Wallis v. Randall (16 Hun, 33; aff’d 81 N. Y., 164), where the question was, whether a mortgage was transferred as an absolute payment of a debt of that amount, or only as security therefor, it was held that evidence that at the time of the transfer the property covered by the mortgage was worth more than the amount <jtf it and a preceding mortgage thereon was admissible as tending to show that the transfer of the mortgage was intended as a payment.

In Dishno v. Reynolds (17 Hun, 137), an action brought to recover money paid to the defendant, it was held proper to show the payment to the plaintiff of money by a third person, for the purpose of showing that the party had money from which the payment to the defendant might have been made.

In Cornell v. Markham (19 Hun, 275), it was held, that evidence as to the value of services to be rendered was admissible as bearing upon the question whether a certain contract was made. The same was held in Bean v. Carleton (51 Hun, 318; 21 St. Rep., 220).

In Pontius v. The People (21 Hun, 328; aff’d 82 N. Y., 339), where the defendant claimed that two notes were given to. him in consideration of an indebtedness due him for borrowed money-exceeding in amount that of the two notes, it was held that evidence tending to show that the defendant was at that time embarrassed in his pecuniary circumstances and pressed by numerous creditors, whom he was unable to pay, wás admissible as tending to show that he had no money to lend.

In Dryer v. Brown (52 Hun, 321; 23 St. Rep., 695), an action brought to enforce the payment of notes, claimed to have been made by a decedent, against his executors who interposed the defenses of usury and want of consideration, it was held that evidence on the part of the defendants tending to show that the payee of the note, who was alleged in the complaint to have loaned the money constituting the consideration therefor to the decedent, was not possessed of any property or money and had not the pecuniary means to make the loan, was competent.

In Quincey v. White (63 N. Y., 370), which was an action against several persons upon an account arising from stock transactions, claimed by the plaintiff to have been joint transactions on the part of the defendants, but claimed by one of the defendants to have been several, it was held that evidence that that defendant had a pz’ivate account running at the time was competent ns a circumstance tending to show that the other account was joint and not several.

The authorities cited seem to uphold the doctz’ine that evidence of circumstances which tend to make a proposition at issue between the parties improbable is admissible to aid the court in correctly determining such issue.

It must be admitted that the correctness of the rulings under; consideration is not wholly free from doubt, but we think the. principle of the authorities cited justifies us in upholding them.

There are other exceptions taken by the appellant, all of which; we have carefully examined, but have found none that would, justify a reversal or that need be discussed. These considerations-lead to an affirmance of the judgment.

Judgment affirmed, with costs.

Hardin, P. J., concurs; Merwin, J., dissenting.


text:
    The People ex rel. Arvin Rice, Survivor, v. The Board of Auditors of the Town of Hannibal, N. Y.

      (Supreme Court, General Term, Fourth Department,

      Filed September 30, 1892.)

    Certiorari—Final determination oe board of auditors.
    The respondent, a town hoard of auditors, rejected the relator’sclaim of $192 for services as attorney on the ground that it was not itemized, but allowed Mm forty-eight dollars on it and delivered the certificate of such: audited claim to the supervisors. Thereafter relator obtained a writ of certiorari to review the action of the board. Held, that the board’s action was a final determination of the claim on its merits, and having then lost jurisdiction of the matter, the relator could not by certiorari obtain the ' relief sought.
    Certiorari to review the determination of the board of auditors of the town of Hannibal of Oswego county, R Y., upon a claim presented by the relator November 5, 1891.

      Piper & Rice, for relator; D. D. Metcalf, for resp’t.
   Martin, J.

—The relator was the survivor of the firm of Howe & Bice, who were attorneys of this court. They were employed by the supervisor of the town of Hannibal to commence an action in his name, against the board of supervisors and county treasurer of Oswego county, to recover certain taxes which had been collected of the Borne, Watertown & Ogdensburg Bailroad Company, and improperly applied for the use and benefit of the; county. The action was commenced, and by them prosecuted to, judgment, and the plaintiff had a recovery. Similar actions were commenced and prosecuted to judgment by the relator for the towns of Oswego, Hastings and Sandy Creek.

