text:
    In the Matter of the Estate of James T. Swift, Deceased.

      (Court of Appeals,

      Filed January 24, 1893.)

    1. Collateral inheritance tax.
    The tax provided for by the collateral inheritance law is only enforceable as to real property which, at the time of its owner’s death, was within the territorial limits of this state.

      2. Same.
    If the property in the foreign jurisdiction is in land, the bringing into this state of its cash proceeds subsequent to the testator’s death, no matter by what authority of will, or of statute, does not subject it to the tax.
    3. Same—Residuary estate.
    Where thereps a clause of the will directing that the amount of the tax upon the legacies and devises should be paid as an expense of administration, the appraiser should not in ascertaining the value. of the residuary estate for the _ purpose of taxation, deduct the amount of the tax tobe assessed on prknTegacies. Thelegaciestaxableshouldbereported, irrespective of the provision of the will; a mode of pa - ment of the succession tax prescribed by will is something with which the statute is not concerned.
    Appeal from judgment of the supreme court, general term, first department, affirming opinion of surrogate of the county of New York.

      S. W Bosendale, atty.-gen. for app’lts;

      Nelson S. Spencer, for resp’ts.

       Modifying 47 St. Rep., 47.

   Gray, J.

James T. Swift died in July, 1890 ; being a resident of this state and leaving a will, by which he made a disposition of all his property among relatives. After many legacies of money and of various articles of personal property, he directed a division of his residuary estate into four portions, and he devised and bequeathed one portion to each of four persons named. The executors were given a power of sale for the purpose of paying the legacies and of making the distribution of the estate. At the time of his death, the testator’s estate included certain real estate and tangible personal property in chattels, situated within the state of New Jersey, which was realized upon by the executors and converted into moneys in hand. When, upon their application, an appraisement was had of the estate, in order to fix its value under the requirements of the law taxing gifts, legacies and inheritances, the surrogate of the county of New York, before whom the matter came, held, with respect to the appraisement, that the real and personal property situated without the state of New York were not subject to appraisal and tax under the law, and the exceptions taken by the comptroller of the city of New York to that determination raise the first and the principal question which we shall consider.

Surrogate Ransom’s opinion, which is before us in the record, contains a careful review of the legal principles which limit the right to impose the tax, and his conclusions are as satisfactory to my mind as they evidently were to the minds of the learned justices of the general term of the supreme court, who agreed in affirming the surrogate’s decree upon his opinion.

The attorney-general has argued that this law, commonly called the collateral inheritance tax law, imposes not a property tax, but a charge for the privilege of acquiring property, and, as I apprehend it, the point of his argument is that, as there is no absolute right to succeed to property, the state has a right to annex a condition to the permission to take by will, or by the intestate laws, in the form of a tax, to be paid by the persons for whose benefit the remedial legislation has been enacted. That is, substantially, the way in which he puts the proposition, and if the premise be true that the tax imposed is upon the privilege to acquire, and, as he says in his brief, is like “ a duty imposed, payable by the beneficiary,” possibly enough we should have to agree with him. We might think, in that view of the act, that the situs of property in a foreign jurisdiction was not a controlling circumstance. But if we take up the provisions of the law by which the tax is imposed, and if we consider them as they are framed, and the principle which then seems to underlie the peculiar system of taxation created, I do not think that his essential proposition finds adequate support. The law in force at the time of the decease of the testator is contained in chapter 713 of the Laws of 1887, amending chapter 483 of the Laws of 1885, and is entitled “ An act to tax gifts, legacies and collateral inheritances in certain cases.”

By the first section, it is provided that “ all property which shall pass by will * * * from any person who may die seized or possessed of the same while a resident of this state, or, if such decedent was not a resident of this state at the time of his death, which property, or any part thereof, shall be within this state, * * * shall be and is subject to a tax, * * * to be paid * * * for the use of the state,” etc.

In the fourth section, it is provided that “ all taxes imposed by this act, unless otherwise herein provided for, shall be due and payable at the death of the decedent,” etc.

