author: Follett, Ch. J. Bradley, J.

text:
    Asa W. Parker, Resp’t, v. Alexander McLean, Impl’ds App’lt.

      (Court of Appeals, Second Division,

      Filed October 1, 1892.)

    Bills and notes—Diversion.
    In an action upon a promissory note the evidence showed that E., the maker, agreed to exchange the lease and furniture of a hotel, upon which there was a chattel mortgage of $2,000, for certain real estate belonging toO., upon which there was a mortgage to plaintiff and unpaid taxes. E. gave her note for the difference in the trade, payable to herself, endorsed it, and then defendant endorsed it for the accommodation of E. and then delivered it to 0., who delivered it to plaintiff, who advanced $300 to O. to enable him to pay arrears in rent of hotel, and later $750 in cash, and the balance, $78.86, was applied to pay a debt of Mrs. O. to plaintiff. The father of E. and her agent was present when the $300 was paid. Defendant claimed his endorsement was for the accommodation of the maker, and so known to be by O. and plaintiff, for the purpose of paying the chattel mortgage, and was wrongfully diverted. Held, that the weight of evidence was so-greatly in favor of plaintiff that the restriction placed upon the use of the note was waived by E.’s father that the judgment should be sustained, as defendant has failed to point out any vital error by the trial court to which its attention was called.
    (Bradley, Vann and Haight, JJ., dissent.)
    Appeal from judgment entered on order of the general term of the city court of Brooklyn, affirming judgment entered upon a verdict in favor of the plaintiff.
    The action was brought against the maker and endorsers of a. promissory note of date July 18, 1889, made by Evelyn P. Everett for $1,128.86, payable to her order four months after date-at Long Island Bank, and endorsed by her, Alexander McLean and Sampson B. Oulton. The defendant McLean alone defended,, and he did so on the alleged defense that the note was made- and by him endorsed for the accommodation of the maker, to be used for the special purpose of being applied in payment of a certain mortgage on personal property at the Hotel Everett in the-city of Hew York. The court directed a verdict for the plaintiff..

      Horatio C. King, for app’lt; N. C. Moak, for resp’t.

         Affirming 34 St. Rep., 790.

   Follett, Ch. J.

In 1889, Sampson B. Oulton owned real estate in Brooklyn, subject to a mortgage held by Asa W. Parker. which was foreclosed, and on the sale the mortgagee purchased the property. Parker agreed with Oulton that the latter might exchange the property and have all he could realize out of it after paying the debt. Miss Evelyn P. Everett was the lessee of the Hotel Everett, in the city of New York, and owned the furniture ■and certain other property connected therewith. In July of that year Oulton and Miss Everett agreed to exchange their properties .free from all incumbrances. When they met to effect the exchange it appeared that there was a chattel mortgage on Miss Everett’s property for $2,000, which did not become due until the following August, and could not, at the date of the exchange, be ■conveniently paid. It also appeared that the taxes in arrear ¡upon the Brooklyn real estate amounted to $871.14, which, deducted from $2,000, the amount of the chattel mortgage, left •$l,128.-86 difference, which Miss Everett was required to pay or ¡secure to be paid to Oulton. ' This being done, Miss Everett took ¡the Brooklyn real estate subject to $871.1.4 due for taxes, and 'Oulton the Everett House property subject to the chattel mortgage for $2,000. To secure the payment of $1,128.86, the differerence between the incumbrances, Miss Everett, on July 18,1889, gave her promissory note by which she promised to pay to her ¡own order $1,128.86 four months after date at Long Island Bank. Miss Everett endorsed the. note .and Alexander McLean also endorsed it for the accommodation of the maker, and it was then -delivered to Oulton, who, July 21st, endorsed and delivered it to ¡the plaintiff, who advanced $300 to enable Oulton to pay rent in arrear on the hotel property, and about September 1st advanced $750, making $1,050 paid in cash for the note. The remainder, ■$78.86, less the discount for the time the note had to run, was applied on an indebtedness of Mrs. Oulton to the plaintiff. The plaintiff testified, and in this he was uncontradicted, that the father of Miss Everett and her agent was present when the $300 was paid. This action was brought against the maker and both endorsers to recover the amount due upon the note. McLean alone defended upon the ground that his endorsement was for the accommodation of the maker, and was known to be by Oulton and the plaintiff; and that the note was made and endorsed for the purpose of paying the chattel mortgage for $2,000 given by Miss Everett, but was wrongfully diverted by Oulton and the plaintiff from that purpose.

It is conceded that $600 of the avails of the note were paid on the chattel mortgage. At the close of the evidence a verdict was ■directed for the plaintiff for $1,050, the amount which he advanced on the note, which was $111.13 less than the amount due thereon. 'The defendant excepted to the direction and to the refusal of the ■court to submit to the jury: (1) Whether it was agreed, to the plaintiff’s knowledge, that the note or its avails was to be applied in payment of the chattel mortgage. (2) Whether the plaintiff was a bona fide holder of the note. These are the only exceptions ■discussed in behalf of the appellant. It is undisputed that $600 received from the plaintiff by Oulton were paid on the chattel mortgage. To that sum there was no defense. The defendant did not endorse the note in the presence of the plaintiff and the-condition upon which he says he endorsed it was not stated in the presence of the plaintiff or made known to him. The defendant endorsed the note which was presented to him by Wood, who alone was present when the condition was imposed, and it is not claimed that what the defendant said to Wood was brought to the knowledge of plaintiff. The evidence oh the part of the defendant does show that it was agreed between Miss Everett and her father on the one side, and Mr. and Mrs. Oulton on the other, that the avails of the note were to be used in payment of the mortgage. The restriction which the Everetts imposed upon the use of the note could be waived by them; and it appears, as above stated, that Mi’. Everett was present when the $300 was advanced by the plaintiff on the note. Had the question been raised that the plaintiff was not entitled to recover that sum, but only the sum which he subsequently advanced, he might have shown a consent that the $300 might be used for other purposes. The case was tried upon the theory that the plaintiff was not entitled to recover anything, and not that the defendant had established a partial defense. The defendant asked to go to the jury upon the theory that evidence had been given which if believed would sustain a verdict of no cause of action, but there was no such evidence. The learned counsel for the defendant does not urge in his brief that the judgment is erroneous in part and should be modified, but insists that it should be wholly reversed. The weight of the evidence is so greatly in favor of the plaintiff andi against the defendant that the judgment should be sustained, unless the appellant points out a vital error committed by the trial court to which its attention was called. This we think he has failed to do.

The judgment should be affirmed, with costs.

Bradley, J.

(dissenting.)—The note in question was the product of a transaction between the defendants Everett and Oulton, by which she exchanged with him the personal property in the Hotel Everett, in the city of Hew York, for certain real estate in the city of Brooklyn. It appears that the plaintiff had foreclosed a mortgage on the Brooklyn property, and became the purchaser at the sale, and advised Oulton, the former owner, that he might, if he could trade the property, have the benefit of it, subject to plaintiff’s claim; and that the latter would at his instance convey it accordingly. Oulton entered into an agreement with Miss Everett to exchange the-property, subject to such claim, with her for her personal, property in the Hotel Everett, and her lease of the hotel. And as there was a mortgage upon her property there of' $2,000, it was arranged that she should give him her note, with an endorser for that amount The note was accordingly-made by her, and endorsed by McLean. But before the transaction was closed it was ascertained that there were taxes existing against the Brooklyn property amounting to about $870., and it was thereupon arranged that the $2,000 note should be reduced the amount of such taxes. The note sued on was then made in the place of the other, and endorsed by McLean; and the trade was consummated. The defendant gave evidence tending to prove that the purpose of the note, and the understanding and agreement upon which it was made and endorsed, were that it or its proceeds should be used in paying the mortgage on the property in the hotel, and that such purpose and agreement was understood by the plaintiff,- as well as by Oulton, at the time the note was made. The evidence on the part of the plaintiff was to the contrary of that on the part of the defendant in respect to the purpose for which the note was made. The note was taken by Oulton, and afterwards he obtained from the plaintiff upon it $300, and later $750 more. And he testified that when he obtained from the plaintiff the first sum, he 'informed him that the purpose for which he wanted it was to pay back rent on the Hotel Everett, amounting to $351.70, and that he obtained and used the money for that purpose. The trial court refused to submit to the jury the questions whether the alleged agreement in respect to the purpose for which the note was made and endorsed was made, and whether the plaintiff was a holder of- it in good faith; and directed a verdict for the plaintiff for $1,050. And upon the exceptions taken to such refusal and direction the questions presented for consideration arise.

The mere fact that the defendant McLean was an accommodation endorser does not aid the defense. But-if, as claimed by him, the note was made and by him endorsed pursuant to an agreement that its use should be devoted to the payment of the chattel mortgage upon the property which the maker had exchanged with Oulton for the Brooklyn premises, then such arrangement may have been effectual as against a person other than a bona fide holder, seeking to enforce its collection, in case a diversion had with his knowledge and consent been made of it from such specific purpose, provided the maker might possibly be benefited by the performance of the condition and prejudiced by the failure to ■observe and effectuate such purpose. In -such case the arrangement does not qualify the terms of the note, nor is it inconsistent with the undertaking of the parties as by it expressed to pay, but has relation to the object to which the 'note or its proceeds are to be appropriated, and constitute a condition in that respect upon which it is made, delivered and accepted. And for that purpose the matter may be the subject of inquiry- by evidence against any •other than a bona fide holder of the paper. Benton v. Martin, 52 N. Y, 570; Bookstaver v. Jayne, 60 id., 146 ; Potts v. Mayer, 74 id., 594.

