text:
    LAURA LE COUTEULX DE CAUMONT, Executrix, etc., of MONTAIGN MORGAN, Deceased, and Others, Appellants, v. STEPHEN G. BOGERT, Executor, etc., of RICHARD J. MORGAN, Deceased, and Others, Respondents.

      Gift of stock in a corporation — what is a sufficient delivery — when a gift to a child is not to he treated as cm advo/ncement.

    Prior to April 16, 1878, one Charles Morgan had transferred certain property to a railroad and steamship company, for which he was entitled to receive its bonds to the amount of $5,000,000 and 50,000 shares of its-stock of the par value of $100 each, but no certificate for such stock had ever been issued and delivered to him. Prior to that time he had announced his intention of distributing nearly all his fortune during his lifetime, and had sent for his counsel, told him that he wished to distribute a majority of the stock of the said company among persons named, and directed him to prepare the necessary instruments. On April fourteenth the testator executed instruments transferring 80,1)00 shares of the said stock to different persons — his widow, some of his children and two sons-in-law — and on April fifteenth the said instruments were duly acknowledged and delivered by him to one of his sons-in-law, with directions to see that the business was all properly perfected, and after so doing he expressed his gratification that the business had been completed. One of the instruments was delivered to the beneficiary named in it, before the testator executed his will; the others were placed by the testator’s wife in a safe in his room.

      Meld, that by the execution and delivery of the instruments the testator transferred his interest in the said shares of stock to, and vested the same in, the beneficiaries therein named.
    April 1(5, 1878, the testator made a will by which he gave, devised and bequeathed all his property, real and personal, “ as provided by the laws of the State of New York in cases of intestacy.”

      jHeld, that the shares so transferred did not form part of the testator’s estate at the time of the execution of the will, and did not pass thereunder.
    That the shares so transferred by the testator were not advancements for which the beneficiaries could be compelled to account upon the distribution of the residue of his estate.
    Appeal from a decree of the surrogate of the county of New York, made upon the final accounting of Mary J. Morgan, as ■executrix of the will of Charles Morgan, deceased.

      John E. Parsons, Charles A. Damson, S. B. Brownell and Charles W. Dayton, for the appellants.

      F. N. Bangs and John Sidney Davenport, for the respondents.
   Daniels, J.:

The appeal has been taken on behalf of grandchildren and great grandchildren of the testator, Charles Morgan, who died on the 8th ■day of May, 1878. It was urged before the surrogate, and has been in like manner upon the hearing of the appeal, that the executrix ■should have been charged in her account with 30,000 shares of the stock of Morgan’s Louisiana and Texas Railroad and Steamship Company. The surrogate rejected this claim, and whether he was right in doing so depends in a large degree, if not wholly, upon the legality of the formal transfers of these shares to his widow, two of his children and one of his grandchildren. The will was executed on the 16th of April, 1878, and what was done to vest these shares in the persons found to be their owners by the surrogate, preceded that time. The testator liad previously transferred the property, acquired by him, to the railroad and steamship company, for which lie was entitled to receive $5,000,000 in its bonds and 50,000 shares of its stock of $100 each, amounting nominally to $5,000,000 more. Sixty shares were distributed to other persons to qualify them to act as officers of the company, and certificates for the residue were to be issued and delivered to the testator, but no such certificates were issued up to the time of the execution of his will. But the fact that he had paid the company for the stock', and had become entitled to the certificates, made him a stockholder in the corporation to the extent of the stock he was entitled to receive. (Rutter v. Kilpatrick, 63 N. Y., 606.) He was accordingly in a position and had such a title as would enable him to transfer to others his right to receive the certificates of the stock. This right, as well as the certificates themselves, was merely a chose in action. It was the right to receive a corresponding proportion of the net earnings of the company (Burrall v. Bushwick R. R. Co., 75 N. Y., 211), and as such was capable of being transferred as other dioses in action may be, by assignment. (Robinson v. National Bank, etc., 95 N. Y., 637, 642.) It was therefore a matter of fact to be-determined by -the evidence, whether these disputed shares had been transferred by the testator previous to the execution of. his will. If they had not they still continued to be a portion of his estate, for the value of which the executrix should have been charged in the settlement of her accounts. But if they had been legally transferred by the testator before the execution of his will, then the decree exonerating her from liability on account of these shares was probably correct.

The shares were, in each instance, in form, transferred by a written instrument executed by the testator. These instruments were ■ subscribed by him and by attesting witnesses, on the 14th of April, 1878, and they were acknowledged by him on the following day. By means of them the testator did design to transfer the shares of stock in the company mentioned in the instruments. By one of these instruments 7,500 shares were in form assigned and transferred to Charles A. Whitney, who was the husband of a daughter of the testator, for the benefit of the testator’s widow. And Whitney, in like manner and form, executed a similar instrument to her and delivered it with the one received by him for her benefit to her before the execution of this will. The other instruments were executed directly to the persons who were designed to be made the donees of similar amounts of stock. Each ran directly to the person designed to be made the owner of the stock, and, with the exception of the name of the donee, the instruments executed by the testator were each in the following form :

Know all men by these presents, that I, Charles Morgan, of the city of New York, for value received, have bargained, sold, assigned and transferred, and by these presents do bargain, sell, assign and transfer unto Charles A. Whitney, of the city of New Orleans, 7,500 shares, being for $750,000 of the capital stock of the Morgan’s Louisiana and Texas Railroad and Steamship Company, standing in my name on the books of the said company, and do hereby constitute and appoint the said Charles A. Whitney my true and lawful attorney, irrevocable for me and in my name and stead, but to his use, to sell, assign and transfer and set over all or any part of the said stock, and for that purpose to make and execute all necessary acts of assignment and transfer, and one or more persons to substitute with like full power, hereby ratifying and confirming all that my said attorney or his substitute or substitutes shall lawfully do by virtue hereof.

In witness whereof, I have hereunto set my hand and seal the 10th day of April, 1878.

CHAS. MORGAN. [l. s.]

Sealed and delivered in the presence of

Henry J". Lbovy,

Margaret Dobson,

George W. Quintard.

STATE OF NEW YORK,

City and County of New York,

gs ,

Be it remembered, that on the 15th day of April, A. D..1878, before me, the undersigned, S. B. Goodale, a commissionor resident in the city of New York, duly commissioned and qualified by the executive authority, and under the laws of the State of Louisianna, to take acknowledgment of deeds, etc., to be used or recorded therein, personally appeared Charles Morgan, to me known to be the individual named in and who executed the within irrevocable stock power, and acknowledged to me that he did sign, seal and deliver the same as his free act and deed on the day and year therein mentioned, and for the consideration, uses and purposes therein expressed.

In witness whereof, I have hereunto set my hand and affixed my official.seal the day and year aforesaid.

[l. b.] S. B. GOOD ALE,

Commissioner for Louisia/nna.

