text:
    The Manhattan Electric Light Company, Limited, App’lt, v. The Harlem Lighting Company et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed February 18, 1892.)

    Contempt—Violation op order.
    Plaintiff obtained a judgment by default against a corporation. Shortly after one G., claiming that it was collusive and fraudulent, petitioned to be allowed to intervene as a defendant and contest the claim on which it was based. Upon stipulation an order was entered that the petition be granted, the cause referred, and that meanwhile all proceedings to enforce the judgment, and all in which the judgment was a basis be stayed until the coming in of the referee’s report. Thereafter the directors of the corporation authorized the delivery of certain bonds to plaintiff as collateral security for their claim, but providing that the same should not be sold until the amount due be finally judicially determined. A motion was made by G. to punish plaintiff and the directors for contempt on the ground that the hypothecation of bonds was a violation of the order entered upon stipulation. The motion was granted and an order entered compelling them to deliver back the bonds to the corporation, and a rescind the resolution authorizing the hypothecation, or be committed for contempt. Held, that the motion was properly granted, as there was a clear, manifest violation of the order staying proceedings.
    (Van Brunt, P. J., dissents.)

      Appeal from an order granting motion to punish the Manhattan Electric Light Company, Abram C. Bernheim, Clarence L. Gians, Eugene Hammett and E. Hochheimer for contempt.

      W. N. Cohen, for the Manhattan Electric Light Company, app’lt; Nathaniel Myers, for Abram C. Bernheim et al, app’lts; A. J. Dittenhoefer, for resp’t.
   O’Brien, J.

On June 11, 1891, the plaintiff obtained by default a judgment against the defendant, the Harlem Lighting Company, for the sum of $142,802.43. In July, 1891, Levi L. Grans, claiming that this judgment was collusive and fraudulent, petitioned this court to be allowed to intervene as a defendant and contest the claim on which the judgment was based. On July 29 th, by an agreement drawn by the attorneys,1 it was stipulated that this petition be granted; that then this cause be referred, and that meanwhile no proceeding to enforce the judgment should be taken. Pursuant to this stipulation an order was entered making Grans a party defendant, referring the issues to a referee, and further ordering and directing that all proceedings for the collection and enforcement of said judgment, and all proceedings in which the said judgment should be used as a basis or foundation, be stayed until the coming in of the referee’s report.

On September 28th the individual appellants, as the board of directors of the Harlem Company, passed a resolution authorizing the secretary to deliver $200,000 of the second mortgage bonds to the Manhattan Company, as collateral security for the payment of claims due the latter by the former company, but providing that the same should not be sold until the amount due. the Manhattan Company should finally be judicially determined. It is asserted that in addition to the claim which was made the basis of the j udgment, the plaintiff as against the Harlem Company, had another claim amounting to $50,000, which had accrued between April 1st and September 30, 1891. As some stress has been placed upon this circumstance, of the existence of this indebtedness of $50,000, it becomes necessary to briefly refer to the explanation given by the appellants of the purpose sought to be effected by the delivery of the $200,000 in bonds of the defendant company.

Mr. Bernheim, in his affidavit, states that said resolution was made by deponent, and, as he verily believes, seconded by Dr. Hochheimer, and passed by the directors voting therefor, for the purpose not only of securing the claim which formed the basis of the judgment, but the claim which had accrued from April 1, 1891.

Again he says, “ the intent was, as the resolution expressly provides, to secure the entire claims due to the Manhattan Company (both in suit, and not in suit) when it should be finally judicially determined what the amount due was, and for the purpose of settling accounts between the Harlem and Manhattan Companies by the sale of the collateral, and thus avoid the issue of an execution upon any judgment.”

Subsequent to the passage of the resolution of September, a motion was made to punish plaintiff and the individual appellants for contempt, on the ground that this conditional hypothecation of bonds was a violation of the order entered under the stipulation. The order appealed from compelled the appellants either to deliver the $200,000 of bonds held by them as collateral security and cause a rescission of the Harlem Company’s resolution authorizing the hypothecation of the bonds, and to pay respondents ten dollars costs of motion, or be committed for contempt until they did so, coupled with the obligation of paying a fine of $250, or spending five days in the county jail, and paying ten dollars costs of motion. The appellants complied with the order by redelivering the bonds, and having the resolution of the Harlem Company rescinded.

It will thus be seen that the order made and now appealed from, and the action taken thereon by the appellants, was to restore matters to the same condition in which they were prior to the delivery of the $200,000 in bonds. We might be content, it being fair and just, to leave the parties where the order has placed them, but it is insisted that the learned judge below erred in making the order, and that as a matter of right they are entitled to have the order appealed from reversed. We do hot agree with this view, and in giving our reasons therefor we need add but little to what has been so well stated by the learned judge below in his opinion. We are not called upon for the purpose of aiding the appellants to draw distinctions between the force and effect of injunction orders, properly so called, and orders staying proceedings ; nor are we to here determine as to the right or propriety of the order staying proceedings, the terms of which were fixed by the parties and not by the court.

After the defendant Grans had presented his petition, and obtained his order to show cause, for the purpose of staying all proceedings to enforce the judgment, upon the ground that it was collusive and fraudulent, the appellants through their counsel, entered into a formal stipulation, which was the basis of the order granting such stay of proceedings. We regard it as entirely immaterial as to whether there was an additional claim of $50,000 due by the defendant or not, for in view of what has already been said it is evident that the $200,000 of bonds were given to secure also the claim which was the basis of the judgment and which by the order was stayed. If, therefore, it was a violation of the terms of the order to deliver the bonds as security for the claim upon which the judgment was based, it is entirely immaterial whether or not there was some other claim for which some of the bonds were also delivered. The appellants in justification insisted that there was no violation of the .specific terms of the order, and that in what they did they acted in good faith, under the advice of counsel.

This latter circumstance, that the stipulation which in effect was embodied in the order was carefully drawn by counsel, points out a distinction which we think should be taken between a case such, as this is and cases cited by appellants, where the courts being satisfied that there was no willful disobedience of its order, and where the order itself was ambiguous or doubtful, and fairly capable of two constructions, one consistent with the person’s innocence of any intentional disrespect to the court, have seized upon such circumstances as the doubt and ambiguity, or double construction to he placed upon the terms of' the order, for the purpose of relieving one from the punishment that must follow an adjudication for contempt. Here, however, where the parties by their counsel have entered into a-stipulation, upon which an order has been made, its terms should be construed as the parties themselves undoubtedly intended, at the time the order was made, they should be construed.

We think that there was a clear manifest violation by the appellants of the order staying proceedings. This order provided “ That all proceedings for the collection and enforcement of said judgment, and all proceedings in which the said judgment is used as a basis or foundation, be stayed until the coming in of the said referee’s report, etc.”

The suggestion now made, that the bonds were delivered not to secure the judgment, but the claim due the Manhattan Company, should not be entertained, for the reason that the claim having been-merged in the -judgment, there existed no longer a claim other than the judgment which was, under the stipulation, allowed to stand as security.' It must be remembered, moreover, that the proceedings brought by Grans resulting in the stipulation and order, attacked both the judgment and the claim upon which it was based; and the claim itself, its validity and enforcement, were the matters referred to the referee to determine.

As well said, therefore, by Mr. Justice Lawrence, “Even if the transfer of the bonds of the Harlem Company, into the treasury of the Manhattan Company, was not a direct proceeding for the collection of the judgment, it certainly was a proceeding for its ultimate enforcement, and a proceeding of which the judgment was the basis and foundation.”

What was sought by the petitioner in his motion to intervene was to prevent the application of the property of the defendant company to the payment of the claim which he alleged to be. fraudulent and collusive. It was that undoubtedly that the order staying the proceedings was intended to prevent; that until the validity of the claim upon which the judgment was based could be judicially determined, the property of the defendant company should not be applied in any way in satisfaction thereof. Notwithstanding that order, we think the defendant company in delivering over $200,000 of its bonds as security for this very claim, for which the judgment was allowed to stand as security, and retaining the bonds, would be to enable the plaintiff, upon a claim which had been attacked, to obtain indirectly the property of the defendant company, which was prohibited by the terms of the order staying their proceedings.

As said in the Mayor v. The New York & Staten Island Ferry Company, 64 N. Y., 622: Injunction orders must be fairly and honestly obeyed, * * * and the court will not look with indulgence upon schemes, however skillfully devised, designed to thwart its orders.” We are of opinion, therefore, that the terms .and spirit of the order were violated, and good faith required that the property of the defendant company should not be placed in possession of the plaintiff, until its right thereto which was involved in the issues which had been referred to the referee were finally determined. It is insisted, however, by appellants that the delivery of the bonds resulted in no injury to the defendant -company, for the reason that the resolution under which they were delivered provided that they should not be sold without the express consent of the directors of the defendant company until the amount due the Manhattan Company shall be finally judi-cially determined. This argument has been fully answered by the judge in his opinion below. We agree with him that the object and intent' of the order undoubtedly was to preserve the exact status of the parties as it existed when the stipulation was signed and the order made.

We are of opinion therefore that the order appealed from, should be affirmed, with costs and disbursements.

Patterson, J., concurs.

Van Brunt, P. J.


source: Caselaw Access Project

author: O’Brien, J. Patterson, J. Van Brunt, P. J.

license: Public Domain

text:
    In the Matter of the Application of William Herbst et al. for leave to sue.

      (Supreme Court, General Term, First Department,

      Filed February 18, 1892.)