Afterwards, and on the 5th day of November, 1891, the relator, as such survivor, presented to the town auditors of the town of Hannibal a bill of two hundred dollars for the services- and expenses of the firm in conducting that action. Without examination of the relator’s bill or discussion by the board, a, motion was adopted allowing him the full amount On the same day several citizens of the town of Hannibal appeared before, the board of auditors and protested against the auditing and allowing of the relator’s claim, on the grounds: 1. “ That the bill for-services was not itemized. 2. That the bill for services and-expenses were not separated or given in items nor the kind" of services or time spent in such services given.” The bill was then examined by the board and decided not to be in. accordance with the requirements of the statute. The resolution allowing the bill was thereupon, rescinded, and the board adjourned until ¡November 14, 1891, for a rehearing of the relator ■on his claim. The chairman of the board was instructed by it to notify the relator of its action and to request him to itemize his bill. The chairman was also instructed to inquire into the employment of the relator and the facts and circumstances relating to his claim.

On the 14th of ¡November, 1891, the board met pursuant to such adjournment, and its chairman reported that he had notified the relator of the adjournment and requirements in relation to his bill, and that the relator informed him that he would itemize -the bill for the expenses but could not itemize it so far as it related to services. The relator did not appear before the board, hut had a statement presented containing an itemized account of -.the expenses contained in his claim, but not as to the services. His claim for services was stated, “ for services $192.”

The chairman then stated that he had inquired of Eli P. Barrett, the then late supervisor of the town, as to the relator’s employment, or the employment of his firm, and that he was informed by Barrett that no amount of compensation was agreed upon, but that Barrett had been solicited by the relator and by other supervisors to place the matter in the relator’s hands, as the suits of the four different towns could be tried nearly as cheap as one, and it would make it less expensive for each town, and that the relator represented that the suits would not be expensive. The -chairman also stated to the board that he had learned that there was no separate trial for the town of Hannibal, but that the suits by the towns of Hannibal, Oswego, Hastings and Sandy Creek were all tried and disposed of at one time, and the whole trial or hearing occupied less than one day.

At this time several of the citizens of the town of Hannibal again appeared before the board and objected tó the auditing and allowing of the relator’s claim on the grounds : “ 1. The bill for services is not itemized according to law ; 2. There is no length of time given in the bill in which service was performed for the town nor the kind or items of such labor given, and, therefore, there is no evidence before the board of the value of the labor so performed, except the statement in the affidavit of the relator; 3. That the bill is excessive and for a greater sum than the value of .the labor performed.” The board then inquired of ¡N". B. Brower, a counselor of this court, as to the relator’s claim, and Brower informed it that he was familiar with the litigation and suit out of which the relator’s bill arose and explained it to the board at length. He also stated that aside from the expenses and what had been previously paid the relator or his firm, that $192 was a full and fair price ana compensation for the preparation and trial of all four of the suits tried.

A motion was then made that the items of expenses contained in the relator’s bill be allowed at the full amount, which was eight ■dollars, and that the claim for $192 for services be rejected, for the reason that it was not itemized and contained no evidence of value, save the relator’s statement, and was, in the judgment of the board, excessive, but that $48 be audited and allowed to the relator as that town’s share or part of the relator’s compensation for the preparation and trial aforesaid and for said claim. This motion was unanimously adopted, and the fifty-six dollars so andited and allowed .was placed upon the town abstract of accounts allowed against the town, delivered to the supervisor of the town and presented by him to the board of supervisors of Oswego county. The amount thereof was levied upon the town, collected and tendered to the relator, who refused to receive it.

On December 30, 1891, the relator obtained a writ of certiorari to review the action of the board, and asks this court to make a final order modifying the determination of the board by awarding to him the sum of $200 with interest and costs, and directing the same to be levied and collected from the taxable property of the town as other town charges are levied and collected.