In the present case there was no understanding with the holders -of the mortgage or otherwise that they would take the note or that it should be tendered or delivered to them. It seems that the mortgage became due before the maturity of the note. While these circumstances may have a- bearing upon the question' of fact presented upon the conflict of evidence, they do not necessarily preclude the inference from the agreement, if found to, have been so made, that the proceeds of the note were to be obtained and made available for and applied to the alleged purpose. In that view, as the note was delivered to Oulton for the purpose for which it was made and endorsed, it would seem to have been contemplated that he would receive or obtain the money upon it and make its application upon the mortgage; and consequently any person who should take the note from him with knowledge of its purpose and advance the money upon it to Oulton would not be affected by the charge of the diversion by him of the fund, unless such person at the time he made the advance and took the note was advised or understood it was to be so diverted. There is evidence tending to prove that the first application to the plaintiff for an advance of money upon the note was for a purpose other than payment upon the mortgage, and that the advance of $300 was expressly made by him to Oulton to use for such other purpose.

Assuming that this was a diversion in violation of the condition upon which the note was delivered to and taken by Oulton, and that the plaintiff then had knowledge of such restriction upon the use of the proceeds' of it, he was, so far as related to the title to the note and the liability upon it of the maker and endorser, in like manner affected by the diversion of the money so advanced by him for and appropriated to such other purpose. But it is essential that the maker or endorser had some interest in having the proceeds of the note paid and applied upon the mortgage, ^ which was the first one on the property, for unless there was a possibility of prejudice to those persons or one of them by the diversion of such proceeds from it there would seem to be no reason for the effectual support of the alleged condition as a defense. The interest, so far as appears, of the maker, of the note in' the observance of such condition was in the fact that she took from Oulton at the time of the transaction a mortgage for $10,500 upon the property covered by the chattel mortgage before mentioned. And thus she may have had an interest in having the property relieved from the lien of the prior mortgage. 1ST or can it be held .that the performance of the condition would have been of no possible advantage to the endorser McLean by way of protection or reimbursement of him as such. But there is evidence tending to prove that he was a party to the agreement so far that his endorsement was made upon the condition- before mentioned in respect to the use which should be made of the note or its proceeds. ' The views the court in Bookstaver v. Jayne, so far as relates to the defense of the endorser, are applicable to the present case. The mortgage in question was not paid by Oulton, but was foreclosed, and it. may be assumed that all the rights afforded by the mortgage made by him to Miss Everett on the property were cut off by such foreclosure.

It is urged that the weight of evidence so dominated in support, of the verdict that if any other than that directed had been rendered, it would have been the duty of the court to set it aside. While it is true that the burden was with the defendant to establish the alleged defense, the evidence, conflicting as it appears, is not such as to warrant that conclusion on this review. In the view taken, however, the evidence as it now appears in the record •does not warrant the inference that any of the money advanced by the plaintiff to Oulton upon and for the note other than the :$300, was made for the purpose of its diversion or with any knowledge or consent of the plaintiff that it would be diverted to or used for any purpose other than in performance of the alleged condition.

These views lead to the conclusion that the judgment should be reversed and a new trial granted, costs to abide the event, unless the plaintiff stipulate to deduct from the judgment entered on the verdict as of the time of its entry $300, and in that event the judgment be so modified and as modified affirmed, without costs in this court to either party.

.Judgment affirmed, with costs.

All concur, except Bradley, Vann and Haight, JJ., dissenting.


source: Caselaw Access Project

author: Brown, J. Parker, J.

license: Public Domain

text:
    John N. Smith, Resp’t, v. David C. Reed, App’lt.

      (Court of Appeals, Second Division,

      Filed October 1, 1892.)

    L Cloud on title—Res adjudicata.
    On November 20, 1874, Wm. H. Taylor, the owner of the real estate in question, conveyed it to F., who immediately conveyed it to Mrs. Taylor. Defendant claims title as a grantee of the daughter of Mrs. T., a devisee under her will. Plaintiff derived his title through a sheriffs’ deed made upon a, sale on a judgment of the Nassau Bank against Wm. H. Taylor, entered April 9, 1875, the sale having been made October 20, 1880. In this action ■commenced in January, 1890, to have the deed to Mrs. Taylor, etc.,declared void as intended to defraud the bank, plaintiff put in evidence, to show rthe fraud, a judgment roll in an action commenced in October, 1875, to set the deeds aside, which upon the death of Mr. and Mrs. T. had been revived against the children, one of whom, defendant’s grantor, was then •a minor. A guardian ad litem was appointed for the infants and answered for them. Said judgment contained a recital that said infant had been served with the supplementary summons. There was no oral evidence. The trial court found that the infants were not served with the summons and that the judgment as against the infants was void.' Held, no error; that the service recited in ’ the judgment was not personal but was upon the guardian ad litem, and that his appointment was void from lack of proof of the facts essential to the jurisdiction of the court to make it.
    3. Same—Fraudulent conveyance.
    The deeds in question were quit claim deeds with a nominal considerar tian of one dollar, at the time of the execution of which Wm. H. Taylor was indebted to the. Nassau Bank and the Germania Bank in two overdue notes of $300 and $600. Held, that as defendant introduced no evidence upon the subject of a valuable consideration, a presumption was raised that the deeds were executed to defraud creditors, and plaintiff was entitled to a judgment declaring the deed to defendant a cloud upon title.
    (Parker and Follett, JJ., dissent.)
    3. Same—Statute of limitations.
    The statute of limitationsfed not apply as it was not an action to recover real estate, but an attempt by an owner to have an apparent, though in fact not a real incumbrance discharged from the record, which right is never barred by the statute.

      4. Same—Equity.
    ■ As the invalidity of defendant’s deed did not appear upon its face and a a resort to extrinsic evidence was necessary, it was a proper case to invoke the aid of a court of equity to remove the cloud.
    ■ Appeal from an order and judgment of the general term of the city court of Brooklyn, reversing a judgment of the special term and granting a new trial.

      Horace Graves, for app’lt; H C. M. Ingraham, for resp’t.

       Affirming 34 St. Rep., 489.

   Brown, J.

The purpose of this action was to have certain deeds under which the defendant claimed to be the owner of an undivided interest in the lands described in the complaint declared to be a cloud upon the plaintiff’s title and to have the same .adjudged void and illegal.

There is no dispute as to the facts of case, and excepting the possession by plaintiff of the property in question, they appear by admissions in the pleadings or from records introduced in •evidence upon the trial by the plaintiff.

The defendant makes his title through a deed from Carrie Lowitz, one of the devisees of the land under the last will and testament of her mother, Caroline Taylor.

Mrs. Taylor’s title was derived from her husband, William H. Taylor, who is admitted to have been the owner of the property on November 20, 1874. On that day he conveyed it to one -Ohauncey M. Felt, who immediately conveyed to Mrs. Taylor.

The plaintiff derived his title through a sheriff’s deed executed pursuant to a sale under an execution issued upon a judgment recovered against William H. Taylor by the Nassau Bank of New York city, on April 9, 1875, and docketed in Kings county •on the following day.

The plaintiff’s contention is, and such was the allegation of the complaint, that said deeds from Taylor to Felt and from Felt to Mrs. Taylor were without consideration, and were made with intent to hinder, delay and defraud said bank, and were fraudulent and void.

The sale by the sheriff was on December 20, 1880, and the execution under which it was made was issued October 9, 1880, pursuant to an order of the supreme court and a decree of the surrogate’s court of Kings county, Mr. and Mrs. Taylor prior to .that date having both died.

This action was commenced in January, 1890. The answer put in issue the plaintiff’s title, alleged the validity of defendant’s title, and pleaded the statute of limitations. From this statement it is apparent that the defendant showed a clear paper title to the share in the land claimed by him, and it was incumbent upon the plaintiff and essential to his recovery to establish his allegation that the deeds which conveyed Taylor’s title to his wife were fraudulent and void as against the Nassau Bank, through whose judgment he claimed. To establish the fraudulent character of that conveyance, plaintiff put in evidence a judgment roll in an action originally commenced by said bank against Mr. and Mrs. Taylor and Ohauncey Felt to have said deeds set aside.

That action was commenced in October, 1875, but before it was brought to trial Mr. and Mrs. Taylor died, and in February, 1878, it was revived against the three children of Mrs. Taylor, who were devisees under their mother’s will. At that time, as it appears from the moving papers, Carrie Taylor, the defendant’s grantor, who was the eldest child, was about seventeen years of age, and all of the children resided in the city of Brooklyn.

A judgment was subsequently entered in that action adjudging said deeds to be void, on the ground that they had been executed with intent to defraud .the creditors of said William H. Taylor, and that the land therein described was bound by the lien of the judgment recovered against said Taylor by the Nassau Bank, and granting leave to said bank to proceed upon execution theretofore or thereafter to be issued upon the judgment and sell said land in satisfaction thereof.

This judgment was conclusive upon the defendant as to the fraudulent character of the conveyance from Taylor to his wife, providing the court rendering it acquired jurisdiction of the person of the infant defendants therein, and whether or not it did acquire such jurisdiction was the crucial question presented upon the trial upon this branch of the case.

The trial court found that the infant defendants were not served with the summons, but that a guardian ad litem was appointed and answered for them without service of the summons, and that the judgment rendered therein as against said infants was void.