    (Receiver—When leave to sue not granted.
    Petitioners performed work as tailors in making up a large number of coats for a firm, who agreed that they should have a general lien upon the coats for the work done. The firm failed, and in a suit brought by other creditors a receiver was appointed. Thereafter the tailors petitioned for leave to sue the receiver in an action to foreclose their lien. Held, that the claim, being an equitable one, could be determined in the receivership suit, and it was proper for the court in the exercise of its discretion to deny the petition.
    (Van Brunt, P. J., d'ssents.)
    Appeal from an order denying motion for leave to sue a receiver.

      Abram Kling, for app’lt; &. Zabrishie, for resp’t.
   O’Brien, J.

William Herbst and Morris Morrison applied at special term for leave to sue Henry W. Grray, a receiver of the firm of Levy Bros. & Co., or to interplead him as one of the- defendants in a suit to be brought to foreclose a lien upon chattels.

By their petition the appellants claim that they performed work, labor and services as tailors in the manufacture of certain clothing, to the value of $2,576.80, at the request of Levy Bros. & Go. ; that the said firm agreed that they should have a general lien upon S15 coats delivered to them to be made up; that they did the work on the coats, but have not been paid. In a suit. ■ brought by Hardt and others against Levy Bros. & Co. and others,. Gray was, by an order of this court, dated May 21,1891, appointed the receiver of the said copartnership firm, and claims all the property by reason of such appointment. The affidavit which accompanies the petition states that a proceeding is now pending in this court to punish the petitioners for contempt for failure to. turn over to the receiver the same goods and chattels, on which they claim a lien, and that the motion is made in the action of Hardt against Levy, in which the receiver was appointed. It is, upon these facts, insisted by plaintiff, that nothing appears to justify the order made by the justice below, and that the denial of petitioners’ application was a .refusal to allow them, having a legally undisputed claim, from prosecuting the remedy which the law prescribed and from seeking in the courts an enforcement of their legal and constitutional rights. The receiver, in his affidavit, shows that the object of the action in which he was appointed receiver is to prevent multiplicity of actions, and to ascertain and adjudicate in that suit the claims of all persons in respect to the property attached by the sheriff or held under claim of lien.

In respect to the delivery of receivership property to the receiver, or the surrender of receivership property by the receiver, many applications have been made by this receiver in the suit in which he was appointed, and the court, in the exercise of its dis: cretion, deemed it wiser to retain all such questions for settlement in the principal suit, and not to require or permit other actions to be brought. With respect to the property held by the appellants, such an application was made by the receiver, and to forestall the decision of the court the appellants made their motion for leave to bring an independent action to foreclose their lien. Such an action as proposed is equitable in its nature, and one which can be established and enforced by a court of equity, or the court can, in an equitable proceeding, require the claimant to submit his claim in the principal suit, and can therein give such relief to the petitioner as he may show himself entitled to. Upon these applications at special term, the court has held that even with regard to claims of a legal nature, triable by right by jury, it will in its discretion permit such an action to be brought. This rule has not however been extended to actions such as this one, which is of an equitable nature, for the reason, as stated, that any claim or lien can be disposed of in the principal suit without injury to any of the claimants’ legal or constitutional rights, and thus secure the object of the principal action by preventing a multiplicity of suits. The theory upon which such action of the court is based is, that where the court has taken possession of property, and appointed a receiver, it has power to try all adverse claims in the principal suit. Such a disposition of adverse claims is in accordance with the former equity practice, which has not been taken away, nor superseded by statute. And it appearing by the record that a proceeding has actually been; brought by the receiver to have the claim of petitioners determined, it was proper for the court, in the exercise of its discretion, to deny the leave to sue the receiver which was applied for. We think that the order appealed from should be affirmed, with ten dollars costs and, disbursements.

Patterson, J.

I concur for the reason that it is utterly unnecessary to sue the receiver. The petitioners held the goods as pledgees and they have only to apply to the court on notice to the receiver for leave to sell, or if their right is disputed, for a reference to determine it. There is no propriety in putting the receiver to the expense and delay of an action when the whole matter can be disposed of by a reference in the main action, as was the practice in chancery, and, as I understand it, is now; there being no provision in the Code of Civil Procedure as to applications of this character, rule 85 of the general rules of practice would apply.

Van Brunt, P. J. In the above memorandum Mr. Justice Patterson bases his decision upon the ground that the petitioners hold the goods as pledgees, whereas the fact is beyond question that they do not hold the goods as pledgees, but as bailees and pledgees. If they held the goods as pledgees they could sell the goods without coming into court, but being also bailees they cannot.

There never was any practice in the' court of chancery or any other court which attempted to or could compel an utter stranger to the questions to be litigated in an equity action to come into that action and try a question which was entirely separate and distinct

Van Brunt, P. J.

(dissenting.)—I cannot concur in the con-' elusion arrived at by Mr. Justice O’Brien upon this appeal.

He seems to be of the opinion that the petitioners should be required to intervene in a suit in the issues of which they have not the slightest interest, in order that they may make available rights which have been conferred upon them by the owners of the property mentioned in the petition.

The papers upon which this application has been made, and' the answer to the same, have been very loosely. and inaccurately drawn, so that it is difficult without some previous knowledge of the litigations out of which this receivership arose to determine exactly the status of the parties.

But sufficient appears to show with some degree of certainty that probably the receiver has but little, if any, interest in the goods which form the subject matter involved. The petitioners allege that the firm of Levy Bros. & Co. were indebted to them in the sum of $2,576.80 for work, labor and services performed by them in the manufacture of clothing for said firm of Levy Bros., no part of which has been paid, and that in the month of May, 1891, the said firm being then largely indebted to the petitioners for work of the character above mentioned, desired the petitioners to do "other work of a like character, and delivered goods for the purpose of manufacture, under the agreement that the petitioners should have a lien upon said goods, not only for ' the work bestowed thereon but also for the indebtedness already existing; that pursuant to said agreement the petitioners received said goods and performed work, labor and services on the same,, and that the whole amount of the indebtedness due to the petitioners was the sum above mentioned; that in May, 2891, in a. certain action a receiver was appointed of the copartnership firm of Levy Bros. & Co., who claims all the property of said firm by reason of said appointment, 'and that the petitioners desired to-commence an action to foreclose said mechanic’s lien upon, said chattels and for the recovery of their debt; and that in such action it will be necessary to make such receiver a party defendant.

It .will be seen upon a consideration of the wording of this petition that the petitioners had a very vague idea in regard to the rights which they had acquired by the transaction, calling the claim a mechanic’s lien, whereas, as -to the work which had already been done, they held the goods as a pawn or pledge, and only as to the work which was. done subsequently did they hold the goods as bailees.

It appears from the affidavit of the receiver, made in opposition to the application, that he has no knowledge as to the merits of the claim of the petitioners, and denies that the property in question is the property of Levy Bros., or any of them, and claims that under the order of his appointment he is entitled to possession of the same. He then alleges that the object of the action in which he was appointed was, among other things, to avoid multiplicity of suits and to adjudicate in that suit the claims of all persons in respect to any of the property attached by the sheriff in favor of the National Park Bank, as stated in the complaint therein,-and that the object and beneficial relief desired in said action will be frustrated if any claimants of any goods so attached were permitted to take the same out of the possession of the receiver before an adjudication in that action, or to maintain separate actions for the purpose of establishing their several rights or claims.

It is apparent from these allegations that the receiver was appointed of goods attached by the sheriff in the action of the National Park Bank v. Levy Bros., for the purpose of preventing parties from taking possession of goods which were in the hands of the sheriff under the attachment, and which were to be transferred to the receiver.

Now, in the first place, the petitioners are not attempting to-take anything out of the possession of the receiver. The receiver apparently never has had possession of the goods in question, and certainly was never entitled to such possession.

The petitioners are not claiming the possession of any goods upon which the sheriff has levied an attachment, there being no evidence that the attachment was ever levied upon these goods. On the contrary, they are in the possession of the goods which have been theretofore pledged to them for a debt, and upon which they have a lien for work done subsequent to the pledge. They, therefore, have no interest in the litigations between the sheriff and the creditors of Levy Bros., in which the title to specific property is the subject matter of investigation. And in considering the necessity of this application it is essential to bear in mind the different remedies which the petitioners have for the recovery of their debt, and the peculiar situation in which they are placed by the fact that as to a part of the debt the goods are a pledge or pawn, and as to the remainder they have a lien for work done, the one being a pledge and the other a bailment for hire. A pledgee has the implied power to sell the pledged goods after a default by the pledgor without the intervention of any court. Story on Bailments, 308. But the party who holds a lien for work done has no right to sell them after default. Id., 311.

This distinction is pertinently stated in 1 Smith’s Leading-Cases, 388. It is there stated that if the pawnor made default in. payment at the stipulated time, the pawnee has a right to sell the pledge, and this he may do of his own accord without any previous application to a court of equity, or he may sue thepawnor for his debt, retaining the pawn, for it is a mere collateral security.

If he thinks proper to sell, the surplus produced after satisfying the debt belongs to the pawnor; while on the other hand, if the pawn sells for less than the amount of the debt, the deficiency continues chargeable on the pawnor.

From all this it will be seen that a pawn differs on the one hand from a lien, which conveys no right to sell whatever, but-only a right to retain until the debt in respect of which the lien was created has been satisfied, and on the other hand, from a mortgage, which conveys the entire property of the thing mortgaged to the mortgagee conditionally, so that when the condition is broken the property remains absolutely in the mortgagee, whereas a pawn never conveys the general property to the pawnee, but only a special property in the thing pawned, and the effect of a default in payment of the debt by the. pawnor is not to-pass the entire title of the thing pledged in the pawnee, but to give him the power to dispose of it, accounting for the surplus, which power if he neglected to use, the general property of the thing pawned continues in the pawnor, who has a right at any time to redeem it.