By the sixth section, it is provided that the executor shall “ deduct the tax from the legacy or property subject to said tax, or if the legacy or property be not money, he shall collect the tax thereon, upon the appraised value thereof, from the legatee or person entitled to such property, and he shall not deliver, or be compelled to deliver, any specific legacy or property subject to .tax to any person until he shall have collected the tax thereon,” etc. The language of the act has been justly condemned for being involved and difficult to read clearly; but considering the language employed in these and in other sections of the law in its ordinary sense, I think we would at once say that if the legislature had not actually imposed a tax upon the property itself, upon the death of its owner, it had certainly intended to impose a tax upon its succession, which was .to be a charge upon the property, and which operated, in effect, to diminish pro tanto its value, or the capital, coming to the new owner under a will, or the intestate laws. Could any one say, after reading the provisions of this law, that it was the legatee, or person entitled, who was taxed ? I doubt it. Property, which was the decedent’s at the time of his death, is subjected to the payment of a tax. The tax is to be deducted from the legacy ; or, when deduction is not possible from the legacy not being in money, and a collection from the legatee or the person entitled to the property is authorized to be made, the tax so to be collected is described as “ the tax thereon," that is, on the property.

If it should be said that such an interpretation of the law is in conflict with the doctrine which some judges have asserted respecting the nature of this tax, I think it might be sufficient to say that the phraseology of the New York law differs, more or less, from that of other states, and seems peculiarly to charge the subject of the succession with the payment of the tax. But I do not think it at all important to our decision here that we should hold it to be a tax upon property precisely.

A precise definition of the' nature of this tax is not essential, if it is susceptible of exact definition. Thus far, in this court, we have not thought it necessary in the cases coming before us to determine whether the object of taxation is the property which passes, of not; though, in some, expressions may be found which seem to regard the tax in that light. Matter of McPherson, 104 N. Y., 306; 5 St. Rep., 680; Matter of Enston, 113 N. Y., 174; 22 St. Rep., 569; Matter of Sherwell, 125 N. Y., 379; 35 St. Rep., 403; Matter of Romaine, 127 N. Y., 80; 38 St. Rep., 76; and Matter of Stewart, 131 N. Y., 274; 43 St. Rep., 171. The idea of this succession tax, as we may conveniently term it, is more or less compound; the principal idea being the subjection of property, ownership of which has ceased by reason of the death of its owner, to a diminution, by the state reserving to itself a portion of its amount, if in money, or of its appraised value, if in other forms of property. The accompanying, or the correlative idea should necessarily be that the property, over which such dominion is thus exercised, shall be within the territorial limits of the state at its owner’s death, and, therefore, subject to the operation and the regulation of its laws. The state, in exercising its power to subject realty, or tangible property to the operation of a tax, must, by every rule, be limited to property within its territorial confines.

The question here does not relate to the power of the state to tax its residents with respect to the ownership of property situated elsewhere. That question is not involved. The question is whether the legislature of the state, in creating this system of taxation of inheritances, or testamentary gifts, has not fixed as the standard of right the property passing by will or by the intestate laws.

What has the state done, in effect, by the enactment of this tax law ? It reaches out and appropriates for its use a portion of the property at the moment of its owner’s decease ; allowing only the balance to pass in the way desired by testator, or permitted by its intestate law, and while in so doing it is exercising an inherent and sovereign right, it seems very clear to my mind that it affects only property which lies within it, and, consequently, is subject to its right of eminent domain. The theory of sovereignty, which invests the state with the right and power to permit and to regulate the succession to property upon its owner’s decease, rests upon the fact of an actual dominion over that property. In exercising such a power of taxation as is here in question, the principle, obviously, is that all property in the state is tributary for such a purpose, and the sovereign power takes a portion, or percentage, of the property, not because the legatee is subject to its laws and to the tax, but because the state has a superior right or ownership, by force of which it can intercept the property, upon its owner’s death, in its passage into an ownership regulated by the enabling legislation of the state.

The rules of taxation have become pretty well settled, and it is fundamental among them that there shall be jurisdiction over the subject taxed; or, as it has been sometimes expressed, the taxing power of the state is coextensive with its sovereignty. It has not the power to tax directly either lands or tangible personal property situated in another state or country. As to the latter description of property no fiction transmuting its situs to the domicil of the owner is available, when the question is one of taxation. In this connection the observations of Chief Judge Comstock, in Hoyt v. Commissioners of Taxes, 23 N. Y., 224, and of some text writers, are not inappropriately referred to. He had said that lands and personal property having an actual situation within the state are taxable, and, by a necessary implication, that no other property can be taxed. He says, further, “ If we say that taxation is on the person in respect to the property, we are still without a reason for assessing the owner resident here in respect to one part of his estate situated elsewhere and not in respect to another part. Both are the subjects of taxation in the foreign jurisdiction.’’