The judgment contained a recital that said infants had been served with the supplementary summons in the action, on March 11, 1878, and such recital was prima facie evidence of the truth of that fact But it was not conclusive ana the defendant was at liberty to show that service of the summons was not in fact made. Potter v. Merch. Bank, 28 N. Y., 641; Bosworth v. Vandewalker 53 id., 597 , Ferguson v. Crawford, 70 id., 253. No oral evidence was offered upon the question, but the appellant claims that the finding of the trial court is sustained by the inferences necessarily drawn from the papers'comprising the judgment roll and with this conclusion we agree.

The order making said infants parties to the action was granted February 23, 1878. It provided that they be brought in and made party defendants and appointed Alexander Cameron, Esq., a guardian ad litem for them unless they should procure the appointment of a guardian within ten days after the service on them of copies of the order.

The order appears to have been served on February 27th, and no guardian was thereafter appointed on the application of the infants. A supplementary summons dated March 11th, was issued pursuant to § 453, Code Civil Procedure, and upon that day was-served upon Mr. Cameron, who thereafter answered in behalf of the infants.

This evidence permits the inference that the only service was-on the guardian. No reason is apparent why the summons should have been served upon him if prior or subsequent to March 11th it was served upon the infants. It is also apparent that the guardian, acted under the appointment contained in the order of February 23rd. This negatives the idea of service on the infants after that date, and as the summons was not issued until March 11th no service could have been made before it. Jurisdiction over the infant defendants therefore, if acquired at all, must rest upon the validity of the order of February 23rd. Section 473 of the •Code of Civil Procedure, to which we are cited by the respondent, provides in substance that when an infant defendant resides in this state and is temporarily absent therefrom, the court may in its discretion make an order designating a person to be his guardian <zd litem unless he or someone in his behalf procures such a guardian to be appointed within a specified time after service of a ■copy of the order, and that in such case the summons may be served by delivering a copy to the guardian so appointed with like effect as when a summons is served without the state upon an adult defendant pursuant to an order for that purpose.

It is claimed that the order of February 23rd and the service upon the guardian was a valid service of ■ the summons under this section. Service of process upon the infants was not essential to confer jurisdiction, and if the order was properly granted and served under the section quoted, service upon the guardian was equivalent to personal service upon the infant Schell v. Cohen, 55 Hun, 207; 27 St. Rep., 889.

Notice in some form to an infant is essential to confer jurisdiction upon a court to bind his property. But the legislature may prescribe that it be constructive instead of actual, and proceedings in conformity with such a statute will be valid and bind the infant. Ingersoll v. Mangam, 84 N. Y., 622; Croghan v. Livingston, 17 id., 218; Gotendorf v. Goldschmidt, 83 id., 110. Section 473 covers a case in which personal service cannot be made and which is not within the provisions of the Code relating to service by publication.

But the difficulty of upholding the jurisdiction of the court to render the judgment against the infants under the order of February 23d' and the service on the guardian is that the moving papers upon which the order was made do not make a case within § 473. That section permits service of the summons to be made upon the guardian ad litem with like effect as if made on the infant, but unless the court had jurisdiction to appoint the guardian the service was wholly ineffectual. To authorize the appointment of a guardian ad litem for an infant defendant the moving papers should set forth the facts conferring authority upon the court to make the order. Grant v. Van Schoonhoven, 9 Paige Ch.. 255.

The petition of the Nassau Bank upon which the order of February 23, 1878, was made, contains no statement that any of the infant defendants were temporarily absent from the state. It states the age of all of them and that they were residing at 184 ■Clinton avenue in the city of Brooklyn.”

The petition was dated February 13th. Copies of the order •granted therein were served personally on all the infants at 184 Clinton avenue, on February 27th, four days after it was granted. There could, be no presumption of' absence between those dates- and existing on February 23d. Moreover, neither the petition nor the order to show cause upon which the motion was made asked for the appointment of a guardian ad litem for Carrie Taylor or that she be made a defendant in the action.

The theory of the plaintiff, as appears from the petition referred to, was that Carrie Taylor was not a necessary party to the action. The petition alleges that James Cleland was her general guardian,, but that there was no general guardian for the other two infants. It then prays that Cleland, as the general guardian, be made a defendant, and that a guardian ad litem be appointed for Demetrius Taylor and Henrietta Taylor, the other children of Caroline-Taylor, deceased. And there is proof of service of the petition on Cleland as general guardian "and on the infants Demetrius and Henrietta, but none on Carrie Taylor.

The order granted was broader than the prayer of the petition and made- Carrie Taylor a defendant in the action, and while it, was undoubtedly within the power of the court to make her a party upon an ex parte application, there was no jurisdiction to-appoint for her a guardian ad litem and provide for a substituted service of the supplemental summons upon him in the absence of proof of the essential fact that she was temporarily absent from the state.

The recital contained in the judgment to the effect that Carrie Taylor had been served with the supplemental summons on March 11, 1878, in view of the facts appearing from the papers in the judgment roll from which I have quoted, is not sufficient to sustain the jurisdiction of the court to render the judgment. It appears very clear, we think, from an inspection of the roll, and also from other recitals of the judgment, that the service which it is there recited was made was not personal, but was upon the guardian ad litem, and that his appointment was void from lack of proof of the facts essential to the jurisdiction of the court to make it. The finding of the trial court, therefore, that the infants were not served with the summons, and that the judgment -setting aside the conveyance of the property from Taylor to his wife was as to said infants void, was fully sustained by the-evidence.

The respondent, however, contends that the evidence in the-case, independent of the judgment in the action brought to set aside said deeds, was sufficient to establish the fraudulent character of those conveyances, and that the trial court should have so found.

The reversal of the general term was upon the facts as well as the law, and the whole case is, therefore, before us for review.

The evidence upon this question is that the conveyances referred to were quit-claim deeds-expressing a nominal consideration of one dollar, and that at the time of their execution and delivery William H. Taylor was indebted to the Nassau bank upon a, promissory note of twenty-three hundred dollars, and to the Ger-mania bank upon a promissory note of two thousand dollars, both of which notes were overdue.

That subsequent to such conveyances judgments were recovered, upon said notes against said Taylor, and execution was issued thereon in Kings county, and returned wholly unsatisfied.

Our statute, 2 R. S., 137, § 4, provided that the fraudulent intent to hinder, delay and defraud creditors by a conveyance of land shall be deemed a question of fact and not of law, and that, no conveyance shall be judged fraudulent as against creditors solely upon the ground that it was- not founded upon a valuable-consideration. But the rule is well settled that a voluntary conveyance by one indebted at the time is presumptively fraudulent. Seward v. Jackson, 8 Cow., 406; Erickson v. Quinn, 47 N. Y., 410; Dunlap v. Hawkins, 59 id., 346; Cole v. Tyler, 65 id., 78. There was. no evidence introduced by the defendant upon this-question, and we are of the opinion that the facts stated raised & presumption that the deeds were executed by Taylor with intent, to defraud his creditors, and in the absence of any explanation thereof it was the duty of the court to have determined the fact-of the grantee’s intention in accordance with such presumption. Coleman v. Burr, 93 N. Y., 17-31.

Having established the fact of the fraudulent character of the conveyances from Taylor to his wife, the plaintiff was entitled to-a judgment adjudging the defendant’s deed to be a cloud upon his title and illegal and void. The plaintiff makes his title through the sale under the execution issued upon the judgment obtained by the Nassau bank upon the promissory note held by it, and it was not at all essential that the conveyances from Taylor to his-wife should have been adjudged fraudulent and void before that, execution was issued.

The trial court found upon plaintiff’s request that the execution was duly issued to the sheriff of Kings county, and that the order of the supreme court and the decree of the surrogate’s court granting leave that it issue were duly made.

No question was of course raised at the general term upon the: plaintiff’s appeal that these findings did not have support in the-evidence, and they are conclusive upon the appellant here. The point taken at the general term that the execution could not, under § 1380 of the Code, be issued until the expiration of three years after letters of administration had been issued upon the estate of William H. Taylor, is not now urged by the appellant,, and I do not understand him now to assail the regularity of the execution, and the sale thereunder, upon any ground except that-the judgment could not be enforced against the real estate in. question until the conveyance from Taylor to his wife had, by a valid judgment, been decreed to have been fraudulent, and set, aside; and that in the absence of such a decree, the judgment was not a lien on the land for the reason that the title at the time of' its entry was in Mrs. Taylor.

This argument has no support in the authorities in this state. A judgment creditor cannot be deprived of his legal right to enforce collection of his judgment against the lands of his debtor by a fraudulent conveyance thereof prior to the entry of the judgmerit, nor can he by such a conveyance be forced to pursue an -equitable remedy for the collection of his debt,.instead of a legal one; and the whole current of authority in this state is to the effect that notwithstanding the fraudulent conveyance, the judgment creditor may sell the land under execution upon his judgment, and the purchaser may impeach the conveyance of the land in a suit at law to recover the possession, or if he can gain possession, defend the title thus acquired against the fraudulent grantee or those claiming under him. Chautauqua Co. Bank v. Risley, 19 N. Y., 369; Bergen v. Carman, 79 id., 153.

Of course it can be said that the conveyance of the debtor is not absolutely void, but only voidable. That it is good inter partes, and the fraudulent grantee may convey a good title to a bona fide purchaser, and such a conveyance would destroy the lien •of the judgment.

But while the title remains in the fraudulent grantee, the lien of the judgment exists, and may be enforced against the land with ■the same effect as if the conveyance had not bgen made. As against the creditor, the conveyance, while the fraudulent grantee holds the title, is a nullity.

In this case the defendant does not occupy the position of a bona fide purchaser for the reason that at the time of the sale by the receiver of Mrs. Lowitz the plaintiff was in possession of the land, claiming title under the sheriff's deed, and such possession was notice to the defendant of his claim thereto.