Therefore, the situation of the petitioners is that without the-intervention of a court of equity, as far as these goods are a pledge, they may sell, but as far- as they are held for a lien, they must foreclose their lien.

Under these circumstances it is clear that the petitioners can only be protected in their rights by a foreclosure of the lien, including the pawn. Standing as they do in a position entirely separate and distinct from' persons claiming title to property which has been reduced to possession by the sheriff under his-attachment, it would seem to be a great hardship to require them, to in that litigation to determine their rights, particularly as the ¡receiver in that suit would have no power to deprive them of the ■possession of the property. In fact the very idea of a lien of this ■kind and of a pawn carries with it the right to possession; and when possession is lost the lien is gone, differing in this respect, •also, from a mortgage.

It may be that the receiver has no interest whatever in this •question, and that the petitioners might foreclose their lien without reference to the receiver. But- if there is any question on that point, and there may be, they are entitled to have him before the court in order that the rights of all parties may be amply protected and disposed of.

I am of the opinion, therefore, in view of the fact that these petitioners have no interest whatever in the class of litigations out ■of which the receivership arose, that they should be permitted to ■•avail themselves of the security which they have received for the payment of their debt, and of the lien which they have for the work which they have done, entirely untrammeled by controversies in which they have no interest.

The order should be reversed, with ten dollars costs and disbursements, and the motion granted.

Order affirmed, with ten dollars costs and disbursements.


author: Van Brunt, P. J.

text:
    Austen G. Fox, Receiver, Pl’ff, v. James J. McComb et al., Def’ts.

      (Supreme Court, General Term, First Department,

      Filed February 18, 1892.)

    •Corporations—Payment of subscriptions to stock.
    A subscription to the stock of an incorporated apartment association was made by a building company upon the agreement that it should be paid by the construction of an apartment house for the association, which agreement was fulfilled. A member of the building company, who had taken mortgages on the land whereon the apartment house stood, to secure advances, foreclosed them, and realized a large sum. The association became insolvent, and its property placed in the hands of a receiver, who began an action against the members of the building company on the ground that the company having been organized defectively, they were copartners, and that the sum realized by the foreclosure was a payment back of the sum paid on their - subscription. Held, that the action could not be maintained.
    Motion for new trial by the plaintiff, the complaint having been dismissed and exceptions ordered to be heard in the first instance at the general term.

      A. SlicJcney, for pl’ff; Q. A. Strong, for def’ts.
   Van Brunt, P. J.

The plaintiff by his complaint alleged the incorporation of the Madrid Apartment Association in December, 1881, and that in April, 1889, in an action in the supreme court, wherein the People were plaintiffs and the Madrid Apartment Association was defendant, a judgment was duly entered adjudging and declaring that said corporation was insolvent, and hadremained insolvent for at least a year, and that it.had also suspended its ordinary and lawful business for more than a year, and that said association be and it thereby was dissolved ; that the plaintiff was duly appointed receiver for the purpose of winding up and closing its affairs ; and that said receiver duly qualified and entered upon the performance of the duties of said receivership.

He further alleged that during all the times mentioned in said complaint the defendants were doing business in the city of New York under the name and style of the Central Park Building Company, limited; and that in or about the year 1884 the defendants had undertaken and were engaged in the enterprise of building the apartment houses of the said association in the city of New York, and on the 14th of January, 1884, subscribed for six shares of the capital stock of said corporation of the par value of $105,000 and procured and caused said corporation to issue to themselves and certain other persons on their behalf the said six' shares as full paid stock, and thereupon the defendant agreed with said corporation to pay for said six shares the full amount of the par value aforesaid, and that such moneys of the defendant as should be appropriated to the construction of said building should be considered and taken to be pro tanto in payment for said shares.

The complaint further alleges that up to the 14th of January, 1884, and thereafter,, certain moneys of the defendants were in the construction of the building contributed from time to time up to about June 1,1885, and these in all amounted to $226,814.13; and .that thereafter the defendants procured to be paid back to them or to the defendant McComb $194,367.87 of the sum so contrib-' uted, so that the said corporation has received in all upon the six shares so subscribed for, either in money, property or other consideration, the sum of only $32,446.26, and that by reason of the-premises there was due and owing from the defendants to the-plaintiff the sum of $72,553.74, with interest thereon since the 14th of January, 1884.

The defendants put in a general denial; and the plaintiff to sustain the issues on his part introduced evidence by which he claimed to show that the Central Park Building Co. was in form organized on the 22d of May, 1883, for the purpose of constructing the apartment houses of the Madrid and other associations,, which construction was then in progress, and in June, 1883, the-defendant McComb became interested in this enterprise and made-a subscription to the stock of the Central Park Building Company, which he never paid ; and that it was the original intent of the two defendants in this action to control the entire enterprise, and to divide its entire profits between themselves as individuals ; that they purposely omitted to contribute any cash capital to the so-called corporation or to give it any property; that its business and property were controlled by the defendants; a subscription by the Central Park Company to the stock of the Madrid Association, which is the stock referred to in the complaint; that the alleged corporation was not a, corporation because of defects in its. organization, and that the individual defendants were therefore liable as partners on all contracts made in the name of said company, they virtually doing business as copartners under such corporate name.

It further appeared that the defendant McComb had received mortgages from the persons in whom the title stood of the land upon which the Madrid Apartment House was erected to secure •advances made by him to the enterprise; that McComb commenced an action to foreclose said mortgage, the Madrid Association and others being parties to the action and putting in answers and litigating the right of McComb to foreclose; and that upon a trial before a referee of the issues thus raised, the right of McComb to foreclose was established, and a judgment of foreclosure and sale entered upon the report of such referee, and in pursuance of such judgment the premises upon which the Madrid Apartpaent house stood were sold, and the sum of $194,367.87 referred to in the complaint realized.

It further appeared that the referee in that action at the request of the Madrid Apartment Association and others, defendants therein, found as a conclusion of law that all contracts and transactions made or done in the name of the Central Park Building -Company, which, if it had been legally organized and incorporated, would have bound it as a corporation, were the joint contracts and transactions of McComb and de Havarro, the defend-ants herein, and were binding upon them personally. This conclusion, however, was not incorporated by the referee in his report, and consequenly forms no part of the judgment roll, although it seems to have been included therein as made up and offered in evidence in this action. Nobis v. Pollock, 26 St. Rep., 155.

Upon the conclusion of the plaintiff’s case a motion was made to dismiss the complaint upon various grounds, among others, that if the action is to be treated as one upon the subscription to the capital stock of the Madrid Association, then both thé pleadings and the evidence establish that the subscription has been fully paid. The motion was granted; the plaintiff duly excepted, and the exceptions were ordered to be heard in the first instance at the general term.

A large number of questions were discussed in the.briefs of counsel, interesting in themselves, but which apprear to us to have no relevancy to the real question presented by the pleadings in this action; and it is to be presumed that the nature of the claim of the plaintiff must be controlled by the allegations in the pleadings, and that unless the cause of action therein set out was established, the complaint was rightly dismissed. The complaint alleges a subscription to the stock of the Madrid Apartment Association bjr the defendants, and that it was agreed that such moneys of the defendant as should be appropriated to the construction of the building of the Madrid Apartment House should be considered and taken to be pro tanto in payment for said shares; and that the defendants expended in the construction of this building up to June 1, 1885, a sum more than twice greater than the par value of the stock for which they had sub•scribed. It is then alleged that the defendants procured to be -paid back to them or to the defendant McComb, a large sum of money, so that the corporation had received upon said stock subscription only about one-third of its par value.

From the evidence it appears that this sum, which it is alleged was procured to be paid back, was the result of the foreclosure proceedings above mentioned. We have then this condition of affairs upon the allegations of the complaint and the proofs, that the defendants had subscribed for this stock and had • paid for it, and that one of them had then brought an action to foreclose a mortgage as against the association of which the plaintiff is the successor and others, "which they defended, and had therein procured a judgment of foreclosure and sale and realized a large sum of money thereunder, which is the amount referred to in the plaintiff's allegation that the defendants procured to be paid back to them, or to the defendant McComb, $194,367.87 of the sum of $226,814.13 so contributed.

This judgment of foreclosure was an adjudication that McComb was entitled to recover that money, and that adjudication was binding upon the Madrid association and the plaintiff as its successor, which is absolutely inconsistent with any claim that such sum formed any part of the subscription which the defendants m this action had made to the stock of the Madrid Apartment Association, and which subscription they had, according to the allegations in the complaint, fully paid.

Therefore the allegation that the defendant McComb procured to be paid back any part of the sum of the subscription contributed is not established, and consequently the cause of action alleged in the complaint was not proved.

If it should be urged that the findings of the referee in the foreclosure suit made at the request of the Madrid Association and the other defendants, in respect to the individual liability of the defendants in this action, is also conclusive upon them, it may be observed that no such issue was presented in the foreclosure action and was a mere expression of opinion upon the part of the referee and in no way entered into his report; the validity of the incorporation of the Central Park Building Company and the relations of the defendant McComb with the defendant de Navarro being entirely foreign to the question as to whether McOomb was a creditor of the Madrid association and had a right to recover his debt. And, furthermore, even if such findings could possibly be binding upon the parties to the action at bar, and the defendants were to be deemed individually liable for the contracts of the Central Park Building Company, yet, as we have already seen, there is no contract or obligation with the Madrid association which it is alleged that they have not fulfilled.