Before either of these instruments was drawn or executed, the testator had formed the design of donating these 30,000 shares of stock as he endeavored to do by means of them. And it was in part for that purpose that the attendance and presence of his counsel residing in the city of New Orleans was secured by him during the latter part of March and the early part of April, 1878. And in a conversation which they had upon this subject, the testator informed him “ that he desired to leave to some of his heirs a portion of his estate, but he desired to leave it conditional. He wanted to leave to them bonds and stocks, but with a condition that would tie them up for a long period of time.” This he was in substance advised by other counsel could not be done, and the condition was not insisted upon. The purpose of the testator was to distribute his property before his decease and to avoid the execution of a will. That was expressed in an interview which he had with Mr. Leovy, his counsel from New Orleans, in which he stated : “ I intend to distribute nearly all of my fortune during my lifetime. I don’t want any will, any fighting over my will, or any litigation about it as is now going on in the Vanderbilt case. I propose to distribute nearly all, and that I propose to do to as few as possible. I wish now to commence at once. I wish to distribute a majority of the .■stock of the Morgan Railroad Oompanv. • It is a long name and I use that to designate the company. I wish to donate a majority to cei'tain persons. I want to give three million dollars of this stock to the following persons: Mrs. Morgan, Mrs. "Whitney, Mrs. Quintará and Richard J. Morgan. He then said that if Richard J. Morgan’s health was good that he would give him the bulk of Ms fortune, or if his father had lived he would have given it to him. My object, he said, is to keep my fortune together. I have worked hard for it and I desire that it should continue to exist. The substance was that he was extremely anxious, and I think he used the words extremely anxious,’ to place the bulk of his fortune in the hands of the persons he mentioned. It was a conversation of nearly two hours.” This conversation took place on or near the third of April, and counsel was directed tq prepare such instruments as would secure the transfer of these shares, as that was designed to be made by the testator. The four formal transfers were after-wards drawn, but not by this counsel. He, however, did draw two •others in the same form, by which 1,000 shares were given to Mr. Quintard and a like number to Mr. Whitney, who were respectively the husbands of the surviving daughters of the testator. When the formal transfers were ready for execution they were presented to the testator, but he then declined to execute them, desiring more time for their further consideration. But on Sunday, the fourteenth day of April, he sent, by his son-in-law, Mr. Whitney, for Mr. Leovy, for the purpose of having the instruments executed. He and Mr. Whitney were afterwards present at the testator’s ■residence, where he was sick and confined to his bed, and these instruments were presented to him for execution. He sat up in his bed, and upon a writing desk placed before him, subscribed the instruments. They were then placed in the possession of his son-in-law Mr. Whitney. The next day, which was Monday, the fifteenth day of April, the instruments were produced and their execution formally acknowledged by the testator, and he then said: “ Mr. Whitney, I rely upon you to see that this business is all properly perfected, and I want to have the fact of these transfers having been signed and made out communicated to Mr. Hutchinson without delay.” Mr. Whitney was the president of the railroad company and Mr. Hutchinson was his partner, supposed to have the charge of the transfer of stock, and information of the transfers was obviously designed to be given in that maimer to the company to render them more complete and effectual than they would be without it, and that under the law would render the transfers, provided they were legal and valid in other respects, operative against the company. (Robinson v. National Bank, etc., 95 N. Y., 637.) After these instruments were executed in this manner, the testator expressed his gratification that the business had been completed,, and before the execution of his will, and after his daughter Mrs. "Whitney had arrived from New Orleans, he said to her, as near as-the witness could recall his 'words: “ Daughter, I have given you seven thousand five hundred shares of the Morgan’s Louisiana and Texas Railroad and Steamship Company’s stock. I have given, your husband one thousand shares. I have given Mrs. Morgan, seven thousand five hundred shares; to your sister Mrs.‘Quintará the same; to your nephew Richard J. Morgan the same. I have-given this stock to you for the purpose of perpetuating the business in the manner I have labored to do it. I have confidence that you. will maintain the stock and strive to have the business carried on in the manner it has been carried on. I will exact from you a promise, as I have from them, that you will retain the stock for that purpose.” On Monday, the fifteenth, George W. Quintará, the husband of one of the testator’s daughters, likewise had a conversation with him, and in this conversation he said that he had given Mrs. Morgan, Mrs. Whitney, Mr. Dick Morgan and Mrs. Quintará seven hundred and. fifty thousand dollars each for the purpose which I have stated before.” This evidence, as well as that which preceded the sub scribing of the instruments themselves, very plainly disclosed the-fact that the testator intended, by means of these instruments, to transfer the shares mentioned respectively in them to the donees, and intended to accomplish that by the execution of the instruments and their delivery to Mr. Whitney. And what he likewise said concerning the completion of the business indicated his understanding to be that all that it was necessary for him to do had been done to transfer these shares. As to those in form transferred to Mr. Whitney for the wife ot the testator, the transfer seems to-have been made in all respects formally complete, for he handed to her on the evening of the fourteenth of April the transfer made for her benefit by the testator to himself, and another executed by him to vest the title to the shares in her. As to this portion of the stock, therefore, no question can arise but that the transfer was then complete and effectual, and vested in her the absolute right to-the shares. (Fulton v. Fulton, 48 Barb., 58), 590, 591.) And when the other instruments designed for the other three donees were placed in the possession and under the control of Mr.Whitney, for their benefit, and with the authority delegated to him to see that, the business was all properly perfected, that equally and as -effectually transferred the title to the shares to them, certainly so .as to Mrs. "Whitney and Mrs. Quintard, who were respectively informed of the facts before the will was executed; and equally so as to Richard Morgan, for the delivery of the shares to Whitney-under this delegated authority was equivalent in law to a delivery to Morgan himself. (Fisher v. Hall, 41 N. Y., 416, 422 423.) And these facts, in a controlling manner, distinguish this case from all those cited and relied upon in behalf of the parties appealing. But after these instruments were executed they were placed in a safe in the room occupied by the testator, and because of that fact it has been insisted that they remained in his possession and were not designed to become, and did not become, operative before the execution of the will. But they seem to have been placed in the safe by Mrs. Morgan herself, simply for their preservation and safety; and making that deposit of them in that manner did not restore them to the possession of the testator, or in any manner tend to annul or avoid the effect of what had previously been done by him. (Armitage v. Mace, 96 N. Y., 538.) And this deposit of the instruments, if it was within the knowledge of the testator, was in no manner regarded by him as a surrender of them to his control. Neither did he at any time express any dissent as to their effect, nor take or intimate that any measures should be taken for their restoration or destruction at or after the time when his will was executed. The witness Dobson did state that it had been said that other papers had been made rendering them ineffectual, but as there was no evidence that such had been the design of the testator himself, or that any authentic statement had been made entitled to this effect by any person, this evidence given by her could have no substantial weight in the case. They still, notwithstanding that deposit, remained complete and effectual transfers of the shares mentioned in them respectively, and the persons named as donees took the title to that extent by means of the execution and delivery of these several instruments, and the notice immediately' forwarded by telegraph to the company, as well as the knowledge acquired by Mr. Whitney ‘himself, rendered the transfers entirely complete, so far as the company could be concerned in them,- and they were so afterwards recognized and acted upon in the course of its business. These shares accordingly did not remain or continue to be a part of the estate of the testator at the time of the execution of his will, which took place about the hour of three o’clock in the afternoon of the 16th of April, 1878. The will was in due form subscribed, published and attested, and is in the following language:

“I, Charles Morgan, of the city of New York, make this my last will and testament.

“ I appoint my wife Mrs. Mary <T. Morgan to be my executrix.

“ All my property, real and personal, is hereby given, devised and bequeathed as provided by the laws of the State of New York in cases of intestacy.

“Witness my hand and seal, this sixteenth day of April, one thousand eight hundred and seventy-eight.

“CHAS. MOEGAN.” [l. s.]

This will was executed on account of his inability to make a complete distribution of his estate as he had previously designed to de himself; and because of the direction contained in it for the disposition of his estate, as provided by the laws of tbe State of New York in cases of intestacy, it was urged before the surrogate, and has also been upon the appeal, that the two daughters and grandson of the testator should have been charged with the shares transferred to them as advancements under the provisions of the statute relating to that subject; and Lawrence v. Lindsay (68 N. Y., 108) and Beebe v. Estabrook (79 id., 246) have, with other authorities, been relied upon in support of this position. But the facts presented in these cases were so dissimilar to those upon which the determination of this appeal is dependent as to render them inapplicable as authorities in the case. It is no doubt true that if the transfers of the shares had been made after the execution of the will, they would have been deemed to be so much of the testator’s estate delivered to the legatees npon their respective legacies. The law upon this subject is well settled to that effect. But as the title to-these shares was completely transferred by the testator before the execution of his will, this principle is not applicable to the disposition of this part of the case. But it is to be determined upon the effect of the will, in view of the provisions of the statute of the State made upon the subject of advancements. But those provisions are not deemed to be applicable to or controlling over the disposition of the appeal in this respect; for the persons-intended to be benefited by the will took whatever shares they became entitled to under it in the estate of the testator by means of its provisions. It related to a disposition of only the property owned or held by the testator at the time when it was executed, or at the time of his own decease. And as the shares in controversy had been previously disposed of by him, they no longer formed any portion of his property or estate, and, accordingly, were not subject to or qualified by the directions contained in the will. That was designed by its language to affect only the property of the testator, and that was so much of his estate as remained exclusive of what he had in this or in any other manner effectually disposed of. And whatever rights or interests his next of kin might be entitled to in his estate they derived them from the will, and not from the provisions of the statute. It was the will itself which gave them such rights and interests. That was done by the intent and act of the testator, and the effect of the reference made to the laws of the State in cases of intestacy was merely to determine who the persons were who should take under the direction contained in the will and the extent of the interests so to be taken. For these reasons the provisions of the statute relating to the subject of advancements have no application to this controversy. For section 91 of the statute, providing for charging advancements, has limited the authority to do so to “ any child of such deceased person,” as was previously referred to by the next preceding section, and that section included only a deceased person who should die intestate, or leaving a will not bequeathing the surplus of his personal estate. (3 R. S. [6th ed.], 101, 105, §§ 90, 91.) The testator did not die leaving a will of this description, for by means of it he disposed of the entire surplus of his estate, and referred only to the statute to ascertain the persons who should receive it and the amounts to be bestowed tipon them in the settlement of his estate. And as this is the full extent of the provisions of the statute relating to the personal estate of a deceased person, those which provide for the charging of advancements are inapplicable to this case. A somewhat similar point was considered in Camp v. Camp (18 Hun, 217), where it was held that advances made by tbe testator to some of his children could not be brought into the settlement of the estate for the purpose of diminishing their interests in it. And Black v. Whitall (1 Stockton [N. J. Eq.], 572); Brown v. Brown (2 Iredell [N. C. Eq.], 309); Kreider v. Boyer (10 Watts, 54) and Brewton v. Brewton (30 Ga., 416) sustain the same view.

Furthermore, it cannot be held as a matter of fact that the testator designed the transfer of these shares to be advancements, within the legal acceptation of that term, to his two daughters and grandson. For he did not contemplate an equal distribution of his estate among his descendants, or that these persons should be excluded from the residue and as a matter of fact intended wholly to disinherit one of the other next of kin because of his own misconduct, and to place the bulk of his property in the hands of as few persons as possible. And it was in subordination to that intention that he made these transfers of the 30,000 shares of the stock, as, well as of 2,000 other shares, given one-half to Mr. Whitney and the other half to Mr. Quintard.

Neither of the authorities relied upon in support of the' appeal justify any other disposition of this case than that which has already been intimated. For there was an effective delivery of the transfers before the will was made, and they cannot be charged as advancements, for the reason that such does not seem to have been the intention of the testator, and by his will he disposed of only that part of the estate of which he then remained the owner, which necessarily excluded the shares of stock previously disposed of by him. Upon neither of the points urged in support of the appeal has any ground been found for dissenting from the disposition of the case made of it by the surrogate. And'his decree should, therefore, be affirmed, with costs, leaving the right of the appellants to costs to be determined on the settlement of the order.

