text:
    NIAGARA COUNTY NATIONAL BANK and Others, Appellants, v. JARVIS LORD, WILLIAM H. ROSS-LEWIN, MERCY T. ROSS-LEWIN, his Wife, and Others, Respondents, Impleaded, etc.

      Mor'tgage of chattels to secure a debt — what constitutes a delivery of the property— , what facts show that the mortgagee acted in good faith — an assignee of the mortgagor' cannot attack it because of a failure to file it — a mortgage given by one pa/rtner, to secv/re any balance that may be due to the other, is not a firm asset— what amendment to a complaint should not be allowed by a referee— accounting by a general assignee.

    This action was brought by judgment creditors of the firm of Jarvis Lord & Co. ■ against its general assignee and others to have certain property formerly belonging to the firm treated as firm assets and distributed among its creditors. In June, 1878, the firm -had 720 barrels of whisky in a United States bonded warehouse. To secure notes discounted by the Bank of Monroe the firm gave to it an instrument acknowledging the receipt in store at its distillery of 720 barrels of whisky for account of the bank, and deliverable' only on thé surrender of the receipt. It recited that it was given as a general continuing collateral security for any and all debts which were then or might thereafter become due from the firm to the hank. From time to time the firm withdrew portions of this whisky, giving similar receipts to the hank for the remainder, which was always of sufficient value to equal the debts due to it. In the fall of 1877 the whisky being reduced to 292 barrels a similar receipt was given to the hank, and shortly thereafter the keys of the warehouse were delivered to and retained by it, so that no one without its consent could have access to the whisky except by a forcible entry. On March 21,1878, the firm made a general assignment. Thereafter the whisky was sold by the bank and the proceeds applied upon the debts due to it from the firm.

      Held, that the delivery of the receipt vested the title to the whisky in the bank for the purposes stated iu it.
    That the transfer was made to and received by the bank in good faith and without any intent to defraud the creditors of the firm.
    That the fact that the instrument was not filed as a chattel mortgage did not render it fraudulent or void as to the assignee.
    That the claim of the plaintiffs could not he sustained.
    Lord, was to furnish the capital for the firm, and his partner Lewin, was to devote his personal attention to the business; and to secure any balance that might be found due to Lord on a final settlement, Lewin agreed to and did procure a mortgage to he executed and delivered to Lord to secure any such balance.

      Held, that this mortgage was not a firm asset, hut belonged to Lord’s individual creditors.
    Upon the trial before a referee the plaintiffs counsel asked for leave to amend the complaint “by adding such allegations of a general creditor’s hill as would enable them to reach the said Ross-Lewin mortgage, and the rights and property thereby secured, as creditors in their own behalf.”

      Held, that the referee properly refused to allow the amendment to be made.
    That the application should have been made at a Special Term.

    At the time of the commencement of this action proceedings were pending in a County Court for an accounting by the assignee. The plaintiff urged that the accounts of the assignee should he taken in this action.

      Held, that the court properly refused to allow this to he done; that it should not in this case interfere with the proceedings pending in a County Court.
    Appeal by tbe plaintiffs from a judgment dismissing tbe complaint, entered on tbe report of a referee.
    In 1872 tbe defendants Jarvis Lord and William U. R. Lewin entered into a copartnership for tbe pni’pose of carrying on the distillery business, etc., in the firm name of Jarvis Lord & Co., and continued in business until 21st March, 1878, when the firm made a. general assignment to defendant Brackett for tbe benefit of creditors. Both members of the firm were then individually insolvent. In Janil ary, 1880, the assignee instituted proceedings in the County Court of Monroe county, pursuant to Laws 1877, chapter 466, etc., for a settlement of bis accounts, and during tbe pendency of that proceeding, and in October, 1880, this action was commenced by the plaintiffs, who were judgment creditors of that firm, charging amongst other things that certain whisky, the proceeds of which were claimed and had been received by the Bank of Monroe, and a certain .mortgage made by tbe defendant Lewin to Lord, were assets of the firm and should be treated and distributed amongst the creditors as such under the assignment. The referee held against the plaintiffs on those propositions and dismissed their complaint, and this appeal is taken from the judgment entered on his report.

      Timothy E. Ellsworth, for the appellants.

      James Break Perkins, for the respondents, the Bank of Monroe and James Brackett, as assignee, etc.

      William Nathaniel Cogswell, for the respondents, Lord and Seward.

      George T. Parker, for the respondent Mercy T. Ross-Lewin.
   Bradley, J.:

At the time the firm of Jarvis Lord & Co. was formed, it was understood that Lord would furnish capital to some extent to organize and carry on the business, and Lewin would devote his personal attention to it, and that to secure Lord for any balance that might be due him from Lewin on final settlement, the defendants Lewin should make to him a mortgage. And pursuant to that understanding they then did make to him a mortgage reciting theformation of the partnership, and that one condition of it was that they should make and deliver to him a mortgage for the purpose before mentioned, and stating that the grant was intended as security for the payment by William H. R. Lewin to Lord of the amount, if any, that should or might be found due from him to the latter upon a final closing of the partnership and settlement of its business, etc.

In June, 1873, the firm had manufactured 720 barrels of whisky, which was then in bonded warehouse, under control of United States revenue officers, and remained so until the government tax on it was paid. The firm obtained at the Bank of Monroe discount of their notes for considerable amount, and in 1873, while the whisky was in bond, the firm to secure the payment of the notes, made to this bank an instrument, as follows :

Received in store at our distillery warehouse, Cartersville, N Y., 720 barrels of whisky, stored for account of the Bank of Monroe, of Rochester, and deliverable only upon the surrender of this receipt, and this receipt is given to said bank as a general continuing collateral security for any and all debts, notes, drafts, bills of exchange or overdrafts which may be due to said bank, now or at any time hereafter by us.
(Signed) « JARYIS LORD & 00.”

From time to time thereafter the firm took from such quantity of whisky portions of it, and made similar receipts to the bank for the reduced quantity remaining ; but at all times the quantity so remaining was in value deemed sufficient to cover the amount of the firm liabilities to the bank. In the fall of 1877, the quantity of that whisky remaining in store at Cartersville, was 292 baiTels, and then the firm made and delivered to the bank a receipt in all inspects like that before set forth, except that “ 292 baiTels ” occupied the place of the “ 720 barrels ” in it, and shortly thereafter the keys to the wai’ehouse containing the whisky, were by the fix-m delivered to, and taken by the bank, which continued to retain them, and nobody else coxild, except by forcible entry, have access to the whisky without the consent of the bank. After the last mentioned receipt was made, the firm took none of the whisky.

When the assignment of 21st March, 1878, was made to Brackett in trust for creditors, the firm owed the Bank of Monroe on notes, $26,000, which were renewals of others held by the bank at the time the last mentioned warehouse receipt (so-called) was made, and the firm was also liable to the baijk in an additional sum for advances made on drafts drawn by the firm on persons who failed to pay.

Insurance had been taken on the whisky payable in case of loss to the bank. About the 25th Mareh, 1878, ninety-eight barrels of it wei’e destroyed by fii’e, and for which loss the bank collected insui'ance $9,591.52 and applied that sum on the liabilities to it of the firm. The remainder of the whisky was then, by direction of the bank, removed fx’om Carterville to the city of Rochestei’. And being advised by most of the creditors of the firm (including the plaintiffs) to close out the business of the firm by carrying it on for a time (to which its members also consented) the assignee, for that purpose, from time to time purchased of the bank portions of this whisky at reasonable pi’ice, which purchases together were ninety-five barcels, for which he paid the bank $8,618.11; and the residue, ninety-nine barrels,-were sold by the direction of the bank at auction and the proceeds received by it.

The whole amount received by the bank from the 292 barrels was $25,397.49, which was applied on the liabilities of the firm to it. The learned counsel for the appellants contends that the assignee was entitled to this property as assets of the firm, passing to him by the assignment, and asks that it be so adjudged to the end that the bank be required to restore the proceeds to the assignee for distribution by the latter piirsuant to the direction of the assignment.