The exceptions should be overruled and judgment ordered for defendants, with costs.

Lawrence, J., concurs.

O’Brien, J. The complaint alleges, the answer admits and the evidence shows that the subscription to the stock was fully paid. Thereafter, McComb claiming to be a creditor, and having certain "collateral mortgages given him as security, brought suit to foreclose them, and it was therein determined that he was such creditor, and pursuant to the judgment he received the moneys now sought to be recovered.

The Madrid Association was a party to such suit, contested the claim and was beaten,.and the judgment was enforced against property not then, though formerly, held by the association. These facts cannot be reconciled with a recovery in a cause of action based on the theory that such money was illegally procured to be paid respondents, or for money had and received. We assume, however, that the theory of partnership liability by reason of defective corporation is the one relied upon. Considering the evidence it is clear that the Central Park Company was at least a defacto corporation and its validity as against all but the state was thus established.

The fundamental principle upon which the whole of appellant’s structure is built being destroyed, and it appearing as to him that the Central Park Co. was a valid corporation, the contracts being in the corporate name, the defendant McComb is protected from individual liability and cannot be held as a partner. I therefore concur in the conclusion reached by the learned presiding judge.


text:
    Michael Bowen, Resp’t, v. Michael Sweeney et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed February 18, 1892.)

    Evidence—Husband of devisee—Code Crv. Peo., § 829.
    Upon the trial of a partition suit, where the issue was the validity of a will, the court excluded the testimony of the husband of one of the devisees named In the will, on the ground that the witness was interested in the will. Held., error.
    Appeal from interlocutory judgment of partition and sale.

      W. H. Arnoux, for app’lts; F. B Candler, for resp’t.
   Van Brunt, P. J.

This action was brought for a partition and sale of certain property in the city of New York, the plaintiff claiming to be interested therein as tenant in common with certain of the defendants. The first complaint in the action was demurred to by the appellants, and it was sustained apparently on the ground that no facts were alleged which showed any interest in the realty belonging to the demurring defendants, and that there was no clear averment of fact upon the subject of a last will and testament of Mary Hatton or the absence of such an instrument. The plaintiff thereupon amended his complaint, alleging that Mary Hatton had died intestate, unmarried and without issue. To this complaint the appellants answered setting up that the said Mary Hatton had made a will by which she devised to them all her estate, of which the premises in question were part, and that such devisees were in the exclusive possession thereof. The court thereupon made an order directing that the cause be put upon the circuit calendar to the end that the trial of the action might be proceeded with and the issues of fact therein contained or such of them as might be necessary might be tried before a court and 3UTy-

Upon the case coming up for trial at the circuit the will of Mary Hatton, referred to in the answer of the defendants, was in-traduced in evidence after proof, and thereupon the plaintiff -sought to attack the same by evidence in reference to its execution. Objection being raised, apparently because of the condition ■of the pleadings, the plaintiff’s counsel moved to amend his complaint by an allegation that Mrs. Hatton left what purported to be a will, but which was not her last will and testament, because it was not properl}'- executed, and because she was not competent to make a will, and that it was obtained from her in an unlawful manner by undue influence. Objection was made by the defendants’ counsel; the objection was overruled and an exception taken. The plaintiff’s counsel thereupon reduced the amendment to form, and the court stated that the amendment would be granted upon terms, and that if the defendants desired, a juror would be withdrawn and the trial, postponed. The defendants’ counsel stated that he did not desire to postpone the trial, and asked that the amendment be reduced to writing and sworn to by the plaintiff, which was done, and the trial thereupon proceeded, and upon the close of the testimony certain issues were framed and submitted to the jury. The peculiarity of one of these issues it is not necessary to discuss, in view of the result which follows the decision of this appeal.

It is now urged that it was error in the court to allow the amendment which was done upon the trial, and in this view we .-are inclined to concur. The attention of the plaintiff’s counsel was distinctly called to the defect in pleading upon the decision of the demurrer to the previous complaint, and he failed to amend his complaint meeting this objection. On this state of facts, as the complaint existed at the time the trial of the issues were ■commenced at the circuit, the plaintiff had no standing in court, he not being in possession of the property sought to be partitioned or any part thereof.

Whatever rights he had were conferred by § 1537 of the Code, where it is provided that a person claiming to be entitled as a joint tenant or tenant in cqmmon by reason of his being the heir •of a person who died holding and in possession of real property may maintain an action for the partition thereof, whether he is in ■or out of possession, notwithstanding an apparent devise thereof to another by the decedent and possession under such devise; but in such an action the plaintiff must allege and establish that the apparent devise is void.

The right to maintain such an action did not exist prior to the passage of chap. 238 of the Laws of 1853, and hence it is an ■entirely different action from the ordinary action of partition, which could only be brought where two or more persons held and were in possession of real property; possession being a necessary ingredient to the maintenance of the action. Chap. 238 of the Laws of 1853 was an innovation in the procedure for partition, and conferred a new and different right of action from that which ever existed before. And it may be doubtful whether it is not such a new and separate and distinct cause of action that it cannot be imported into a complaint for partition by amendment. But whether it was so or not, we do not think that upon a trial after the notice which this plaintiff had received of the defects in his complaint that the amendment should have been allowed.

Without discussing in any way the merits of this case, or considering the testimony which is referred to at so great length upon the points of counsel in reference to the sufficiency of the proof to sustain the findings of the jury, it will only be necessary to call attention to one or two exceptions to the admission of evidence which are fatal to the judgment in question.

One Francis Gallagher was called as a witness upon the part of the defendants. Much testimony had been given in reference to the knowledge which Mrs. Hatton had of this will and of the circumstances under which it was executed, it being claimed that she did not know what she was doing, and that it was procured through the undue influence and fraud of the devisees. After having testified that he was the husband of Mrs. Gallagher, one of the devisees named in the will of Mrs. Hatton, he was asked,, “ Had you a conversation with her on the morning before she executed the will ?”

This was objected to, on the ground that the witness is interested in the will and is not competent to testify. He then-testified : “I have children by my present wife.” The objection was sustained, and the defendants excepted. He was then asked “Did you hear Mrs. Hatton say anything about executing or having a will made for her before she executed it?” This was'objected to, the objection sustained, and defendants excepted.

“ Q. Do you know that Mrs. Hatton had this will in her possession for three or four days before the morning she executed it?

“ Objected to; objection sustained; exception.

“Q. After the will was executed did you hear Mrs. Hatton read it? '

“ Objected to ; objection sustained; exception.”

No ground is stated for these last three objections, and it is claimed by the respondent that, as thé objection was a general one, if the evidence could be excluded on any ground whatever,, the court will not hold on appeal that there was error in excluding "the evidence. We are not aware of any such rule. On the-contrary, the only ground upon ■ which an objection can be-sustained without any ground being stated is that it is irrelevant, and immaterial.

But we think that it is fair in the construction of these objections to assume that the evidence was ruled out upon the same ground as was stated in the first objection above referred to.

In making this ruling, however, the court evidently erred.

It is true that if Mrs. Gallagher died leaving'no will, and without having conveyed her real estate, the witness would bo entitled to a tenancy by the curtesy. But as this is simply a contingent interest and not vested, it was no disqualification. The children of a party living have precisely the same interest in the property owned by their parent. If he dies intestate and without having conveyed the property, it falls to them. But they have never been excluded upon the ground of interest. •

This rule is laid down in 1 Greenleaf, 390, where it is stated that the true test of the interest of a witness is that he will either gain or lose by the direct legal operation and effect of the judgment, or that the record will be legal evidence for or against him in some other action. It must be a present, certain and vested interest, and not an interest uncertain, remote or contingent. Thus the heir apparent to an estate is a competent witness in support of the claim of his ancestor, though one who has a vested interest in remainder is not competent; and if the interest is of a doubtful mature the objection goes to the credit of the witness and not to his competency.

This rule was applied in the case of Hobart v. Hobart, 62 N. Y., 80, and In re Clarke, 40 Hun, 233, and in that case the distinction between the contingent interest of a husband in the living wife’s real estate and the vested interest of a wife in the real estate of her husband is pointed out. In the one case the interest may be terminated by the wife; in the other the husband cannot divest his wife of her right to dower. Therefore, the husband was a competent witness in reference to transactions between himself and the deceased.

But it is urged by the respondent that if these questions had been answered, the testimony at most would only have tended to prove that the decedent knew when she executed the will that it was her will, and that fact the jury and the court found in favor of the appellant, so as they were able to establish that fact without any of the answers to thése questions, they were not prejudiced by the rulings of the court excluding them. .

But this claim does not by. any means meet the objection. It is claimed that this will was obtained by fraud and undue influence, and the jury have so found. Mow the declarations of Mrs. Hatton in reference to her will, made before -she executed it, are certainly exceedingly important upon such an issue; as .■also is the evidence of her possession of this will for days before its execution. And in view of the attempt to establish the fact that Mrs. Hatton could not read, evidence going to show that the witness heard her read the will in question seems to be most material.

We see.no escape from holding that the exclusion of this testimony was error, and very serious error to the appellants.

We think, therefore, that the judgment must be reversed and a new trial ordered, with costs to appellants to abide the event.

O’Brien, J., concurs.


author: Andrews, J.

text:
    Thomas Barrett, Resp’t, v. The Manhattan Railway Co. et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed February 18, 1892.)