The plea of the statute of limitation is not available to the defendant

The action is not to recover possession of the land, that being already in the plaintiff, but to compel the removal of an instrument which apparently impairs and injuriously affects the plaintiff’s title. An owner has a right to invoke the aid of a court of equity at any time while he is the owner to have an apparent, though in fact not a real incumbrance discharged from the record, -and this right is never barred by the statute of limitations. It is a continuing right which exists -as long as the occasion for its exercise. Miner v. Beekman, 50 N. Y., 337-343; Schoener v. Lissauer, 107 id., 111; 11 St. Rep., 368.

The right to this remedy is, however, denied if the invalidity of the defendant’s deed or incumbrance appears upon its face, and -a resort to extrinsic evidence to show such invalidity is unnecessary, and hence the final inquiry on this appeal is, whether the plaintiff’s case is within the rule upon which the courts interfere in this class of actions. We think that it is.

The defendant does present an apparent title through the •deeds from Taylor to his wife, the death of Mrs. Taylor and the Revise to her children and the receiver’s deed to.himself. In thus presenting the claim of title from Taylor to himself he would not necessarily disclose the defect arising from the fraudulent intent •existing in the conveyance by Taylor to his wife. He would disclose,. it is true, the fact that these deeds expressed nominal consideration only, but that fact under the statute which I have quoted would not indicate their fraudulent character. That would only appear upon evidence of Taylor’s indebtedness at the time-, of the conveyance. But while that evidence would exist upon the record in the form of judgment, it would not be any part of the record of the title to the land, but would be extrinsic thereto.

And in ejectment against the plaintiff the appellant could make out a prima facie case without developing the defects in hi® title.

From these facts, all the elements exist to make this a proper case to invoke thé aid of a court of equity to remove a cloud.

We are of the opinion, therefore, that the plaintiff was entitle^ to the relief sought, and the order of the general term should be affirmed and judgment absolute rendered against the appellant, with costs in all courts.

Parker, J.

(dissenting)—I am unable to agree with the result, reached by the majority of the court

The trial court refused to find as a fact that the deeds made by Taylor and wife to Felt, and Felt to Mrs. Taylor, “ were without consideration and were fraudulently made, executed and delivered with intent to hinder, delay and defraud the said Nassau Bank of the city of New York, and were void as against the bank,” and rendered judgment in favor of the defendant.

The general term, however, reversed the judgment on both the facts and the law, and we must now inquire whether the evidence required the finding of fact which the trial court refused to> make.

It is apparent from the record before us that the plaintiff to establish his cause of action, relied wholly on a judgment declaring, the deeds to be void on the ground that they had been executed with intent to defraud the creditors of William H. Taylor, in an action originally commenced against Taylor, his wife and Chauncey Felt Were it a valid judgment, the plaintiff’s reliance would have been well founded.

But we are agreed for reasons stated in the prevailing opinion, that the court did not in that action acquire jurisdiction over the, infant defendants, and that as to them the judgment was void.

If the decision of the general term be upheld therefore, it can only be done on the ground that there is other evidence requiring a finding that the deeds from Taylor and wife to Felt, and Felt to Mrs. Taylor, were fraudulently made with intent to hinder, delay and defraud creditors.

It will be well’ to bear in mind, as we consider the evidence, that the deeds alleged to be fraudulent, and which apparently vested the legal title in Caroline Taylor, were executed and delivered November 20, 1874, and duly recorded the day following. That Caroline Taylor died August 5, 1877, leaving a last will and testament, by which she devised such real estate to her three-children, one of whom, Caroline, subsequently conveyed her undivided interest to a receiver appointed in proceedings supplemental to execution. Subsequently the receiver, pursuant to art order of the court, sold such interest at public auction to this defendant, and a deed therefor was delivered to him bearing date -October 4, 1889, nearly fifteen years after the execution of the -deeds alleged to be fraudulent

The evidence which it is insisted required the trial court to find as a fact that the deeds of November 20, 1874, were fraudulent, -consists: 1. Of the recital in the deeds of a nominal consideration of one dollar. 2. That at the date of their execution Taylor was indebted to the Nassau Bank of New York City and the Germania Bank. 3. That some months later the bank obtained judgment therefor, and issued executions thereon, which were returned unsatisfied June 15, or about seven months after the execution of the deeds.

Undoubtedly the recital of a nominal consideration would have been prima fade evidence that the conveyance was without consideration as against the Taylors, because regarded as the declaration of each. But they were not parties to the action ; indeed, both have long been dead. . And as against this defendant, who •obtained his deed nearly fifteen years later, such recitals standing -alone should not be regarded as sufficient evidence to set aside the •deeds which were the source of his title.

If such recitals, entirely unsupported, could in any case be held .-sufficient evidence of the absence of a valuable consideration, as .•against a person nota party to the conveyances, the court-should •certainly hesitate to so hold on review where, as in this case, it is apparent that the action was tried by the plaintiff on the theory ' that the judgment in the other suit was to control the disposition ■of this one.

Assuming, but not admitting, that the recitals furnish sufficient ■evidence as against this defendant of the absence of a valuable ■consideration, and that an appellate court could properly hold that, under the circumstances already referred to, the trial court erred in refusing to find that the deeds were not founded on a valuable consideration, still such a finding is not sufficient to condemn the conveyances as a fraud upon creditors.

The statute provides, “ nor shall any conveyance or charge be adjudged fraudulent as against creditors or purchasers solely on the ground that it was not founded on a valuable consideration.”

It is not true that a voluntary conveyance by one indebted at the time is presumptively fraudulent. Before the presumption •can arise, it must appear that the debtor did not have other property at the time sufficient to pay his debts. As was said by this court in Kain v. Larkin, 131 N. Y., 300-307 ; 43 St. Rep., 197 : When a judgment creditor assails a conveyance made by the judgment debtor, he cannot cast upon the grantee the onus ■of showing good faith and of establishing that the grantor was ■solvent after the conveyance by simply showing that 'the deed was not founded upon a valuable consideration. But the person .assailing the deed assumes the burden of showing that it was executed in bad faith, and that it left the grantor insolvent and without ample property to pay his existing debts and liabilities.”

The plaintiff did not meet the burden which the decision quoted declares rested upon him. He did not attempt to show vthat on November 20, 1874, Taylor did not have abundant property, aside from that conveyed, oat of which to satisfy the claims of the Nassau and Germania Banks, the only creditors disclosed by the record The evidence does not demonstrate that the act complained of made him insolvent. The only evidence on the subject is that about seven months later the sheriff returned two executions unsatisfied The return of the sheriff is evidence that at that time he did not have property within the county where the executions were issued out of which they could be made, but it was not evidence that he did not have property in the adjoining county, nor that he had not had during some portion of the seven months prior thereto abundance of property in the same county to have satisfied the claims of the banks.

In Sherman v. Hogland, 54 Ind, 579, the court had under consideration the sufficiency of the complaint It said: “ We do not think it sufficient to charge that some months or years after the conveyance was executed no other property could be found on which to levy an execution, or that at some subsequent time it was ascertained that the debtor had become wholly insolvent.”

Whitesel v. Hinery, 62 Ind., 168, was an appeal from a judgment overruling a demurrer to a complaint in a suit like the one under consideration.

The complaint, which was filed fifteen months after the alleged fraudulent conveyance, averred the grantor’s insolvency, and that he was without property subject to execution. It was held insufficient, the court quoting with approval from a prior decision the following: “ It is necessary to charge in the complaint and prove on the trial that, at the time the conveyance complained of was made, the debtor did not have left enough of other property subject to execution to pay all his debts."

In McCole v. Loehr, 79 Ind., 430, the court say: “The allegation that the grantor died hopelessly insolvent does not make the ■complaint sufficient. ' The character of a transaction is to be determined by the circumstances surrounding the parties at the time it took place. The validity of a conveyance does not depend upon subsequent events. The question in such cases is the financial condition of the grantor at the time, for if then solvent Ms subsequent insolvency will not invalidate the conveyance.”

The cases thus referred to were cited with approval by this court in Kain v. Larkin, supra, and seem to be decisive of the question under consideration.

It is difficult to discover any principle on which to base a distinction between Kain’s case and this. Indeed, Kain's case seems to command the judgment which the trial court rendered. What were the important facts ? Two days after Kain commenced his action against Larkin, which resulted in a judgment, which was the foundation of the action to set aside the deed, Larkin gave his brother a mortgage for $3,000 on his house and lot, that being the full value of the property, and drew out of the savings bank $1,400, which 'he had on deposit, and immediately redeposited $1,200 in the name of bis wife.

Subsequently he conveyed the house and lot to his minor daughter, the deed declaring the consideration to be “ natural love and affection and one dollar.” Then Larkin’s brother satisfied the mortgage which had been given him. The plaintiff also proved that about one year and seven months after the conveyance the sheriff returned unsatisfied an execution issued against the property and effects of Larkin, and that subsequently and before the commencement of the action Larkin was examined in proceedings supplemental to execution. The learned trial court thought the plaintiff .had established the fraudulent character of the deed, and so found." But this court reversed the judgment on the ground that the plaintiff did not show the defendant’s financial condition at the precise time of the making of the conveyance. it saidIt is quite probable that Patrick Larkin did. divest himself of all his property by the disposition made of his deposit in the savings bank, and the conveyance of his real estate. But that should not be left to mere inference. If true it is capable of proof, and the plaintiff who comes into court alleging fraud and assailing the deed therefor, should furnish the proof.”

I advise a reversal of the order of the general term.

Order of general term affirmed and judgment absolute rendered against appellant, with costs in all courts.

