author: Lawrence, J.

text:
    Daniel B. Childs, Receiver, Pl’ff, v. Edward T. Latham et al., Def’ts.

      (Supreme Court, General Term, First Department,

      Filed May 15, 1891.)

    1. Execution—Mere indulgence to the debtor dobs not make it DORMANT.
    In order to entitle a person to contend successfully that an execution has become dormant or fraudulent as to a subsequent execution, it is necessary to show more than mere indulgence upon the part of the plaintiff in the execution attacked.
    2. Debtor and creditor—Preferences.
    A debtor has a right to give his creditor a judgment, even for the purpose of enabling such creditor to obtain a preference over another.
    Appeal from the decree and judgment of the special term of this court, awarding the priority of lien to defendant, Edward T. Latham.

      Blumenstiel & Hirsch, for def’t Wernberg et al.; Olcott, Mestre & Gonzalez, for def’t Latham; Herbert G. Hall, for pl’ff and resp’t
   Lawrence, J.

The plaintiff in this action who was appointed receiver in an action brought by Oelberman and another, to set aside an assignment for the benefit of creditors, made by the defendants Chester N. and Charles E. Foster to the defendant Bur-nap, brings this action praying for a judgment or decree and direction of the court, settling and determining the different, priorities between the other defendants, who are judgment creditors of the assignors, and who have respectively obtained judgments setting aside the said assignment as fraudulent and void as against creditors. The action has been twice tried; and on the first trial it was decided that the defendant Latham was entitled to a priority, but a new trial was ordered on the ground that certain evidence had been improperly excluded. Upon the second trial, before Mr. Justice Andrews, it was again decided that the defendant Latham had a lien on the property in the hands of the plaintiff to the amount of his judgment, and that such lien was superior to any lien of the defendants Wernberg, Simon, Mayer, Henry, Dawson, Corey ór Laycock, and also that the suit of Latham against Burnap was duly and diligently prosecuted.

The learned justice who presided at the second trial reached • the same conclusion that was found upon the first trial; stating in his opinion that he fully “ agreed with the counsel for Wernberg and others that the case is a very hard one for their clients and for themselves but that the weight to be given to that fact, as well as to the other facts, and to the arguments upon the merits which were presented upon the former trial, and have been again presented upon .this trial must be determined, if at all, by the appellate court, for it is my plain duty to follow the decision of Mr. Justice Patterson.”

The appellants contend that the suit brought by Latham was collusively and fraudulently brought, and have referred to the dates at which the judgment in that action was obtained, the execution issued and returned, and the creditor’s suit commenced by him, comparing them with the dates of the various proceedings brought by the defendants Henry & Co. and others, for the purpose of showing that undue advantage was given by the assignee and the defendants Foster to Latham, to enable him to obtain a priority over Henry & Co.; and while it is admitted that the execution in the case of Latham was issued prior to the executions in favor of the other defendants, other than the assignor, it is claimed that Latham purposely allowed the proceedings in his action to remain dormant, until it was ascertained that Henry & Co. by their diligence were likely to obtain priority over him, when he entered into an agreement that his suit to set aside the assignment, should abide the result of that which was brought for Oelberman & Co., to accomplish the same purposa

Our examination of the case upon this appeal satisfies us that the counsel for appellants have wholly failed to establish, that there was any collusion between Latham, the Fosters and their assignee. The action of Latham to set aside the assignment was commenced prior to the suit of the appellants, for the same purpose, and Burnap was appointed receiver in that action pendente lite upon his giving a bond as such- receiver for $100,000. Having thus secured the property for the benefit of all the creditors who might be entitled to share therein, there is nothing to show that the subsequent alleged inaction on the part of Latham was the result of any wrongful or improper agreement or understanding, between him and the assignors or assignee. It is quite true that, if such an agreement was substantiated by the evidence, it might be held in analogy to the principles applicable to dormant executions at law, that Latham had lost his lien. Storm v. Waddell, 2 Sandf. Ch., 494; Smith v. Erwin, 77 N. Y., 466; Russell v. Gibbs, 5 Cow., 390; Kellogg v. Griffin, 17 Johns., 274. In order to entitle the plaintiff in such cases to contend successfully that an execution has become dormant or fraudulent as to subsequent execution, it is necessary to show more than mere indulgence on the part of the plaintiff. Russell v. Gibbs, 5 Cow., 390; Boardman v. Lake Shore & Michigan Southern R. R. Co., 84 N. Y, 182, 183.

It is well settled that a debtor has a right to give his creditor a judgment even for the purpose of enabling such creditor to obtain a preference over another; and every fact or circumstance which appears in evidence in this case tending to show that Latham was at all expedited in his proceedings by the assignors or the assignee is perfectly explainable upon the ground that the debtor was only exercising that legal right No express agreement between the parties is shown, and the inference which is sought to be drawn from the rapidity with which a portion of the proceedings on the part of Latham were conducted, that the same were fraudulent, we think is not warranted by the evidence.

The learned justice from whose judgment this appeal is taken has expressly found that the defendant Latham was not guilty of any laches in the prosecution of the suit of Latham v. Burnap, that the action brought by said Latham to set aside the assignment was duly commenced, and that the order appointing the receiver was duly made, and that the rights and liens of the defendant Latham were vested before the commencement of any other action by any other defendant to set aside said assignment. He has also found that the suit of Latham v. Burnap was not instituted under any collusive agreement or plan on the part of Latham or John Munroe & Co. or of any one else of not proceeding with the trial of the same until after the trial of the actions brought by the defendants, constituting the firm of Henry & Co., or any of the other defendants, so that in the event that such actions brought by said other defendants should not be successful, the action brought on behalf of the said Latham would then be discontinued and said Munroe & Co. would claim the payment of that portion of their debt and demand a preference under said general assignment as preference therein directed to be paid. In these findings of the learned justice we fully concur, and as we fail to see that the firm of Henry & Co. have made out as. against Latham any case which under well established principles would permit them to claim that Latham has been guilty of laches which would justify them in invoking the doctrine in rel rtion to dormant executions, so elaborately discussed in the brief of appellant’s counsel, notwithstanding the apparent hardship of the case, we feel constrained to affirm the judgment of the court below, with costs and disbursements to the respondents.

• Yan Brunt, P. J., and Daniels, J., concur.


source: Caselaw Access Project

author: Daniels, J.

license: Public Domain

text:
    The People, Resp’ts, v. James Noonan, App’lt.

      (Supreme Court, General Term, First Department,

      Filed May 15, 1891.)

    Criminal law—Motion for new trial.
    An appeal from a judgment, upon a criminal trial, brings up for review a motion for a new trial or one in arrest of judgment.

      Appeal from judgment of the court of general sessions convicting the defendant of the crime of burglary in the second degree.

      Purdy & McLaughlin, for app’lt; McKenzie Semple, for resp’ts.
   Daniels, J.

The fact that a burglary was committed by breaking and entering in the night-time the premises mentioned in the indictment, was admitted by the defendant’s counsel at the commencement' of the trial. That left but one fact to be proved to support the indictment, and that was that the defendant was the person who committed the crime. To prove this fact, "the wife of the person whose premises were broken and entered, testified that she saw the defendant in their sleeping room, and at that time he was searching the bureau. She then made an outcry and he ran from the room. Even if no great reliance can be placed upon her evidence, which was a fact that impressed itself upon the mind of the recorder, who presided at the trial, it was still so far supported by the evidence of the policeman who made the arrest, as to present the question of the defendant’s identity and guilt as one of fact for the examination of the jury. For he testified that he saw the defendant running out of No. 4 Jefferson street about a quarter past one in the morning and the occupant of the premises in his night clothes in close pursuit of him, and that he followed the defendant until he went into the side door of the saloon at No. 5 Norfolk street, where the officer at once demanded admission.

That was not accorded to him, but after he had informed the occupant of the saloon that he wanted the man who last entered there, the .defendant was brought out to him, and that he was the same person whom the witness had seen running out of No. 4 Jefferson street, where the burglary had been committed, was positively affirmed by the officer. And the officer testified further that the woman who swore that she saw him in the sleeping room searching in the bureau also identified him as the same man. The evidence was quite direct in the way of proof of the defendant’s guilt, and it was by no means so far overcome by the testimony of the defendant, and of the other witnesses sworn for him on the trial, as to withdraw this subject from the consideration of the jury.

But in the submission of the case to them, it has been objected that observations were made concerning the evidence by the learned recorder which were prejudicial to their impartial consideration of the case. But these observations were so cogently suggested by the condition of the evidence as to have been without the least detriment to the case of the defendant, and for that reason supply no substantial ground for objection. The first related to his condition when he was taken into custody by the officer, who had testified that he was then “kind of panting.” And the recorder, in his reference to this evidence, repeated that he was then panting, and added that it was from the effect of running. And it is this last comment that is now made the subject of objection. In making it, the denial of the defendant as to the fact of running was overlooked. But as the comment was made in the presence of the defendant and the counsel, this oversight should have been, but it was not, brought by the latter to the attention of the recorder, when its correction would at once have been secured. Even the present liberal system for the review of criminal convictions does not sanction the practice of counsel permitting an inaccurate statement in the charge to be passed wholly unnoticed, as it was in this case, when by a mere reference to the state of the evidence it would be corrected, and then to depend upon the inaccuracy for a reversal of the conviction. The time for the correction is when the occurrence has taken place, and if it shall then be denied, the defendant will have good reason to complain.