    1. Railroads—Elevated—Damages.
    In an action against an elevated railroad to recover damages for injury to abutting property, the court fixed the amount of the plaintiff’s rental damages at the rate of $1,000 a year and the fee damages at $7,000. Defendants objected on the ground that the award of rental damages was inconsistent, because over fourteen per cent of the fee damages awarded, eight to ten per cent being the annual percentage of the value of property charged as rent. Held, not inconsistent; as it did not appear but that the-, fee damage was too low.
    2. Same—Hearsay evidence.
    Defendant called a former tenant of the property in question, who testified that he had never complained to plaintiff about the dust and cinders-of the road, and had not refused to pay a higher rent on that ground. Plaintiff was re-called and testified as,to conversations held with the tenant in which he complained of the dust and cinders and refused to pay an. increased rent. Held, that the evidence as to the conversations was not' hearsay, but original evidence given for the purpose of impeachment.
    3. Same—Lease prior to purchase by plaintiff.
    The award to plaintiff of damages for injury to the use of premises during the unexpired term of leases, covering the entire property, made at a-fixed rental, before plaintiff acquired the title, was proper.
    ■ 4. Same—Property in possession of tenants.
    An award to plaintiff for injuries to the premises while leased to and in the exclusive possession of tenants holding under written lease is proper.
    5. Same.
    Upon the allegations of the complaint, the action might be regarded either as one at law for a nuisance or as an equitable one to restrain the, continuance of a trespass. Defendant moved that it be sent to the circuit . for trial, which was denied, but no motion was made that plaintiff elect whether he would try the case as an action for a nuisance, or for a trespass. Held, that defendant could not object on appeal that it was denied a trial by jury.
    (Van Brunt, P. J., dissents.)
    Appeal from a judgment in favor of the plaintiff rendered after a trial at the special term.
    . Davies, Short & Townsend, for app’lts; Peckham & Tyler, for resp’t.
   Andrews, J.

The court below fixed the amount of the plaintiff’s rental damages at the rate of $1,000 a year from the time he-bought the premises, making, with costs, a total money judgment $8,337.71. The fee damages were fixed at $7,000, and the judgment enjoined the defendant from maintaining their rail way,unless such fee damages were paid within twenty-five days, or unless the easements were acquired within thirty days by condemnation, proceedings. From this judgment the defendants appealed, and their counsel presents numerous points, upon which it is claimed a. new trial should be granted.

The first point made is that the award of $1,000 per year,, as rental damages, is inconsistent with the remainder of the judgment and decision and unwarranted by the evidence and the facts.

The gist of this objection appears to be that real estate in this city usually produces from eight to ten per cent income, and that the loss of annuál rental income should not therefore have been placed at more than eight or ten per cent on $7,000, which was fixed by the court as the amount of fee damage. . So far as the inconsistency is concerned we fail to perceive the force of the argument, because it might as well be claimed that the fee damage is too low, as that the rental damage is too high. So far as the facts proved are concerned, the testimony presents the contradictions always found in actions of this character, and it is very difficult to determine from such testimony precisely what sums should be allowed, either for rental or fee damage. So far as we can ascertain .from the evidence the findings of the trial court, both as to rental damage and fee damage, are sustained by a fair preponderance of evidence.

The second point raised is, that the findings made by the court as to the injury to these premises are unsupported by the testimony on that subject.

To sustain this proposition the learned counsel for the defend-ants quote in their brief a portion only of the testimony in the •case which bears upon the subject of the injury done to the premises, and fail to quote a large amount of other testimony which is also to be found in the case. While there might be some foundation for the claim that the testimony, on the subject of the injury to the premises was insufficient to support some of the findings, if that portion only of such testimony which is quoted in the brief of defendant’s counsel were considered, we think that taking all the testimony on that point which is found in the printed case, the findings of the trial court as to the injury done to the premises are amply supported by the evidence.

The third point raised is that the trial j udge erred in permitting the plaintiff Barrett to go upon the stand and testify as to alleged •conversations had with a former tenant, and in thereafter basing an important finding of fact on the hearsay evidence so admitted.

We are of opinion that this point is not well taken. One Lib-man, a former tenant of the property in question, had been called as a witness for the defendant, and had testified that he had not complained to Barrett about the dust and cinders of the elevated road, and had not refused to pay a higher rent on that ground, •and that the presence and operation of such railroad did not in any way substantially interfere with the carrying on of his business.

Barrett had been previously called as a witness on his own Behalf, and, after this testimony had been given by Libman, Barrett was recalled and re-examined, and testified that said Libman, in conversation with himself, had at various times compained of the dust and cinders from the road; that they were injurious to his stock, so much so that in the summer time he had to keep his windows closed, and had to keep the goods always covered, and that was the reason he assigned why he would not pay an advanced rent; and that he did so frequently. Counsel for the defendants objected to the question which elicited this testimony ■as incompetent, immaterial and irrelevant and hearsay; and, after the testimony had been given, moved to strike it out upon the same grounds. Counsel for the plaintiff stated that it was offered simply to impeach the testimony of the witness Libman, and the objection of counsel for the defendants was overruled, and the motion to strike out the testimony denied.

We are unable to see that error was committed. The plaintiff’s counsel had the right to recall Barrett to contradict Libman, and the testimony given for that purpose was in no sense hearsay. It is true that the testimony so given, for such purpose, could not be regarded as testimony upon which, disconnected from other testimony in the case, a finding that injury was done by the road could be based ; but we are unable to discover that any finding as to the injury done was based upon such testimony, exclusively. The only effect which could properly be given to such testimony, and so far as we can see, the only effect that was given to it by the trial court, was to discredit the testimony giving by Libman on behalf of the defendants.

The next point raised is that the trial court erred in awarding to the plaintiff damages for injury to the use of premises during the unexpired term of leases, covering the entire property, made at a fixed rental, before plaintiff acquired title thereto.

It was held in Conkling v. Manhattan Railway Co., 36 St. Rep., 124, that loss of rental for a period of six years prior to the commencement of the action could be recovered, although the-premises were occupied during that period under a lease given more than six years prior to the commencement of the action. The principle established by that decision applies to the present, case, in which it appears that the period for which the plaintiff has been allowed for loss of rent was included in a lease given before the plaintiff became the owner of the premises. Moreover, it has been repeatedly decided that the owner of property injured by the defendant’s road, can recover fee damages, although he-purchased the property after the road was built We think the reasoning of those cases applies to a case like the present, where the owner suffers loss of rent by reason of a lease executed before he purchased the property. The doctrine that a continuous-trespasser is liable to the owner for fee damages, although such owner may have purchased the property at a lower price because of the existence of the trespass, applies to a case like the present, where the owner has purchased property encumbered by a lease,, at a low rental, although he may have paid a lower price for the-property than he otherwise would, because of the existence of such lease.

The case of Hine v. N. Y. Elev. Railway Company, 37 St. Rep., 606, cited by defendant’s counsel, does not apply, _a.ll that was-decided in that case was, that “ an action against an elevated railroad to recover damages for trespass committed by it to easements may be maintained by an owner of leased premises where, because of such trespass, he can procure from his lessee only a. reduced rent from that which he would have received had the trespass not existed.”

The fifth point raised is that the case made out by the' plaintiff did not warrant the judgment.

The testimony given by the witnesses for the respective parties-, presents the usual contradictions found in actions of this character, but, as we have already stated, we think the findings as to- the nature and extent of the injury done by the defendants are supported by a fair preponderance of testimony.

The,sixth point raised is that the trial judge erred in refusing a jury trial to the defendants.

Upon the allegations in the complaint the action might be regarded either as brought to restrain the continuance of a nuisance or the continuance of a trespass.' At the commencement of the trial counsel for the defendants moved to strike the case from the special term calendar, and that it be sent to the circuit for trial, on the ground that the defendants were entitled to a jury trial by the constitution and the Code of Civil Procedure. This motion was denied and defendants’ counsel excepted, but no motion was made that the plaintiff should be required to elect whether he would try the case as an action for a nuisance or for a trespass.. We are of the opinion that, under these circumstances, the case-falls within the decision of this court in the case of Lilmann v. The Manhattan Railway Co., 59 Hun, 428; 36 St. Rep., 639, and that the point is not well taken.

The seventh point is that the premises having been leased to and in the exclusive possession of tenants holding under written leases, it was error to award damages for alleged injuries to the use of this plaintiff.

This point has been decided against the plaintiff' in Hine v. N. Y. Elev. Railway Co., supra, and other cases, and it is not necessary to consider it further.

The judgment should be affirmed, with costs.

Barrett, J., concurs; Van Brunt, P. J., dissents.


text:
    In the Matter of The Mayor of the City of New York to acquire lands. In re Mary A. Blizzard.

      (Supreme Court, General Term, First Department,

      Filed February 18, 1892.)

    Adverse possession—Title of squatter.
    Petitioner finding an island vacant went in and took possession without. claim of title, erected buildings and remained in possession for over twenty years. Held, that as her occupation was that of a squatter, she could not obtain title by adverse possession.
    Motion to confirm referee’s report upon claim of moneys' awarded to unknown owners.

      W. R. Lambertson, for motion ; C. D. Olendorf, opposed.
   Van Brunt, P. J.

The commissioners of estimate by their report in this proceeding awarded the sum of $13,350 to unknown owners for parcel 691 in Pelham Bay Park; of this $5,000 was made for the land and the balance, $8,350. for the buildings. The petitioner claims to have been the owner of parcel 691 at the time-of the confirmation and of the report of the commissioners in said proceedings, and the referee has so found.