All concur, except Follett, Ch. J., and Parker, J., dissenting.


author: Vann, J. Landon, J.

text:
    The People, App’lts, v. William J. H. Ballard et al., Resp’ts.

      (Court of Appeals, Second Division,

      Filed October 1, 1892.)

    1. Corporations—Action against directors—Code Civ. Pro., SB 1781, 1782.
    An action against a domestic corporation and its trustees to compel the latter to account for corporation property transferred, lost or wasted by a. violation of duty on their part, and to remox e said trustees, can be maintained by the attorney-general, in his discretion, in the name of the people without a relator.
    (Landon and Brown, JJ., dissent.)
    2. Same.
    A corporation created by the laws of this state cannot be reorganized under the laws of another state without the process of lawful dissolution.
    3. Same.
    A corporation cannot sell all its property to a foreign corporation organized through its procurement, with a majority of non-resident trustees, for the express purpose of stepping into its shoes, taking all its assets and carrying on its business. Such a transfer would be unauthorized and void as to non-assenting stockholders and as to the state.
    Appeal from a judgment of the general term of the supreme court in the first judicial department, affirming a judgment entered upon the decision of the court at special term.
    This action was brought, in the name of the People, without a relator, against a domestic business corporation and its trustees, to compel the latter to account for their official conduct in the management and disposition of its property, to require them to pay over to it the value of all property acquired by themselves,, transferred to others, lost or wasted by a violation of duty on their part, and to remove each of them from his position as trustee of the company.
    The facts, so far as material, appear in the opinion.

      J. Langdon Ward, for app'lts; Treadwell Cleveland, for resp’ts.

       Reversing 29 St. Rep., 926.

   Vann, J.

In 1880 the Spring Valley Hydraulic Gold Company was organized as a corporation under the general manufacturing act of this state, and shortly thereafter it invested substantially all its capital in certain mines in the state of California, and until the year 1886 operated the same as its sole business. The object for which it was formed, as stated in the certificate of incorporation, was to carry on the business of mining various precious ores, and to smelt, refine and sell the product.

In July, 1886, the defendant trustees transferred all its property, both real and personal, including said mines, to a corporation organized at the time under the laws of the state of California, for the purpose of carrying on the business theretofore conducted by the defendant company, and of taking title to its assets. This was ■done with the approval of stockholders holding a majority of the stock, in good faith, to save the property from sacrifice, but without the consent of the holders of a large number of shares, and .against the protest of some of the stockholders. The sole consideration for such transfer was an agreement by the California com-pony to pay the debts of the Hew York company, and to issue to lit certain shares of its capital stock. A majority of the directors of the former company were, and still are, residents of California, and the only object of the transaction was, without a dissolution, to reorganize the defendant company under the laws of another state in order to obtain some real or supposed advantage afforded thereby. The attorney-general commenced this action to remove the trustees and to compel them to account for the property thus transferred, but the special term dismissed the complaint because no one was joined as a relator, and the general term affirmed the judgment, one of its learned justices dissenting.

This appeal presents two questions of grave importance:

1. Whether an action for the judicial supervision of a business corporation, its officers and members, can be maintained by the .attorney-general in the name of the People without a relator ? People v. Lowe, 47 Hun, 577 ; 15 St Rep., 105; People v. Bruff, 9 Abb. N. C., 153.

2. Whether a corporation created by the laws of this state can be reorganized under the laws of another state without the process ■of lawful dissolution ?

The first question has been twice considered, but never decided by this court In the People v. Lowe, 117 N. Y., 175, 190; 27 St. Rep., 138, the present learned chief judge of the court, after .a thorough and able discussion of the subject, reached the conclusion that the People have no right to maintain such an action, •but, as a majority of the court were unable to agree with him in that conclusion, the judgment was reversed upon another ground. The question was again considered by the court in the very case how before us, and an opinion, unfortunately not published, because it is exhaustive, in research and persuasive in reasoning,, was prepared, sustaining the right of the People to sue without a. relator, but, as one of the members of the court was the attorney-general who commenced the action, only six judges could act, and they were equally divided upon the question, so that no judgment was rendered. The case was subsequently certified to. this, division of the court for decision, and after hearing a re-argument, and giving the subject the most careful attention, we also are divided in opinion and are unable to pronounce judgment except, by the vote of a majority. The duty of giving expression to the-views of those who think that the action can be maintained as brought, necessarily involves, to a great extent, the adoption of positions already taken and arguments already made in previous discussions of the question.

As early as 1817, it was held by Chancellor Kent, Attorney General v. Utica Ins. Co., 2 Johns., Ch., 871, that the court of chancery, upon motion of the attorney general, had no power to restrain an insurance company from carrying on a banking business, even if it was in violation of a public statute. After reviewing all the authorities, which at that early date were exclusively English, the conclusion was reached that, as there was an adequate remedy at law by quo warranta, the court of .chancery had no jurisdiction to supervise the conduct of corporations, unless it was in the case of charitable corporations, which were regarded as of sufficient public concern to warrant interference by' a court of equity. The only question discussed was the jurisdiction of the court to entertain such an action at all, and no attention was given to the form of procedure. It was not even claimed by the eminent counsel who took part in the argument of that case but what, if the court had jurisdiction of the subject of the action, it.could proceed at the instance of the attorney general, without a relator. Page 374. In none of the cases cited by the chancellor, did the court refuse to proceed because the attorney general came into» court alone and represented the interests of the public only. While there was doubt in the minds of some of the judges whether chancery or the king’s bench was the proper tribunal to supervise the conduct of charitable corporations, there seems to have been no doubt that such jurisdiction, wherever it resided, could be exercised upon motion of the attorney general, either with or without a relator. Attorney General v. Bucknall, 2 Atk., 328; King v. Masters of St. Catharine's Hall, 4 Durn. & East., 233, and note A. on page 240; Attorney General v. Brown, 1 Swan., 265; Attorney General v. Oglender, 1 Yes., Jr., 246. The-only object of joining a relator at all seems to have been to provide security for the costs of the defendant. Attorney General v. Green, 2 Brown, 496; Redesdale’s Ch. Pl., 79.

The revisers had in mind the decision in the Utica Insurance Case, supra, when they reported that part of the Revised Statutes relating to “ proceedings by and against corporations and public bodies having certain corporate powers, and by and against officers representing them,” the thirty-first section of which is as follows: “ Upon a bill being filed by the attorney general in the ■court of chancery, the chancellor shall have power to restrain by injunction any corporation from assuming or exercising any franchise, liberty or privilege, or transacting- any business not allowed by the charter of such corporation; and in the same manner, to restrain any individuals from exercising any corporate rights, privileges or franchises not granted to them by any law of this state.” 2 R. S., 462, § 31. To this section the revisers appended the following note: “The proceedings at law by quo warranta or scire facias are so dilatory that much mischief will generally be done before judgment can be obtained, and are so expensive that a summary remedy seems absolutely necessary. Chancellor Kent held in 2 Johns. Ch., 391, that the court did not possess the power proposed to be given in the preceding section.”

It is clear that the object of the legislature in enacting this section with this official explanation before them was to enlarge the power of the court of chancery in relation to proceedings against ■corporations. This is made even more apparent by the specific provisions of § 33, which is as follows: “ The chancellor shall have jurisdiction over directors managers and other trustees and officers of corporations. 1. To compel them to account for their official conduct in the management and disposition of the funds and property committed to their charge. 2. To decree and compel payment by them to the corporation whom they represent, and to its creditors, of all sums of money, and of the value of all property which they may have acquired to themselves, or transferred to others, or may have lost or wasted by any violation of their duties as such trustees. 3. To suspend any such trustee or •officer from exercising his office whenever it shall appear that he has abused his trust 4. To remove any such trustee or officer from his office upon proof or conviction of gross misconduct. 5. To direct new elections to be held by the body or board duly authorized for that purpose to supply vacancies created by such removal. 6. In case there be no such body or board, or all the members of such board be removed, then to report the same to the governor, who shall be authorized, with the consent of the senate, to fill such vacancies. 7. To set aside all alienations of property made by the trustees or other officers of any corporation contrary to the provisions of law, or for purposes foreign to the lawful business and objects of such corporation in cases where the person receiving such alienation knew the purpose for which the same was made, and, 8. To restrain and prevent any such alienation, in cases where it may be threatened, or there may be good reason to apprehend it will be made.”

The revisers, in their note to this section, say that it was “drawn to supply what are conceived to be important defects in some cases, and to remove doubts entertained respecting the power of the court in others. The first subdivision is intended, in connection with § 35, to give to the court of chancery in this state the same power that is exercised by that court in England in cases of charitable corporations, and in other cases, the possession of which power is doubted by Chancellor Kent in 2 Johnson’s Chancery-Reports, 384, although alleged to be a part of the. general jurisdiction of the court in 2 Term Reporter, 199.”

This legislation was doubtless induced by said decision, of the chancellor, and as he gave prominence to the supposed defect in the power of the court, so the legislature gave prominence to that subject in enacting the statute, but the method of exercising the power is made clear by § 35 in the following language : “ The jurisdiction conferred by the preceding thirty-third section shall be exercised as in ordinary cases on bill or petition, as the case may require or the chancellor may direct, at the instance of the attorney-general prosecuting in behalf of the people of this state, or at the instance of any creditor of such corporation, or at.the instance of any director, trustee or other officer of such corporation having a general superintendence of its concerns.”