The fact was mentioned in the statement of the officer that the defendant had been running immediately before his arrest, and as the jury must have disbelieved the testimony of the defendant, this comment could not have been injurious to the defendant.

The comment upon the testimony of the wife of the complaining witness was favorable to the defendant. It was that “ if the old woman’s evidence stood alone I should at once direct you to acquit this defendant, because her testimony, standing alone, would not satisfy me beyond a reasonable doubt that the defendant was the person who entered her premises upon that occasion, but it does not stand alone.” The substance of the statement was that without corroboration it was insufficient to warrant a conviction. But it was not said how far, or to what extent, there was corroboration of her testimony. It was only added that it did not stand alone, which was a fact beyond controversy in the case.

Attention was also directed to the evidence of the officer and the jury was directed to look into the evidence to discover whether there was any improper motive on his part, or any ill-feeling towards the defendant, inducing him to testify falsely, and the jury were admonished “to look carefully into all the facts and circumstances for the purpose of finding a motive or inducement to testify falsely.” These observations were fairly with the case, and suggested by its condition, and did no more than direct the attention of the jury to an inquiry which it was due to the defendant that they should make.

That these comments were not intended to impress the jury with the conviction that the defendant was guilty is still more clearly manifested by the concluding direction which was given to them by the recorder. That was that they should “ give this man the benefit of every reasonable doubt upon the. testimony; s give him the benefit of the evidence as to his character,"' and determine upon all the evidence" whether - this x defendant is "guilty of the crime of burglary in the second degree,-'or not guilty.” That placed the ease entirely at their disposal,'* without bemg._-affected by any prejudicial inference,' which could "be 'drawn from! the observations to which objection has been taken.

After the verdict of guilty had been rendered a motion for a new trial was made upon the ground of newly-discovered evideuce. Also because the jury had been misdirected, and the verdict was against the law and the evidence. This motion was denied, and the defendant’s counsel excepted to the decision of the recorder having that effect. And it has been urged that this is the subject of review by this court as a part of the appeal from the judgment, for the reason that by § 517 of the Code of Criminal Procedure it has been declared that upon such an appeal “ any actual decision of the court in an intermediate order, or proceeding forming a part of the judgment roll, as prescribed by § 485, may be reviewed.”

By subd. 6 of the section here referred to the judgment roll is required to contain a copy of the minutes of any proceedings upon a motion either for a new trial, or in arrest of judgment. And although doubt has been expressed in People v. Hovey, 1 N. Y. Crim., 324, whether this will entitle the denial of the motion to be reviewed, it probably was intended to secure by it this right of review. For that object the provision should be reasonably construed. And there seems to have been no other object for making the proceeding a part of the judgment roll as these proceedings have been made than to give the defendant this right of review by way of an appeal from the judgment itself. The section is broader than § 1316 of the Code of Civil Procedure, under which it has been held that an appeal from the judgment, does not bring up the denial of a motion for a new trial. Matthews v. Mayberg, 63 N. Y., 656. The decision denying the new trial in this case may therefore be now considered.

It depended mainly on the affidavit of Metter stating that he entered these premises on the night of January 11th or the morning of January 12, 1891, and took money from the drawer in the grocery. He did not confess to the breaking, but only to the stealing. And to do even that exhibits under the circumstances quite an unusual degree of criminal depravity. But little, if any, reliance could be placed upon his evidence, even if it had been before the jury, inasmuch as both the woman who swore she saw the defendant searching the drawer, and the officer who arrested him have sworn that Metter is not the man who was in the house, and afterwards taken into custody. To add the evidence of this man to the defense, with these contradictions, and the improbability of its truth against it, would be of no service to the defendant

The other affidavits add no force to that made by this man, and as they all appear, so little credit could be given to him, that there is no reason for believing any change in the result, could be produced by his evidence before a jury. The other evidence relied upon is as to character. There was such evidence on the trial, and it was not contradicted. The defendant, therefore, did have the benefit of this class of testimony, and merely adding to the number of witnesses who gave it, would be of no practical advantage to him. The case in all respects appears to have been correctly disposed of and the judgment should be affirmed.

Lambert, J, concurs.


author: Daniels, J. Van Brunt, P. J.

text:
    The Moser & Heidenheimer Malting Co., App’lt, v. George Lawrence et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed May 15, 1891.)

    Motions—Where made.
    The place of trial of an action was the first district. An order of arrest was granted by a justice in the fifth district. A motion without notice, and also a motion upon notice, was made to vacatedhe order. Upon the hearing of the last motion, it was denied by the justice “without prejudice to defendants’ right to renew the same at special term.” Held, that the renewal motion must be made in the first district, and that the special term of the fifth district had no jurisdiction.
    Appeal from an order vacating an order of arrest

      Louis Marshall, for app’lt; W. S. Andrews, for resp’ts.
   Daniels, J.

The order of arrest was made by Mr. Justice Kennedy, and that entitled the defendants to move before him, as such justice, without notice, and also with notice to the plaintiffs, to vacate it. Code Civ. Pro., § 568. They made each of those motions, and they were denied by Justice Kennedy. In the denial of the last motion, the order directed that it was “ without prejudice to defendants’ right to renew the same at special term.” The section just referred to did not provide for the making of that motion at a special term held in his own district, or by Justice Kennedy. It authorized him at a special term held by himself, to hear and decide an application to vacate the order on the papers on which it was granted. That could be made either with or without notice. But when made in either mode, the application was to be heard only on the papers on which the order was founded. When the application proceeded upon proof by affidavit on the part of the defendants, then this section has authorized it to be made to the court itself, or to any judge of the court If made to the court, it has not been provided that it can be made to any court, or to the court held in the district in which the order has been made. But that has been left subject to other provisions, declaring to what court the motion may be addressed.

That was the final condition in which this action was left by the order; the motion was to be made at a special term. And when a motion is to be made at the special term, § 769 of this Code has declared where it shall be made. That is at a court held in the district, or a county adjoining the district, in which the action is triable; but when the action is triable in the first judicial district, then the motion must be made there.

The place of trial in this action is the county of New York, forming the first judicial district. The action was there triable, therefore. And as the motion to discharge the order of arrest was to be made only at special term by the order which Justice Kennedy finally made, and under which the motion was brought on, it should have been made in the first district

So much of the order of Justice Kennedy as permitted the renewal of the motion is free from all possible ambiguity. It was to be at special term, and that included only the special term having the power under the law to hear it; and as no special term out of the first judicial district had that power, it follows that the special term held in the city of Syracuse, which is in the fifth judicial district, and which heard and decided the motion, was without that authority. And the case of Sutton v. Sabey, 22 Hun, 557, fully sustains this construction of the law. The order vacating the order of arrest was accordingly made without jurisdiction over the subject, and should without considering the merits be reversed, with ten dollars costs and the disbursements.

Lawrence, J., concurs.

Van Brunt, P. J.

It appears that the order of arrest in question was originally granted by Mr. Justice Kennedy, and a motion made to vacate the order upon the papers upon which it was granted before him, which motion was denied without prejudice to a renewal. The second motion was made before Mr. Justice Kennedy upon the papers upon which the order was granted and certain additional affidavits. This motion was also denied upon the merits without prejudice to defendant’s right to renew it at special term. A third motion was then made before the same judge at the Onondaga special term, although the venue in the action was laid in New York county. The plaintiff objected to the hearing of the motion out of the first judicial district on the ground that the action was triable in said district. This objection was overruled by the court; and it thereupon, notwithstanding such objection, proceeded to hear the motion. It is now urged upon this appeal that the objection was well taken.

It is undoubtedly true that all motions in cases in the first judicial district must be made in that district; but as the motion in question was not a motion of right, but leave to make the same had been granted as a favor, the court making the order had a right to prescribe that the motion might be made elsewhere than in the district in which the case was triable.

It is true the phraseology of the order does not necessarily bear this construction, but it having been so interpreted by th^ judge who made the same, it undoubtedly was his intention to' allow the motion to be made before him at special term and| with his interpretation of his own order we do not think we ought-to interfere.

This action was one of replevin to recover possession of 22,899-bushels of malt made of Hew York and Western barley. Upon' the usual affidavits and undertaking á requisition was issued to the sheriff of Onondaga and Madison counties to replevin the same. Both sheriffs made return that they could not take the property since it had been eloigned sold, removed and disposed of. The plaintiff thereupon amended its complaint by setting forth the fact that the malt had been sold, removed and disposed of by defendants, so that the same and no part thereof could be found and taken by the sheriff, with the intent that it should not be so found and taken and to deprive the plaintiff of the benefit thereof.