This contention is based upon the charge that the transfer made by the so termed warehouse receipt was fraudulent as against the creditors of the firm. That instrument may not', in the strictly legal sense of the term, be a warehouse receipt, which is generally understood to be a receipt made by a warehouse-keeper or wharfinger, on the reception of goods, or when called for by the person entitled to it, on the production of which by him, or any one to whom it may have been transferred, the delivery of the goods may be required. And it partakes something of the character of a bill of lading, so that a transfer of it passes title to the property and the receiptor at once becomes the bailee of the transferee of the receipt.

But as between the parties to it this receipt was effectual and vested in the bank the title for the purposes expressed in it. (Gibson v. Stevens, 8 How. [U. S.], 384; Dows v. Perrin, 16 N. Y., 325; Dows v. Greene, 32 Barb., 490; affirmed, 24 N. Y., 638; Hoyt v. Hartford F. Ins. Co., 26 Hun, 416.) And for that purpose it need not come within the provisions of the Laws of 1858 (chap. 326), nor does it require the aid of that act to give it effect as between them. (F. and M. National Bank v. Lang, 87 N. Y., 209, 215.)

It differs as between the parties to it from that mentioned in Yenni v. McNamee (45 N. Y., 621), which was practically made by the owner through his superintendent to himself by his direction, but the transfer of it by him as security was deemed good as between the parties to the transfer for that purpose.

The assignee, without the aid of a judgment, had the right to assail the transfer to the bank for fraud, and successfully if fraudulent as against the creditors of the firm. (Laws 1858, chap. 314, § 1; Southard v. Benner, 72 N. Y., 424.)

And assuming that there was no immediate delivery and continued change of possession of the property, the presumption would be that the sale to the bank was fraudulent and void as -against the creditors of the firm, and such situation would be conclusive evidence of fraud unless it should be made to appear on the part of- the bank that it was made in good faith and without any intent to defraud such creditors. (2 R. S., 136, § 5.)

It appears that the debt due from the firm to the bank was a valid one, created by advances actually made and evidenced by notps, etc.; that the transfer (as it imported) was made to secure the payment of such debt, and although the firm appropriated a portion of the whisky included in the transfers preceding the last one, there is no evidence other than inferences arising from the fact of doing so that there was any understanding or consent on the part of the bank that it might be done. There is no occasion afforded by the evidence for the inference that there was any purpose on its part in taking any of them other than to secure the payment of the debt due to it and protect itself. And the inference is reasonable that the firm took from the warehouse some of the property solely by reason of desire and opportunity without the aid of any understanding with or consent of the bank. And that on taking the last transfer of the quantity reduced to 292 barrels, to protect itself against future reduction of the security, the bank took and assumed the exclusive control and custody, so far. as it could be done, by having the only means other than forcible, of access to it.

This evinced a purpose of preserving its security; and this last transfer may be treated as distinct and independent of any preceding it and characterized solely by its attending circumstances. The property on a fair disposition produced insufficient proceeds to pay the debt which it was held to secure. The conclusion that this transfer was made to the bank, and taken in good faith and without any intent to defraud the creditors of the firm, is fairly justified'. (Thompson v. Blanchard, 1 N. Y., 303; Mitchell v. West, 55 id., 107.) But in view of the character, quantity and situation of the property, there may be said to have been delivery of it made to and taken by the bank. And although the delivery must be of the actual possession, and a constructive one will not answer to constitute a delivery and possession in such cases (Crandall v. Brown, 18 Hun, 461; Topping v. Lynch, 2 Robt., 484; Steele v. Benham, 84 N. Y., 634; Stimson v. Wrigley, 86 id., 332, 337), the delivery of the keys of the warehouse and the surrender of the custody and control' to- the bank, and so recognized, may be treated as a delivery and possession. (Hunn v. Bowne, 2 Caines, 44; Wilkes v. Ferris, 5 Johns., 335; Bank of Rochester v. Jones, 4 N. Y., 506; Stimson v. Wrigley, 86 id., 337, 338.) And the fact that delivery was delayed a short time does not defeat the force of it. (Brown v. Platt, 8 Bosw., 324.) Bat When some time intervenes between delivery of a chattel mortgage and possession of the property the presumption of fraud may arise from that delay or omission. (Stimson v. Wrigley, 86 N. Y., 332.)

The transaction being free from actual fraud, and no rights of creditors having intervened by way of lien on the property, the intention of the parties to vest in the bank the right to the whisky as security, would be effectuated and become perfect on taking possession, although subsequent to the time of delivery of the receipt. (Parshall v. Eggert, 54 N. Y., 18.)

In the view taken of the instrument and its effect, the question of the actual possession of the property does not seem important. The earlier cases holding the necessity of explaining the continued possession of the vendor, or mortgagor, in addition to the establishment of the fact that the sale was made in good faith and without any intent to-defraud, have been overruled. (Mitchell v. West, 55 N. Y., 107.) The judgment of the Niagara County National Bank was recovered 19th June, 1878, and those of the other plaintiffs in September, 1878, and March, 1879. And the plaintiffs by their complaint found the claim against the validity of the transfer of the whisky to the Monroe County Bank, upon and through the right and duty of the assignee and in aid of him and his accounting.

Their learned counsel contends that within the meaning of the statute, the invalidity of a chattel mortgage as against creditors, etc., by reason of its not having been filed, is based on the ground of fraud, and that by reason of such omission it is deemed fraudulent. This contention is not supported. That statute provides that such mortgage, when not accompanied by delivery and followed by continued change of possession of the property, shall be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers, etc., in good faith, unless the inortgage or a copy be filed in the office of town clerk, etc. (Laws 1833, chap, ~79, § 1.) This statute is independent of 2 Revised Statutes (136, § 5), and the invalidity of the mortgage as against creditors, etc., because not filed is not dependent on fraud, but the purpose of the requirement was to furnish means of notice or information of the lien and protection, and the consequence of the omission as against creditors and purchasers in good faith is in the nature of a penalty for such neg1ect. (Wood v. Lowry, 17 Wend., 492; Smith v. Acker, 23 id., 658, 659; Meech v. Patchin, 14 N. Y., 71, 72; Southard v. Benner, 72 id., 428, 429; Ball v. Slafter, 26 Hun, 355.)

The case of Brackett v. Harvey (25 Barb., 502), in which remark was made to the contrary and supporting a recovery by an assignee, etc., was reversed. (91 N. Y., 214.1 The provision of the act of 1833 declaring that an unfiled mortgage shall be void as against a creditor and a purchaser, etc., in good faith, is peremptory and without any reference to fraud or good faith on the part of the mortgagee. The relief as for fraud and the presumption afforded by continued possession of the mortgagor are given b'y 2 Revised Statutes (136, § 5).

The creditor who can avail himself of the omission to file a mortgage is he who has a judgment, and proceeds upon that and obtains a lien. A creditor at large cannot. (Thompson v. Van Vechten, 27 N. Y., 568; Jones v. Graham, 77 id., 628.) The assignee of Jarvis, Lord & Co. was not a purchaser in good faith, and had no right, based upon the mere fact of omission to file the instrument in question, to assail it for that reason. (Van Heusen v. Radcliff 17 N. Y., 580; Southard v. Benner, 72 id., 424.)

This action was commenced after the proceeds of the whisky had been received and applied by the bank. The plaintiffs could not therefore, through their judgments or by means of processes issued on them, acquire any lien upon the property so as to contest title to it, as creditors upon a claim so founded. And in view of the support given to the conclusion of the referee that the transfer to the bank was in good faith and without any intent to defraud creditors, etc., it is unnecessary to consider the contention of the plaintiffs' counsel in respect to the right on the part of the plaintiffs to pursue by this action the proceeds of the whisky.