Brady, P. J., concurred.

Present — Brády, P. J., and Daniels, J.

Decree affirmed, with costs,


source: Caselaw Access Project

author: Daniels, J.:

license: Public Domain

text:
    ALFRED G. W. CARTER, Respondent, v. GEORGE TALLCOT, Appellant.

      Malpractice by an attorney — what constitutes it — what evidence is admissible to establish it.

    'Two actions were brought against the defendant, by one Moore, in one of which he claimed to recover for commissions earned by him in securing the sale of a medical compound, under a contract with the defendant, and in the other he sought to recover damages for the breach of the said contract by the defendant in discharging him before the expiration of the period mentioned therein. In each action the defendant, acting under the advice of his counsel, set up as .a counter-claim a claim for damages which he had sustained by reason of the failure of Moore to perform his contract; the counter-claim being considered as a proper subject for trial before a jury. Upon the trial of the first action ■which had been referred, the defendant’s counsel withdrew from the consideration of the referee all that part of the counter-claim which should exceed the demand of the plaintiff therein. The referee in that action reported in favor of Moore. Upon the subsequent trial of the second action, the court held that the counter-claim was barred by what had taken place upon the trial of the first action and refused to allow it to be proved.
    In an action brought by the counsel to recover for services rendered to the defendant in the actions brought by Moore:

      Meld, that he was guilty of such malpractice as deprived him of all right to recover therefor.
    The counsel for the defendant opposed the reference of the first action, which involved the examination of a long account, claiming that its compulsory reference was a violation of the Constitution of this State and of the United , States, and advised an appeal from the order to the General Term, with a view to its final appeal to the Supreme Court of the United States. It was brought by appeal to, and was affirmed by, the General Term.

      MM, that the counsel should recover nothing for his alleged services in resisting the reference, and that he should be compelled to indemnify the defendant, against the expenses to which he had been thereby subjected.
    ■Upon the trial of this action, questions put by the defendant to professional witnesses to elicit their views as to the conduct of his counsel in these actions, were excluded under general objections, no objection being taken to the form of the questions or the manner in .which they were, propounded.

      Meld, that this was error; that the evidence offered was competent and should have been received.
    Appeal from a judgment in favor of the plaintiff, entered on the report of a referee.

      M. 3. Underhill, for the appellant.

      William JR: Garrard, for the respondent.
   Daniels, J.:

The judgment was recovered, for the amount found to be due to the plaintiff and Nelson Cross, who was his partner, and had' assigned his interest in this demand to the plaintiff, for services performed by them as attorneys and counselors in the courts of this State for him. The defense relied upon by the defendant wa& that the services had been unskillfully performed by the plaintiff and his assignor, and that they were accordingly of no value to him, but involved him in loss which he would not otherwise have Sustained. The services principally drawn in question were performed in two suits brought by Charles E. Moore against the defendant, upon a contract by which he had employed Moore toará as his agent in securing the sale of a medical compound made by him. In the first suit Moore claimed to recover for commissions earned by him, under the contract, during the month of September, 1874; and in the second suit the claim was for damages-for breach of contract arising out of his discharge by the defendant before the expiration of the period mentioned in the agreement. The defendant, by way of defense, alleged the non-performance of the contract by Moore, through which he had sustained damages in his business to a large amount, which he presented as a counterclaim against the causes of action alleged by Moore against him. The answers were substantially the same in each case; and the action for the commissions, which was by far the least important of the two, was first brought to trial, and this counter-claim was presented as an answer to that action, but before it was submitted to the referee the defendant’s counsel withdrew from his consideration all that part of the counter-claim which should exceed the demand of the plaintiff in the action. The referee in that action afterwards found and reported in favor of Moore, the plaintiff, and judgment was entered upon his report.

The second action afterwards came on for trial at the circuit, but before its trial leave was obtained to set forth, by way of reply, the judgment entered in the first action on the referee’s report as a bar to the residue of the counter-claim relied upon in the answer in the second suit. And under that reply it was held by the court that the defendant’s counter-claim was barred by what had taken place upon the trial of the first action, and that this portion of his defense was accordingly out of the case. It appears by the evidence, and the fact was also found by the referee, that the defendant and his counsel regarded the- counter-claim as a meritorious demand which might be sustained by evidence within the defendant’s control on the trial of the action; and upon these facts the question accordingly arises whether their conduct was that of competent and skillful counsel in following the course they adopted concerning the counterclaim on the trial before the referee. This counter-claim was considered and regarded by them as a proper subject for trial before a jury, and they were apparently under the impression that they could make use of so much of it as would answer the claim made by Moore in his first action, and afterwards rely upon the residue, not only as a defense to the second action, but as the basis of a recovery for the balance against Moore, the plaintiff. This was manifestly and clearly an erroneous view to be taken of the rights of the defendant in the enforcement of the counter-claim, and which,, according to the evidence of the assignor Cross, was not anticipated.

The law at that time, as well as at the present time, would not permit an entire demand to be divided in this manner. The defendant and his counsel had their election whether they would make use of the counter-claim in the first or second action, but they could not use it in both. This counter-claim arose out of the contract upon-which Moore based his right to recover in each of these actions, and by section 150 of the Code of Procedure, which was at that time in force, it formed a legal answer to either of the actions brought by Moore, the plaintiff; and in either, under the authority of section 271 of'the Code of Procedure, the defendant, upon supporting the counter-claim by proof, was entitled to relief by way of judgment in his favor after extinguishing by means- of it the demand presented as the basis of the .plaintiff’s right of action ; and that was the regular as well as the legal course to be followed if the counter-claim was used at all upon the trial of the first action before the referee. Neither the Code nor the settled principles of law not dependent upon it permitted the course to be taken which was adopted at the close of the evidence on the trial before the referee. (2 Pars, on Cont. [6tli ed.], 619, and eases in note; O'Dougherty v. Remington Paper Co., 81 N. Y., 496, 499, 500.)

The law upon this subject was clear and unmistakable, and the facts subjecting this controversy to its application have not only been proved by the evidence, but they have been specifically found by the referee himself; and yet it was determined by him that the defendant’s counsel in thus withdrawing from the consideration of the referee a part of the counter-claim exhibited such skill and exercised such diligence as is usual with lawyers of average learning and ability at the New York bar.

The evidence of the legal gentlemen who were examined upon the trial of the action, so far as it was ' permitted to be given, did not support this view of the conduct of the counsel. With certain ■qualifications those who were examined on behalf of the plaintiff did not disapprove of their conduct, upon the facts themselves as they were sustained and found; that the counter-claim was deemed to be a meritorious one; that the proper forum for its trial was that of a court and jury, and that the right so to try it was lost by what took place concerning it before the referee, but they did not approve of the practice followed by the defendant’s counsel.

Neither can that be approved of by the well settled principles of the law which require that professional gentlemen engaging as attorneys and counselors in the service of others, shall be reasonably well informed of the legal principles applicable to, and governing the disposition of, the business committed to their charge. They are not to.be held responsible for errors of judgment which may arise when that degree of care and attention has been devoted to their professional employment, as is ordinarily devoted by persons reasonably competent, experienced and well qualified for the discharge of professional duties of this description. But if they fail to inform themselves of statutory provisions, or well settled principles of law, readily accessible by means of ordinary care, attention and investigation, and in consequence of that failure the business committed to them is mismanaged, and the person or persons •employing them are in that manner deprived of their legal rights, there they will not only forfeit all legal claim for compensation, but in addition to that be justly held responsible for any loss or injury sustained by means of such misconduct, by the person or persons for whom they may be employed. This subject was considered in Von Wallhoffen v. Newcombe (10 Hun, 236), and in the course of the opinion of Presiding Justice Davis it was held that “the law requires that every attorney and counselor shall possess- and use adequate skill and learning, and that he shall employ them in every way, according to the importance and intricacy of the case; and if a cause miscarries in consequence of culpable neglect or gross ignorance of an attorney, he can recover no compensation for any services which he has rendered, but which were useless to-his client by reason of his neglect or ignorance.” (Id., 240.) And the authorities referred to fully maintain this just and sensible-legal principle.

Under the law as it has been settled, and the facts found by the referee himself, as they were established by the evidence in the case, the plaintiff was not entitled to recover for so much of the services of himself and his associate as had been performed in this manner, and by which the defendant was deprived of the right to try this counter-claim before a jury, and secure to himself the probable advantages of such a trial. The course which they elected to follow resulted in an adjudication against the defendant upon the counter-claim, which was a conclusive bar to the residue of it when it was brought up for consideration upon the second trial. And that could have been ascertained by them to be the law of the case by any reasonable or well directed effort that might have been made to discover it. They failed to acquire that knowledge, and accordingly failed to discharge the. duties which the law imposed upon them under their employment to the defendant. And so far as they have been allowed to recover compensation in this action for such services the judgment is erroneous and cannot be sustained.