Thus, as it seems to us, the legislature intended to greatly increase the power of the court of chancery in regard to the supervision of corporations, and to authorize the attorney-general, on his own motion, to call upon the court to act. The revisers intended, as we gather their meaning from the language used, that the couit of chancery, in this state, should have the same power in regard to corporations generally that is exercised by that court in England in the case of charitable corporations. We cannot unite with the learned justice who decided the case at special term in the opinion that it was intended to limit the jurisdiction, conferred to those-cases in which it was exercised by the English court. The statute-contains no words of limitation, but in plain terms confers upon the chancellor the powers enumerated, and provides that they shall be exercised at the instance of the attorney-general. If the-revisers had intended to limit those powers to a single class of' corporations, would not so important a limitation have appeared in the statute itself rather than in a note? But, it is asked, if' this power really existed, why was it not exercised by some attorney-general during the long period that these provisions of the Revised Statutes were in force ? The contemporary construction of a statute is always valuable, because it involves the-judgment and understanding of those conversant with the law at the time the statute was passed. This, however, means such construction by contemporaries as indicates actual user of the statute. Mere negative construction, inferred from non-user for-many years, is of little value, especially when the only person ■capable of calling the statute into action is a high officer of the-state, with multifarious duties and cares. As the statute conferred the same power of acting under it upon creditors and others that it did upon the attorney-gen eral, it may be that that officer left parties tó their own resources, or that parties-preferred to act for themselves so that they could control the-proceedings.

The next legislation upon the subject,' after the Revised Statutes, appeared in the Code of Procedure, which provided that an action might be brought by the attorney-general in the-name of the People in various cases. Such actions were in the-place of writs of scire facias and quo warranta and of proceedings by information in the nature of quo warranta. Code of Procedure, §§ 428 to 447.

These provisions have but little bearing upon the question under consideration, except as they reflect the general policy of the state in allowing the attorney-general to interfere with the affairs of corporate bodies without a relator “ in every case of public interest,” and with a relator “ in every other case in which satisfactory security shall be given.” Code of Pro., § 430.

Attention is also called to an act passed in 1870, to regulate proceedings against corporations by injunction and otherwise,” which provided that “ all actions and proceedings against a corporation, when the relief sought, or which can be granted therein, shall be the dissolution of such corporation or the removal or suspension of any officer or director thereof shall be brought by the attorney-general in the name of the People of the state. Laws 1870, chap, 151, § 2.

In 1874 two cases were decided by this court holding that, under the peculiar circumstances therein appearing, the state could not sue in its name of sovereignty without some specific-interest in the subject of the action. People v. A. & S. R. R. Co., 57 N. Y., 161; People v. Ingersoll, 58 id., 1.

These cases are said to have led to the passage of chapter 49 of the Laws of 1875, which conferred upon the People the right to sue without a specific interest and authorized the attorney-general to prosecute such actions in their name.

We have thus reviewed the law as it stood prior to the enactment of the Code of Civil Procedure, in order to learn the history of legislation and judicial decision together with the general policy of the state upon the subject, so that the statute under which this action was commenced might be the more easily understood. That history, if we read it aright, shows a progressive tendency on the part of the state towards the supervision, through its courts and attorney-general, of the corporations which it brought into existence by keeping them within the lines of the law.

Title 2 of chapter 15 of the Code of Civil Procedure treats of " actions relating to a corporation,” and the second article is entitled the “ judicial supervision of a corporation and of the officers and members thereof.” This action was brought under §§ 1781 and 1782, which appear in the article headed by that significant title. Section 1781 is a re-enactment in substantially the same language of § 33, already quoted from the Bevised Statutes. 2 B. S. (1st ed.), 462. In plain terms it confers jurisdiction upon the court over the subject-matter of such an action as this, leaving it to the next section to prescribe by whom the action is to be brought in the following language: “An action may be brought, as prescribed in the last section, by the attorney-general in behalf of the People of the state, or, except where the action is brought for the purpose specified in subdivision third or fourth of that section, by a creditor of the corporation, or by a trustee, director, manager, or other officer of the corporation having a general superintendence of its concerns.” Code Civ. Pro., § 1782. The excepted subdivisions relate to the suspension or removal of a. defendant from office.

To this section the commissioners attached the following note: “2 R. S., 462, § 35, amended as required by the changes of the judicial system and forms of proceeding and by Laws 1870; chap. 151, § 2.” Thus § 85, already quoted from the Revised Statutes, is pointed out as the basis of the section reported,, amended, however, as required by the ,act of 1870, so as to provide that all actions in which a part of the relief sought is the suspension or removal from office of any officer or director of a, corporation, “ shall be brought by the attorney-general in the name of the People of the state.” Laws 1870, chap. 151, § 2. This is an action of that character. Section 1786 applies only to actions to dissolve a corporation, and §§ 1797 and 1798 to-actions to vacate or annul the charter of a corporation. No such relief is sought in the action before us. Section 1804 excepts religious, educational, municipal and some other corporations from the operation of the act Section 1808 provides that “where-the attorney-general has good reason to believe that an action” such as the one under consideration, “ can be maintained in behalf of the People of the state, * * * he must bring an action accordingly, * * * if, in his opinion, the public interests-Require that an action should be brought In a case where the action can be brought only by the attorney-general in behalf of the People, if a creditor, stockholder, director or trustee * * * applies to the attorney-general for that purpose and furnishes the-■security required by law, the attorney-general must bring the action, or apply for leave to bring it, if he has good reason to believe that it cq.n be maintained.”

This section provides for two classes of action, each of which requires two facts to exist before the action can be brought, but only one of which is common to both. Each class requires that the attorney-gen eral should have good reason to believe that the action can be maintained. In addition to that, the first class-requires that he should be of the opinion that the public interests-require that an action should be brought, and the second class, that one of the persons named should apply to him to bring the-action and furnish the security required by law. It is not enough to warrant the commencement of either action for the attorney-general to be satisfied that it can be maintained, for in the one: case he must also be satisfied that the public interests require him to act, and in the other, one of the designated persons must ask him to act and give security. In the first class no security is required, and in the second the public interests need not be consulted, but simply private interests. If a relator were required.in the first class, the attorney-general might not be able to procure one, and hence could not obey the command of the statute.

If a relator were not required in the second class, costs might be thrown upon the People in litigation in which the public had no concern. This construction is confirmed by the commissioners’note to said section, in which they say: “New, as respects an action brought under article 2 or article 3, but corresponding to Code of Procedure, § 430, last sentence, as respect® an action substituted for the proceedings by quo warranta.. It will often happen, and, indeed, has happened, that the attorney-general, who, alone, under §§ 2 and 5 of the act of 1870, can. bring some of the actions provided for in articles 2 and 3, declines to interfere on the ground that no public interests are-jeopardized by the transactions complained of. In such a case? the aggrieved parties were remediless, until the enactment of this-section. Ho sufficient reason is apparent why the rule established by Code of Procedure, § 430, should not apply to such, cases.”

We have now examined all the sections of the Code to which: our attention has been called, except 1811, which provides that a director or other officer of a corporation cannot be removed otherwise than by final judgment in an action brought by the , attorney-general. This section, also, had its origin in chapter 151 of the Laws of 1870, as the commissioners state in their note-thereto. Section 1986 has no bearing, because it is limited to-title 1 of chapter 16, which relates to a different subject, except where a creditor applies to the attorney-general to sue under § 1808, when a relator is to be joined if the application is granted and the action commenced.

Considering the history of the law upon the subject, the origin, object and language of the statute, we think that the legislature intended to authorize the attorney-general to bring such an action as this whenever he was convinced not only that it could be maintained, but also that the interests of the public would be promoted thereby. We appreciate the force of the-argument that it is contrary to the prevailing rule to permit an action to be brought in the name of one who has no direct interest in the result.

This, however, bears upon the question of construction only, for what the legislature has authorized may lawfully be done, in the absence of some- restriction in the constitution. But, while the People have no pecuniary interest in the result, have they no-interests that need protection ? Corporations for various purposes-are created by the state. They exist only by virtue of its will. Their interests are vast, their assets enormous, their powers extensive, and their action affects the welfare of every citizen. When they act within the law, they serve a useful purpose and promote the common good When they act in violation of law, their great power affords a practical protection which the average citizen cannot command Has the state no interest in supervising the conduct of its creatures to whom it has confided such great power ? In a broad and political sense, has it no interest in requiring the managers of corporations to observe their charters and not abuse their powers ? Has it no interest to prevent, by the deterrent effect of example in a flagrant case of wrong, similar violations of law by those managing other corporations? May not the legislature have thought that sound public policy required not only remedies for the redress of private wrongs to be enforced at the instance of those injured, but also the direct interference by the state whenever, according to the sound judgment of a discreet and conservative public officer, it was necessary in order to arrest a growing evil ? These questions, we think, suggest an answer ■to the argument founded on the supposed improbability that the legislature would depart from the usual rule of requiring a direct interest to support an action. No such interest was regarded as necessary in order to annul a charter, dissolve a corporation, remove a receiver or oust a usurper. With great deference to the learned judges who have reached a different conclusion and whose opinions have caused us to hesitate long and anxiously before pronouncing judgment, we think that this action, if otherwise well founded, can be maintained by the attorney-general in the name of the People alone.