It seems clear that the mortgage of Lewin to Lord was not a partnership asset, and therefore could not go to the assignee for the benefit of the creditors of the firm under the assignment, which included only partnership property. Seward v. Huntington, 94 N. Y., 104. That mortgage was the individual property of Lord and in respect to that his creditors have the preference. (Hewitt v. Northrup, 75 N. Y., 506, 509. While the members of a partnership i ay voluntarily administer and distribute their property ’ among creditors without reference to the classes of them, and a creditor of the firm may by legal process appropriate the property of an individual member of the firm for payment of his debt, the rule is otherwise in equity; there the rights of the two classes of creditors, respectively will be observed, so that the firm property will not be available to the creditors of the individual members, nor that of the latter to the partnership creditors, until the claims of those first entitled of the respective classes are discharged. (Wilder v. Keeler, 3 Paige, 167; Kirby v. Schoonmaker, 3 Barb. Ch., 46; Meech v. Allen, 17 N. Y., 300, 302; Jackson v. Cornell, 1 Sandf. Ch., 348.) The fact that there were partnership assets from which the assignee made dividends to the firm creditors renders it unnecessary to inquire whether the exception to this rule, recognized by the English courts, to the effect that where there is no joint estate the firm creditors may share-ratably with the creditors of the individual members in the estate of the latter (Gray v. Chiswell, 9 Ves., 124; McCulloch v. Dashiel, 1 Harr. & G. [Md.], 96; Ex parte Hayden, 1 Bro. C. C., 454; Abell, Exporte, 4 Ves., 838; Kensington, Ex parte, 14 id., 447; Kendall, Ex parte, 17 id., 521) has been or should be applied in this State.

The complaint being so framed as to relate, only to the joint estate of which this mortgage is charged to be a part, it would be departing from it very considerably to proceed to take an account of the liabilities of one of the members of the firm with a view to ascertain whether anything from his property could be made applicable to the payment of the firm debts due the plaintiffs. The plaintiffs’ counsel at the trial asked leave to amend the complaint “ by adding such allegations of a general creditor’s bill as would enable them to reach the said Ross-Lewin mortgage and the rights and property thereby secured, as creditors in their own behalf.”. This was refused by the referee on the ground of want of power.

This amendment formally inserted, in tbe complaint to tbe extent asked for, would produce a different cause of action and controversy from those presented and permitted by tbe complaint and issues in the action, and in which other parties’ rights might be involved, and does not seem to come within that permitted to.be allowed and made at tbe trial (Code Civ. Pro., § 723), and was properly refused by the referee. The application to amend was one which properly should be made at Special Term only, where the incidents and consequences attending the amendment could be considered and provided for. (Hochstetter v. Isaacs, 44 How., 495; Chittenango C. Co. v. Stewart, 67 Barb., 423.)

On the part of the plaintiffs it is urged that the accounting of the assignee should be taken in this action. At the time of the commencement 'of the action the proceeding for the accounting was pending, and had considerably progressed in the County Court. While the power is vested in the County Court to take and settle such accounts it is not exclusive, but in its jurisdiction is concurrent with that of this court. (Laws 1877, chap. 466; 1878, chap. 318.) And that of the County Court having been first acquired will not be interrupted qr restrained in the proceeding unless for some substantial reason. (Chipman v. Montgomery, 63 N. Y., 222; Schuehle v. Reiman, 86 N. Y., 270, 273.) But this court very properly may and will entertain jurisdiction and exercise its powers by action for purposes of discovery, and in aid of proceedings for accounting, etc., in another tribunal having jurisdiction and limited powers. (Seymour v. Seymour, 4 Johns. Ch., 409.)

Upon the evidence no occasion appears for restraining the proceeding in the County Court, and transferring the accounting of the assignee from that to this court. There seem to be no errors m the rulings at the trial to the prejudice of the plaintiffs. And none of the several exceptions to the findings of the referee, and to his refusals to find, require any further consideration.

The judgment should be affirmed, with costs.

Smith, P. J., Barker and Haight, JJ., concurred.

Judgment affirmed, with costs.


source: Caselaw Access Project

author: Bradley, J.:

license: Public Domain

text:
    JOHN B. SMITH, Respondent, v. ABRAM T. KERR, Appellant.

      Sealed instrument — its terms ca/nnot be altered by a subsequent •verbal agreement— when the terms of a sealed lease cannot be varied by a verbal agreement.

    On September 5, 1880, a store in Salamanca occupied by tbe defendant was burned. He occupied it by virtue of a lease under seal executed by the plaintiff for a term beginning February 20, 1880, and ending October 5, 1883, at tbe monthly rent of twenty-five dollars. After "tbe fire tbe plaintiff erected a brick building upon tbe lot. While this was being done it was verbally agreed between him and the defendant that after the new building was completed the . rent should be fifty dollars a month instead of twenty-five dollars. The defendant did not surrender the old lease to the plaintiff. The defendant having subsequently refused to pay the fifty dollars per month the plaintiff instituted summary proceedings to recover possession of the land.

      Seld, that as the lease was under seal, its terms and provisions could not be varied by a subsequent verbal agreement; that the verbal agreement to pay the additional rent could not be enforced and that the plaintiff’s proceedings should be dismissed
    Appeal from a judgment of tbe Cattaraugus County Court, affirming tbe determination and order of a justice of tbe peace in a summary proceeding instituted to recover tbe possession of real property, by wbicb possession thereof was awarded to tbe plaintiff.

      Ansley <& JDmie, for tbe appellant.

      Johnson db Markham, lex tbe respondent.
   Bradley, J.:

On tbe 20th February, 1880, tbe respondent by lease of that date under seal executed by him and by tbe appellant through one Arnold, his agent, demised to tbe appellant the premises in question for a term ending on the 5th day of October, 1883, for the annual rent of $300, payable in monthly payments of twenty-five dollars each. The lessee was then in possession, as assignee, of a prior lease to which Arnold was a party. The premises were situated in Salamanca and occupied by a store building in which the appellant carried on the business of selling goods. Tbe building was destroyed by fire on 5th September, 1880, and the latter, by Arnold, erected a temporary structure called a shanty on tbe lot and continued business in that. The respondent at once proceeded with, preparations to rebuild, cleared away the rubbish, dug cellar, and put in foundation, of which Arnold had some supervision. The respondent let the contract to construct the building and it was substantially completed, and the appellant went into occupation of it in December, 1880.

In January, 1881, the respondent presented to Arnold and requested him, as such agent, to execute a new lease of the premises at the annual rent of $600, which the latter refused to do. The respondent claiming that by agreement after the fire the rent had been increased to fifty dollar’s per-month, which the appellant declined to pay, and having given the requisite notice to pay or surrender possession, instituted this proceeding, ana the determination of the justice in his favor having been affirmed by the-County Court, this appeal is taken. And the question presented is whether the lease of 20th February, 1880, remained operative, or a new and valid one was made after the building was destroyed.

The default of Kerr depends upon the existence of the latter increasing the rent. The respondent gave evidence tending to prove that at first he intended and was proceeding to rebuild a frame of wood to be filled in with brick, which was defeated by a village ordinance, requiring that all buildings erected in that locality be constructed of solid brick work ; that' he then stated to Arnold that h& could not afford to put up a brick building under the old lease, and at the rent mentioned in it; to which the latter replied, that he did not expect him to do so, and expected to pay more, and asked how much more he should charge him; that the respondent said he could not then say, as he did not know what the building would cost him; that afterwards in November, 1880, wheD the building was well advanced towards completion, Arnold asked respondent what rent he should charge him; the latter said fifty dollars per month. Arnold replied that he thought it was pretty high, and that it was then agreed that Arnold should put in the store fixtures, counters, shelves, drawers, etc., at a cost to respondent not exceeding $250,. to be applied on rent. Arnold did put them in. The testimony on the part of the appellant is in conflict with that of the respondent, so far as relates to" the agreement to pay increased rent. We shall assume that this conflict in testimony was properly disposed of by the trial court, and if tbe conclusion there was justified in any view that can be taken of the evidence, the judgment of the court below should be sustained. By the common law the lessee of land was not relieved from payment of rent by destruction by fire of the buildings upon it during his term, although his beneficial enjoyment was solely in the use of them, unless the right to surrender his-lease was reserved by the express terms of it. (Hallett v. Wylie, 8 Johns., 44; Graves v. Berdan, 26 N. Y., 498.) But the statute jiro vides that when the building shall be destroyed or so injured by the elements, or any other cause, as to be unfit for occupancy, without fault or neglect on his part, the lessee shall not be liable or bound to pay rent thereafter, unless expressly required by written agreement, and may thereupon quit and surrender possession of the premises. (Laws 1860, chap. 345.) The right thus given is for the benefit of the lessee only, and he may or not at his election surrender the possession and avail himself of the purpose of the statute in the event therein mentioned.