Her claim of ownership is not based upon any record title to-said.premises, but is founded wholly upon possession and occupancy of said property for a period of more than twenty years.

The parcel stands in an island in Westchester Creek, and is divided into two parts, which may be described as the northerly and southerly parts of the island, the dividing line being a public highway extending the whole length of the island, upon each side of which highway there is and was at the time the claimant went into possession a substantial stone wall or fence. The petitioner went into possession of the southerly portion of the island more than twenty years prior to the confirmation of the report, and erected a hotel and buildings connected therewith, and has ever since remained in possession thereof. Her entry does not seem to have been under any claim of title, and her occupation has been that of a squatter.

It is true that upon her examination she stated that she took possession of this property, claiming title thereto. But it is apparent from her cross-examination that she made no claim of title at the time of her entry, but to use her own language, she “ just squatted there, as it were.”

It further appeared that she had no record title to said premises either by way of deed, grant, devise or writing of any kind.

Her only acts of ownership in respect to the northerly portion’ of the island consisted in building a boat house and planting oysters and clams in the waters adjacent to the island.

Upon'these facts the referee reported that the petitioner was •entitled to the award made for the island in. question. In this we think he clearly erred. It is plain that whatever the possession of the petitioner was, it was not under any claim of title. She found this island vacant, and went in and took possession and remained for a long period of time. But such entry was not in pursuance of any claim of title, nor does it appear that she ever-asserted ownership except by being in possession. Under the definition of adverse possession, such possession to be adverse must be under claim of title, and the naked possession unaccompanied by such claim can never ripen into a good title.

It necessarily follows that where possession is under a claim of title it must’ be made under some distinct claim of title, and not by a mere general assertion of ownership, without reference- to any source from which such ownership can arise. In other words, a mere squatter can never obtain title by adverse possession.

In order that possession of land shall be adverse, it must be shown that the land is held in hostility to the true owner’s claim of title thereto. It appears from the evidence taken in this proceeding that the taking of possession by the petitioner was not in its commencement hostile to the true title, and it does not appear when the petitioner commenced to claim title to the premises exclusive of any other right, if she ever did so, and as under no circumstances can possession be deemed adverse until this condition of affairs is made to appear, it is not in proof that there was any adverse possession of the petitioner for twenty years.

In view of the conclusion at which we have arrived in regard , to the main question involved, it is not necessary to discuss the distinction between the nature of the possession of the northerly and southerly half of the island.

Upon the whole case we think that the claim of the petitioner is defective in establishing a right to the moneys which have been, awarded for the taking of the premises in question.

Motion denied.

Barrett, J., concurs.


text:
    The Nassau Bank, Resp’t, v. Joseph Campbell et al., Executors, App’lts.

      (Supreme Court, General Term, First Department,

      Filed February 18, 1892. )
    Bills and notes—Endorser released by surrender oe collateral.
    Two promissory notes were endorsed by 0., it appearing upon their face that there had been deposited as collateral security nine bonds, all of which were secured by a mortgage on certain property. After C. had endorsed the notes, the mortgage in question was surrendered with the-consent of the bondholders, so as to leave the security of the bonds subservient to other loans upon the property mortgaged; and this was dona without the knowledge of the endorser U. In an action brought against O. to recover on the notes, Held, that he was discharged as endorser by the surrender of the collateral.
    Appeal from judgment entered upon the verdict of a jury directed by the court.

      William H. Arnoux, for app’lts ; A. P. W hitehead, for resp’t
   Van Brunt, P. J.

This action was brought to recover upon two promissory notes drawn on demand with interest, it appearing upon their face that there had been deposited as collateral security to the notes nine Fifth avenue Plaza bonds for $1,000 each with accrued interest on the same from October 1,1884. Each of the; notes bore date April 12, 1886, and was made by Phyfe & Campbell and endorsed by William Campbell, the testator of the defendants. All the bonds of the character stated in these notes to have been pledged as collateral were secured by a mortgage upon certain property in the city of New York.

On the 14th of April, 1886, after William Campbell had endorsed the notes in question, the mortgage in question was surrendered with the consent of the holders of the bonds so- as to leave the security of the bonds subservient to other loans upon the property mortgaged, which they were not before such cancellation. And this was done without the knowledge of the endorser William Campbell.

We think this proceeding discharged the indorser. The notes upon their face showed that certain securities were pledged as collateral, and the endorser had a right to assume that these securities would follow the notes in the same condition in which they were at the time he made the endorsement; and any trafficking with these securities by which their valpe was impaired necessarily operated as a release of the endorser.

It is clear that if any person had purchased these notes unaccompanied by the bonds, the endorser would not be held, because upon payment he is entitled to be subrogated to the securities there stated to have been pledged for their payment; so, if these securities are impaired in value by the action of the holder after endorsement of the notes, the same rule must necessarily apply. The endorser was endorsing a note secured in a certain way. His-liability to final loss by reason of his endorsement of the note might depend very largely upon the value of the securities pledged for its payment; and therefore any diminution of their value was .a direct detriment to him. It seems to us therefore that the necessary conclusion is that the changing of these securities subsequent to the endorsement of the notes necessarily releases the endorser, as the bonds which upon the face of the notes are represented as accompanying the same have been severed therefrom.

Some point was made in reference to the protest of the notes in question that the bonds not having been tendered at the time of the -demand, the endorser was discharged. But the difficulty with this position is that no such point was made during the. trial, nor is any such point raised by the pleadings. The ground of the motion to dismiss based upon the question of the collateral securities was stated to bé that as the plaintiff had neither tendered the return of the securities, nor made any accounting for the same he ' ■could not recover, which, distinctly, did not refer to the time of making the protest, but up to the time of trial; and no attention was drawn to the question as to what was done at the time of the protest. The plaintiff was not bound to either tender the securities or account for the same upon this trial. If the endorser desired the securities he could pay the notes. If anything had been realized upon the securities that was.a matter of defense.

Upon the whole case we are of opinion that the judgment should be reversed and a new trial ordered, with costs to appellant to abide event.

Lawrence,.J., concurs.

O’Brien, J. The bank held fifteen bonds of the Fifth Avenue Plaza Company as collateral security for the loan of $7,500 to Wyckoff. By agreement between Wyckoff and the bank the bank gave up two of the bonds to Wyckoff, and also permitted -the remaining thirteen to be postponed to a new' mortgage, to be given to the Rew York Life Insurance Company.

Both of these considerations as between Wyckoff and the bank were good and valuable, and if nothing else appeared -would have been a sufficient consideration for Campbell’s endorsement.

There is no doubt that the postponement of the payment of the thirteen bonds to the new mortgage -impaired the value of them, and by giving up the two bonds to Wyckoff, the bank lessened its - security which it held for the payment of Wyclcoff’s note. To what extent the endorser was injured would under such circumstances be a question of fact.

The evidence, however, tended to show that this arrangement between .Wyckoff and the bank was made prior to April 12, 1886, and that the consideration for.the postponement ot the payment of the bonds to the new mortgage and the giving up of the two bonds to Wyckoff by the bank was under the agreement to deliver the note endorsed by the defendant Campbell. It will further appear from the testimony that the day fixed for stamping the bonds with the statement that they were postponed to the lien of the new mortgage and the giving of the notes sued upon with Oarnpbell’s endorsement was originally April 12, 1886, and the notes bear date as of that day.

The closing of the transaction was, however, postponed until the fourteenth, when Wyckoff went to the bank, obtained the fifteen bonds and had them all stamped as postponed to the new mortgage. The bank, as stated, gave up to him two of the bonds, retaining thirteen, of which thirteen nine are the bonds mentioned in the notes.

Two questions upon this evidence it seems to me were presented.

First. As to whether the surrender by the bank of the security it then had; in consideration of the receipt of the notes endorsed, were not part and parcel of one transaction ?

Secondly. That even if this should not be so, whether or not any injury, and if so how much, resulted from postponing the payment ■of the nine bonds held as collateral to the new mortgage ?

In connection with these questions it must be remembered that the notes themselves only specified nine bonds, whereas, in point of fact, the bank received and held thirteen. Moreover it must be noticed that the bonds, after being stamped, answered the description of the collaterals mentioned in the notes, and thus another inference arises in favor of the view that the endorsement of William Campbell was obtained by Phyfe & Campbell upon the notes for the purpose of carrying out the very agreement made by Wyckoff with the bank. It is true there is no evidence showing that when Campbell endorsed the notes that knowledge was brought home to him as to the exact use to which they were finally put, or any knowledge that the collateral bonds were to be postponed to the lien of the new mortgage.

There is some evidence to support the conclusion that Phyfe & •Campbell, who took part in having the bonds stamped, obtained the endorsement for their accommodation and to carry out the agreement which they had made with Wyckoff for the payment of their debt to him. If therefore we assume the adjustment between Wyckoff and the bank to have taken place on the 12th, •and that in consideration of the surrender of the two bonds and the stamping of the remaining bonds as postponed to the lien of the new mortgage Wyckoff delivered the notes endorsed, and if it be conceded that the bank refused to carry out the arrangement until it received the notes so endorsed, a recovery upon these facts could have been had as against the endorser, for the reason that this would have presented a case where one endorses for the ■accommodation of another, and notes so endorsed áre used for the very purpose for which they were endorsed. The delay from the 12th to the 14th in closing would not change the rights of the parties.