The suggestion is made that while an action may be brought by the attorney-general in- the name of the People, without a relator, still it is for the court to decide whether the public interests, in fact, required the action to be so brought,, and if it decides that they did not so require, that the complaint should be dismissed on that ground. The interest of the public, according to this construction, would be an issuable fact. A comparison of § 1871, which provides for the substance, with § 1808, which provides for the form, shows, as we think, that such was not the intention of the •legislature. The attorney-general is to bring the action if he has good reason to believe that it can be maintained, and “ if in his opinion,” not in the opinion of the court, the public interests require that it should be brought. While the former section is to govern the action of the court in granting relief, the latter is to govern the action of the attorney-general in deciding to ask for relief, and is addressed to his conscience only. The sole responsibility of suing in the name of the People rests upon him. That subject is wholly in his keeping as the representative of the public interests. If it were held otherwise, upon what evidence could the court proceed? If, for instance, the attorney-general, upon learning that serious abuse of power by the trustees of corporations was so common as, in his judgment, to amount to a public evil, should decide to interpose the power of the state for the sake of a wholesome example, could the court take evidence as to the mass of wrongful acts upon which he relied in deciding to bring the action ? If so, would not the defendants have the right to show that each act was innocent and not wrongful? Would nr.i this lead to an intolerable multiplication of issues? Could those issues be defined by pleadings ? Unless so defined, could the defendants be prepared for trial?

We think that the question as to what the public interests require is committed to the absolute discretion of the attorney-general, and that it cannot be made the subject of inquiry by the courts. If he abuses the great power entrusted to him, a remedy may be found in his removal from office, or in the election of a successor worthy of the high position.

The statute authorizes an action to remove the trustees of a corporation for misconduct; to compel them to account for their official acts in managing and disposing of the property committed to their charge, and to require them to pay to the corporation, or its-creditors, the value of any property transferred in violation of their duties. Code of Civ. Pro., § 1781.

A corporation is purely artificial, having no natural or inherent power, but only such as its charter confers. The charter of the-corporation in question was the statute under which it was organized. Upon filing the certificate of incorporation it came into existence, with power to do only that which is expressly or impliedly authorized by the statute. It had no power to act except through its trustees, who were authorized to manage its “ stock, property and concerns,” and a majority of whom were required to be citizens of this state. Laws of 1848, chap. 40, as amended by Laws of 1860, chap. 269. While they were authorized to conduct its affairs, they were not authorized to terminate its existence, although, under special circumstances, the courts could dissolve it upon their application. Code of Civ. Pro., § 2419. A corporation cannot cease to exist of its own will. Its-life continues until either the charter period has expired or the court has decreed a dissolution. The law made it and the law only can put an end to it. As it cannot take its own life directly, it cannot do so indirectly, for that would be a fraud upon the law and against public policy. By the transaction complained of the defendant company was stripped of all its property, and thus prevented from going on in business and deprived of all means of carrying into effect the object of its existence. While a corporation may sell its property to pay debts, or to carry on its business, it cannot sell its property in order to deprive itself of existence. It cannot sell all its property to a foreign corporation organized through its procurement, with a majority of non-resident trustees, for the express purpose of stepping into its shoes, taking all its assets and carrying on its business. That would be the practical destruction of the corporation by its own act, which the law will not tolerate. Whether the process by which it was sought to convert the Hew York corporation into a California corporation is called reorganization, consolidation or amalgamation, it was the exercise of a power not delegated, and was void. It was corporate burial in Hew York for resurrection in California. While the stockholders who consented may be estopped by their acts, those who did not consent can take advantage of this violation of their rights, and the state of Hew York can demand that those who did the wrong shall make restitution.

The case of Abbott v. The American Hard Rubber Company, 33 Barb., 578, is the leading authority upon the subject in this state, and it is also recognized as the leading authority in most of the states. In that case a majority of the trustees of a business corporation, without the consent of some of the stockholders, transferred all its personal property, which was especially adapted to its business, to two persons, who forthwith caused another corporation to be formed and transferred such property to it. It was held that, as such transfer practically terminated . the corporation by taking from it the power to fulfil the object of its organization, it was a violation of that object, was not within the power oí the trustees, and was hence void as ultra vires. The case was elaborately considered both at special and general terms, and we regard it as a sound and valuable authority.

A somewhat similar question was under consideration in Frothingham v. Barney, 6 Hun, 366, where the court said: “This, as a business arrangement, was wise, discreet and sagacious. As such it should be sustained if it legally is possible. The interests oí •one or two small stockholders should not enable them to work the destruction of the interests of co-owners, or compel the purchase of their stock at fictitious or unreal prices if it can be .avoided. * * * Upon the dissolution of the association it became the duty of the trustees to convert the assets into money, .and distribute the proceeds among the stockholders. To a certain -extent that has been done. A portion of such assets have not been distributed, and another portion, including the good will of the old association, has been exchanged by the trustees for the -corporate stock of a new Wells, Fargo & Co. This, as I understand, the trustees had no right to do. They had no right to exchange the assets of the old association for the corporate stock of any corporation without the consent of all the stockholders. Mann v. Butler, 2 Barb. Ch., 362. Equally were they without authority in making this partial exchange without such consent Stockholders of the old association could not thus, against their will, be forced into relations with the new company. Blatchford v. Ross, 54 Barb., 42; H. & N. H. R. R. Co. v. Croswell, 5 Hill, 383, 386.”

In Taylor v. Earle, 8 Hun, 1, a New York corporation, by the vote of a large majority of its stockholders, sold all its property, except cash on hand, mills and franchises, to a Vermont corporation and took in payment shares of stock in the latter company. 'The court said: “ The whole scheme of the transfer and its execution was illegal. There is no power given by the acts under which the Burlington Cotton Mills (the Hew York corporation) were incorporated to transfer all its property and thus terminate its existence, and take in payment stock in a company carrying on the same business with a different name, charter and stockholders, and being a foreign corporation. The corporation, by the Hew York law, could increase or diminish its stock, ór extend its business to other objects, but that falls far short, I think, of the sweeping power exercised on this occasion. The sale was not real. It was a mere form to turn a Hew York corporation into a Vermont one, and thus escape the scrutiny into the affairs of the •company permitted by the New York law to the stockholders.”

All the authorities in this state are uniform in holding that the trustees of a corporation cannot so dispose of its property as to virtually end its existence and prevent it from carrying on the business for which it was incorporated. Blatchford v. Ross, 54 Barb., 42; Copeland v. Citizens' Gas Light Co., 61 id., 60; Smith v. The N. Y. Consolidated Stage Co., 18 Abb., 419 ; Metropolitan El. Ry. Co. v. Manhattan Ry. Co., 14 Abb. N. C., 303 ; Hartford, etc., R. R. Co. v. Croswell, 5 Hill, 383.

Other courts of the highest standing have laid down the same

rule. Railway Co. v. Allerton, 85 U. S., 233 ; Stevens v. Rutland, etc., R. R. Co., 29 Vt., 545; New Orleans, etc., R. R. Co. v. Harris, 27 Miss., 517; see also, Morawetz on Corporations, § 413 : Spelling on Corporations, § 1012; Cook on Stock and Corporation Law, § 667; Beach on Corporations, §§ 358 and 430.

The fact that the trustees acted in good faith did not empower them to do an illegal act; and the fact that there may be some difficulty in the final adjustment of rights, because some of the stockholders consented, while othei-s did not, constitutes no defense to the action. We see no greater difficulty, however, than would exist if the action were brought by a trustee who had not consented to the act complained of, and no reason why “ the liability of the trustees to account ” should not be “ limited to those stockholders who have not assented to the transfer.”

We think that the transfer was unauthorized and void as to the non-assenting stockholders, and as to the state, and that the People can maintain the action in their name of sovereignty.

The judgment should, therefore, be reversed and a new trial-granted, with costs to abide event.

Landon, J.

(dissenting.)—The learned trial judge, after finding the'facts in detail, found as a conclusion of law as follows: “There is no evidence in this action of a public grievance, and the people having no interest in the subject' matter of the action, or in'any •of the acts herein complained of, cannot maintain this action.”

It is clear from the complaint, and from the detailed findings of fact, that the grievance sought to be redressed is a private and not a public one. It is equally clear that the People have no interest in the subject matter of the action, or in any of the acts complained of, except in the sense that the People as a body politic always have an interest in promoting obedience to the laws and the performance of legal duties and obligations. But this public interest is the political and moral one attaching to sovereignty, and is widely differenced from a private and special interest in particular tilings. The conclusion of the learned trial judge, that the People as a body politic cannot maintain this action, would seem to follow as the necessary result of the absence both of a public grievance and of a private arid special interest. A suitor who has no substantial interest in the litigation he institutes cannot be injured by the dismissal of his suit

But the learned counsel for the appellants contend that the People can maintain this action because, and only because, the language of the statute permits it Code of Civ. Pro., §§ 1781, 1782,1808,1976. The historical review of the law upon the subject is presented in the learned opinions of Judges Peckham and Vann in the case at bar, and in the opinion of Judge Earl in People v. Lowe, 117 N. Y., 175, 190; 27 St. Rep., 138. This review shows that but for the statute the action in cases not affecting the public interests could not be maintained by the People without a relator. The question therefore is whether the statutes have removed this objection. This review, I think, also clearly shows that the reasons moving to the enactment of the statutes enlarging the chancery power of supervision of corporations, and the intention of the statutes themselves, were the protection and promotion of interests public in their character. Chancellor Kent, in Att'y-Gen'l v. Utica Ins. Co., 2 Johns. Ch., 371, the case which led to the provisions of the Revised Statutes upon the subject, admitted that stockholders aggrieved by the fraudulent breach of trust by the trustees could resort to equity in default of an adequate remedy at law. They did not need the statutes for their protection.

Fully concurring in the views expressed by Earl, J., in People v. Lowe, I venture to add a few suggestions which seem to me to support the conclusion that in this case, under a reasonable construction of the statutes, the complaint was properly dismissed.