In Judge Cooley’s work on Taxation it is remarked (p. 159) that “ a state can no more subject to its power a single person, or a single article of property, whose residence or situs is in another state, than it can subject all the citizens, or all the property of such other state to its power."

Judge Cooley had reference in his remarks to the case of bonds of a railroad ; for he cites the case of “ the state tax on foreign held bonds” in the United States supreme court, 15 Wallace, 300, where Mr. Justice Field delivered the opinion and, in the course of it, observed that “ the power of taxation, however vast in its character and searching in its extent, is necessarily limited to subjects within the jurisdiction of the state.”

Judge Story, in his work on the Conflict of Laws, speaking of the subject of jurisdiction in regard to property, said (§ 550) that the legal fiction as to the situs of movables yields when it is necessary for the purpose of justice, and, further, “ a nation within whose territory any personal property is actually situated has an entire dominion over it while therein, in point of sovereignty and jurisdiction, as it has over immovable property situated there.”

The proposition which suggests itself from reasoning, as from authority, is that the basis of the power to tax is the fact of an actual dominion over the subject of taxation at the time the tax is to be imposed.

The effect of this special tax is to take from the property a portion, or a percentage of it, for the use of the state, and I think it quite immaterial whether the tax can be precisely classified with a taxation of property or not. It is not a tax upon persons. If it is called a tax upon the succession to the ownership of property, still it relates to and subjects the property itself, and when that is without the jurisdiction of the state, inasmuch as the succession is not of property within the dominion of the state, sue-cession to it cannot be said to occur by permission of the state. As to lands, this is clearly the case, and rights in or power over them are derived from or through the laws of the foreign state or country. As to goods and chattels it is true ; for their transmission abroad is subject to the permission of and regulated by the laws of the state or country where actually situated. Jurisdiction over them belongs to the courts of that state or country for all purposes of policy, or of administration in the interests of its citizens, or of those having enforceable rights, and their surrender, or transmission, is upon principles of comity.

When succession to the ownership of property is by the permission of the state, then the permission can relate only to property over which the state has dominion and as to which it grants the privilege or permission.

Nor is the argument available that, by the power of sale conferred upon the executors, there was an equitable conversion worked of the lands in New Jersey, as of the time of the testator’s death, and, hence, that the property sought to be reached by the tax, in the eye of the law, existed as cash in this state in the executors’ hands, at the moment of the testator’s death. There might be some doubt whether the main proposition in the argument is quite correct and whether the land did not vest in the residuary legatees, subject to the execution of the power of sale. But it is not necessary to decide that question. Neither the doctrine of equitable conversion of lands, nor any fiction of situs of movables, can have any bearing upon the question under advisement. The question of the jurisdiction of the state to tax is one of fact and cannot turn upon theories or fictions, which, as it has been observed, have no place in a well-adjusted system of taxation.

We can arrive at no other conclusion, in my opinion, than that the tax provided for in this law is only enforceable as to property which, at the time of its owner’s death, was within the territorial limits of this state. As a law imposing a special tax, it is to be strictly construed against the state and a case must be clearly made out for its application. We should incline against a construction which might lead to double taxation; a result possible and probable under a different view of this law. If the property in the foreign jurisdiction was in land or in goods and chattels, when, upon the testator’s death, a new title, or ownership, attached to it, the bringing into this state of its cash proceeds, subsequently, no matter by what authority of will, or of statute, did not subject it to the tax. A different view would be against every sound consideration of what constitutes the basis for such taxation, and would not accord with an understanding of the intention of the legislature, as more or less plainly expressed in these acts.