The surrender is the fact, not established by that of the destruction of the building merely, but by the election and action of the tenant, such action as evinces the election to surrender. (Smith v. Sonnekalb, 67 Barb., 66; Johnson v. Oppenheim, 55 N. Y., 280.) The question whether the evidence was sufficient to justify the conclusion that the respondent surrendered the premises after the fire is an important one in this case, and requires the consideration of all the circumstances inferable from the testimony. The appellant’s agent without much delay put up a shanty, placed his goods-in it and continued his business there. This is by no means conclusive of purpose not to surrender, and the. appellant may have-been chargeable not under the lease, but as for use and occupation merely (Austin v. Field, 7 Abb. [N. S.], 29), but is a fact which may with other circumstances have more or less significance. Before the respondent was advised of the necessity of constructing solidly of brick, and very soon after the fire, he had some talk with Arnold about rebuilding, and said to him that he (Arnold) was as much interested as he was, and to go on and -build to suit himself that he (respondent) would be away and that he (Arnold) could oversee the clearing away, digging the cellar and putting up the building,, and he would pay the bills. Arnold did this, and got the foundation in,. when it was ascertained that the superstructure must be of brick, and then respondent let the contract to put it up, and the first.conversation about increase of rent before referred to was had, and the respondent stated to Arnold that he should not .charge him rent from the time of the fire, until the building was completed.

So far as appears the purpose of the appellant, through his agent Arnold, as indicated by the latter, to occupy the premises, was continuous, and the respondent so understood it, and it was expected by both that the business of the appellant would be continued in the new building when erected. There seems to be nothing in the fact that the plaintiff went on and erected a new building to indidate a surrender of the possession pursuant to the right giv'en the lessee by statute.

The mutual understanding immediately followed the destruction that the burned building should be replaced by a new one. The circumstances do not tend to show, nor do they permit the inference, that the right of the plaintiff to construct the new building came from a surrender to him of the premises, or of the lease, but on the contrary that it was done by consent and understanding not inconsistent with the continued operation of the lease and possession of the lessee under it. And in fact the fight of entry to make repairs for the protection of the reversion is one of the incidents of the relation of landlord and tenant vested in the former. (Sulzbacher v. Dickie, 51 How., 500.)

There is no evidence tending to show an election or purpose on the part of defendant to abandon or relinquish the possession of the premises, but on the contrary the intention to continue his business there is clearly evinced from the time of the fire, so far as anything upon that subject appears by the testimony, although it is possible his views in that respect may have been otherwise if the purpose of the plaintiff to rebuild had not been promptly declared.

But on the part of the respondent it is contended that the right to the relief given is supported by the agreement to pay increased rent which was founded on a good- consideration. If the agreement so made was a valid one that contention is sustained. A new lease, when valid, will operate as a surrender of an old one then in ■operation.

The lease was a sealed instrument, and at the time of the alleged agreement nearly three years of its nnexpired term remained. There had been no breach of it, and therefore it could not be substantially modified by parol. (Allen v. Jaquish, 21 Wend., 628; Clough v. Murray, 3 Robt., 7, 16; Kuhn v. Stevens, 7 id., 544; S. C., 36 How., 275; Ducker v. Rapp, 9 J. & S., 236; Dodge v.6 Crandall, 30 N. Y., 306, 307; Coe v. Hobby, 72 id., 148.)

This rule does not apply to agreements for extension of time merely of performance of stipulations of contracts under seal. It follows that the parol agreement to pay more rent cannot be effectual as a mere modification of the original lease, so as to constitute it one to continue to the end of its term, and making the rent $600 instead of $300 per year. The inquiry now arises, was the new agreement a valid one? The inference arising from the transaction would (if the law is not in the way) be justified that the parties made an agreement for the payment by the defendant of rent at the rate of fifty dollars per month. The defendant is informed by the plaintiff that the latter will charge that amount, and although not assented to at the time, he goes into occupation without further negotiation. That ordinarily may be deemed an acceptance of terms proposed. There was no duty on the plaintiff to rebuild (Doupe v. Genin, 45 N. Y., 119), and none on the part of the defendant to remain after the fire, and construing this as an agreement to pay the increased amount of rent if the plaintiff would rebuild, the consideration was sufficient. If there had been a surrender of the possession of the premises pursuant to the right of the lessee under the statute, there would be no difficulty on'that state of facts in charging the defendant with the rent of fifty dollars per month, although the agreement itself may have been void within the statute of frauds.

The taking possession would be effectual to charge him as tenant from year to year. (Schuyler v. Leggett, 2 Cow., 660; Reeder v. Sayre, 70 N. Y., 180; Laughram v. Smith, 75 N. Y., 205.) Hut here the effect, if any, on the lease is in the agreement itself, and to operate as a surrender of it the agreement must be valid in its terms. If it can be construed only as one for a longer term than one year it is void, and cannot be effectual as a surrender of the estate of the tenant existing under the -lease. (2 R. S., 134, § 6 ; Id., 135, § 8.) And in such case it of itself confers no right and creates no obligation as between the parties to it. (Dung v. Parker, 52 N. Y., 494.) Inasmuch as a valid lease by parol may be made for a year, one under seal having but a year to run may be surrendered by a new parol one for that time. (Smith v. Develin, 23 N. Y., 363.) And when the parties make another lease valid as a contract, whether by parol or otherwise, inconsistent in terms with the continuance of an existing lease, it operates as a surrender of the latter. (Schieffelin v. Carpenter, 15 Wend., 400, 406, 407; Smith v. Niver, 2 Barb., 180; Bedford v. Terhune, 30 N. Y., 453, 462.) In the talk between the plaintiff and Arnold about increased rent, no term was mentioned, nor was the prior lease. It related merety to a rental increase' from twenty-five dollars to fifty dollars per month. There is nothing to -indicate a purpose to reduce the teym; and assuming, as we are required to by the evidence, that the premises had not been surrendered to the plaintiff, and that the lease was-still operative, the situation was the same as if the building had not been destroyed, except so far as relates to the matter of consideration for an agreement, and it would seem necessarily to follow that the intention of the parties and the purport of their arrangement,, so far as it was made, was to increase the rent for the term the lease-had to run, and therefore that agreement was void. In Coe v. Hobby (72 N. Y., 147) the court say: “ The farthest that our courts have gone, is to hold that to effect a surrender of an existing lease by operation of law, there must be a new lease, valid in law, to-pass an interest according to the contract and intention of the parties.”

While in view of the fact of the agreement, which the trial court must have found, it seems equitable that the plaintiff should receive-the increased rent, the evidence does not without violence to it permit the conclusion or inference that any agreement was made to rent the premises for the term of a year or less. And well established rules of law as they are must be applied. This is a proceeding at law and has relation to existing contracts only.

In Horgan v. Krumwiede (25 Hun, 116) no aid is given to the-plaintiff. There was involved property other than that included in the lease, which, during the term of the latter, the lessee accepted and occupied under a parol arrangement for both properties which, by its terms, reduced the rent mentioned in the lease. That agreement was induced by tlie’declaration of the purpose of the tenant to leave the premises because of his inability to pay the rent.