A reference of the first action was resisted by the defendant’s counsel, and they appear to have entertained the conviction that the order referring the case was made in violation of the Constitution of this State and of the Constitution of the United States. Upon both these subjects they were under a palpable misapprehension of the law. Por the Constitution of this State, as it was adopted in 1846, maintained the right to a trial by jury in that class of cases only in which it had been previously used. But previous to its adoption it was the common and well established practice of the courts to refer the trial of actions which should involve the examination of long-accounts, although either of the parties might oppose the order directing the reference. And the present Constitution of the State was adopted with that understanding of the law and designed to perpetuate it by restricting the right to trial by jury to cases in which it had previously been used. The Constitution of the United States, so far as it related to the right of trial by jury, was restricted to proceedings in the courts of the United States, and had no reference to actions arising under and prosecuted in the courts of a State. These were quite familiar principles, and yet the counsel for the defendant, when the order of reference was made, advised an appeal from it with a view of finally taking it to the Supreme Court of the United States on the ground that it violated the clause of the Constitution of the United States providing for jury trials. And under that advice an appeal from the order was taken to the General Term, where this as well as other views were impressed upon the consideration of the court. That appeal was determined adversely to the defendant, and no further proceeding was taken upon it. The legal views under which the appeal was taken in this manner were not sanctioned by the witnesses, who were sworn and examined before the referee, so far as their evidence was taken. But the referee in his conclusions considered that the defendant’s counsel exercised such skill and diligence as is usual with lawyers of average learning and ability at the New York bar in advising and prosecuting the appeal on this ground.

But this was altogether too indulgent a view to be adopted of the' skill and diligence required to be observed by a professional legal gentleman engaged in managing and caring for the legal interests of other parties. There was no plausible authority justifying or supporting the course that was taken upon this subject, and for the services of the counsel in that appeal they had no legal claim against the defendant, but should have been held liable to indemnify him against the expenses to which he was subjected in prosecuting that appeal.

Upon both these subjects, professional evidence proposed to be given by the defendant was excluded upon the trial. The questions which were asked were not objected to as being in any respect improperly framed or propounded to the several witnesses, but they were objected to in the most general terms, and on such objections the answers were excluded. These questions were designed to •elicit, in a more particular manner than had otherwise been shown, what the views of the witnesses to which they were put were concerning the conduct of the defendant’s counsel. And they should have been permitted to be answered, for counsel, in framing hypothetical questions, have been held to be “not confined to facts admitted or absolutely proved, but facts may be assumed which there is any evidence on either side tending to establish, and which are pertinent to the theories which they are attempting to uphold.” (Dilleber v. Home Ins. Co., 87 N. Y., 79, 83.) And within that rule these questions should have been permitted to be answered.

In another action which had been prosecuted by the defendant, as plaintiff, an injunction had been set aside and proceedings were taken to ascertain the damages caused by the injunction to the •defendant. And upon the reference ordered for that purpose, ■several days were consumed by the defendant’s counsel in endeavoring to make proof of the fact that the defendant in that action had been guilty of a contempt by the violation of the injunction while it remained in force. In this manner expense had been incurred by the defendant, and he was also charged by the plaintiff for the value of these services performed by his counsel.

A series of questions were propounded in different forms to the witness Freling H. Smith, designed to elicit testimony indicating this conduct to exhibit the absence of ordinary professional skill and acquirements. The questions were put in proper form under the authority just referred to for the production of that character of evidence, but they were all, upon the most general objections, overruled and the answers were excluded. If some of these questions might be criticised as to their form, but which were not objected to on that ground, others were clearly free from objection, and the answers proposed to be taken from the witness should have been received. To the rulings made by the referee, excluding the evidence offered, ■exceptions were taken on behalf of the defendant; so they were as to his conclusions concerning the professional conduct of the defendant’s counsel in the management of the counter-claim, and in the appeal from the order of reference ; and these exceptions seem to be very well founded. In the disposition of the objections, as well as in the views adopted concerning the effect of the evidence, the learned referee was involved in error; and as those errors were substantially injurious to the defendant, the judgment in the case should be reversed and a new trial ordered,' with costs to the defendant to abide the event.

Davis, P. J., concurred.

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


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    SIMEON J. M. BEAR, Respondent, v. THE AMERICAN RAPID TELEGRAPH COMPANY, THOMAS WALLACE and DANIEL H. CRAIG, Appellants, Impleaded, etc.

      Application to remove a trustee — all the beneficiaries must be made parties — extra* allowance — where a motion therefor, must be made.

    Five persons conveyed to two trustees their rights and interests in certain inventions or improvements, in order to enable the trustees to dispose of them to the-best advantage. The proceeds arising upon any sale were to be divided among the parties, in proportion to the value of their respective inventions, and in, case of dispute the proportion was to be settled by arbitration.
    This action was brought by the plaintiff, one of the parties to the agreement, to-have the trustees removed for neglect of duty and breach of faith in returning: to a corporation, which had purchased the said inventions, the certificates of its stock which it had agreed to give in payment therefor.

      Held, that the action could not be maintained without making all the parties to-the agreement parties to the action.
    That although the defect of parties appeared upon the face of the complaint, the-right to object was not, in this case, waived by the failure of the defendants to raise the objection by demurrer.
    That the fact that the complaint alleged that the action was brought by the plaintiff not only in his own.behalf, but also in behalf of his co-beneficiaries in the trust, did not cure the omission.
    Where an action in the Supreme Court has been tried in the first judicial district,, an application for an extra allowance of costs must be made in that district, although the justice before whom the action was tried resides in another district.
    Appeal from a judgment recovered on a trial at tbe Special Term, and from an order making an additional allowance of costs.

      AsKbel Green, G. B. Alexander and Thomas Thaoher, for the appellants.

      F. W. Whiiridge and William A. Boyd, for the respondent.
   Daniels, J.:

The action was brought to remove Daniel H. Craig and Thomas Wallace from their positions as trustees for Thomas M. Foot, Charles A. Randall, the plaintiff, and the Telegraph Construction Company,, and the appointment of successors for them and to obtain from the defendant, the American Rapid Telegraph Company, certain shares of its stock, which it was agreed should be delivered by it, as the consideration of patented rights and interests indirectly transferred to it by the trustees for the benefit of themselves and the other parties named as beneficiaries. The trust had been created by two agreements, by the first of which the five persons named in it transferred all their rights and interests in certain telegraphic inventions- or improvements, claimed to have been invented by them respectively, to Daniel H. Craig and Horatio G. Angle as trustees. The object of the transfer was to enable the trustees to dispose of the inventions on the best terms they could, and to avoid conflicting or contesting claims or interests between the parties. And whatever should be obtained as the consideration of the transfer of the inventions was to be divided between the parties to the agreement proportionately to the value of the respective inventions or improvements affected by it. And that proportion, in case of dispute, was to be settled and ascertained by means of an arbitration. Three of the persons executing the agreement afterwards applied to the trustees to purchase and consolidate with their own interests the American Compound Telegraph Wire, then owned by the Telegraph Construction Company, and to associate with them selves another person to act as trustee. They made that purchase and associated the defendant Thomas Wallace with themselves as the additional trustee, and in case of a disposition of this with the other interests, its proportionate value was to be ascertained: substantially in the same manner. After the association was perfected in this manner the inventions and improvements claimed and owned by it were transferred under the authority of the trustees to the defendant, the Rapid Telegraph Company, in considerafcion of whioli that company agreed to make and deliver 20,000 shares of its capital stock. And a certificate for the shares was accordingly made out, but not delivered, and was afterwards relinquished by the trustees to the company. And it was to avoid that result that the plaintiff, as one of the beneficiaries, brought this action to remove two of the trustees, and to secure the transfer and delivery of the 20,000 shares of stock. The court, upon evidence tending to establish the truth of the allegations contained in the complaint, directed judgment removing two of the trustees from their office and providing for further proceedings under which the agreement made by the telegraph company should be performed and carried into effect. Various objections were made at the close of the proof against the plaintiff’s right to maintain the action, and in support of an application for the dismissal of the complaint. Among these was the objection that the action could not be maintained by the plaintiff as one of the associates, without making the others, either as plaintiffs or defendants, parties to the suit. This objection was not presented in any. form by the pleadings, and was considered by the court, under the provisions of the Code, to have been waived by means of that omission. But this result will not follow if the action is one where a complete determination of the controversy cannot be had without the presence of the other parties, for there it has been made the mandatory duty of the court to cause to be brought in such omitted parties. (Code Civil Pro., § 452.) It has also been urged that the other beneficiaries under the agreements were included in the action, and for that purpose it has been claimed that Edwin Read had, prior to the commencement of the suit, acquired by assignment the interests of Theodore M. Foot and Charles A. Randall, and that he was made a party to the action. But the fact that he had acquired that interest was not otherwise made to appear than by an affidavit, in which the statement was made to obtain an order making Read a party to the action. And ©n his application such an order was made directing that “ he is hereby permitted to come in and defend, and to make such answer ¡to the complaint herein as he may be advised, within five days after service of a copy of this order upon Hamilton & Lyon, his attorneys.” He did not, however, come into the action in that or any other manner, and neither made nor served an answer to the complaint. Neither was any process served upon him on behalf of the plaintiff bringing him into the action as a party either plaintiff or •defendant. If he had acquired by assignment the interest of Foot .and Randal], as long as he did not become a party to the action that interest was not legally represented in the suit. ' If he did not .acquire that interest then it still remained in Foot and Randall, and they were neither of them parties to the action. Neither was the Telegraph Construction Company in any form whatever brought ■into or made a party to the suit. There were, therefore, at least ■this company and Read, if he was the assignee, as he stated he was, of Foot and Randall, who were interested in the result of the action as beneficiaries and were neither of them made parties to the suit.