The respondent contends that the determination of the board of audit upon the relator’s claim was at most a technical rejection of his claim for the reason that it was not properly itemized, and, therefore, not such a final determination as would prevent a subsequent presentation of his claim for services or would justify the issuing of a writ of certiorari. An examination of the determination made discloses that the board of audit allowed the portion of the relator’s bill or claim that related to the expenses at' the full amount claimed, but rejected the portion of his claim for $192 for services, for the reason that it was not itemized and contained no evidence of value except the relator’s statement,. and was in the judgment of the board excessive. It also con- • tained this further provision: “ But that $48 be audited and allowed to the relator as this town’s share or part of the relator’s compensation for the preparation and trial aforesaid and for said claim.”

That the action of the board was final as to the expenses there can be no doubt; but of its action in that respect no complaint is made. If the rejection of the relator’s claim for services had stood alone upon the ground of the insufficiency of the proof as to its nature, extenfand value, the relator would doubtless have been in a position to have again presented his claim. The board, however, went farther, 'and while it rejected his claim for $192 upon that ground, it allowed him forty-eight dollars on his claim as the town’s share of the relator’s compensation. When we consider the whole determination together, we are disposed to think that the action of the board of audit amounted to a rejection of the relator’s claim except as to forty-eight dollars thereof allowed, and that it constituted a final determination of the matter on its merits.

Assuming that the determination of the auditors was final, the question is presented whether the relator can by certiorari obtain the relief sought, the certificate of audited accounts having been previously delivered to the supervisors. In Osterhoudt v. Rigney, 98 N. Y., 222, Andrews, J., in discussing this question, said: “But not only is the issuing of the writ discretionary, but to be effeetuai it must be prosecuted while the board of audit has jurisdiction of the proceedings. Its jurisdiction of accounts presented for audit terminates with the delivery to the supervisor of the schedule of audited accounts, and after that has been done a certiorari directed to the board would be fruitless. * * * The remedy by certiorari, therefore, must be taken, if at all, before the delivery of the certificate of audited accounts to the supervisor.” See, also, People ex rel. v. Supervisors Queens Co., 82 N. Y., 275; People ex rel. v. Reddy, 43 Barb., 539; People ex rel. v. Supervisors Rensselaer Co., 34 Hun, 266; People v. Tompkins, 40 id., 228. As the certificate of audited accounts was delivered to the supervisor and by him delivered to the board of supervisors of Oswego county before the writ in this case was issued, it would seem to follow that the proceedings herein should be dismissed and the writ quashed.

Moreover, when we examine the merits of this controversy, it appears that the board of- audit, when it examined the relator’s bill, found that his claim for services and expenses was not itemized and contained nothing to show the character of the labor performed, except that it. was performed in the suit mentioned, nor to show the time spent either by his firm or the counsel in the case in the preparation and trial, or the value of the services of either the firm or the counsel. Under these circumstances the board rescinded its former action in allowing the claim, adjourned until November 14th for a rehearing of the relator on his bill, and instructed its chairman to notify the relator of its action and to request him to itemize his bill. Such notice was given. The relator itemized his bill as to the expenses, but not as to the services. He neither attended before the board nor gave any evidence as to the value of the services rendered by him. The board then made inquiries as to the services performed and'their value, and thereupon allowed the relator the full value of the services according to the information received.

If the merits of this controversy were before us, it would be ■difficult to see how, upon the facts as shown by the appeal book, the relator is entitled to the relief sought. The board of auditors seem to have acted in good faith and diligently sought as best they could to inform themselves as to the value of the services rendered, while the relator neglected to furnish the board any ■evidence of the amount of services performed or their value.

We are of the opinion that the writ should be quashed and the proceedings dismissed. Writ quashed and proceedings dismissed, with costs.

Hardin, P. J., and Merwin, J., concur.