After the term had expired and the agreement had been fully executed, the lessor disregarding it brought his action to recover the .amount of the lease in excess of that provided for by the parol agreement, and the court held that as the lease was under seal it could not be modified or the rent resei’ved by its terms reduced by an oral executory agreement, but as that agreement was founded on a new consideration and afterwards performed by the parties, the plaintiff was not entitled to recover. The case is not fully reported, but it sufficiently appears by the memorandum to 'show that the decision rested on the ground that the complete execution of the agreement by the parties was deemed a satisfaction of the rent. And such is the effect of the cases there cited so far as they arepertinert to that case. (Dearborn v. Cross, 7 Cow., 48; Delacroix v. Bulkley, 13 Wend., 71, 75; Allen v. Jaquish, 21 id., 631, 632.)

In the case at bar the remedy sought is necessarily dependent upon an executory agreement to pay rent, and is based upon the charge of failure to execute it. And it may be observed that in those cases where the statute of fraud intervenes the difficulty in making oral agreements effectual to modify existing valid contracts is increased. The views above given lead to the conclusion that the judgment appealed from cannot be supported.

The judgment of the County Court and the determination and order of the justice should be reversed.

Smith, P. J., and Bareer, J., concurred; Haight, J., not sitting.

Judgment of the County Court and the determination and order of the justice reversed, with costs.


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    GEORGE TRUESDALE, Respondent, v. THE CITY OF ROCHESTER, Appellant.

      City of Rochester —power of the common council to alter the sala/ry of a police justice— 1880, chap. 14, secs. 45, 48 and 64 — the objections of the ma/yor must be accompanied by his reasons — Constitution, a/rt. 3, sec. 24 — the increase of an officer’s salcvry is not an extra compensation.

    The plaintiff’s term of office as police justice of the city of Rochester expired on the first Monday of April, 1881. On May 18, 1880, the common council passed a resolution raising the salary of that office from $2,250 to $2,500 a /ear. On May twenty-first the resolution was presented to the mayor, who returned it on the twenty-seventh with an indorsement stating that he approved the proceedings of the common council with the exception of that portion which fixed the salary of the police justice at $2,500, to which he objected. On June first he sent a message to the clerk giving his reasons for objecting to the increase of Ialary.

      Held, that the failure of the mayor to state his reasons for disapproving the resos lution, as required by section 48 of chapter 14 of 1880, rendered his objection thereto unavailing, and that the resolution took effect at the expiration of five days'from the time it was presented to him.
    That the common council had power, under the provisions of the charter (secs. 45 and 64 of chap. 14 of 1880), to fix and alter the salary of a police justice from time to time during the term for which he was elected, provided the salary was not diminished during the then current year.
    That the increase of the salary for the remainder of the term for which the plaintiff had been elected, did not violate the provisions of section 24 of article 8 of the Constitution, prohibiting the "common council from granting extra compensations to any public officer.
    Appeal from a judgment of tbe Monroe County Court, affirming judgment in favor of the plaintiff of the Municipal Court of the iity'of Rochester.

      John R. Fanning, for the appellant.

      George Truesdale, for the respondent.
   Bradley, J.:

The plaintiff was police justice of the city of Rochester for the term of four years ending with the day preceding the first Monday of April, 1881, when the term of his successor commenced. Prior to May 18, 1880, the plaintiff’s annual salary had been less than' $2,500. On that day the common council of the city made determillation by ordinance or resolution that the salary of tbe police-justice be $2,500, which was presented to the mayor of the city for his approval on the 21st day of May, 1880, and on the twenty-seventh day of the same month he returnéd it to the clerk of the common council with a statement subscribed by him annexed as-follows : “ I hereby approve the foregoing proceeding of the common council, with the exception of that portion which fixes the-salary of the police justice, at $2,500, and to which I object.” And afterwards and prior to June first a message of the mayor, bearing date May twenty-eighth, was sent by him to the clerk giving his reasons for disapproval of such increase of salary. The treasurer paid the salary of the plaintiff, as police justice, at the rate $2,250 for the last year, that being the amount fixed as the salary by the common council April 20, 1880. The plaintiff claiming that he was entitled to salary at the rate of $2,500, demanded further payment July 14, 1881, which was refused by the treasurer. And this-action is brought to recover it.

The trial court held that he was entitled to the increase of salary from, the time the determination was made to raise it to $2,500, with interest from the time of the refusal of the treasurer to pay it. On the part of the appellant it is contended: 1. That the salary having been fixed on April twentieth for the municipal year at $2,250, the common council had not the power to increase it. 2. That the mayor’s veto was' effectual to defeat the operation-of the-resolution of 18th May, 1880, increasing the salary. 8. That the attempt to thus change the salary was unconstitutional. The charter of the city makes the municipal year and the terms of its officers commence on the first Monday of April (Laws 1880, chap. 14, §§ 8, 21, 45), and directs that the common council shall annuálly determine the salary of police justice and other officers named, which shall not be diminished during the then current year, (Id., § 45), and that the police justice shall not be entitled to receive any fees “ but shall receive in full compensation for his services an annual salary to be fixed from time to time by the common council.” (Id., § 64.) The legislative power of the common council is only such as is given by the statute. Their power and duty are to determine annually the salary of the office in question. The inquiry arises whether when having done that, their power is for -that year in that respect exhausted. When the provision was inserted in the charter that they should not diminish, during the current year, the salary fixed, it would seem by fair implication to indicate the power to increase during that period, to which some force might be imparted in that direction by the provisions of section 64 before mentioned, and together it would seem that complete legislative power on the subject of salary of this officer was vested in the common council, subject only to the limitation that they .should not diminish it during the current year. The relation between the city and its officer is in no sense that of contracting parties in respect to compensation, nor is the accepting or holding public office a contract with the government or municipality so .as to afford any vested right in either relating to salary. The' •officer has no property in the office in the nature of a grant. It is .a public trust with its duties imposed wholly by law, and except so far as restricted by constitutional or statute law, power may be vested and exercised to increase or diminish his compensation at pleasure. (Conner v. City of N. Y., 2 Sandf., 355; S. C., 5 N. Y., 285; McVeany v. The Mayor, 80 id., 185, 190; Butler v. Pennsylvania, 10 How. [U. S.], 402.)

' The mayor was vested with power to veto the resolution referred to. The charter provides that before any such resolution shall have .any force or effect, it shall be presented to him for his approval, and “ if he approves he shall indorse his approval thereon in writing; * * * if he disapproves-he shall return such transcript to the ■common council or the clerk thereof, with his objections and reasons for disapproval, in writing ” (Laws 1880, chap. 14, sec. 48); and if any such transcript, with such objections and reasons, shall not be returned by the mayor to the common council or clerk within five days after the transcript shall have been presented to him (Sundays •excepted), such ordinance, resolution, order or act shall have full for&e and effect in like manner as if duly approved by the mayor.” (Id.)

This resolution was returned with his disapproval within the time prescribed (one Sunday intervening), but the reasons for disapproval did not then go with it, and were not in fact given until after the expiration of the five days. The legislative power to the •extent conferred is in the common council, and the requirement which enables the mayor to approve or disapprove is not to defeat but to check municipal legislation deemed by him hasty or unwise, by returning the measure to the same body for reconsideration, where, notwithstanding the objections of the executive, still exists the power to enact it by the votes of two-thirds of its members. (Id.)

This duty and power of the mayor to be effectual must be exercised in the time and manner prescribed. The framers of the ■charter' evidently deemed his reasons for his objection as essential .as the objection itself, and required that they should accompany its return and be given within the time limited. The failure to do this permitted the ordinance to become effectual, and it was then a subsisting enactment. (Harpending v. Haight, 39 Cal., 189; S. C., 2 Am. R., 432.)