A prominent object of the action was the removal of the trustees, or at least of two of their number, because of what was alleged to have been their fraudulent misconduct in releasing and discharging the telegraph company from its obligation to make compensation for the rights and interests of the associates transferred to it. And it resulted in a judgment removing Craig and Wallace, the two active trustees who were charged as the responsible agents of this misconduct, the other trustee being made a defendant in the .action, but not appearing to have been an active participant in the fraudulent misconduct which was charged as the foundation of the •suit. These persons were not the trustees of the plaintiff alone, but they were the trustees equally of all the associates. And as the rule was settled before the adoption of the present system of practice, in an action brought for the removal of trustees, all the beneficiaries, as a general proposition, were required to be made parties to* the action, for in no other manner could the removal be made effectual and binding upon the interests of all the persons concerned in maintaining the trust. Upon this subject it has been said that “ where the suits are between the trustees and the eestuis que trust in relation to the property, the general rule is, that all the trustees and all the oestuis que trust must be before the court either as plaintiffs or defendants.” (2 Perry on Trusts, § 875.) The reason of this rule is, that the court may be placed in the condition in which' it can do complete justice as far as that may be possible, by taking the accounts and adjusting the liabilities of the defendants between themselves, and in that manner avoiding additional litigation. The trustees, it has been said, “ ought not to be twice vexed where it is possible to determine all the rights of the parties in one suit. But a bill by a part of the eestuis que trust ought not to be dismissed, but it should stand for amendment and for summoning in of other parties.” (Id., 881.) And this rule is very well supported by the authorities. (Hamm v. Stevens, 1 Vern., 110, where, however, the non-joinder was alleged in the answer; Roberts v. Tunstall, 4 Hare, 257, 261; Piatt v. Oliver, 2 McLean, 267, 307; Phillipson v. Gatty, 6 Hare, 26; Sherman v. Burnham, 6 Barb., 404, 414.)

And this principle has been embodied in the Code of Civil Procedure, which requires the parties who are united in interest to be joined as plaintiffs, except where the consent of any one who ought to be so joined cannot be obtained, and there he is required to be made a defendant, with a statement of the reason for placing him in that relation to the action. (Code, § 448.) The fact that these other persons were interested as beneficiaries in the action was made to appear by the allegations contained in the complaint, and it might undoubtedly have been demurred to because of the omission to join them as parties. And in ordinary cases the omission to demur, where the right to do that appears by the complaint, or to answer the non-joinder where it does not so appear, will be a waiver of the objection. But that is not the case where a complete determination of the action cannot be made without the presence of other parties, and this was an action of that description. For the trustees, who were equally such for all the beneficiaries, could not be removed from their offices at. the suit of the plaintiff without making the other beneficiaries in some form parties td the action. They might elect to continue the trustees in their offices, notwithstanding their alleged misconduct,, or they might present very satisfactory reasons why they should not be removed. Their interests might require their continuance-in their offices; and upon these, as well as any other pertinent considerations which might be suggested, they were entitled to an opportunity to be heard before the persons who were appointed by them, and acting as their trustees, should be removed from their offices. Without this hearing the judgment directed their removal, but, as the other beneficiaries were not parties to the action, it could not be made effectual or operative as to them. Their interests remained entirely unaffected by it, and the trustees necessarily continued in the trust so far as the interests of these persons were included, notwithstanding the general direction of the judgment, for as to such parties it was necessarily ineffectual.

It has been urged, as the plaintiff alleged in the complaint, that he brought the action not only in his own behalf, but also in behalf of his co-beneficiaries in the trust, that the omission to make them parties was in this manner rectified. But that by no means followed from this allegation made in the complaint, for it is only where the parties are so numerous as to render it inconvenient or impracticable to make them parties to the action that one or more of the parties may prosecute it on behalf of themselves and others, having a common interest with them. That was the rule of practice preceding the adoption of the Code, and it has been continued by a similar provision contained in section 448 of the Code. But in continuing it, it has been limited to cases where the controversy is one of a common or general interest of many persons, or where the persons who might be made parties are very numerous and it may be impracticable to bring them ail before the court. And it was so considered in Trustees v. Greenough (105 U. S., 527, 532, 533.) But in this action the controversy was not one of a common ■interest to many persons, neither were the persons so numerous that it was impracticable to bring them all before the court. For if all. those who were interested in the trust under the agreements as they were made were brought into the action, it would require but three additional parties. They would be Theodore M. Foot, •Charles A. Randall and the Telegraph Construction Company; while if Foot and Randall had assigned their interests to Read, then there were but two beneficiaries remaining who were not parties to the suit, namely, Read and the Construction Company. And in neither view would the omitted parties, therefore, be so ■numerous as to permit their omission as such in the action under this provision of the law. The case is distinguishable from that of Hitchcock v. Linsly (17 Hun, 556), for there the right upon which the action proceeded was separate and distinct, belonging solely to the plaintiff in the suit, and to that class of eases the rule which has been mentioned has no application. But in this case the interests of the parties as beneficiaries in the trust were joint, and could only be severed by means of the arbitration provided for when the time arrived for the division and distribution of the proceeds of the patented inventions. No' such aihitration has ever taken place, and all the beneficiaries, therefore, still continued tobe jointly interested in whatever might be derived as the equivalent or consideration of the disposition and sale of their patented inventions. And they should have all been joined as parties to the action in order to-secure a complete and effectual disposition of that part of it designed to accomplish the removal of the trustees, or the two of them, by whose misconduct the rights of the associates had been imperiled, and the appointment of others in their place and the transfer to them of the stock alleged to be unlawfully and improperly withheld by the telegraph company. The omission to join them either as plaintiffs or defendants was fundamental, for without their presence a complete determination of the controversy could not be made, and in that state of the case the law is mandatory that the court must direct them to be brought in. As the case now stands this defect of parties cannot be corrected or obviated, but the judgment should be reversed and a new trial ordered, with costs to-abide the event, but before another trial can properly take place-measures should be instituted to make these other persons parties to the action.

The appeal from the order making an allowance of $2,000 as additional costs need not be specially considered, for that order will necessarily be superseded by the reversal of the judgment. It . is clear, however, that in making it, as the motion for the allowance was at a court held in the city of Rochester, while the place of trial in this action was the city and county of New York, the case of Hun v. Salter (92 N. Y., 651) was overlooked. An order may be-made formally reversing this order, but without costs to either party-

Brady, B. J., concurred.

Present — Brady, P. J., and Daniels, J.

Order reversed, without costs.


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    PETER BOWE, Respondent, v. THE UNITED STATES REFLECTOR COMPANY and WILLIAM P. CORBET, Appellants, Impleaded, etc.

      Vacating an attachment — when the defendant cannot be compelled to pay the sheriff’s costs and expenses — Code of Civil Procedure, sec. 709 — its provisions directing the payment of sheriff’s costs, eta., is unconstitutional.

    Under an attachment issued in an action brought by one Hall against the defendants, the sheriff seized certain articles of personal property belonging to them, and held the same until an order was made setting aside and vacating the attachment, because of the failure of the plaintiff in that action to increase the security given by him therein. The sheriff, claiming to be entitled under section 700 of the Code of Civil Procedure to retain the property until all his legal costs, charges and expenses had been paid, refused to deliver the same to the defendants, and brought this action to have a lien thereon to that extent adjudged to exist in his favor, and to have the property sold to satisfy the same.

      Held, that in so far as the said section of the Code attempts to compel a defendant to pay the costs, charges and expenses incurred by the sheriff in levying upon his property under an attachment issued in an action brought by a third person in a case in which such attachment has been subsequently vacated and set aside, it is unconstitutional and void, as depriving the defends ant of his property without due process of law.
    At the time the property was taken it was agreed between the sheriff and the defendant that it should remain in the store in which it then was, and that the sheriff should pay the rent for the store, and that the amount so paid should be treated as expenses incurred by him in enforcing the attachment.

      Held, that to the extent of the rent so paid the sheriff was entitled to a lieu upon the property.
    Appeal from an interlocutory judgment oyerruling a demurrer interposed to the plaintiffs’ complaint.

      Edward P. .Wilder, for the appellants.

      Malcom Graham, for the respondent.
   Daniels, J.:

The object of this action is to obtain a judgment declaring the plaintiff, as late sheriff, to have a lien upon certain personal prop erty for his fees, disbursements and expenses, and for the sale o-£ the property to satisfy the same. The property consists of a stock of manufactured articles and other things seized by the sheriff under an attachment issued in favor of Bolton Hall and others against The United States Reflector Company.

After the seizure of tbe property it remained in the possession ■of the sheriff until on or about the 5th of May, 1883, when it was ordered in the action that- the warrant of attachment be vacated, annulled and set aside, unless the plaintiffs should increase the security given by them upon the attachment. They failed to do that, and “on the 5th of June, 1883, it was ordered that said ¡attachment be vacated, annulled and set aside.” A copy of this -order was served upon the plaintiffs with notice of its entry, and it •has remained in force in the action ever since that time. The fees, 'expenses and disbursements of the sheriff under the attachment were adjusted, and upon the sum allowed the plaintiffs paid the sheriff $3,740.50, leaving a balance still unpaid to the sheriff of $5,429.78. The attached property has remained in the possession pf the plaintiff, notwithstanding a demand made for its delivery on behalf of the defendants in the action, and it is for the collection and satisfaction of this balance that the plaintiff is now proceeding by this action to enforce it as a lien in his favor against the attached property, and for which it is claimed that a sale of the property shall be made.