The defendants answered this complaint alleging an agreement between the plaintiff and defendants to malt for it 50,000 bushels of barley and deliver such malt to the plaintiff, and that they .performed this agreement according to its terms, and subsequently malted for the plaintiff about 80,000 bushels of barley and that they remained indebted to the plaintiff in the sum of $4,500 and prayed judgment that the complaint might be dismissed except so far as to allow the plaintiff to take judgment against them for the sum of $4,500 with costs. Subsequently plaintiff procured an order of arrest against both defendants upon the ground that the defendants had removed the chattels sought to be recovered in the action, with intent that they should not be found or taken and depriving the plaintiff of the benefit thereof. A motion to vacate said order as above mentioned was made and from the order finally vacating the order of arrest this appeal is taken.

It appeared that on the 22nd of October, 1889, the defendants entered into a contract with the plaintiff whereby they agreed to malt during the season of 1889-90 fifty thousand bushels of barley for the plaintiff in their malt house, situate at Maulins and Oanastota, upon the following terms: The charge for malting to be ten cents per bushel upon the cost price of the barley, plaintiff to receive the entire amount of the malt (including increase) made fi’om the barley purchased for them at the cost of the barley, and ten cents advance on said cost, the malt to be delivered free of all charges, whether for lighterage or terminal charges at Hew York or Brooklyn.

The defendants agreed to make drafts at three months, without interest, for the amount they paid for the barley, and they also agreed to effect insurance on all barley purchased for the plaintiff and the malt on hand made from such barley, said insurance policie to be made for and in the name of the plaintiff. They also agreed not to draw for more than four cents per bushel above cost price of barley for necessary running expenses of their malt house. This contract seems to have been entirely fulfilled, and bn the 21st of January, 1890, the plaintiff telegraphed the defendants as follows: “ Don’t buy any more barley, as this completes our contract; will not accept more,” and on the same day wrote as follows: “We received statements showing you have bought 50,700 bushels of barley. As this is more than our contract calls for, you will please not buy another bushel, as we will not accept any more.”

On the 22nd of January plaintiffs wrote another letter, in which they say: “You may continue buying our malting for us until we let you know to stop, but you must not buy any western, as we will not accept it,” etc.

It further appeared that subsequently a large quantity of western barley was delivered to and received by the defendants at Maulins and Oanastota, a portion of which was paid for by money raised on drafts upon the plaintiffs, who were informed of said purchase, and the balance was paid by the defendants accepting drafts drawn on them which were not paid, and judgment on said drafts was subsequently obtained against the defendant, amounting in the aggregate to the sum of over $5,000.

On the 3d of March, 1890, the plaintiff wrote to the defendants to ship ten car loads of malt, half western, thus showing that they had ratified the purchase of the western barley and had receded from their instructions to the defendants not to purchase any such barley.

It further appears that the defendants had disposed of a large quantity of malt to other parties which the plaintiffs claimed to have been part of the malt belonging to them, and made out of barley purchased by the defendants with their money.

The learned judge below based his decision upon the ground that the plaintiff did not secure to itself the title of the barley bought and malted after the new or substituted agreement on January 22, 1890, because by its terms the defendants had no authority to purchase and malt for the plaintiff any western barley, and that the title of the western barley bought by the defendants after the making of the new agreement did not therefore vest in the plaintiff, even though the same had been wholly paid for by money raised from drafts accepted by it; that if the plaintiff furnished money to the defendants with instructions to purchase New York state barley only, and with the distinct prohibition against buying western barley, and the defendants appropriated the money in whole or in part to buy the prohibited barley, the title to that would not vest in the plaintiff until it had actually received the malt made therefrom by delivery to it, and thereby ratified the unauthorized act

We think that the learned judge has overlooked the fact that the prohibition contained in the contract of January 22 was waived, and that the defendants reported to the plaintiff the purchase of western barley, and that the plaintiff authorized the purchase of western barley, and that such barley came under the terms of the contract of October, precisely the same as state barley purchased by the defendants for the plaintiff.

It is true that a portion of this western barley was bought by the defendants on their credit, and which they have not paid for. But the plaintiff did not lose the title to its property because the defendants have so confused it with their own, which they had no right to do, that its identity could not be traced.

It seems to us when we take into consideration the fact that the prohibition against the purchase of western barley had been withdrawn, that the claim that the title to the barley purchased by the money of the plaintiff did not vest in the plaintiff cannot be sustained.

Now it is clear from the evidence that the defendants have disposed of malt which the plaintiff would have had a right to take in this proceeding had they found it in the possession of the defendants. It is clear from the nature of the contract of October, 1889, that it was the understanding of the parties that the title to this barley should be in the plaintiff, as also in the malt made thereupon. It was the plaintiff’s money that was paid for it. The only additional money which the defendants were to get was the ten per cent as compensation for malting the barley. The barley was to be insured in the name of the plaintiff, a very clear indication as to where the parties understood the title of the barley to be. If the defendants violated the instructions of the plaintiff in the purchase with their money of merchandise different from that which they were authorized to purchase, as between the plaintiff and the defendant, the plaintiff had a right to ratify the purchase and claim the property which had been bought by their agents with their money.

But it is not necessary to resort to any principle of this description, as it is clear, as already stated, that the prohibition against the purchase of western barley had been withdrawn, the purchase had been recognized and the title to the western barley bought with the money of the plaintiff passed to the plaintiff.

We think, therefore, that the learned judge in the court below erred in coming to the conclusion that no title to any of this western barley passed to the plaintiff, and as considerable of the malt eloigned was produced from western barley, that, therefore, no order of arrest should have been granted.

But we think that the amount of bail required in the order of arrest was excessive. It seems to have been assumed by the learned judge in the court below that there is some difference in the object of giving bail in a civil and criminal suit, for he says: “ Upon an indictment for any crime the accused party is entitled to bail, not excessive, but for his personal appearance only. Upon an order of arrest in a civil action bail of this character is not available to the defendants, but, instead, that required is beyond their ability to furnish,” etc.

We had supposed that all that bail in a civil action was given for was to secure the appearance of the defendant in answer to the execution against his person; and that bail is given in a criminal action for the purpose of securing the appearance of the defendant at the trial of the indictment and subjecting himself to the judgment of the court, precisely the same thing.

How since the virtual abolition of imprisonment for debt making the longest term of imprisonment less than that which would be imposed on an indictment for misdemeanor, bail in a civil action should be in some degree proportioned to the penalty which might be inflicted on the defendant who has become subject to arrest, and does not depend upon the amount of the claim, because be the claim great or small the defendant cannot be imprisoned as long as he might be upon conviction upon an indictment for almost any kind of misdemeanor.

We think therefore that the order appealed from should be reversed, with ten dollars costs and disbursements.


author: Van Brunt, P. J. Daniels, J.

text:
    Samuel Galle, Resp’t, v. Adolphe Tode et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed May 15, 1891.)

    Creditor’s action—General creditors cannot maintain.
    General creditors of a firm cannot maintain an action, in aid of an attachment, in which they seek to have confessions of judgments made by a firm declared fraudulent.

      Appeal from order denying injunction to restrain the defendants from enforcing judgments and execution thereupon issued.

      E. J. Myers, for app’lts; A. J. Simpson, for resp’t.
   Van Brunt, P. J.

The plaintiffs are attaching creditors of the defendants Tode & Wulling, and certain other defendants, are judgment creditors by confession of the defendants Tode & Wulling, upon which executions had been issued to the defendants, the sheriffs of the counties of New York and Orange.

The plaintiffs alleging said confessions to be fraudulent have brought this action in aid of their attachment, seeking to have the said confessions and judgments declared fraudulent, and to have the sheriffs aforesaid restrained from proceeding under the executions above mentioned; and asking that the defendants account to the receiver, and when a judgment shall have been recovered by the plaintiffs against the defendants Tode & Wulling in the action in which the attachment is granted, that it be first paid out of the assets, property and effects of said defendants Tode & Wulling. In other words, the plaintiffs have brought a creditor’s bill to set aside these confessions of judgment upon the ground of fraud, and to reach the property which has been levied upon under the executions issued upon said confessions, being simply creditors at large having no judgment or execution returned unsatisfied.

That such an action cannot be maintained has been the law in this state certainly ever since the case of McElwain v. Willis, 9 Wend., 549. It was recognized in the cases of Adsit v. Butler, 87 N. Y., 585; Adee v. Bigler, 81 id., 349 ; Carpenter v. Osborn, 102 id., 558; 2 N. Y. State Rep., 520, and Clafiin v. Gordon, 39 Hun, 54. The case of Thurber v. Blanck, 50 N. Y., 80, is a direct authority against the claim of the plaintiff.

' The plaintiffs, therefore, are not in a position to maintain this action for equitable relief, and the order continuing the injunction must be reversed, and the motion denied; but in view of the fact that the point was not raised in the court below, or even suggested, and, as far as we have been able to discover, not made upon the brief submitted upon this appeal, the reversal should be without costs.

Daniels, J.