The constitutional provision that the common council shall not .grant any extra compensation to any public officer (Const., art. 3, ■,§ 24) is not in the way of this resolution. No extra compensation was provided for or authorized by it. The salary unearned by the ■officer was fixed by this enactment. No application was made of it in the court below to the served portion of the year. There is nothing in the charter of the defendant entitled to a construction requiring that the salary of the police justice shall be uniform •during the entire year. The commpn council are required to annually determine the salary, not the annual salary to be paid, etc. •(Sec. 45.) And the police justice shall receive an annual salary to be fixed from time to time. (Sec. 64.) The import of this is not ■that his salary must be uniform through the year, but that his compensation shall be a fixed one, termed salary, and that shall be ■determined by the constituted authority designated as in its judgment the character, amount and value of the official services may from time to time require:

No question of public policy seems to intervene to interrupt or defeat this construction of the statute; and no reason now occurs to us for denial of the claim awarded to the plaintiff by the judgment ■of the Municipal Court.

The judgment of the County Court should be affirmed.

Smith, P. J., Barker and Haight, JJ., concurred.'

Judgment affirmed.


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    GEORGE W. HUNTLEY, Respondent, v. JAMES E. BAKER, Appellant.

      Foreign judgment — when valid, although the summons was not personally served — error in the proof of sm'vice of a summons — when immaterial — domicile—how determined.

    In November, 1881, a judgment by default was entered against the defendant in the Municipal Court of Dane county, Wisconsin. He was at that time domiciled in that State, but was absent therefrom. The summons was not personally served upon him, but was left at his residence in the presence of his wife. This mode of service and the proceedings in the Municipal Court were regular and valid according to the laws of that State.

      Held, that the judgment was valid, and that an action might be brought thereon against the defendant in this court.
    The certificate of the officer serving the summons stated that he left it at the house in the presence of the defendant’s daughter, naming hey Upon the tidal of this action it was shown that it was the wife and not the daughter who was present.

      Held, that the validity of the service of the summons was not thereby affected.
    Prior to 1881 the defendant resided with his family and kept house in Madison, Wisconsin. In January, 1881, he procured employment in Buffalo, New York, and has since that time been there engaged in work. In May he concluded to bring his family there, but was unable to do so owing to the delicate health of his wife. About November twentieth he removed his family to Buffalo, where they have since resided. On November seventeenth a judgment was entered against him in the Municipal Court of Madison upon a summons not personally served, which was issued November tenth. ,
    Held, that he was domiciled in Madison at the time the summons was issued and the judgment was entered.
    Appeal from a judgment in favor of the plaintiff, entered upon the report of a referee.
    The action was brought upon a judgment rendered by the Municipal Court of the county of Dane in the State of Wisconsin.

      Wm. W. Lyon, for the appellant.

      Ernest K. Weaver, for the respondent.
   Bradley, J.:

By the record of the judgment of the Municipal Court of Dane county, Wisconsin, it appears that on the 10th day of November, 1881, a summons was issued by the judge of that court directed to the sheriff or any constable of that county, commanding that the defendant, if found within the county, be summoned to appear, etc., on the 17th day of "November, 1881, to answer the plaintiff to his damage of $200; that upon it was indorsed the certificate or return of I. L. Lewis, policeman, to the effect that the defendant not being found, he on that day served the summons by leaving a true copy of it at the defendant’s usual place of abode in that county, in presence of Miss Eetta Baker, daughter and one of the family of the defendant, of suitable age and discretion, whom he informed of its .contents : that on the return day the plaintiff appeared and his complaint was on a note of the defendant who did not appear, and judgment was rendered against him for ninety-one dollars and seventy-four cents. This action. was brought on that judgment.

The referee finds that the judgment was duly rendered by that court having jurisdiction of the subject-matter and of the person of the defendant, and directs judgment against him for its amount*

It will be ’ observed that the summons was not served on the defendant personally. And it appears that at the time of the constructive service (and is so found by the referee) he was not in the State of Wisconsin, nor was he afterward in that State until after the judgment was rendered, and had no actual knowledge of the action or of the judgment until about the time this action was commenced, the latter part of December, 1881.

It does, however, appear that constructive service of the sum-, mons, as evidenced by the return in the record, was in accordance with the direction of the statute of that State. It is clear that unless some relation of the defendant to the State of Wisconsin rendered such constructive service, of the summons effectual to permit a judgment against him in personam, the judgment rendered there must be deemed without jurisdiction and void, for it seems repugnant to the first principles of justice to charge a party personally with, a judgment, rendered without any actual notice to him or appearance on his part. (Kilburn v. Woodworth, 5 Johns., 37; Robinson v. Ward, 8 id., 90; Borden v. Fitch, 15 id., 121, 142; Noyes v. Butler, 6 Barb., 613, 617; Phelps v. Baker, 60 id., 107; Ferguson v. Crawford, 70 N. Y., 261.)

The courts of any State or country can have no extra territorial jurisdiction so as to give notice, serve process, or charge persons or property beyond their respective boundaries. And when thus unable to acquire jurisdiction of the person against whom legal proceedings are by statute authorized, and nominally taken without actual service on him, the proceeding can be treated as m rem only in respect to property within the jurisdiction. But it has been repeatedly held" in England that this doctrine is not applicable when the person so sought to be charged by judgment is a subject or citizen of the country vyhere and at the time the proceedings are taken, and when they are in conformity to the statute there, although the person be then absent from the country, and that is put upon the ground that the person domiciled there owes allegiance to the country and submission to its laws. (Douglas v. Forrest, 4 Bing., 686; Becquet v. McCarthy, 2 Barn. & Adol., 951; Bank of Australasia v. Nias, 16 Q. B. [Ad. & Ell.], 717; Same v. Harding, 9 C. B. [M. G. & S.], 661; Vallee v. Dumergue, 4 Exch., 290; Meeus v. Thellusson, 8 id., 638; Copin v. Adamson, L. R., 9 id., 345; S. C., 10 Moak, 492.)

And therefore a judgment may in such case be rendered against and charge a defendant in personam, without any personal service upon or actual notice to him, and in his absence 'from the country. There are only a few reported cases in this country where that proposition has been considered. In the United States Supreme Court a question somewhat analogous was decided in like manner as applied to 'the United States. (The Laffayette Insurance Company v. French, 18 How. [U. S.], 404; approved in St. Clair v. Cox, 106 U. S., 356; Pennoyer v. Neff, 95 id., 714, 722, 734, 735.) And in this State this proposition is stated, and the English cases cited with 'apparent approval. (Gibbs v. Queen Insurance Company, 63 N. Y., 114, 126; Hunt v. Hunt, 72 id., 218, 238; Cassidy v. Leetch, 53 How., 108, 109.)

Without stating the principle more at length, it may be assumed that by reason of ,the relation between the State and its citizen, which affords protection to him and his property and imposes upon him duties as such, he may be charged by judgment in personam, binding on him everywhere as the result of legal proceedings instituted and carried on in conformity to the statute of the State, prescribing a method of service which is not personal and which in fact may not become actual notice to him. And this may be accomplislied in his lawful absence from the State. It therefore becomes important to inquire whether the State of Wisconsin was the domicile of the defendant at the time the constructive service of the summons was made there, because it is upon domicile that his civil status depended. (Udny v. Udny, L. R., 1 H. L. (Scotch and Divorce App. Cases), 441; Abington v. N. Bridgewater, 23 Pick., 176.)

The maxim that every person must have a domicile is peculiarly applicable to the question of citizenship, disposition of his property and the right of succession after his death. The domicile of the defendant was in either the State of Wisconsin or New York at the particular time in question. The referee found that it was in the former. Upon this question considerable testimony was given.

For several years preceding 1881, his family resided and kept house in Madison, Wisconsin, and that was his home. In January,' 1881, he procured employment in an establishment in Buffalo, N. Y., and went and has since, been engaged there. In May, 1881, he concluded to remove his family to Buffalo and make that his place of residence, and in June following went to Madison with the intention of returning to Buffalo with his family and household goods, but finding his wife in delicate health and by reason of it, he returned without them. His family, consisting of his wife and daughter, 'continued to remain keeping house at Madison as before, until about the 20th November, 1881, when they were removed by him to Buffalo and have since resided there. This state of facts substantially is found by the referee.