This right on the part of the sheriff is asserted to have been created by section 709 of the Code of Civil Procedure, and it has been directed by it that where a warrant of attachment is vacated or annulled, or an attachment is discharged upon the application of the defendant, the sheriff must, except in a case where it is otherwise specially prescribed by law, deliver over to the defendant, or to the person entitled thereto, upon reasonable demand, and upon payment of all costs, charges and expenses legally chargeable by the sheriff, all the attached personal property remaining in his hands, or that portion thereof as to which the attachment is discharged, or the proceeds thereof, if it has been sold by him. The right of the sheriff to hold the property after the discharge of the attachment has been denied by the defendants, who claim that the legislature had no authority to subject it to the obligation of paying the sheriff’s costs, charges and expenses after the attachment had been •discharged.

The attachment was not issued at the instance, or under the authority, of either of the defendants, but solely at the instance and upon the application of the plaintiffs in the other action. It was as to tlie defendants an adverse proceeding, whose object was to seize the property of the party against whom the attachment was issued and hold it as a security for the plaintiffs’ demand in the action. By such a proceeding the owner of the attached property entered into no obligation or duty to pay its costs, charges or expenses. But, so far as a liability for their payment would arise out of the facts, it must be exclusively that of the persons in whose favor and at whose instance the attachment was issued and the property was •seized. Its seizure arose out of no fault of the defendants, as has been demonstrated by the fact that -the attachment has been voluntarily abandoned and also set aside by an order of the court. But without its consent its property was taken under it and placed in the possession of the sheriff, where since its seizure it has remained. To permit the sheriff to hold it now, after the attachment has been set aside, until his costs, charges and expenses have been paid, and •sell it for their payment, would be to allow him to hold and dispose of the property of one party to pay the debt exclusively of another. For no further proceedings can be instituted or maintained in this •action, which will convert his demand into a legal liability of the defendant proceeded against.

It must still remain and continue to be a demand owing by other parties, and the point therefore arises to be determined whether the legislature has the authority to provide that the property so seized, ■after the discharge of tlie attachment can be applied or appropriated by the sheriff to the payment and satisfaction of such a demand. To apply and appropriate it in that manner is to take the property of one party against his or its consent and apply it to the payment or discharge of the obligations of another, and that has not been ■considered to be within the authority of the legislature.

Upon this subject care has been taken to preserve and protect the rights of the owners of property against interference of this description, even though that may have been provided for by an ;act of the legislature. To prevent such interference it has been declared that ££ no member of this State shall be disfranchised or ■deprived of any of the rights or privileges secured to the citizens thereof, unless by the law of the land or the judgment of his peers.” ,<£ Nor be deprived of life, liberty or property without due process of law.” (Const., art. 1, §§ 1, 6.)

And these provisions have been so construed as to maintain the rights of property against mere legislative interference, and as requiring a legal proceeding following other ordinary forms of law and resulting in a judgment upon some obligation or contract or liability incurred by the party proceeded against, before he can be-divested of his property, and it can be applied to the uses of another party. They protect the owner against the taking of his property by color of legislative authority, to bestow it upon or give or devote it to the uses of another person. This was generally considered in New York and Oswego Railroad Company v. Van Horn (57 N. Y., 473). And it was held by the court that the legislature never can take the property of one individual without his consent and give it to another. And this salutary general principle has also been maintained in Embury v. Conner (3 Comst., 511-517); Taylor v. Porter (4 Hill, 141); Weismer v. Douglas (64 N. Y., 91, 105). That is precisely, where an attachment has been set aside, vacated or annulled, either by the abandonment of the party in whose favor it is issued, or- by an order of the court, what this-section of the Code has provided may be done with the property of the defendant when it has been seized under an attachment. This direction, in its practical effect, is to take the property of the defendant after the lien of the attachment has in this manner been removed, and apply it to the payment of the debt created by issuing and serving it, and afterwards detaining the defendant’s property under its authority ; and no more flagrant violation of the rights of an owner of property can well be imagined. If it should be sustained,, there will be nothing to prevent a frequent repetition of what seems to have taken place in this instance — that the defendant’s stock in trade shall be taken into the possession of the sheriff, his-business interrupted and for the time destroyed; .and when the attachment can be no longer maintained, to leave him, as the only alternative for resuming the possession of his property, the payment of the costs, fees and expenses of the proceedings by which he may have been despoiled. And it was in part to protect parties against disasters of this description that these constitutional provisions were adopted, and to prevent them from being produced, by the mere fiat of a legislative direction. It will be no answer to the protection which these provisions of the Constitution were designed to afford, that the person whose property may be taken from him, and held by the sheriff until he shall pay his costs, charges and expense, may reimburse himself for the amounts paid by a suit upon the undertaking. For that will ordinarily afford him no equivalent for the loss and destruction of his business after it has been brought about in this manner.

A suit upon an undertaking where the defendant’s stock in trade may have been taken from his possession, .and his business interrupted and suspended, would afford him no redress for the most serious injury he will appear to have sustained. - For the loss to which he will be subjected by the interruption of his business must usually be incapable of being proved in such a manner as to render it the subject of compensation in an action. But if that could be proven, the perplexity, delay and suspense to which the defendant would necessarily be subjected in the prosecution of an action, would, to a great extent, deprive him of anything like adequate-redress for the injury indicted upon his affairs. Then, before an action even upon the undertaking could be maintained, the costs, charges and expenses of the sheriff would require to be paid, and it is not every person whose property may be seized, and whose-business may be thereby interrupted, who would have the ability to-raise the money required to make such payments. That may very well be the position of the defendant against which the attachment issued in this case. For before possession of its property can be assumed, it has been required, under the authority of this section of the Code, to raise and pay to the sheriff this large sum of $5,429.78. An action, the right to maintain which can only be secured in this manner, must evidently fall far short of adequate means of redress to the party whose property may be seized and held in the manner in which this stock was taken and held by the sheriff. It would not justify legislation of the description of that contained in this section of the Code. For it would permit the taking of the property of another and applying it to the discharge of the obligation of the party taking it, without affording any adequate means of redress for the wrong so committed.

The ease of Woddruff v. Imperial Fire Insurance Company (90 N. Y., 521) in no manner tends to maintain the authority of this legislation. For there the defendant settled with the plaintiff, paying the amount of his claim and thereby conceded the regularity of the attachment, which might very well primarily subject him to the payment of the sheriff’s costs, charges and expenses, while in this case there was no such concession in any form whatever; but the regularity of this seizure was practically superseded by the •order made vacating the attachment. The case of Hall v. United States Reflector Company (66 How., 31), does not consider the power of the legislature to devote the property of the defendant in •an attachment, after it has been annulled or vacated, to the payment ■of the fees and expenses, not in any manner created or incurred by its owner, but it in effect declined to consider the rights of the sheriff, as it there appeared that they were being made the subject of determination in other legal proceedings, and no authority has been found lending its sanction to the theory that the legislature may subject the property of a defendant to the payment of the •sheriff’s fees and expenses, after his entire power over it has been •ended by vacating or setting aside the attachment. The principle is entirely different from that which has been held to sustain the right of a receiver to compensation from the property itself or its •owner, after it has been committed to the care and protection of such an officer in the course of legal proceedings.

That was the case of Hopfensack v. Hopfensack (61 How., 498). There the property was held and preserved for the benefit of all the parties to the controversy, and for that reason it was decided that the receiver could not be divested of his possession without the payment of his fees, while here the property was not taken or held in any sense for the benefit of the defendant in the attachment, but that was exclusively for the advantage and benefit in that action •of the plaintiffs. So far, therefore, as the claim of the sheriff against the property consisted of costs, fees and expenses, unauthorized or sanctioned by the defendant in the attachment, he had no lien upon or right of possession off the property which had been taken under the attachment. And to that extent no legal authority exists in support of his action, brought to sell the property for the satisfaction of his costs, charges and expenses.

At the time when the property was taken it was in the store known as No. 4 Great Jones street, and both the plaintiffs and the president of the defendant, in the attachment, entered into a stipulation by which they agreed that the sheriff should pay the rent then owing for the premises, and such rents as should after-wards fall due, until the property should be finally disposed of, and that the rent should be treated and regarded as expenses of the sheriff in this action, under the process held by him. This stipulation and another of the like effect, afterwards made, seem to have been entered into upon the understanding that the sheriff could hold the property for his fees and expenses under the attachment, and to induce him to pay the rent and protect himself in this manner, because of this understanding. He appears to have paid for the rent of these premises after these stipulations were made, and before 1ns right to do so under their authority was in any manner withdrawn or denied, the sum of $3,605. And for so much of that as was not discharged by the payments which the plaintiffs made to the sheriff on account of his fees and expenses, he had the right to hold this property, for it is fair to assume that he would not have paid this rent if these stipulations had not been entered into. He was induced by them to make the payments, and that was done by the concurrence and authority of the defendant in the attachment, as well as that of the plaintiffs. And after having induced him to make such payments, with the expectation and implied assurance that the amounts paid should be secured by the property attached, the defendants are not at liberty to deny the right of. the sheriff to this remedy. So far as he holds the property for the rent paid, this action may well be maintained. To that extent the sheriff has a right of action for the sale of this property, to reimburse him for the amount still owing to him. which was paid out upon the faith of these stipulations. But beyond that he has no right to proceed against this property for the satisfaction of his costs, charges and expenses. As, however, something still remains due to him on account of the rent paid, the action to that extent must be maintained, and that will require the judgment from which the appeal has been taken to be affirmed, but with liberty to the defendants to withdraw their demurrers and to answer on payment of costs

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

Judgment affirmed, with liberty to defendant to withdraw demurrers and answer on payment of costs.


author: Daniels, J.: Brady, J.

text:
    WILLIAM GIBSON JONES, Respondent, v. LULA V. JONES, Appellant.