The agree to the reversal of the order from which the appeal has been brought The injunction is not sustained, even by the case of Bates v. Plonsky, 28 Hun, 112, whose chief design was to restrain the execution creditors from taking the proceeds of the sales of the attached property under executions which had been issued on the judgments attacked as fraudulent, until the right to such proceeds could be determined by action.


author: Van Brunt, P. J.

text:
    Samuel Galle, Resp’t, v. Adolphe Tode et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed May 15, 1891.)

    Attachment—Fraudulent preferences.
    A firm, being in difficulties and desiring an extension of time, formed a corporation, but learning that this act was fraudulent called a meeting of creditors and assured them that no preferences should be granted. The corporation re-transferred the property to the firm; thereupon the firm confessed judgments to certain creditors and executions were issued thereon. Another meeting of creditors was called and the firm made a proposition for a settlement. Held, that all their acts were a part of a plan to force a settlement, and that the fact that the judgments were confessed for bona fide debts did not assist the debtors; that said judgments were fraudulent as to the creditors, and that an attachment was proper.
    Appeal from order denying motion to vacate attachment

      E. J. Myers, for app’Its ; A. J. Simpson, for resp’t.
   Van Brunt, P. J.

The attachment in this action was issued upon the ground that the defendants had assigned, disposed of and secreted their property with intent to defraud their creditors.

It was distinctly established that the defendants in this action were in difficulties and desired to get an extension of time and to devise some plan by which their property could be placed beyond the reach of their creditors, in order that they might procure such extension. The formation of a corporation was first resorted to for the purpose of carrying out this fraudulent scheme; but the defendants having been informed by the attorneys for certain of their creditors, and by their own attorneys, that this disposition of their property was a fraud upon their creditors and could be set aside, certain meetings were had by the creditors and the defendants for the purpose of seeing what should be done under the circumstances ; and it appears from the affidavits that the defendants assured these creditors that nothing would be done by them towards giving one creditor a preference, and that all the creditors should be treated equally and should share pro rata under the agreement which had been made between the creditors and the defendants. Subsequently, the corporation re-transferred the property to the defendants, and thereupon the defendants confessed judgment in favor of certain of their creditors, and caused executions to be issued upon such judgments, and then issued a notice for a meeting of their creditors, at which a statement of the affairs of the defendants was to be given and a proposition for settlement would be submitted.

It needs but a mere statement of these features.of the case to show the animus which actuated these defendants.

It is urged that the defendants had a right to prefer any creditor whom they might see fit This is undoubtedly true, if such preference was honestly made, but if made for the purpose of forcing a settlement with the other creditors, then it was fraudulent, and however bona fide the debt might be which was due to the creditor, the fraudulent intent of the parties confessing the judgments invalidated the whole proceeding.

It appears distinctly that the sole object and intent of these parties was to prevent their creditors from seizing upon their property. They resorted to the scheme of a corporation first, and when that was pronounced fraudulent, then they confess these judgments, cover them with executions and say to the creditors: “Now settle.”

These facts appear without dispute; and it further appears that these creditors were lured to sleep by the promise of these debtors that they would not prefer one creditor over another.

It may be true that the restoration of the property of the defendants by the corporation to them restored them to the position in which they originally were, but they were still overshadowed by the fraudulent intent which actuated them in resorting to that scheme for the protection of their property against their creditors and naturally cast suspicion upon any of their acts by which their property was taken away from the legitimate claims of creditors.

The learned counsel for the appellant seems to be of the opinion that because the debts for which the judgment was confessed were bona fide that therefore the confessions cannot, be assailed. But the difficulty is that it needs something else beside a bona fide debt in order to support the confession of a judgment

It is necessary that such confession should be given for a bona fide purpose; and it is clear from the evidence in this case which is undisputed, that there was an intent upon the part of these defendants to force a settlement by placing their property beyond the reach of their creditors.

We think, therefore, that the order sustaining the attachment should be affirmed, with costs.

Daniels, J., concurs.


author: Dwight, P. J.

text:
    Sarah A. Thomas, by guardian, App’lt, v. Mary E. Thomas, Impl’d, Resp’t.

      (Supreme Court, General Term, Fifth Department,

      Filed June 2, 1891.)

    Benefit societies—Change of benefciaby—By-laws.
    The by-laws of a benefit society prescribed that in order to change the beneficiary designated by a member, the original certificate of membership must be returned with written directions as to the charge, which directions must be duly acknowledged; that these latter were to be recorded, anew certificate issued and the old one cancelled. After the death of the member these directions were found interlined by him with the name of his wife inserted over that of his daughter, the original beneficiary. Other changes were made. None of the new directions were acknowledged, no surrender had been made of the old certificates or request made for the issue of new ones. Held, that these acts were ineffectual to change the original beneficiary.
    Appeal by the plaintiff from a judgment entered on the findings and decision of the court at special term (Niagara, November, 1889).

      W. C. Ely, for app'lt; A. H. Potter, for resp’t.
   Dwight, P. J.

This case is controlled by the same principles which governed the decision, at this term, in the case of the same plaintiff against the same defendant Thomas, impleaded with the Order of -Chosen Friends. In this case, as in that, the by-laws of the association required for the purpose- of a change of beneficiary that the existing certificate should be surrendered and a new one issued, but in this case fuller details were prescribed of the proceedings necessary in making such surrender. The provision was as follows:

Article VTII.

Section 2. Every member shall designate in his application some person or persons to whom the money shall be paid in the event of his death, and is authorized to make such change of beneficiary from time to time as he may desire, for which change he shall pay to the association the sum of fifty cents.

Any member desiring to make a change in his beneficiary shall return to the association his original certificate of membership, with written directions for such change attached or endorsed thereon, signed by such member, and duly acknowledged before some officer authorized by law to take acknowledgments, in which case the secretary shall record the same and issue a new certificate of membership in accordance with such direction, in place of such original certificate, which shall thereupon be surrendered to the association and become null and void.

In this case the member held two certificates in two classes ; A. and B. There were printed on the back of each certificate, blank forms in the following words:

I,--, to whom the within certificate was issued, do hereby
revoke my former direction as to the payment of the beneficiary
due at my death, and direct such payment to be made to ---,
having relationship to me of--.
Witness my hand and seal this —:-day of-, 188—.
-----. [l. s.]
This instrument must in all cases be acknowledged before a notary public or other officer authorized to take acknowledgments.
State of -
County of -
On this-day of-in the year one thousand eight hundred and-, before me the subscriber, personally, came-
--, to me known to be the person who executed this iustru-
-i
ment, and said-same.
• acknowledged that he executed the
1
1
Official Character.

After the death of Mr. Thomas there was found, in each of the certificates, the same interlineation as in the former case, of the name of his wife after that of his daughter as beneficiary, in the body of the certificate. Also that on both of the certificates he had filled the blanks in the first form by inserting his own name in the first blank, the names of his wife and daughter in the second, and their several relationships in the third; that to this form, in the case of the certificate in class B, he had attached his signature with the date of June 15, 1882, but that the same form on the other certificate (in class A) was never signed, and that in both the certificates the form of acknowledgment was left in blank.

As in the former case, no offer was made by the member to surrender the old certificates nor any request that the association issue new ones; no application was made for a change in the designation of the. beneficiary, nor notice that the member had assumed to make an alteration in the certificates in respect to such designation. The fact that the member pursued, to a certain extent, the formalities prescribed by the regulations, as preliminary to a surrender of his certificates, and the application for new ones, does not take the case out of the rule discussed and applied in the former case.

The judgment appealed from, which was the same as in the former case, must be reversed.

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

Macomber, J., concurs.


text:
    Sarah A. Thomas, by Guardian, App’lt, v. Mary E. Thomas, Impl’d, Resp't.

      (Supreme Court, General Term, Fifth Department,

      Filed June 2, 1891.)

    Benefit society—Change of beneficiary—By-laws.
    The by-laws of á benefit society prescribed as the sole method of changing the beneficiary named in the certificate of membership the surrender of the original certificate and the issue of a new one. The member never did any of the acis required by the by-laws, but at his death the certificate was found with an interlineation after the name of the original beneficiary, the plaintiff, of the words “ and my wife, Mary Elizabeth Thomas.” Held, that this interlineation was of no force and did not affect the right of the plaintiff to receive the entire proceeds.
    Appeal by the plaintiff from a judgment entered on the findings and decision of the court at' special term (Niagara, November, 1889).

      W. C. Ely, for app’lt; A. H. Potter, for resp’t.
   Dwight, P. J.

The controversy is between the daughter and the widow of David H. Thomas, deceased, who died holding a beneficiary certificate of membership in the association, or order, joined as defendant in this action. The certificate, as issued, in accordance with the application of the member, designated the plaintiff, his daughter, as the sole beneficiary. About a year after the issuance of the certificate Mr. Thomas married the defendant, Mary E. Thomas, and he died about five years later. After his death there was found interlined in the certificate, in his own handwriting, after the name of the plaintiff, where she was designated as beneficiary, the words “and my wife, Mary Elizabeth Thomas.” No other step had ever been taken towards effecting a revocation of his original appointment of a beneficiary, nor towards procuring the designation of a new beneficiary. No application had ever been made to the order, defendant, for a change in such designation, nor notice given that an alteration had been made by the member in the certificate issued to him.