The defendant had but one domicile and that having been in ' Wisconsin the burden was with him to show that he had changed it, and when he had done so the new one prima faeie would be that of his family although they may have continued in Wisconsin. (Inhabitants of Cambridge v. Inhabitants of Charlestown, 13 Mass., 501; Wade v. Matheson, 4 Lans., 161; Greene v. Greene, 11 Pick., 410.) But his intention alone was not sufficient to change or create a domicile; the fact of residence must concur with intent to produce that result. (Chaine v. Wilson, 1 Bosw., 673, 685; Dupuy v. Wurtz, 53 N. Y., 556, 561, 570; affirming 64 Barb., 156; Jennison v. Hapgood, 10 Pick., 77; Crawford v. Wilson, 4 Barb., 505, 519; Anderson v. Anderson, 42 Vt., 350; 1 Am. R., 334-6; Lowry v. Bradley, 1 Speers’ Eq., 1; 39 Am. Dec., 142; Hart v. Lindsey 17 N. H., 235; 43 Am. Dec., 597; Hallett v. Bassett, 100 Mass., 167, 170; Graham v. Administrator, 4 Bradf., 127; Platt v. Att'y-Gen'l, etc., 3 Appeal Cases, 336; 24 Moak, 234; 2 Kent’s Com., 431, notes.)

It is unnecessary to consider tlie distinctions between domicile and residence, and the peculiar circumstances under which it has been held that a person may be a non-resident of the place of his domicile (In re Thompson, 1 Wend., 45; Haggart v. Morgan, 5 N. Y., 428), or that he may have two places of residence for certain purposes (Bartlett v. City N. Y., 5 Sandf., 44; Bell v. Pierce, 51 N. Y., 17), for they are in no wise important here.

The question in respect to the domicile of the defendant at the time in question was one of fact dependent upon all the circumstances appearing by and inferable from the testimony to which it is unnecessary here to refer in detail. (Dupuy v. Wurtz, 53 N. Y., 556, 562; Williams v. City of Roxbury, 12 Gray, 21, 23; Holmes v. Greene, 7 id., 299.)

The view of the referee evidently was that the intention of the. defendant to make Buffalo his permanent place of abode was not consummated by the union with it of the fact, until he removed his family to that city. As a whole the. evidence supports the finding of the referee, that at the time the action was commenced and judgment rendered in Wisconsin, his domicile was there.

'We think the conclusion of the referee in that respect should not be disturbed. The record of the Wisconsin judgment is not conclusive, but may be impeached in respect to any jurisdictional proceeding.

By the statute of that State ample jurisdiction is given to the Municipal Court for all purposes of the action in which the judgment was rendered, and the proceedings conformed to it.

The policeman had the powers of constable and his certificate of return was all that was required to establish the service of the summons, and the fact that the summons was left in the presence of the wife of the defendant and the contents disclosed to her, instead of Retta the daughter as certified, does not have the effect to so impeach the return as to impair the jurisdiction. The wife was a person of suitable age and discretion within the meaning of the statute. The fact subject to impeachment is the service of the summons. Where the proof shows merely a discrepancy which does not invalidate the service, but proves that it was properly made, it fails to impeach jurisdiction.

It does not bring the case within the rule that the judgment cannot be supported by proof of jurisdiction aliunde the record. Here the proof that the service was not made in the presence of the daughter, showed that it was in that of the wife.

The conclusion follows that the judgment appealed from should be affirmed.

Smith, P. J., Babkeb and Haight, JJ., concurred.

Judgment affirmed.


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    JOHN HODGE, Respondent, v. THE SECURITY INSURANCE COMPANY of New Haven, Connecticut, Appellant.

      Policy of insurance — an agent authorized to procure a policy, is not authorized to receive notice of its cancellation ly the company — when a custom tojhat effect cannot le shown — when the prepayment of the premium is waived ly the delivery of the policy.

    The plaintiff, residing in Lockport, applied for insurance upon his opera-house situated in that city to one Holt, an insurance agent. Holt applied therefor to one Ellis, an insurance broker residing in Buffalo, who applied to Fish and Armstrong, who were the defendant’s agents at that place. They delivered a policy on December tenth for $1,000 to Ellis, stating to him that they would take the risk conditionally and report it to the company; that they would issue the policy subject to its approval, and if it disapproved of it the policy"was to ■cease and be returned immediately. Ellis handed the policy to Holt, who delivered it to the plaintiff. On December seventeenth Fish and Armstrong received a letter from the company, dated December fourteenth, saying that it could not accept the risk and directing them to decline it. They on that day wrote to Ellis saying that the company had ordered their policy canceled and asking him to return it at once. Ellis thereafter saw Holt and asked him to take up the policy, but no notice was given to the plaintiff by Holt or by the defendant’s agents. On January fifth the property was destroyed by Are.

      Held, that the policy having been delivered to the plaintiff’s agent unconditionally, all the previous negotiations and stipulations were thereby merged and rendered of no effect.
    That the determination of the company to cancel the policy was ineffectual because the notice of such determination was not served upon the plaintiff, or upon any person having authority, as his agent, to receive such notice.

      Tbe defendant sought to prove a custom among insurance agents and brokers in Buffalo of giving and receiving notices of termination of insurances by the election of the company.

      Held, that the evidence was properly rejected as it was not shown that the plaintiff had knowledge thereof or assented thereto.
    It appeared that Ellis had an account with the defendant’s agent for premiums on policies which were settled from time to time.

      B.eld, that the delivery of the policy without requiring the prepayment of the premium was a waiver of the right to set up its non-payment as a defense.
    Appeal from a judgment in favor of the plaintiff, entered on a verdict directed by the court.
    The recovery was had on a policy issued by the defendant, insuring the plaintiff against loss or damage by fire to' the extent of $1,000, on his opera-house block, in Lockport, and the furniture, etc., therein.

      Edward D. McCarthy, for the appellant.

      George C. Greene, for the respondent.
   Bradley, J.:

The plaintiff, residing in the city of Lockport, applied to Elijah Holt, an insurance agent of that city, for insurance on his opera-house block, etc., situate there. Thereupon Holt spoke to Robert C. Ellis, a broker, residing in the city of Buffalo, about furnishing a policy for $1,000. Ellis said he could and shortly after and on the 10th day of December, 1880, Ellis called upon the firm of Eish & Armstrong, agents at Buffalo for the defendants, and applied to them for the policy, and they issued it and Ellis handed it to Holt, who, on the same or the next day delivered it to the plaintiff. When the application was made by Ellis to Eish & Armstrong they, as appears by the testimony of the latter, first objected to taking the risk, and after discussing it told him they would take it condition-. ally; that they would report the risk to the company; that they would issue the policy of insurance; that it should be subject to the approval of the company; and that if the company disapproved it the policy was to cease and be returned immediately.

They did communicate with the defendant, and on seventeenth December received from it a letter of date fourteenth December addressed to them saying: “We cannot accept line on opera-house, Lockport, N. Y. (2683.) Please decline and oblige.” And the-defendant’s agents immediately wrote and sent to Ellis, who was then at Loekport, the following:

“ Buffalo, December IT, 1880.
R. C. Ellis, Esq., Loekport:
“ Dear Sir — The Security Insurance Company have ordered their policy, 2683, for J. Hodge, Hodge Opera House, canceled. Please return it to- us at once and oblige,
“Yours, very truly,
“ EISH & ARMSTRONG, Agents.”

which was received by Ellis, and he shortly after saw and requested Holt to take up the policy, but no communication was made by either of them, nor by the defendant’s agents to the plaintiff.