Another question, which I shall merely advert to in conclusion, arises upon a ruling of the surrogate with respect^ to appraisement, in connection with a clause of the will directing that the amount of the tax upon the legacies and devises should be paid as an expense of administration. The appraiser, in ascertaining the value of the residuary estate for the purpose of taxation, deducted the amount of the tax to be assessed on prior legacies. The surrogate overruled him in this, and held that there should be no deduction from the value of the residuary estate of the amount of the tax to be assessed either upon prior legacies or upon its value. He held that the legacies taxable should be reported, irrespective of the provision of the will ; and that a mode of payment of the succession tax prescribed by will is something with which the statute is not concerned. I am satisfied with his reasoning and can add nothing to its force. Manifestly, under the law, that wThich is to be reported hy the appraiser for the purpose of the tax is the value of the interest passing to the legatee under the will, without any deduction for any purpose, or under any testamentary direction.

A question is raised as to the effect upon the law, as contained in the acts of 1885 and 1887, of the passage of chapter 215 of the Laws of 1891; but as that has been the subject of another appeal and is fully discussed in the opinion in the Matter of the Estate of Prime, no reference will be made to it here.

My brethren are of the opinion that the tax imposed under the act is a tax on the right of succession under a will or devolution in case of intestacy ; a view of the law which my consideration of the question precludes my assenting to.

They concur so far in my opinion as it relates to the imposition of a tax upon real estate situated out of this state, although owned by a decedent, residing here at the time of his decease; holding, with me, that taxation of such was not intended, and that the doctrine of equitable conversion is not applicable to subject it to taxation. But as to the personal property of a resident decedent, wheresoever situated, whether within or without the state, they are of the opinion that it is subject to the tax imposed by the act.

The judgment below, therefore, should be so modified as to exclude from its operation the personal property in Hew Jersey and, as so modified, it should be affirmed, without costs to either party as against the other.

Judgment accordingly.

All concur, except Maynard, J., not sitting.


source: Caselaw Access Project

author: Earl, J.

license: Public Domain

text:
    Clark R. Griggs, Resp’t, v. Melville C. Day et al., Surviving Executors, App’lts.

      (Court of Appeals,

      Filed January 24, 1893.)

    Motion for reargument.

      Melville 0. Day, for app’lts;

      William H. Arnowe and John H. Post, for resp’t.

       See 48 St. Rep., 853.

   Earl, J.

A re-examination of this case upon this motion for a reargument satisfies us that we made no mistake in our decision. Ho rule of law or material fact was overlooked or misapprehended.

The notes used by Garrison for the purchase of the second mortgage bonds of the railroad company, or in exchange for such bonds, were used either rightfully or wrongfully by him. There is no pretense of any contract between him and the plaintiff under which they were used, or of any contract under which he agreed to pay or allow the plaintiff any particular sum or price for them. Even if Garrison used them with the tacit consent of the plaintiff, we know of no rule of law which imposed upon him any liability to allow for them more than their value. By what kind of legal jugglery , can Garrison be charged with the par value of these worthless notes, in the absence of any agreement that he should take them at that value, or of any proof that the plaintiff was damaged to the amount of their full value by the use Garrison made of them ?

In this equitable accounting between these parties by what kind of necromancy can these worthless pieces of paper be transmuted into pure gold ? There is certainly no proof and no finding of fact in this record upon which this enormous claim of the plaintiff can be based.

But upon the argument in this case we understood the counsel for the plaintiff to repudiate the claim of the defendants that Garrison used these notes in payment or exchange for the bonds with, the consent of the plaintiff, and we assumed, as most favorable to the plaintiff, that in the use he made of them he wrongfully converted them. If the plaintiff cannot, upon that theory, charge Garrison with the full value of these notes, then there is no theory upon which he can do it. ■

It is claimed that we ought not to have said in our opinion that these notes and the second mortgage bonds were substantially of no value. Why should we not have said so? It is beyond controversy upon the evidence that they were substantially worthless. The referee refused to make any specific finding that they were of no value, on the ground that such finding was immaterial, and this refusal upon that ground was erroneous, if there was any evidence tending to establish the fact that they were of no value and that fact was material. To test the propriety of that refusal we must assume the existence of the fact which the evidence tended to establish, and so we assumed that the notes and bonds were of no value, and by so doing showed that the fact was a vital one, and that the referee should, therefore, have passed upon the evidence bearing upon it.