The by-laws of the Order of Chosen Friends prescribed, as the sole method of procuring a change of beneficiary, a surrender of the original certificate and the issuance of a new one. No offer

was ever made by the member to surrender the original certificate, nor any request for the issuance of a new one. The by-law referred to was in these words: “A member in good standing may, at any time, surrender his or her relief fund certificate and a new, certificate shall thereafter be issued, payable to such person or persons as the member may direct, upon the payment of the certificate fee of fifty cents.” This regulation recognizes the certificate as the act and contract of the association by which it was issued, and clearly negatives (if that were necessary) the proposition that it is competent for any person other than its duly authorized officers to change that contract in any of its terms; or, even, that it is competent for its duly authorized officers to make such change except in the mode prescribed by its laws. The rule seems to be based upon the most elementary principles applicable to contracts, but its application to the particular case of a change of beneficiary in contracts of this nature has been repeatedly affirmed. Ireland v. Ireland, 42 Hun, 214; 5 N. Y. State Rep., 89 ; Sanger v. Rothschild, 50 Hun, 157; 19 N. Y. State Rep., 345; S. C. in court of appeals, 34 N. Y. State Rep., 258; Gladding v. Gladding, 29 id., 485. In the case of Luhrs v. Luhrs, 24 N. Y. State Rep., 252, the general term of this court, in the first department, held the rule applicable in a case of great hardship, where everything to accomplish the purpose intended had been done by the member in strict accordance with the regulations of the association, and nothing remained to be done except the issuance of the new certificate by the association, and that was prevented only by the death of the member. The court of appeals reversed even that judgment with hesitation, and only upon the distinct ground that nothing remained for the insured to do to accomplish a full compliance with the law of the association, and that the association had no alternative but to issue the new certificate if only the member had lived long enough to receive it.

We regard this case of Luhrs v. Luhrs, in the court of appeals, as conclusive in its reasoning in favor of the contention of the appellant in this case. . Here the member had done nothing which was required by the laws of the association to accomplish the change of beneficiary. He had done nothing which, under the laws of the association, authorized its officers to make the change, much less required them to do so. He had simply assumed to make the change himself in a manner equally unauthorized by the laws of the association and the law of the land.

Upon the principles thus firmly established in reason and by authority we regard the conclusions of law of the learned court at special term to the effect that the wife and daughter were joint and equal beneficiaries in the certificate in question, and each entitled to receive one-half the money secured thereby, as not warranted by the undisputed facts of the case.

The judgment, which was in accordance with those conclusions, must be reversed.

Judgment appealed from reversed and a new trial granted, with costs to the appellant to abide- the event

Macomber, J., concurs.


author: Macomber, J.

text:
    Bernard Rothschild et al., Resp’ts, v. The Grand Trunk Railway Co. of Canada, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed June 2, 1891.)

    1. Pleading—Complaint—Demurrer.
    A complaint alleged that the defendant, for a valuable consideration, agreed with the plaintiffs to carry from Detroit to Rochester certain trunks, but that the defendant so negligently carried such property that the same was lost and not delivered to the plaintiffs. A demurrer was interposed upon the ground that two causes of action, one on contract and the other for injuries to personal property, had been improperly joined. Reid, that but one cause of action was stated, negligence of the defendant, and that in any event the causes of action arose out of the same transaction, and the facts might be alleged.
    2. Same—Failure to allege corporate character must be reached BY MOTION.
    An omission to allege the corporate character of the defendant is not available on demurrer; it must be reached on motion.
    Appeal from an interlocutory judgment entered April 25,1890> in Monroe county, overruling the defendant’s demurrer to the complaint

      George F. Brownell, for app’lt; David Hays, for resp’ts.
   Macomber, J.

There are three counts* set forth in the complaint, the first of which is, that on or about the 27th day of April, 1889, the defendant, for a valuable consideration, agreed with "the plaintiffs to carry from Detroit, Michigan, to Rochester, M. Y., two trunks containing goods of the value of $1,000, belonging to the plaintiffs, but that the defendant so negligently carried such property that the same was lost and not delivered to the plaintiffs.

The second count is, in substance, that in violation of the agreement of the foregoing date, under an arrangement to transport the same from Detroit to Buffalo, the defendant so negligently carried the trunks that their contents, together with the trunks themselves, were destroyed at the city of Hamilton, on the line of the defendant’s railroad.

The third count is a.statement of the same matter under allegations that the agreement was to carry one Herman Kern as a passenger, together with the same trunks, from Detroit to Buffalo.

The demurrer was interposed to each count upon the ground that two causes of action had been improperly united, one being upon a contract and the other for injuries to personal property. And secondly, that the court had no jurisdiction of the subject of the cause of action. Third, that the complaint does not state facts sufficient to constitute a cause of action. The demurrer was overruled at special term with permission to the defendant to answer, on terms, and an interlocutory judgment was accordingly entered and from that judgment this appeal is taken.

In our judgment the demurrer is untenable. There is but a single cause of action stated in each count. The complaint is" put upon the ordinary grounds that the defendant, owing a duty to the plaintiffs by reason of its undertaking, negligently violated that contract to the damage of the plaintiffs. This constitutes a cause of action,‘solely, for the negligence of the defendant. In any event, as was stated by the learned justice at the special term, the supposed two causes of action arose out of the same transaction, and consequently, it is not improper to allege the facts in relation thereto. Code of Civ. Pro., § 484, subd. 9. The defendant being a common carrier owed a duty to the plaintiffs to transports the trunks and their contents, under the agreement, safely to their destination, and in failing to do so a cause of action has arisen to which it must respond.

As a matter of argument, it is further urged under the allegation, that the complaint does not state facts sufficient to constitute a cause of action ; that the pleading is defective and demurrable under § 1775 of the Code of Civil Procedure, which requires the pleading to state whether the party is a corporation or not, and, if a corporation, whether it is a domestic or. foreign corporation, and if a foreign corporation to allege the state, county or government by or under whose laws it was created. We fully concur in the reasoning of the court to the contrary of this contention, in the case of Hafner & Schoen Furniture Company v. Grumme, 10 Civ. Pro., 176. If any advantage can be taken of the omission to allege the corporate character of the- defendant, the same is not available by demurrer though it may be reached by motion.

The interlocutory judgment appealed from should be affirmed.

Dwight, P. J., concurs.


text:
    The Singer Manufacturing Co., Resp’t, v. Mary Hill, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed June 2, 1891.)

    Replevin-—Conditional bale—Refusal to deliver according to agreement.
    The plaintiff leased to the defendant a sewing machine under a written agreement, which provided for monthly payments; the title to remain in the plaintiff until full payment, and upon failure to make the agreed payments, the plaintiff was entitled to retake the machine. The defendant was a member of the Seneca Nation of Indians, and by chap. 92, Laws of 1813 (2 R. L., 153, § 2), it is provided that no person shall maintain an action upon a “ contract "against such an Indian. The defendant failed to make the agreed payments, and uppn a demand for the machine refused to surrender it, whereupon plaintiff brought replevin. Held, that the action was not upon contract, but founded on tort. That the right of action 'did not arise from the agreement, but was created by the wrongful refusal of the defendant to deliver the machine on demand.
    Appeal from a judgment, of the county court of Cattaraugus county, affirming a judgment of a justice of the peace in favor of the plaintiff.

      A. Hazeltíne, for app’lt; G. W. Cole, for resp’t.
   Dwight, P. J.

The action was replevin for a sewing machine. The defendant is a woman of the Seneca Nation of Indians. By chap. 92 of the Laws of 1813 (2 R. L., 153, § 2), it is provided, “ that no person shall sue or maintain any action on any bond, bill, note, promise or other contract against any of the Indians * * * of the Seneca tribe or Nation; * * * and every person who shall sue or prosecute any such action against any such Indians, shall be liable to pay treble costs to the party aggrieved.” The defendant was in possession of the sewing machine under an agreement with the plaintiff, witnessed by a writing, signed by the defendant, dated December 20, 1881, and denominated a lease, which certified that she had leased the machine of the plaintiff for the term of fourteen months, and that for the use of it she agreed to pay the sum of fifty dollars in sums specified, payable monthly, commencing with the date of the agreement

The lease contained stipulations as to the disposition, use and care of the machine during the said term, and continued as follows: “ And if any default should be made in the payment of the rent, or any part thereof, as above provided, or if I shall violate any of the provisions of this agreement, then and in either case, on demand, I agree to pay the said Singer Manufacturing Co., their agent or assigns, the full original price of said machine, less the sum or sums that shall actually have been paid for the hire of the same; and it is further agreed that in case I fail to pay as last aforesaid, or fail to pay the rents as above stipulated, or any part thereof, or violate any of the provisions of this agreement, they, the said Singer Manufacturing Co., at their election may take said machine, and I hereby agree to surrender and deliver the same, with all its accompaniments, to them or their authorized agent, without let or hindrance, and do authorize them to enter my dwelling, building or place of business for the purpose of reclaiming the same. It is further agreed that as soon as the Singer Manufacturing Co. shall have received the sum of fifty dollars for the said rent or otherwise for the said machine, the full title and ownership thereof shall pass from the said The Singer Manufacturing Co. to me, and not before.”