The learned judge upon the trial however directed a verdict in favor of the plaintiff. This, I think, was error, for the reason that there were certain questions of fact presented upon the evidence which should have been presented to the jury. I concur, therefore, in the result reached by the presiding justice, that the judgment must be reversed and a new trial ordered.


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

text:
    Francis Higgins, Receiver, Resp’t, v. John J. Curtis, Impleaded, App’lt.

      (Supreme Court, General Term, First Department,

      Filed February 18, 1892.)

    Fraud—Evidence on—Sufficiency.
    In an action by a receiver to set aside a sale of the assets of a firm, as a fraud upon creditors, it appeared that when the sale was first mentioned, the proposed purchaser thought it a joke; that he had never been in the business; that he made no inquiry as to whether the firm was solvent or insolvent, nor as to the reason for the proposed sale; that the property was appraised on Sunday, when no one but the vendee, appraiser and purchaser were present; that the price paid was inadequate, and that the purchaser paid cash, although he had a bank account. Held, that the evidence sufficiently showed that the sale was fraudulent as to creditors, and should be set aside.
    (Van Brunt, P. J., dissents.)
    Appeal by defendant Curtis, from a judgment rendered at the special term, • setting aside a bill of sale, etc.

      Charles H. Woodbury and William H. Blain, for app’lt; Henry McCloshey, for resp’t
   Lawrence, J.

This is an appeal by the defendant Curtis from a judgment rendered at special term, by which it was decreed that the sale of the assets of the firm of T. A. Anglim, by said defendant, to defendant Curtis, was null and void, as a fraud upon creditors.

We think it is evident that the sale and transfer by Anglim to Curtis of the stock, fixtures, good -will and lease of the premises number 23 Murray street, was a fraud upon the creditors of the firm, of which he was the general and Miss Brophy the special partner.

On the evidence we are obliged to conclude that Anglim intended a fraud upon his creditors, to which the special partner refused to consent. There also cafi be no reasonable doubt that Curtis knew that Anglim intended to commit a fraud upon the latter’s creditors in making the sale. Curtis had never been in the' toy business, and so far as the evidence discloses, knew nothing-about the method or manner in which it was carried on. The-transaction is open to suspicion, from its beginning to its close. No inquiry seems to have been made by Curtis as to whether the-firm was solvent or insolvent, nor as to the reason why Anglim proposed to sell his business and stock. The evidence shows that when Anglim first mentioned the subject to Curtis the latter thought that he was joking. It is not compatible with common sense to argue that one man could propose to another the sale of a large stock of goods, in a business with which the proposed vendee was entirely unacquainted, without having the suspicions of the latter aroused, nor that the proposed purchaser should not make some inquiry, apart from the statements made to him by the proposed vendor, of the reasons which induced the sale. We are of the opinion that Curtis did know that Anglim was insolvent, and that his reason for making the sale to Curtis was to enable him to hinder, delay and defraud his creditors. Without reiterating the fact already stated, as to the ignorance of Curtis of the business, the further facts that the property was appraised on Sunday, when no one but the vendor and proposed vendee and the appraiser were present; that before the bill of- sale was signed Anglim said to Curtis that he had a store in Twentieth street, and Curtis told him that he had better put it in, and that this was done, and that Curtis paid cash, although he had a bank account, sufficiently show that the design was that the transaction should be kept secret from the creditors of the firm, and from the special partner, and that the sale was fraudulent as to creditors.

Again, the calling of the creditors’ meeting the day after the sale and the offer which was then made characterized the whole transaction as one which had been entered into • by Anglim for the purpose of hindering, delaying and defrauding the creditors of the concern. We think it is also evident that Curtis’ knowledge of Anglim’s insolvency^made him a party to the fraud on the firm’s creditors, even although he paid $4,000 in cash and gave the four notes for $1,500 each upon consummating the transaction.

In Billings v. Russell,, 101 N. Y., 226, it was held that the fact that a mortgage is given, or it seems that property was transferred by a debtor for a valuable consideration, is not as a proposition of law inconsistent with the existence of an intent on the part of the debtor to defraud his creditors, or of such knowledge thereof on the part of the mortgagee or purchaser as will avoid the mortgage or conveyance, and that in this regard no distinction can be made between the consideration furnished by an existing- debt and that arising in any other manner. Also, that where there is an actual intent to defraud no form in which a transaction is put can shield the property transí erred from the claim of creditors. That case was much stronger than this. There the proof showed that the mortgage executed by an insolvent debtor was given to secure a debt actually owing by the mortgagor, and yet it was held, as a matter of law, that the execution of the mortgage, did not disprove the existence of a fraudulent intent on the part of the debtor. .See particularly opinion of Euger, Ch. J., at pages 231 and 232. The transaction which is the subject of consideration in this case cannot be upheld under the cases Mabbett v. White, 12 N. Y., 442; Bedell v. Chase, 34 id., 386; Van Brunt v. Applegate, 44 id., 544, and Graser v. Stellwagen, 25 id., 315, for the reason that in those cases the conveyance and transfer of the firm’s property was made to a bona fide creditor of the firm in payment of a partnership -debt, and no question of fraud was presented.

If it is necessary to add anything more to support the conclusion at which we have arrived in this case, it is sufficient to say that we are of the opinion that the consideration which was paid for the sale of the property in question was far below its actual value, and that fact goes far to convince us that the transaction was intended to be, and was fraudulent as to creditors. We are, therefore, of the opinion that no error was committed in the disposition which was made of this case by the special term, and that the judgment which was rendered below should be affirmed, with costs and disbursements.

O’Brien, J. The evidence conclusively shows that 'Anglim’s intention in selling was to defraud the creditors.

The remaining question is, does the testimony show that Curtis had knowledge of this intention and did- he co-operate in effectuating this fraudulent intent.

That he was aware of Anglim’s insolvent condition before the-receipt of the bill of sale seems to me reasonably free from doubt. This fact, however, would not be conclusive against his title if he had purchased in good faith for a valuable consideration.

That he did not so purchase is shown by the evidence which, supports the findings to that effect of the learned judge below and the opinion of Mr. Justice Lawrence on this appeal. To my mind the course pursued by Curtis before and iminediately after the sale is susceptible of one construction only, viz.: that with knowledge of Anglim’s condition, and without desiring to become-a real purchaser, he was willing to assist Anglim in his scheme to obtain a compromise with creditors which could have been, arranged on more favorable terms with a bill of sale outstanding and a third party in possession of the business than with Anglim himself in possession of the property. This, moreover, would have prevented attachments by- creditors, which was one of the things feared by Anglim. Having lent himself to a scheme thus-devised which would show an intent to hinder, delay and defraud creditors, he should suffer the legal consequences.

I do not mean that Curtis was guilty of any fraud from which he was to profit, but that his friendship for Anglim induced him to enter into an arrangement which should not, as against the-plaintiff, as receiver for the creditors, be upheld. I therefore, concur with Mr. Justice Lawrence in affirming the judgment.

Van Brunt, P. J.

(dissenting.)—I cannot concur in the conclusion arrived .at by Mr. Justice Lawrence in the disposition of the appeal in this case.

It seems to me that the fact has been lost sight of that no matter what may have been the fraudulent intention of the seller of the goods in question, unless the purchaser participated in that fraudulent intent or was aware of its existence his title to the property purchased cannot be impeached, and it is not sufficient to establish facts and circumstances which may tend to establish a guilty knowledge, but which are equally consistent with the innocence of the accused party, because under such circumstances the meaning must be ascribed to those facts and circumstances which accords with innocence rather than that which imputes a criminal intention. Morris v. Talcott, 96 N. Y., 100, 107; Baird v. Mayor, id., 567-592, 593.

It is also the rule that the fact of the existence of a fraudulent intent upon the part of the seller simply'throws the burden of proof upon the purchaser to show that he is a Iona fide purchaser for a valuable consideration. Starin v. Kelly, 88 N. Y., 418. There is no question but that the proof establishes a fraudulent intent on the part of the seller, but it seems to me that there is an utter absence of proof going to show that the purchaser was aware of it, or that he in any way participated in the fraud.

It is claimed that there has been shown inadequacy of price as an indication of fraud upon the part of the purchaser. But it is to be observed that although the learned court found that the goods were worth $15,000, there is no proof to sustain such finding or that the purchaser was in any way aware that there was such a gross inadequacy in the consideration as would necessarily excite his suspcion of the good faith of the seller.

It is true that the appellant testified that the appraiser who examined the goods appraised the same at $15,000, but it is shown in connection with the other evidence that this appraisal was ■based upon the assumption that the goods should be sold in the ordinary way and that that could not be done until the next season, the expense of carrying the goods over being quite large.

It is true that the appellant had never been in this business before ; but this fact did not preclude him from buying a stock of goods which was offered him for sale if he could purchase them in good faith and at a price upon which .he might make some profit. • Trade and barter depend upon the prospect of profit, and if a man cannot purchase goods at a lower price than he can hope to sell them for, then trade must stop. That seems to be the theory upon which it is claimed that the appellant paid an inadequate consideration for the goods in question.