This corporation was created to conduct private business, and it conducted no other. Some of the stockholders seem to have conceived that by reason of the management of the trustees, not. strictly authorized by the letter of the law, a technical cause of action accrued against them in favor of such stockholders. The findings of fact by the learned trial judge are to the effect that the action of the trustees was beneficial to all the stockholders. It is not denied that the laws afford ample remedies to these stockholders, or any of them, for whatever relief they can prove themselves entitled to.

Under such circumstances why should the government, without a responsible relator, champion one side of this strictly private controversy, and oppress the other by the weight of its influence and power? Is it-reasonable to suppose that the legislature by the statutes in question intended to authorize such governmental intervention ? Does not a sound public policy require that whatever exclusively pertains to individual interest should be left to the individual? That the state should provide and care for the general interests and for those which are beyond the reach of the individual ? Is it not true that to the extent that such individual can with safety to all the rest be permitted freedom to manage his own affairs, that governmental intervention is both unnecessary and inexpedient ? Is not governmental paternalism to be cautiously guarded lest it subvert the just rights and liberties of the-individual ?

Is there any good reason why tire individual should call upon the sovereign for help when the sovereign has afforded him ample méthods and liberty to help himself ?

I concede that it is within the legislative power, in the absence^ of constitutional restriction, to provide for governmental intervention in private affairs ; and, also^ that cases exist in which private-affairs are so connected with the public interests that the government may wisely interfere and regulate them. It may also be conceded that the tendency of the cruder, efforts at legislation to enlarge the field of governmental intervention so as to embrace many subjects which it were better to leave to individual control.

Bearing these suggestions in mind, it is submitted that, in the •construction of the statutes in question, it is reasonable to presume, in the absence of controlling language to the contrary, that the legislature did not intend to extend the direct and voluntary intervention of the government to the championship of the cause of one party against the other in a strictly private controversy over their respective interests as affected by the management of a private corporate enterprise.

The statutes are as follows, Code of Civil Procedure, § 1781: “An action may be maintained against one or more trustees, directors, managers or other officers of a corporation, to procure a judgment for the following purposes, or so much thereof as the case requires: 1. Compelling the defendants to. account for their official conduct in the management and disposition of the funds and property committed to their charge 2. Compelling them to pay to the corporation which they represent, or to its creditors, any money, and the value of any property which they have acquired to themselves, or transferred to others, or lost or wasted by a violation of their duties.”

“ 4. Removing a defendant from his office upon proof or conviction of misconduct and directing a new election to be held by the body or board duly authorized to hold the same, in order to supply the vacancy created by the removal: or, where there is no such body or board or where all the members thereof are removed, directing the removal to be reported to the governor, who may, with the advice and consent of the senate, fill the vacancies.”

Section 1782. “ An action may be brought as prescribed in the last section, by the attorney-general in behalf of the people of the state ; or, except where the action is brought for the purpose specified in sub-divisions third or fourth of that section, by a creditor of the corporation, or by a trustee, director, manager or other officer of the corporation, having a general superintendence of its concerns.”

Section 1808. “ Where the attorney-general has good reason to believe that an action can be maintained in behalf of the people of the state, as prescribed in article second, third or fourth of this title, except § 1797 of this act, he must bring an action accordingly, or apply to a competent court for leave to bring an action as the case requires, if, in his opinion, the public interests require that an action should be brought. In a case where the action can be brought only by the attorney-general in behalf of the people, if a creditor, stockholder, director or trustee of the corporation applies to the attorney-general for that purpose and furnishes the security required by law, the attorney-general must bring the action or apply for leave to bring it, "if he has good reason to believe that it can be maintained. Where such an application is made, § 1986 of this act- applies thereto, and to the action brought in pursuance thereof.”

Section 1986. “ Where an action is brought by the attorney-general as prescribed in this title on the relation or information of a person having an interest in the question, the complaint must allege, and the title of the action must show, that the action. is brought upon the relation of that person. In such a case the attorney-general must, as a condition of bringing the action, require the relator to give satisfactory security to indemnify the people against the costs and expenses thereof. Where security is-so given, the attorney-general is entitled to compensation for his-services, to be paid by the relator in like manner as the attorney and counsel for a private person.”

I think the sections in' question authorized the attorney-gen eral to bring this action; that is to say, the People as a body politic or corporate having a capacity to sue, authority was thereby conferred upon the attorny-general to make them a party plaintiff in this action, if, as was no doubt the case, in his opinion the public-interests required the action to be brought.

But this amounts to nothing more than that the People may rightfully claim their day in court upon the alleged cause of action they present

It is for the court to decide whether they present and establish a good cause of action. Section 1808 clearly implies that the attorney-general may not thus bring the action unless in his opinion the public interests do require it If the legislature did not intend that the action should be brought unless in the opinion of the attorney-general the public interests should require it, it is clear that they did not intend that it should be sustained except in 'furtherance of the same interests.

Evidence tending to show such interests thus becomes essential to a recovery. It will not be contended that the opinion of the attorney-general is of any further force than to show that he did not exceed his authority in using the name of the People as a party plaintiff:

If, in fact, ’the People have no public interests to promote by bringing the action, the mistaken opinion of the attorney-general to the contrary will not reverse the situation and cure the material defect. He can, in fact, have no opinion as to the public interests involved if there are none. It hence results that the sections in question may be construed to authorize a recovery in an action of' this nature brought in the name of the People without-a relator, where it appears or is established upon the trial that the public interests are thereby to be protected, or in some substantial way promoted, apart from the mere private relief to be awarded to individuals, and failing in this that the action fails.

In People v. Lowe, Earl, J., said that municipal, religious and eleemosynary corporations, “which are public, and discharge-functions which might otherwise devolve upon the government,” may become subject to chancery visitation. If, for instance, the-trustees of an incorporated charitable institution, endowed by benevolent persons long since dead, should squander its funds or divert them to purposes foreign to the charity, it might well be that if the state should not interpose no redress could be had.

The learned judge also suggested that quasi public corporations,, like railroad, banking and insurance companies, might be subject, when the exigency should require it, to the like visitation. A life insurance company, holding millions for the benefit of policy holders, may be plundered by its trustees, or the rights of the policy holders jeopardized by unauthorized investments. ' The policy holders may have such an interest as would justify their intervention, but their interests in the aggregate rise to a quasi public character.

A corporation is vested with the franchise of supplying a city with pure and wholesome water, and has the means and facilities' for the purpose, but its trustees misapply its funds and thus disable it from rendering the proper service. • So, too, a strictly private corporation may, by the application of its funds to purposes; not contemplated by its charter, create a public nuisance or establish a monopoly injurious to the public interests, or, as in the case-cited from 2 Johns. Ch., which was present in the minds of the revisers, an insurance company may carry on the business of banking without the statutory regulations which safeguard the public interests in cases of banking corporations. In all such cases; the direct interposition of the attorney-general may be necessary and proper. It is reasonable to suppose that the statutes were intended ' to enable that officer to seek the aid of the court in redressing the public grievances suggested and others of similar character. It will still remain for the court to decide as to the sufficiency of the alleged cause of action. The contrast between the grievances suggested and the private ones in the case before us is obvious. The statutes can be given their proper remedial effect without resorting to a construction authorizing the attorney-general to intrude upon strictly private rights.

The statutes are framed to provide respectively the public remedy as it may be needed, and the private remedy upon the relation of the private suitor in cases where it may be properly extended. It is easy to avoid confounding the one with the other and if it is true that the letter of the statute authorizes the attorney-general of his own motion to engross both remedies, such is-not the intent of the statutes, and therefore not within their authorization.

The rule is well settled that statutes should receive a sensible-construction, such as will effectuate the legislative intention, and avoid an unjust or absurd conclusion. This rule is strikingly illustrated and applied in the recent case of the Holy Trinity Church v. United States, 148 U. S., 457. An act of congress made it unlawful for any person or corporation to assist or encourage the-migration of any alien or foreigner into the United States under any contract or agreement, made previous to such migration, that such alien or foreigner should perform “ labor or service of any kind ” in the United States. The Holy Trinity Church, a religious corporation, did first make a contract with an alien residing-in England to migrate to New York and there enter its service-as rector and pastor, and in pursuance of the contract the migration was accomplished and the service entered upon. The court conceded that the case was within the prohibition of the letter of the statute, but held that it was not within the intention, and therefore, not within the statute itself. In our own courts, in cases of doubt, this rule of construction has often been resorted to, and not infrequently freedom of inclusion or exclusion of particular cases has been allowed in order that the intention may not wholly fail, or may not be perverted to unjust or absurd results. I cite a few of the many cases. Tracy v. Troy & Boston R. R. Co., 38 N. Y., 433; Holmes v. Carley, 31 id., 289; Lake Shore, etc., R. Co. v. Roach, 80 id., 339; Burch v. Newbury, 10 id., 374 ; People v. N. Y. Comrs. Taxes, 95 id., 554; People v. Lacombe, 99 id., 43 ; People v. Utica Ins. Co., 15 Johns., 358. I think it ought to be applied in this case.

The fact that the removal of the trustees forms, at least nominally, part of the relief sought, does not of itself warrant a recovery. It should appear that the public interests require their removal.

Argument for making the People sole party plaintiff deduced from the fact that the corporation is the creation of the government, would be applicable to an intervention upon public grounds. Power given for public purposes is abused when perverted by loaning it to individuals for strictly private purposes.

The language of the Code does not require us to presume that the legislature intended either the favoritism' to one individual or the prejudice to the other which such a loan of power implies ; and, without explicit language to that effect, we may safely refrain from imputing such intention.

For these reasons, and especially for those stated in People v. Lowe, I advise an affirmance of the judgment.

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

All concur, except Landon and Brown, JJ., dissenting.