Below the date and the signature of the defendant was the following :

“ This certifies that I know and fully understand the provisions of the above lease.
“ (Signed) Mart Hill.”

The defendant had had possession of the machine nearly eight years, and had paid under the contract less than thirty-five dollars when the plaintiff demanded the balance of the money due, which the defendant declared herself unable to pay. The plaintiff then demanded possession of the machine, which the defendant refused to give unless she was repaid the money already paid by her, and the plaintiff thereupon commenced this action to replevin, and took the machine under process issued therein.

The sole question in the case is whether that action was an action “ on contract ” within the meaning of the statute quoted above

Whether the agreement under which the defendant took possession of the machine was a lease or a conditional sale, or both, it is plain that the title to the property was all the time in the plaintiff. From the- moment of the demand and refusal to deliver the machine, the possession of the defendant was wrongful The plaintiff’s cause of action in replevin was based upon that demand and refusal. Although the contract between the parties determined the right of the plaintiff to the possession of the property, yet the right of action in replevin was not given by the contract, but arose only upon the wrongful refusal of the defendant to deliver the property on demand. The action of replevin is not an action on contract, but is one sounding in tort If a Seneca Indian hired a horse for a day or for a week, and then refused to return him to the owner, there would be no question of the right of the latter to maintain replevin for his horse, even though the Indian acquired possession under a contract, and the right of the owner to the possession depended upon the term of the hiring, which was fixed by the same contract.

The case of Hastings v. Farmer, 4 Com., 293, is not at all in point Hastings had bought a pair of horses at a sale on an execution issued upon a judgment recovered by default, against an Indian, in an action on contract. The Indian took his horses where he could find them, and Hastings brought replevin to recover possession of the property. The court held that the judgment, the execution and the sale were absolutely void and that the plaintiff acquired no title by his purchase. He was not defeated because his action was on contract; but because the action in which the judgment was recovered, under which he claimed title, was on contract and, therefore, void.

The judgment in this case must be affirmed.

Judgment of the county court of Cattaraugus county affirmed, with costs.

Macomber, J., concurs.


text:
    Hiram Wood, App'lt, v. Benjamin M. Baker et al., Resp’ts.

      (Supreme Court, General Term, Fifth Department,

      Filed June 2, 1891.)

    1. Deed—Mortgage—Bights op a bankrupt not prosecuted by his assignee.
    In an action to have a deed declared a mortgage and to redeem, it appeared that plaintiff in 1873 deeded the premises, then subject to a large mortgage, to the defendant as security for loans; that subsequently he leased the premises of the defendant; that in 1874 he surrendered possession and was soon after declared a bankrupt; that an assignee was appointed who acted, and was with the plaintiff discharged; that there was no fraudulent concealment by the plaintiff as regards the assignee of his assets; that the assignee never made any claim or took any_ steps to recover these premises. Held, that the action could be maintained; that the bankrupt court having for whatever reason failed to use or in any manner
    apply this asset of the plaintiffs’ estate to his creditors, and that trust having been closed, all rights to attack the transaction remained in the plaintiff.
    2. Same—No reconveyance by assignee necessary.
    No reconveyance from the assignee to the plaintiff was necessary to clothe the latter with any property rights therein which the bankrupt court refused or failed to receive as assets.
    3. Same—Involuntary trustee.
    Although the plaintiff may have become an involuntary trustee of the premises for his creditors, this did not prevent his maintaining the action.

      4. Limitations—Statute—How pleaded.
    The pleading of a longer statute of limitations does not excuse the failure to plead a shorter one, nor is the shorter one in any sense included by the pleading of the longer one. It is the limitation which is to be pleaded and not the time elapsed.
    5. Same—Action to bedeem.
    Under Code, § 379, such an action brought within twenty \years is in time.
    6. Judgment.
    That where all the facts necessary to grant relief to a party are before the court, and relief has been denied him upon a question of law held otherwise in this court, it has power under Code Civ. Pro., § 1317, to grant the party the judgment to which the facts entitle him.
    Appeal from a judgment entered in Monroe county, April 14, 1890, on tlie decision of the special term, directing a dismissal of the plaintiff’s complaint.

      James C. Smith and John Van Voorhis, for app’lt; Theodore Bacon, for resp’ts.
   Macomber, J.

This action is brought to obtain an accounting of the rents and profits of certain real estate in the hands of the defendant, and for redemption of the land from an instrument which is claimed by the plaintiff to be a mortgage.

The real estate involved consists of a lot on Fitzhugh street in the city of Bochester, with a sixty-six feet frontage, containing altogether about one-fourth of an acre. By an instrument dated January 9, 1872, the plaintiff conveyed this land to the defendant, Benjamin M. Baker, for the consideration as expressed in the deed of the sum of $12,000. The conveyance was made subject to a mortgage of $20,000, executed December 9, 1871, by Wood to the Mutual Life Insurance Company of Mew York. By a paper dated the same day as the deed, the defendant, Benjamin M. Baker, for the consideration of the rents and covenants expressed in the lease, let and demised to the plaintiff these premises for the term of one year at the sum of $1,200, with the privilege to the lessee of purchasing the same at any time within six months from the date of the lease upon payment of the sum of $12,000. The deed contained no assumption personally on the part of Baker of the payment of the mortgage to the Mutual Life Insurance Company. By the terms of the lease, the plaintiff was required to pay the interest upon the mortgage; to maintain the premises in good repair; to insure the same in the sum of $15,000 for the benefit of the Mutual Life Insurance Company, and $5,000 for the benefit of the defendant, Benjamin M. Baker. This lease also contained the usual covenant of payment of the rent, and of the restoration of the premises one year thereafter. On the 13th day of January, 1873, a like lease was executed to the plaintiff by the defendant, Benjamin M. Baker, at the rent of $2,000 per year, with the like privilege of purchasing the same at any time within six months upon the payment of the sum of $20,000, with the same covenants contained in the first lease above mentioned.

It is asserted in the complaint, admitted by the answer, and found by the learned trial judge, that when the deed was given by Wood to the defendant Benjamin M. Baker, and the first lease taken back, there had been advanced by Baker to the plaintiff the sum of $12,000. It is further alleged in the complaint and admitted in the answer, and likewise found by the trial judge, that when the second lease was given the sum of the advancements made by Baker to the plaintiff had, with the year’s rent accruing, amounted to $20,000.

Up to July, 1870, this property had been occupied as a livery stable, and conducted, first by the defendant Benjamin M. Baker, who was then the owner, and subsequently, upon a sale of the real estate to Wood, the same was conducted by the plaintiff in his own behalf. On the 5th day of July, 1870, the livery stable was destroyed by fire. At this time it was contemplated by Wood to erect a substantial building, in the place of the old one, to be used for hotel purposes. On consultation with Mr. Baker, it is alleged in the complaint and testified to by Wood, that Baker agreed to advance to Wood sufficient moneys to carry out this plan. This fact, however, is disputed by Baker, and whether it is true or not, the allegation and the proof do not form very essential parts of the legal question presented for review on this appeal, though the trial court has found in favor of the plaintiff on that matter as a fact of some importance.

It is established by the evidence of the plaintiff, together with many attending corroborating circumstances, that the instrument executed by Wood to B.aker on the 9th day of January, 1872, which was, in form, an absolute deed, was intended by both parties thereto to be a security for the moneys that had been at that time advanced by Baker for the benefit of Wood, namely, the sum of $12,000. This fact is denied by Baker in his testimony, and the latter insists, that he declined to loan the plaintiff any money upon the strength of the execution of a mere security upon the property, but offered to purchase the property and pay Wood therefor a sum which, in addition to the sums advanced, would come to $12,000. He testifies, that he agreed to assume the payment of the $20,000 mortgage to the Mutual Life Insurance Company, though, as stated above, no such assumption on his part is contained in the deed, or elsewhere in writing. Wood testifies with much circumstance and detail, that Baker was desirous to receive ten per cent as interest for the moneys which he had loaned, and that, accordingly, the rental sum in the first lease above mentioned was fixed at $1,200, which would be ten per cent upon the indebtedness then existing, and the rent of the second lease, fixed at $2,000, which would be ten per cent of the amount of the indebtedness at that time existing.

The plaintiff, on the 1st day of November, 1874, being seriiously ill and unable longer to carry on the hotel business, surrendered voluntarily to the defendant, Benjamin M. Baker, the possession of the premises. Immediately thereupon proceedings by the creditors of the plaintiff were instituted in bankruptcy, which resulted in the adjudication of his bankruptcy on the 11th day of November, 1874, and the appointment, in the month following, of an assignee, together with the usual assignment made by the register in bankruptcy of all of the property of the bankrupt for distribution among creditors. In the succeeding month of May a dividend of 1 4-| per cent was declared upon the indebtedness of the bankrupt, and upon the payment of this sum the assignee and the bankrupt both were (as is conclusively presumed in the absence of evidence to the contrary, on notice to all of the creditors) discharged in pursuance of the provisions of the bankrupt law.