The building and contents were destroyed by fire on the 5th day of January) 1881. ■ The requisite notice and proofs of loss were given and furnished to the defendant, and after the sixty days’ grace, given by the policy, this action was commenced. The complaint contains the usual allegations in such cases. The answer does not deny the issuing of the policy, but alleges that the policy was procured by the agent of the plaintiff and the contract therefor made by such agent in behalf of the plaintiff with the defendant’s agents ; that the policy was delivered to the plaintiff’s agent for his benefit; that no part of the premium was or has been paid, and that pursuant to the provisions there referred to of'the policy the defendant terminated the insurance represented by the policy ,in the exercise of its optional right by giving the plaintiff, through his authorized agent, notice to that effect. The defendant’s counsel contends:

1. That the policy did’ not become operative, and that it was issued and taken under an executory arrangement, which did not permit it to become effectual unless and until the risk was approved by the defendant.

2. That if otherwise, then the notice given had the effect to terminate the policy.

3. That the premium was not'- paid and no credit was actually-given and none can be inferred under the circumstances.

The defendant’s agents having power to issue the policy, and having delivered it to Ellis without any restriction in respect to the -delivery by him to the plaintiff, the delivery to and acceptance by the latter effectuated the contract of insurance, unless there was some condition precedent that made the delivery incomplete. It is contended that there was no delivery of the policy other than as in the nature of an escrow. This cannot be so treated as the policy was not handed to a stranger, but was delivered to one acting as the agent of the plaintiff. (Worrall v. Munn, 5 N. Y., 229; Cocks v. Barker, 49 id., 110; Henshaw v. Dutton, 59 Mo., 139.) And although the rule that the delivery when made of a complete instrument by one of the parties to it, to the other for whose benefit it purports to be made is not liable to challenge, may not strictly be applicable to instruments not under seal, yet in such case the party charging that a delivery formally made was not in fact to take effect as a delivery, has the burden to clearly show that the instrument did not become operative ; and having been delivered it is not subject to defeat by an oral arrangement, not appearing in it, that it should be given up in an event which may have afterwards arisen. (Tower v. Richardson, 6 Allen, 351; Spring v. Lovett, 11 Pick., 417; Aden v. Furbish, 4 Gray, 504.)

In support of the contention that the preliminary negotiation and arrangement which resulted in the issue of the policy defeated its operation in the hands of the plaintiff the defendant’s counsel cites Wood v. Poughkeepsie Insurance Company (32 N. Y., 619) as controlling authority. The question there was whether or riot there was a waiver of a condition in a policy, and the court held there was not. The policy in that- case was not delivered to the assured named in it, but was in his absence left with his clerk with specific instructions and upon the condition that when the assured returned home he should pay the premium, if accepted, otherwise return the policy. That case does not seem to apply materially to the question under consideration.

Here there was a delivery to the plaintiff’s agent without any instruction or condition having relation to any provision of the policy, which by its terms was to be performed as a condition precedent to its effectual operation, and no qualified delivery was in that manner made. The talk and arrangement between the defendant’s ■agents and Ellis in legal effect had no reference to the delivery of the policy, but only to its continuance as an insurance. It was information that the defendant might not approve the risk and that if they did not “ the policy was to cease cmd be returned.” It was an expression in the nature of a condition subsequent by which Ellis was advised that the right reserved 'in the policy to terminate it would, in that event, be exercised. And the defendant, as .appears by its answer, so understood the situation when it alleged that the policy was delivered to the plaintiff’s agent for his benefit, and that the insurance was terminated by giving the notice required The policy must therefore be deemed to have been delivered and to have become operative as a contract of insurance.

The question arises whether the notice to Ellis was notice to the plaintiff. If it was, the insurance was terminated and the plaintiff was not entitled to recover. The policy provides that the insurance may be terminated at any time at the option of the company on giving notice to that effect.” In making the application to the defendant’s agents, and in taking the policy and handing it over to Holt, Ellis must be deemed acting for the plaintiff and as his agent. In that respect the policy provides that any person other than the assured who may have procured this insurance to be taken by this company shall be deemed to be the agent of the assured named in the policy, and not of the company, unless he shall have received a commission signed by the officers of this company appointing him agent.”

The contention of the learned counsel for the defendant is that for the purposes of the notice Ellis continued to be and was the agent of the plaintiff, and that the communication to him of the direction of the defendant in respect to the risk was effectual to {emanate the insurance, and in support of his position cites: The Standard Oil Company v. The Triumph Insurance Company (64 N. Y., 85), and McLean v. The Republic Fire Insurance Company (3 Lans., 421). In those cases the persons acting for the plaintiffs were actually employed by them, and their relations to the plaintiffs were practically those of general agents, so far as related to the procuring and looking after the insurance of their property. The power of those agents in that respect was ample, and the exercise of it was not dependent upon- special instructions. They in fact represented their principals in that department of their business. The situation of Ellis was very different. There was no conven tional relation of principal and agent between him and tbe plaintiff. That relation arose ont of tbe adoption by the plaintiff of the-assumed action by Ellis for him. Tbe policy was then taken and delivered to tbe plaintiff. He accepted it. That was apparently and in fact a complete • transaction. To that extent and for, that reason tbe act of Ellis must be deemed to have been for tbe plaintiff. Tbe business of Ellis was that of a solicitor of insurance when opportunity occurred. He was' not employed nor paid by tbe plaintiff. It is difficult to see bow lie could be treated as continuing tbe agent of tbe plaintiff for any purpose after tbe policy was delivered to tbe latter. Tbe employment of Ellis by Holt was simply to procure a policy of insurance. When that was' completed by the delivery of tbe policy bis agency ceased. (Grace v. Am. Central Ins. Co., 109 U. S., 278; reversing S. C., 16 Blatchf., 433.)

Tbe case last cited is quite directly in point. There a broker was employed to procure insurance. He did so and tbe policy was delivered to tbe assured, and shortly after the broker who procured tbe policy was notified by tbe agent of tbe company that it refused to carry tbe risk and required tbe return of the policy, and be gave the agent to understand that it would be returned. Tbe court held that when the contract was consummated by the' delivery of tbe policy tbe person so procuring it ceased to be tbe agent of the assured, and that the notice given was not notice to the latter. That is so here. Tbe plaintiff bad no notice of tbe purpose of the company to tei’minate tbe risk taken by tbe policy in question. And tbe question of custom which the defendant sought to establish as existing between ,the insurance agents and brokers in tbe city of Buffalo, of giving and taking notice of termination of insurance obtained by tbe latter, has no importance. They could not create a custom that would have tbe effect to vary the terms of the contract of insurance. That required notice to tbe assured to terminate tbe operation of tbe policy. A notice to somebody else with no authority to receive it for him could not by any custom of which be bad, no knowledge, and without his consent, prejudice bis rights. (Grace v. Am. Central Ins. Co., 109 U. S., 278; Standard Oil Co. v. Triumph Ins. Co., 61 N. Y., 91.)

In respect to the non-payment of the premium, the evidence justified tbe conclusion that tbe prepayment of it was waived. The-•delivery of the policy without requiring prepayment is evidence of waiver and of intention to give eredit. (Boehen v. Williamsburgh City Ins. Co., 35 N. Y., 131; Bodine v. Exchange F. Ins. Co., 51 id., 117, 122; Van Schoick v. Niagara F. Ins. Co., 68 id., 439, 440.) And in addition to that the defendant’s agents had an account with Ellis in the insurance business, who from time to time settled with them for premiums, etc., on policies issued upon his solicitation, which relation and transactions so conducted between them-permits the inference that the payment of the premium at or before the issuing of the policy in this instance wa3 waived. "Whether or not there was a question of fact presented by the testimony is not important, as the defendant’s counsel expressly conceded at the trial that there was no question for the jury. The cáse was prop•erly disposed of at the trial.

The judgment appealed from should be affirmed.

Smith, P. J., Bárkek and Haight, JJ., concurred.

Judgment affirmed.