      Service of a summons on a defendant outside of the territoi'ialj urisdiction of the court— effect of a judgment entered then'eon in another State — when binding if the defendant appears — TT. S. Const., an'i. 4, sec. 1 —after the dissolution of a mm'riage ru> action for divorce will lie.

    In this action, brought to procure a divorce on the ground of adultery, the defendant,who was then a resident of Texas, after having been served with the summons under an order of publication, appeared and answered the complaint. Thereafter the defendant commenced an action in Texas to procure a decree dissolving her marriage with the plaintiff, her husband, upon the ground of his cruelty and other misconduct. While the present action was pending, a citation, issued in the action brought by the wife, was personally served upon the defendant in that action (the plaintiff in the present action) in New York, the place of his residence, as authorized by a statute of the State of Texas. After the service of this citation the plaintiff proceeded to Texas and answered the petition filed against him there by his wife, the present defendant. After the'wife had been allowed to amend her petition, to obviate objections taken by him to the sufficiency of its allegations, he again answered it, alleging, first, a want of jurisdiction on the part of the court over his person, and afterwards setting up a defense to the action upon the merits. Upon the verdict of a jury, a judgment was entered in favor of the wife, dissolving the marriage, which judgment was subsequently affirmed by the Supreme Court of Texas upon an appeal taken to it by the husband. After the recovery of this judgment, the wife, the defendant in this action, was allowed to set up the recovery thereof, by supplemental answer, as a defense to this suit.

      Held, that although the service of the citation, issued in the wife’s action, upon the husband in this State would not have conferred jurisdiction upon the court in Texas to direct a judgment dissolving the marriage, which would be valid and effectual in this State, yet by his appearing in that action and contesting the jurisdiction of the court, and the right of his wife to maintain her suit, he rendered the judgment entered against him conclusive in that State, and therefore entitled, under section 1 of article 4 of the United States Constitution, to the same conclusive force and effect in this State.
    That if the Texas court erred in holding that it had acquired jurisdiction over his person, the error could only be corrected by means of an appeal, writ of certiorari, or writ of error, brought for the direct purpose of reviewing and correcting the decision.
    That as the judgment dissolving the marriage, so recovered by the wife, was binding upon the plaintiff, her husband, it disabled him from further prosecuting this action against her. (Beady, J., dissenting.)

      Btilphen v. SUlphen (58 Me., 508), distinguished.

      Appeal from a judgment in favor of the plaintiff, recovered on a trial at Special Term.

      William W. Badger, for the appellant.

      Edwin B. Smith, for the respondent.
   Daniels, J.:

The action was brought for a divorce on the alleged ground of adultery. At the time of its commencement the defendant; was a resident of the State of Texas, and the summons was served upon her under an order of publication. She appeared in the action and answered the complaint. After the service of her answer she ■commenced an action in the District Court of Camp county, in the State of Texas, against'the plaintiff in this action, who was then her husband, and obtained a divorce dissolving her marriage with him, on the ground of cruelty and other misconduct alleged for that purpose in her petition. She had at that time resided in Texas for a period of six months, and under the statute of that State was authorized to commence and prosecute such action for the causes alleged in her petition. The plaintiff in this action was not in the State of Texas at the time when her petition was filed, and a citation was issued by the court directed to him, requiring him to answer the petition, as that was authorized by the statute of that •State. This citation was personally served upon him in the city of New York, on the 11th of December, 1882, while his own action was still pending against his wife. The statute of the State of Texas permitted such a service to be made of a citation out of the State. But if the action proceeded alone upon its service, and proof of the facts alleged in the petition, and a judgment dissolving the marriage had followed, under the authority of the statute of the State of Texas, it would not have been binding or operative upon the plaintiff in this action, who at the time was a resident of this State. For it is now settled by the authorities that an action commenced in this manner by a husband or wife resident in another State, against the husband or wife, at the time residing in this State, will not confer jurisdiction over the person residing out of the State in which such action has been commenced, or authorize a judgment dissolving the marriage. Jurisdiction over an absent party cannot be obtained in. that manner, so as to render a judgment effectual or operative beyond the State in whose tribunals it may have been obtained. (Holmes v. Holmes, 4 Lans., 388; and Hart v. Sansom, 110 U. S. R., 151.) "Where it is held that “no court, deriving its authority from another' government, will recognize a merely constructive service as bringing the person within the jurisdiction of the court. The judgment would be allowed no force in the courts of any other State; and it is of no greater force as against a' citizen of another State, in a court of the United States, though held within the State in which the judgment was rendered.” (Id., 155 Cox v. Cox, 19 Ohio St., 502; Sewall v. Sewall, 122 Mass., 156.)

This rule has been so rigidly adhered to that it has been held that the defendant in such an action, commenced and prosecuted to a judgment by his wife against him in the State of Ohio, would not be at liberty to marry again after the recovery of such divorce by her; and as he did so, a criminal offense was committed, for which he might be punished by imprisonment in a State prison. (People v. Baker, 76 N. Y., 78.)

But after the service of the citation upon the present plaintiff, he • proceeded to the State of Texas and answered the petition filed by the present defendant against him for a divorce. By his answer he first objected to the jurisdiction of the court over him, by the service of a citation upon him, in the city of New York, and demurred and excepted to the sufficiency of the facts mentioned in the petition to entitle his wife to a judgment against him under the statute of the State of Texas. She afterwards obtained leave to amend her petition, and did so, by alleging further facts deemed to be material on her part, and this amended petition was again answered by him, alleging, first, a want of jurisdiction on the part of the court over his person, and afterwards presenting his defense to her action upon the merits. The issue joined in this manner came on for trial before the court and a jury, when a verdict was recovered against him. This verdict was followed by a judgment dissolving his marriage with his wife and conferring upon her the ■ custody and education of their infant child. Objections and exceptions were taken and filed by him for the purpose of a motion for a new trial. A case and bill of exceptions was also made and settled, and an appeal taken by him from the judgment in the action to tlie Supreme Court. The appeal was afterwards argued* and upon full consideration by the court the judgment was affirmed, and has since been reported as Jones v. Jones (60 Texas, 451). After the recovery of the judgment by his wife she applied for leave in this action to present it by way of supplemental answer to the-plaintiff’s complaint. That leave was secured by her, and the answer was served setting forth the recovery of the decree dissolving her marriage with the plaintiff in this action, as a defense to this suit;, This defense was presented upon the theory that, as her marriage with the plaintiff had been dissolved by the decree, and judgment recovered by her in the State of Texas, she was no longer his wife, and that he was accordingly disabled by that fact from further prosecuting this action against her under the laws of this State. The right to maintain such an action being secured by the present, as well as the preceding law, only to a person sustaining the relation of husband or wife to the defendant. (3 R. S. [6th ed], 155, 156 ; Code Civ. Proc, § 1756.)

And if the judgment recovered by her was binding upon her husband, this result would seem to follow as one of its necessary effects, for it is not important upon what ground the marriage may have been dissolved, if its dissolution had actually taken place. Por another action, whose object is thé attainment of a similar result, cannot be maintained by a divorced husband against his wife.. It is supposed that a different ruling was followed in Stilphen v. Stilphen (58 Maine, 508). Put that decision proceeded upon the effect of a statute of the State of Maine in terms securing; that right, and it was held, although that statute had been superseded by another, that under the law the same right to another divorce might still be maintained. But as this authority proceeded solely upon the effect of the statutes of the State of Maine, and no» such statute exists in this State, the further prosecution of this action by the plaintiff cannot be maintained by reason of anything; that was held in that case.