The case is devoid of any evidence to show that the assignee in bankruptcy ever made the claim that is now made by the plaintiff in his own behalf, or that he ever received any information which would lead him to believe that the estate, which he officially represented under the appointment, embraced any claim of right of redemption under the deed of January 9, 1872.

There are other facts disclosed by the evidence, and which are in the main found in the decision of the learned trial judge, but it is not thought to be necessary to refer to them in detail, as they do not have any immediate bearing upon the solution of the questions involved in this appeal.

The learned justice at the trial, while finding all of the material facts in favor of the contention made on behalf of the plaintiff, has directed a judgment to be entered in favor of the defendant of a dismissal of the complaint upon the sole ground that the rights claimed in this action passed to the assignee in bankruptcy, and that they had never been restored to the plaintiff otherwise than by the discharge of the bankrupt and his assignee, and that, consequently, this action cannot be maintained.

Undoubtedly the object of the bankrupt law was to secure a just and equitable distribution of the bankrupt’s property, and the whole of the same, among his creditors; and to this end it was provided that all of the bankrupt’s estate, with certain exceptions unimportant in this case, including all his rights of action for property, and all the rights of the redemption of such property, should be transferred by assignment to his duly appointed assignee. U. S. Rev. Statutes, §§ 5044, 5045, 5046. But the question immediately arises, what becomes of the property, whether it be tangible or otherwise, which the bankruptcy court and its assignee declined t6 consider or failed to use as assets? Is it the property of nobody, or does it necessarily, by operation of law, revert to the bankrupt ? The title .to it must rest somewhere, and there is a conclusive presumption that it remains where originally found, until it is shown to have been taken away in fact as well as in theory.

It will be observed, and too much stress cannot be placed upon the fact, that no fraudulent concealment of any of his property or rights of action is alleged in the answer against the plaintiff. A long perusal of the evidence has led likewise to the conclusion, that if such defense had been interposed it would have been unavailing. There is absolutely no fraud imputed to the plaintiff in the part which he played in the bankruptcy court, though it is plain to be seen that his mind was overlaid and his actions controlled to a great extent by the domination of Mr. Baker. Had any fraudulent concealment been alleged and proved, an entirely different application of the principle enunciated would be administered, for fraud vitiates everything.

Suppose that the plaintiff’s claim, as made in this case, had been based, not upon a mere right of action, but upon the fact of the existence of some tangible property, like bonds, which had been pledged for the payment of an indebtedness, and this property had been overlooked by the bankruptcy court and its assignee, or, if not overlooked, had been thought to have been pledged for a sum greater than its intrinsic value, and consequently the court had refused to treat it as assets, and had administered the estate accordingly, and both the bankrupt and the assignee had been duly discharged, which must necessarily have been under notice to all creditors; could it reasonably be said that the pledgee of such property, after the payment of his debts, might hold it, be-, cause, under the bankruptcy proceedings it might, and probably should, have been applied to the payment of the indebtedness of the bankrupt, either by judicial proceedings to redeem on payment of the debt, or by a sale thereof under an order of the court? We think not

Can the case of the plaintiff be less strong, simply because his claim is based upon a mere right of action, not evidenced by any instrument in writing, but which is secured to him by well-established and undisputed principles of equity jurisprudence, namely, the right to go behind the mere form of the instrument by which his property was conveyed’to his creditor, and to say, that that instrument, in terms an absolute deed, was intended only as security for the payment of the debt? The discharge of the bankrupt from his debts, accompanied by the discharge of the assignee from further duties in the premises, made a cáse where it must be conclusively presumed that the bankruptcy court determined that the claim which existed in behalf of Wood against Baker, was not assets, or, at least, that it was such an onerous right of action involving in its pursuit an advancement of so large a sum of money to the insurance company, that it was not worth anything. Nash v. Simpson, 78 Me., 143; Amory v. Lawrence, 3 Clifford, 523.

We know of no right existing in this court to say, that the bankruptcy court made a mistake. There was yielded to the federal court, under the act of 1867, the absolute control of the bankrupt’s property for. the payment of his debts. If that tribunal, through accident, mistake or design, saw fit not to regard the claim now in suit as assets, we have no power to revise that determination and say that it was assets, and that the bankrupt shall now have no title thereto, because it should have been distributed in that court Boyd v. Olvey, 82 Ind., 294.

We think no reconveyance of this right of action was required to be made by the assignee, in order to clothe the plaintiff with any property rights therein which the bankruptcy court refused or failed to receive as assets. Colie v. Jamison, 4 Hun, 284; Dewey v. Moyer, 72 N. Y., 70: affirmed by the H. S. Sup. Ct. in Dewey v. Moyer, 103 U. S., 301; Amory v. Lawrence, 3 Cliff., 523.

We are unable to see how the defendant can be heard to object to the prosecution of this claim by the plaintiff, rather than by the assignee in bankruptcy. The latter was discharged in the year following his appointment, and the bankrupt'himself relieved from any obligation further to pay his debts by the judgment of a competent court

The bankrupt had applied all his property which the court would take to the payment of his debts without any fraudulent concealment of any part thereof. There is no conflict of interest between the assignee in bankruptcy and the plaintiff, and consequently the defendant is not in any proper attitude to object to being called upon to perform his honest obligation in this action. King v. Remington, 36 Minn., 15; Starkweather v. Cleveland Ins. Co., 2 Abb. U. S., 67.

The cases cited by the learned judge at the special term, Vanslyke v. Shryer, 98 Ind., 126; Jones v. Dexter, 125 Mass., 469; Kenyon v. Wrisley, 147 id., 476, and Smith v. Chandler, 3 Gray, 392, do not, in our judgment, vary in any material respect, as applicable to this case, the principle above enunciated.

Why should not the plaintiff be permitted to maintain this action under these circumstances ? The federal court having presumably repudiated this claim as an asset, nobody can complain of the action of the plaintiff in availing himself of the right to prosecute it, except possibly those persons who might share in the distribution of the avails of this action, should the plaintiff ultimately prevail therein. The logical and necessary result of the discharge of the assignee in bankruptcy, and of the bankrupt himself, was to repossess the plaintiff of all property rights which the district court of the United States refused to regard as assets. Undoubtedly, the creditors, had they moved opportunely, might have instituted an action, even though the assignee had refused to, in order to establish the claim now made. The most, in our judgment, which may be said against the plaintiff is that by a mistake or accident the claim which now appears to be so valuable was overlooked by the district court in its administration of the bankruptcy case. In the absence of allegations and proof of fraud, the most that may be claimed against the plaintiff’s rights would be the principle in equity that he had, by the facts disclosed, become an involuntary trustee of the property for the benefit of the persons who otherwise would have received it, Segrave v. Kirwan, Beatty, 157, and that he should in turn apply the property, or the proceeds of the action thus instituted, to the discharge of his debts; but that principle does not prevent him from maintaining this action.

In our view it is not necessary, perhaps, to show that any right of action, based upon this claim, must have been enforced within two years by the assignee in bankruptcy ; for any rights of such assignee, or any person in his place, seem to have been absolutely abandoned. The question, therefore, whether the plaintiff, in his attempt to maintain this action, is in better position by reason of the lapse of the two years mentioned in the Federal Statute (U. S. Rev. St., § 5057), does not seem to be of much importance.

The point made in regard to the failure of the answer to set up such two years limitation does not appear to be, under the proofs and under the findings of the learned trial judge, of any moment in enabling us to arrive at what we deem to be a proper conclusion. This action is timely brought within § 379 of the Code of Civil Procedure, which provides that an action to redeem real property from a mortgage, with or without an account of the rents and profits, may be maintained by the mortgagor, or those claiming under him, against the mortgagee in possession, or those claiming under him, within twenty years.

The defense, therefore, set up in the answer, that the cause of action stated in the complaint did not accrue to the plaintiff within ten years next preceding the beginning of the action, is not ten-», able. The reply of the learned counsel for the respondents to the suggestion made in the brief of the appellant, that the two years statute provided for by the Federal act had not been pleaded, is to the effect that inasmuch as the defendants had alleged that a thing did not happen within ten years, that such allegation was sufficient to show that it did not happen within two years. This/ undoubtedly, would be correct as a matter of time, but in plead-' ing the statute of limitations it is quite obvious that the greater] number of years pleaded does not include a lesser number, for( § 413 of the Code of Civil Procedure provides “the objection that the action was not commenced within the time limited, can be taken only by answer." It is the limitation of time which is required to be pleaded, but not the time itself.