But it is said there is some evidence that these goods were worth $20,000. This depends upon the evidence of Mr. Campbell, who knew nothing whatever upon the subject. He testified that he stated to Curtis that he understood the goods were worth some $20,000 and that the sale was wrong; that it ought not to have been done; that it would be an improper thing to do as it would be a fraud upon the special partner, and that he understood the sale was to be for $3,000 in cash and $7,000 in notes to run 3, 6, 9 and 12 months. And in another place he testified that he told Mr. Curtis that he thought it an improper thing to do; that it was a fraud on the creditors and on Miss Brophy the special partner. The fact that the goods were not worth any such sum is established beyond all question, and the alleged statements of Campbell are contradicted by every witness who was present on that occasion. And it is to be observed that the amount of credence to be placed upon Campbell’s evidence is very much shattered by the fact that knowing that the purchase price of these goods as he understood it was to be $3,000 cash and $7,000 in notes, he made an affidavit in respect to this matter in which he stated that the defendant Anglim (the seller) told him that the stock of goods was worth about $20,000 and that he intended to sell them to Curtis for $3,000 in cash. And when questioned in regard to the fact of the notes and his omission to mention them in that affidavit:

“Q. Was that intentionally left out? A. I don’t know.”

How much credence is to' be placed upon the evidence of a witness who endeavors, apparently intentionally, to mislead the court in regard to the consideration that was paid, in so manifest a manner, it is not necessary to discuss. It would be rather unjust to compel a man to lose $4,000 of money which he had put into an enterprise upon evidence of such a character, when such evidence was denied by credible witnesses.

It seems to me that it is apparent that the discussions which arose at Campbell’s office were as to the right of the general partner to sell this stock without the consent of the special partner. It appears from the evidence that as soon as Mr. Curtis, the. purchaser, knew that there was a special partner, he desired to see the special partner or her counsel, and it was only when he was advised that he could purchase these goods from the general partner and get a good title thereto that he perfected the purchase. He went into possession immediately, and the seller went out of possession and never had anything further to do with the business until more than a year thereafter, when he was employed by Curtis, pursuant to the order of the court, entered upon the consent of all the parties. That Curtis may have known of the insolvency of Anglim, the seller, may be true.

But even if he did, it in no way impeached his title; as far as the evidence shows, Curtis may have believed that Anglim was desirous of selling this stock of goods, although insolvent, for the purpose of applying the proceeds thereof in payment of his debts.

Whatever proceedings the seller Anglim took in reference to his creditors cannot affect the title of Curtis, if it was acquired in good faith.

There is only one point of evidence which to my mind in any way impeaches the good faith of Curtis, and that is his testimony as to the store in Twentieth street, in respect to which he testified that the bill of sale was ready, but before it was signed Anglim says : “ There is a little store up at Twentieth street that I have got, in which there is a couple of hundred dollars worth of goods. I said you had better put it in,” and they added that to the bill of sale.

But it seems to me that this circumstance cannot establish a fraudulent intent upon- the part of Curtis in making the purchase. The payment by him of a fair consideration for the merchandise was strong evidence of his good faith, and of the absence of a fraudulent intent on his part. In order to be sufficient to overcome the presumption of honest motives in making the purchase, the evidence should certainly be of a satisfactory character, and inconsistent with a.n innocent purpose.

It is claimed upon the part of the appellant that the court erred in refusing to find certain matters of law. In this we think there was no error. They were arguments to be used before the court in respect" to the weight to be given to evidence, being rules of evidence rather than findings in respect to matters of law.

The court is bound to find conclusions of law arising upon facts found, but nothing in the shape of argument

Hpon the whole case, therefore, it seems to me that there was too slight evidence of any fraudulent intent upon the part of the appellant Curtis to justify the court in holding the sale to him void.

The judgment should be reversed, and a new trial had, with costs to the appellant to abide the event.

Judgment affirmed, with costs.


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    Jacob Friedman, App’lt, v. Herman Hirsh, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed February 18, 1892.)

    Deed—Fraud—Security eor grartee.
    " In an action brought for the purpose of having declared null and void for fraud a deed executed by the plaintiff to the defendant, whereby he conveyed a vested remainder, it appeared that at the time of the transfer plaintiff had just passed his twenty-first year, and the only evidence of fraud was that the price paid was only between one-third and one-fifth of the value of the remainder. Held, that relief should be granted plaintiff, although the proof of fraud was not clear and satisfactory, but the deed allowed to stand as security for the sum paid by defendant.
    Appeal from judgment entered after trial at special term. •

      Samuel Greenbaum, for app’lt; William Irwin, for resp’t.
   Van Brunt, P. J.

This action was brought for the purpose of having declared null and void, and cancelled of record, a certain deed executed by the plaintiff to the defendant, whereby he conveyed a vested remainder which he owned in certain premises in the city of Hew York.

It appeared from the evidence in the case that the premises were of the value of at least between $14,000 and $15,000, and probably more; and that they were owned by the plaintiff and his brother and were subject to a mortgage of $10,000 and the life 'estate of the father.

At the time of the transfer the plaintiff had just passed his twenty-first year, and the interest in question- was sold for the sum of $300. And it was claimed that it was done while he was intoxicated and incapable of protecting his own interests, and that he was overreached and defrauded by the defendant in making the sale. The court below found from the evidence that the plaintiff was not intoxicated and incapable of exercising judgment and discretion with reference to what' he was doing at the time he made this sale; that on the contrary, he knew perfectly well what he was doing, and it was at his instigation that the defendant made the purchase in question; and that the case was one of those in which a court of equity would not interfere without convincing proof of such allegations as those contained in the complaint;. and that there was nothing so oppressive or so wrong in the transaction as to require in furtherance of justice that anything further should be done than to leave the parties just as they are; and that “ inadequacy of consideration is not of itself a ground for setting aside the conveyance, and so long as there was no element of fraud, oppression or deceit on the part of defendant, and the whole transaction was conducted in such a way as would indicate that the conveyance was made at the procurement of the plaintiff, and on his express wish and with full knowledge of the surrounding circumstances, and with a determination to do just what he did, there are no equities which eall for the interference of the court.”

It is claimed upon this appeal that the plaintiff being a remainderman is entitled to greater protection at the hands of the court than are persons dealing with their own property, and our attention is called to the rule which has obtained in the English courts, that dealings of heirs in reference to their expectancies and of reversioners and remaindermen in reference to their vested property are the subjects of special protection by courts of equity, and transactions by persons belonging to those classes are set aside upon much slighter grounds than those which ordinarily obtain.

This rule, however, has not been enforced by the courts of this country to the extent which has prevailed in the courts of England; and the evident inclination of the courts of this country has been to restrict the rule in as great a degree as possible. This is shown by the decision, of the court in Parmelee v. Cameron, 41 N. Y., 392, where they would not apply the rule to the sale of a legacy payable at a future day.

But where there is a gross inadequacy of price, that alone will raise'a presumption of fraud in some instances and form a sufficient basis to grant relief. It is true that cases of interference simply upon this ground are few; and in most instances in which a party has been relieved from an improvident bargain there have been circumstances of a suspicious character connected with the transaction, or something in the relations of the parties which renders it inequitable that the party should retain the advtantages he received by his bargain. But in other cases, where there is no positive evidence of fraud, but the inequality of the bargain is so gross that the court cannot resist the inference that though there may be no direct evidence of fraud such a bargain must have in some way been improperly obtained, relief has been granted.

In the case at bar there is a dispute in regard to the value of the property; the evidence ranging from $14,000 to $18,000. The learned judge below thought the property was worth $14,000 to $15,000. There was a mortgage of $10,000 upon it, and a life estate, the life tenant being forty-eight years of age. There was, therefore, an equity of redemption of $4,000 to $5,000 at least subject to the life tenancy.

In the points of the respondent it is stated that according to the tables the expectancy of life of the tenant is nineteen years, and if the learned judge took this statement as to the expectancy it may have very largely influenced his judgment. ■

But upon our examination of the tables it would appear that instead of the expectancy being nineteen years it was a little above nine and one-half years, which makes a vast difference in the value of the remainder. And, therefore, if the total value of the premises was between $14,000 and $15,000, the amount paid was about one-third of the value of the remainder; if it was $18,000, it was between one-fifth and one-sixth of its value; gross inadequacy being apparent. It is, of course, not to be expected that the purchaser of such a remainder will pay the full value as shown by the tables; but where the difference is so large as it seems to be in this case, it seems to us that the relief should be granted, although the proof of actual fraud may not be clear and satisfactory.

In the case of Dunn v. Chambers, 4 Barb., 381, the rule is stated that it is not unusual for a court of equity, where the proof of actual fraud is not clear and satisfactory, to make the conveyance subservient to the whole ■ equity of the case. While it refuses to declare the deed absolutely void it will direct that it shall stand as security for the sum actually due.

It seems to us that the circumstances of the case at bar were eminently adapted to this middle course. Complete justice may be done to all parties by allowing the deed to stand for the defendant’s indemnity as was done in Boyd v. Dunlap, 1 Johns. Ch., 478. The defendant should be paid his costs of the action, including costs of this appeal and a reasonable counsel fee for defending this action, if this disposition of the case is accepted by him.

A new trial, however, will be necessary to carry out these views, and such new trial is ordered accordingly.

O’Brien, J., concurs.


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    Benjamin Z. Friedman, App’lt, v. Herman Hirsch, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed February 18, 1892.)

    Appeal from judgment entered after trial at special term.

      iS. Qreenbaum, for app’lt; W. Irwin, for resp’t.
   Van Brunt, P. J.

This action is similar to that of Jacob Friedman v. Hirsch, decided herewith. The evidence is substantially the same, with the exception that it is not claimed that the plaintiff in this action was in a condition of intoxication. The reasons which impelled the court to the conclusion arrived at in the case of the brother are certainly just as strong in the case at bar, otherwise the court would be seemjng to give a. premium on dissolute habits, and the same relief will be granted.

' Ordered accordingly.

O’Brien, J., concurs.