It has, however, been further insisted that the judgment recovered by the wife against her husband in the action in the State of Texas is not effectual or binding upon him, for the reason that her suit could not be commenced in the manner in which it was and be» afterwards binding upon him, as he was entitled to disregard the ■service of the citation made upon him; that bis answer to the petition filed by his wife could not be construed to be a waiver of this right, or as a submission of his person to the jurisdiction of the Texas court. And authorities have been brought to the attention of the court, in which it has been held, as a general legal proposition, that a court, in which a legal proceeding has been carried on without obtaining jurisdiction of the person of the individual designed to be proceeded against, could not acquire such jurisdiction by his appearance for the purpose of objecting and alleging this want of it; and that if his plea or answer were overruled, he might still contest the merits of the action without depriving himself of the validity of the objection taken to the jurisdiction of the tribunal. This has been held to be law in cases arising not only in this State but in other States and in the Supreme Court of the United States. But in all those cases where the law has been so applied to the determination of the point of jurisdiction over the person of the defendant, it has been by means of an appeal, writ of ■certiorari or writ of error, brought for the direct purpose of reviewing and correcting the adverse decision. Such was the «course of proceeding in Cunningham v. Goelet (4 Denio, 72); Wright v. Boynton (37 N. H., 9); Avery v. Slack (17 Wend., 85); Ressequie v. Brownson (4 Barb., 541); Allen v. Stone (9 id., 61); Belden v. New York and Harlem Railroad Company (15 How., 17); People ex rel. Wyman v. Johnson (1 Thomp. & C., 578); Insurance Co. v. Dunn (19 Wall., 223); Harkness v. Hyde (98 U. S., 476); Sullivan v. Frazee (4 Robt., 616); Walling v. Beers (120 Mass., 549); De Witt v. Monroe (20 Texas, 289): McKinney v. Jones (7 id., 598); Steamship Co. v. Tugman, (106 U. S., 118). Under the rule settled by these authorities, the plaintiff in this case was probably entitled to a judgment relieving him from the effect of the action, commenced in the manner in which the suit was comimenced, which was pending in the State of Texas, and if his appeal could have been extended so as to bring the case within the authority of the Supreme Court of the United States, that might well have been the result, according to the decisions made by that tribunal. But it was not, for the case was reviewed and a determination made against him by a final decision of the Supreme Court, upon his appeal. By this determination it was definitely decided by tbe courts, in tbe State of Texas, that jurisdiction had been acquired over the person of the defendant, and that the courts of that State possessed rightf ul authority to 'decide the legal controversy pending between himself and his wife. Such a determination was finally made, and to the present time it remains in full force and unreversed. That court may have decided erroneously against the husband in overruling his objections to its jurisdiction, but it does not follow from that circumstance that he can avoid the •effect of the determination so made, by now insisting upon the •error and establishing his legal right to have had that point decided in his favor, instead of against him, as it was by the court in the State of Texas. The error,' if one intervened in the legal proceeding, cannot be corrected in this manner. It must be done by way of appeal or writ of error, in the action or proceeding in which the error arose. When a judgment, which may have proceeded upon an erroneous view of the facts or of the law, is brought up for consideration between the same parties in another action, its •effect cannot be avoided by reason of the circumstance, that it may have been erroneously or irregularly decided. (Potter v. Rowland, 4 Seld., 448.) But where such a judgment or final determination remains in force, unreversed, it continues to be binding as an adjudication against the parties to the action. It is a general rule of the law that where a fact has been put in issue in the course of legal proceedings, and after a hearing, has been definitely considered and decided, that the decision while it remains uni’eversed is final and conclusive against the parties to the action or proceeding in which it may have been made. (Sheldon v. Edwards, 35 N. Y., 219; Webb v. Buckelew, 82 id., 555-559 ; Church v. Kidd, 88 id., 652; Patrick v. Shafer, 94 id., 423.)

This is the general rule of the law applicable to such a state of facts, and it follows from it that this judgment, certainly in the State of Texas where the same principle is to be presumed to be the law, conclusively settled the point against the present plaintiff that the court in which his wife proceeded against him did acquire jurisdiction over his person, and certainly had authority to determine the controversy in the action there pending between his’ wife and himself. That was the effect of the judgment as it was recovered by her in her action against him, and in no proceeding taken upon that judgment in that State would he, under this rule, have been permitted again to contest the jurisdiction of the courts of the State of Texas to pronounce the judgment which was there recovered against him as the result of that litigation. The fact was definitely maintained that the court had jurisdiction over his person, and that a state of facts éxisted which, under the laws of the State of Texas, entitled his wife to a judgment against him dissolving their marriage, and awarding the custody of their child to her. This was the necessary and legal effect of what had there taken place; and as the judgment had, by his appearance in the action and contesting the jurisdiction of the court and the right of his wife to maintain her suit, become conclusive against him there, • it was necessarily entitled to the same force and effect in this State. He had voluntarily appeared there and presented these points for the consideration and determination of the courts of the State of Texas. These courts decided the facts as well as the law against him, and as that was done after an appearance and contest on his-part, he was necessarily concluded by the judgment there; and, being concluded there, it follows under the Constitution of the Hnited States that it must have the same force and effect in this State. For, by section 1, article 4 of the Constitution, it has-been declared that “ full faith and credit shall be given in each State to the public acts, records and judicial proceedings of every other State.” And congress, soon after the adoption of the Constitution, enacted a statute, which still remains in force, to carry this provision into effect. And, under the Constitution and this-act of congress, it has been held that the judicial proceedings had in one State shall, when properly authenticated, be of the same binding force and effect in each of the other States. (Mills v. Duryee, 7 Cranch, 481; Christmas v. Russell, 5 Wall., 290.) There the principle was sanctioned that “ if a judgment is conclusive in the State where it was pronounced, it is equally conclusive everywhere.” The judgment considered in that action had been recovered in the State of Kentucky, and it was said by the court: Beyond all doubt the judgment was valid in Kentucky, and conclusive between the parties in all her tribunals. Such was the decision of the highest court in the State, and it was undoubtedly correct; and, if so, it is not competent for any other State to authorize its courts to open ■the merits and review the cause, much less to enact that such a judgment shall not receive the same faith and credit that bylaw it had in the State courts from which it was taken.” (Id., ■302.) And in Cheever v. Wilson (9 Wall., 108) it was held that ■a judgment for divorce was entitled to the same weight and effect, where it had been pronounced after jurisdiction had been acquired by the court over the parties to the action. In that case it was said that “the Constitution and laws of the United States give the ■decree the same effect elsewhere which it had in Indiana. If a judgment is conclusive in a State where it is rendered, it is ■equally conclusive everywhere in the courts of the United States.” {Id., 123.) And in Kinnier v. Kinnier (45 N. Y., 535) the same xinciple was again applied to a judgment recovered in an action for divorce. _ It was held that the “ question whether he was a resident there so as to enable him to file his bill, was for that court to determine; and, although it may have decided erroneously, the decision cannot affect the validity of the judgment. The status of all persons within a State is exclusively for that State to determine for itself. It is unnecessary to say what the effect might be if it was alleged that Pomeroy had never been within the State, although he may have authorized the bill to- be filed; but it is conceded he was there, and sufficient facts are alleged to give the Illinois court power to decide the question of domicile, and the judgment is not void, if we concede that the decision was erroneous, and if it is also conceded that the question of residence is vital to give jurisdiction. A wrong decision does not impair the power to decide, or the validity of the decision when questioned collaterally.” (Id., 540, 541.) Under the effect undoubtedly secured by the rule sustained by these authorities, it should have been held upon the trial of this part of the action that this judgment, which was recovered upon the voluntary appearance of the defendant in that action, and fipon the contest made by him drawing in question the jurisdiction ■of the court, and also the right of his wife to maintain her action against him upon the merits, that it conclusively settled the controverted points, and legally dissolved the marriage existing between his wife and himself. It was not necessary that the judgment should have proceeded for a cause allowed by the statute of this State as a ground of divorce to entitle it to that effect, for each of the States lias -undoubted authority by its own laws to provide for the causes for which a marriage contract may be dissolved: and when that has been done, and a case under the authority of the statute has been brought before the courts of the State, and ic lias, been sanctioned and maintained after a hearing of both parties, and a judgment has resulted, it cannot, while it shall remain in force, be questioned or avoided by either of the parties. The State of Texas has enacted a law by which, for the causes alleged in the petition of the wife, her marriage with the plaintiff in this case could be dissolved. The court in which the action was pending had jurisdiction over that subject-matter, and by his appearance the defendant voluntarily submitted himself to that jurisdiction. He applied to the court to hold in his favor that jurisdiction over his person had not been obtained, and also to determine the merits of the controversy against his wife. This application on both grounds-was entertained by the court and decided against him. And as he was there concluded by that decision obtained in this manner, he was concluded in the same manner in this action, and the judgment should have been held to be a legal defense to the further prosecution of this suit. The judgment should accordingly be reversed and a new trial ordered.

Davis, P. J., concurred.

Brady, J.

(dissenting):

This action was brought to obtain a divorce on the ground of infidelity. The defendant set up, among' other things, the recovery of a judgment, in May, 1883, by her in Texas, decreeing an absolute divorce, of which State she was then, and continued at the time of the answer interposed herein, to be a resident. The defendant moved, therefore, and it was ordered, that all the issues of fact in reference to the separate defense pleaded by her, alleging the judgment and decree of divorce already mentioned, be tried at' the Special Term without a jury, and that she have leave to renew the motion to settle the other issues as to adulteries alleged in the complaint for trial by jury, if she should be so advised. The object of this mode of procedure, which is unprecedented in an action of this character, was doubtless to avoid the trial of the other issues, which would become unnecessary if the divorce set up were valid, and being so, dissolved the relation of husband and wife-, between the parties.

It appears from the record that the plaintiff in this action was aa resident of this State at the time the proceeding in Texas was com^menced against him ; and that he was served with process in this: State, but appeared in the proceeding in Texas, insisting that the-court in which the action was brought by the defendant against him had no jurisdiction over him. This want of jurisdiction was repeated in all the stages of the proceeding in Texas, notwithstanding his answer and his contestation of the right of the defendant to recover against him.

The opinion of the learned justice in the court below contains a statement of the salient facts of th'e issue which was tried before him, and discusses each one of the points presented by them, and fully disposed of them on principle and authority, declaring, as the result, the judgment of divorce in Texas to have been without jurisdiction. We see no reason for differing from him in the views expressed, and adopt his opinion as conclusive.

I think the judgment should be affirmed, without costs.

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