The only other question remaining is whether, under the expression of these views, it is our duty to grant a new trial, or whether we should direct what seems to us to be the proper judgment following the findings of the trial judge. In the case of Wood, Supervisor, etc., v. Board of Superivsors of Monroe Co., 30 N.Y. State Rep., 706, we increased the amount of the recovery by a considerable sum of money which had been thrown out by the special term, but which had been included in the findings of fact. This conclusion which was reached, after some consideration of § 1317 of the Code of Civil Procedure, which we thought warranted it, and the cases cited in the opinion then rendered, was affirmed by the court of appeals in that case. On this appeal, all of the facts necessary for a complete judgment in favor of the plaintiff’s contention are found in his favor, and relief is denied him solely upon the ground above stated, namely, that he had not become repossessed of the right of action, otherwise than by a discharge of the assignee in bankruptcy and his own discharge from all liability to his creditors. If these findings of fact of the special term are correct, the proper judgment would be substantially for an accounting of the rents and profits of the real estate and for a redemption of the title thereof, upon the ground that the instrument conveying the property to the defendant was, though in form a deed, in fact a security for the payment of an indebtedness, and that consequently the defendant, from the time he took possession in the year 1874, was a trustee for the due application of the rents and profits to the extinguishment of the debt which was owing to him by the plaintiff.

But it is claimed by the learned counsel for the defendants, that though the judgment appealed from may not be sustained upon the legal ground mentioned by the learned trial justice, yet that it may be affirmed upon the ground that the learned justice was in error in his conclusion of facts. If this contention is borne out by the evidence, it undoubtedly would lead to the conclusion reached by the learned counsel. Upon an examination of the testimony, we are satisfied that the conclusions in respect to the facts are sustained by a clear preponderance of the evidence. To quote the testimony of the principal witnesses, namely, the plaintiff and the defendant, Benjamin M. Baker, would be a prolongation of this opinion beyond all ordinary limits. There are, however, two overwhelming considerations which show that the contention made by the plaintiff upon the question of fact is correct, and these are: First, that after the figuring up and ascertainment of the indebtedness of $12,000, the rental value of the premises was fixed at the sum of $1,200 per year, being ten per cent upon the indebtedness, that being the measure of rent reserved according to the testimony of Wood; and that when such indebtedness became $20,000, such rent reserved was the sum of $2,000, neither sum under the evidence being near the actual rental value- of the premises, and: Second, if the defendant’s claim of an absolute conveyance with a conditional agreement of sale, is correct, the rights of the parties became fixed six months after the delivery of the deed, to wit, in the month of July, 1872, and that thereafter the plaintiff had no right, if the arrangement was a mere conditional agreement, to sell back the property, to call upon the defendant to make good his promise which was contained in the lease given of even date with the deed. This being so, according to the contention of the defendants, the subsequent loans which, with the year’s unpaid rent, amounted to $8,000, were mere gratuities made by the defendant Benjamin M. Baker, to the plaintiff, absolutely without security, but as acts of generosity. There is, however, nothing in the printed record which would show that this defendant, having once made the bargain, which he claims to have made, was a person disposed to give up any of the advantages of that bargain, and to bestow upon another with whom he was claiming to be dealing at arms end, a mere gratuity.

We think, therefore, that the judgment appealed from should be reversed and in its place an interlocutory judgment should be entered declaring that the deed of January 9, 1872, was executed and delivered as a security for the loan of money, and that the plaintiff is entitled to an accounting of the rents and profits during the time that the same has been in the possession of the defendant, Benjamin M. Baker, and an application of such rents and profits to the satisfaction and extinguishment of the indebtedness, together with lawful interest thereon as fixed by statute, Schermerhorn v. Talman, 14 N. Y., 126 and 127; and declaring that Baker was from that time a trustee for the plaintiff, in relation to the premises; and directing that upon payment of any balance due the defendant Baker, if there be any, the latter shall reconvey the property to the plaintiff.

Judgment is so ordered, with costs of the trial term and of this appeal to the plaintiff.

Dwight, P. J., concurs.


author: O’Brien, J.

text:
    The People ex rel. Benjamin W. Winans et al., App’lts, v. Ambrose T. Adams et al., Resp’ts.

      (Court of Appeals,

      Filed June 23, 1891.)

    Costs—Extra allowance—Code Crv., Pro., § 1956—Usurpation op OFFICE.
    Where the complaint in an action to oust defendants from an office in a domestic corporation and put relators in possession thereof, demands that each defendant shall pay a fine of §2,000 as provided by Code Civ. Pro., § 1956, this does not justify the court upon the complaint being dismissed in granting defendants an extra allowance based upon the amount of such fine.
    Appeal from judgment of the supreme court, general term, first department, affirming order granting defendants an extra allowance of $350.

      Wm. H. Arnoux, for app’lts; Hoffman Miller, for resp’ts.

       Reversing 37 N. Y. State Rep., 603.

   O’Brien, J.

This was an action brought by the attorney general under §§ 1948 and 1949 of the Code of Civil Procedure. The complaint alleges that on the 7th day of April, 1890, the relators, ten in number, were duly elected, respectively, wardens and vestrymen of the church of the Holy Nativity, a Protestant Episcopal church in the city of New York.

That the defendants Adams and Townsend unlawfully intruded into the office of warden and the other defendants into the office of vestrymen of said church, and were unlawfully holding these offices in violation of the rights of the relators. Judgment was demanded that the defendants were not entitled to the office into which they respectively had intruded, and that they be ousted and excluded therefrom, and that the relators be put in possession of the offices to which they were respectively elected as alleged. Costs were demanded against the defendants, and that each of them pay to the People of the State of New York a fine of $2,000. On the trial the complaint was dismissed, with costs, and an order made granting the defendants an extra allowance of $350. The only basis for the allowance was the demand that each defendant be fined $2,000, and as there were ten defendants, it was held that the complaint contained a claim against the defendants of $20,000 in the aggregate. The order has been affirmed at general term.

The only question presented by the appeal is whether the court had power to grant an allowance in the action. Section 3253 of the Code of Civil Procedure confers power on the court, in its discretion, to award to the successful party a sum not exceeding five per centum upon the sum recovered or claimed, or the value of the subject matter involved. And § 1956 provides that in actions such as this the court may in its discretion also award that the defendants pay a fine to the people of the state not exceeding $2,000, and if such fine is imposed execution may be issued upon the judgment, and when the fine is collected it must be paid into the treasury of the state. The relators could have no interest in the fine, and no one could demand that it be imposed as a legal right. The cause of action or claim set forth in the complaint was the intrusion of the defendants into an office in a domestic corporation, from which it was sought to oust them, and to put the relators in possession thereof. The fine was a mere incident that might or might not follow the success of the action, resting wholly in the discretion of the court with reference to the facts and circumstances of the case. It was no part of the claim or cause of action. It was not necessary to demand it in the complaint, as the court could have imposed it whether demanded or not upon a proper state of facts. By demanding it the plaintiff did not change the character of the action or engraft upon the complaint any element of a pecuniary claim within the meaning of that term as used in the section of the Code above referred to. There was no power in this; case to grant to the defendants an extra allowance, except upon the basis of the value of the claim or subject matter involved in the action and litigated directly and not incidentally. Atlantic Dock Co. v. Libby, 45 N. Y., 499; Adams v. Arkenburgh, 106 id., 615; 11 N. Y. State Rep., 121; Conaughty v. Sar. Co. Bank, 92 N. Y., 404.

The action was brought to try the title to certain elective offices in a religious corporation. It does not appear that these offices were of any value in themselves, or that there were any emoluments or pecuniary advantages attached to them, and hence it cannot be said that the subject matter of the action was of any value whatever. The entirely unnecessary demand that each of the ten defendants be fined $2,000 was not a claim that could form the basis of an allowance any more than would a request at the trial that the discretion of the court in that regard be exercised.

The order of the general and special terms should be reversed, with costs in all courts.

All concur, except Finch, J., absent


author: Gray, J.

text:
    In the Matter of the Application of The Metropolitan El. R. Co. In re Watson et al.

      (Court of Appeals,

      Filed June 23, 1891.)

    Appeal—Cannot be taeen prom confirmation of award by commissioners.
    This court has no jurisdiction to review a decision of the supreme court,. rendered upon the appraisal and report of commissioners appointed by it, to condemn property taken for railroad purposes.

      Appeal from order of the supreme court, general term, first department, affirming orders confirming awards.

      Edwin M. Felt, for app’lt; Julien T. Davies, for resp’t.

       Affirming N. Y. State Rep., 793.

   Gray, J.

I think that this- Court has no jurisdiction to review a decision of the supreme court, rendered upon the appraisal and report of its commissioners. It has been so held in proceedings to acquire property rights taken under the provisions of the general railroad act of 1850, and so, by parity of reasoning, we must hold where the petitioner is incorporated, and proceeds under what is commonly known as the rapid transit act (chap. 606, Laws of 1895). In the latter act, the provisions respecting the acquisition of lands, in invitum the owner thereof, are similar as to the procedure to those prescribed in the act of 1850. However, serious, therefore, the error of the commissioners may have been in the rejection of the proof relating to the prior adjudication in the equity action between these parties, there is no power in this court to review it, upon, an appeal from the order of confirmation.'

Appeal dismissed, with costs to the respondent

All concur, except Finch, J., absent.