What we have said about the worthlessness of the notes and second mortgage bonds, obviously, cannot conclude the plaintiff upon a new trial. It will then be open to him to show, if he can, that the notes and bonds were actually valuable and how much they were worth.

In our former opinion no point was discussed and no position taken which was not fairly embraced within the record and presented by exceptions properly taken.

The motion should be denied.

All concur.


author: Lewis, J.

text:
    Byron C. Ketcham, Ex’r, Resp’t, v. Spencer C. Ketcham et al., Resp’ts, Impleaded with Esther E. Ketcham Redman et al., App’lts.

      (Supreme Court, General Term, Fifth Department,

      Filed January 18, 1893.)

    Will—Construction.
    When the language of a will is clear and unambiguous and gives an estate less than a fee, although it charges the devisees personally with the payment of testator’s debts and funeral expenses, the payment thereof will not enlarge the estate to an absolute fee.
    Appeal from a portion of a judgment of the supreme court, Monroe county, construing the will of Abram F. Ketcham, deceased,

      Henry W. Conlclin, for app’lts;

      Daniel Holmes, for pl’ff, resp’t ;

      John D. Burns, guardian ad litem, for infant def’ts, resp’ts.
   Lewis, J.

This action was brought to procure the construction of the will of Abram F. Ketcham, deceased. The material part of the will is as follows:

“I give and bequeath to my dear wife, Julia Ann Ketcham, the use and control of fifty acres of my estate laying on the south side of the road on which we live, so long as she shall remain my widow. After her death it is my wish that all my property, both real and personal, shall be divided among my children in the following manner, to wit: I give and bequeath to my son, Warren F. Ketcham, aside from what he has had of my estate, four hundred dollars, after the death of my wife. I give to my two grandchildren, Henry Warren Haskell and Mary Louise Haskell, three hundred dollars apiece after they become of age. I give and bequeath to my daughter, Gertrude Blossom, six hundred dollars, aside from what she has had of my estate, to be paid within two years after the death of my dear wife. I give and bequeath to my four boys, Allen J. Ketcham, Byron 0. Ketcham, Spencer 0. Ketcham and Bichmond A. Ketcham, the residue of my estate, share and share alike, to have and to hold the same so long as they shall live, after paying my debts and funeral expenses. I constitute and appoint my sons, Allen J. Ketcham and Byron G. Ketcham, my sole administrators to settle my estate.”

The will is dated on the 14th of May, 1875. The appellants are Esther E. Ketcham Bedman, the widow of Allen J. Ketcham,Flora La Moyne and Emma B. Brooks, daughters of Allen J. Ketcham. Allen J. was one of the sons of the testator and one of the four devisees named in the will. He died after his father’s death The plaintiff having declined to appeal, the appellants were, by an order of court, permitted to appeal in his name, and they appealed from so much of the judgment as decrees that the four sons take a life estate only. So that the only question presented for our decision is whether the four sons take an estate in fee, or for life only. The trial court held that they took a life estate only. The appellants contend that a consideration of the entire will shows that the testator intended to give to his four sons an estate in fee, and this claim is based mainly upon that clause in which the testator expresses his wish that all his property, both real and personal, shall be divided between his children in the following manner. It is contended that this clause shows an intent to dispose of his entire estate by will, and not leave a residue to go to his heirs by descent, and that the clause “ to have and to hold the same so long as they shall live ” was used by the testator without a full understanding or appreciation of its import and meaning.

The will was shown to be in the handwriting of the testator. He was a farmer by occupation. The phraseology of the will furnishes evidence that the testator was not a lawyer, nor was he accustomed to drawing wills. He left an estate worth about $8,000, consisting mainly of real estate. It is conceded that, in order to pay the money legacies, it will be necessary to sell the land. If it be true, as contended by the appellants, that there is a necessary conflict between the granting and limitation clauses of the will, the court would' be justified in rejecting the limitation clause, but we do not so read the will. After giving to his widow the use and control of fifty acres of his estate so long as she shall remain his widow, he says: “ It is my wish that all my property, both real and personal, shall be divided among my children in the following manner.”

Full force and effect can be given to the part of the will which precedes the limitation clause, and still give full force and effect to that clause. The cases to which we are referred in the appellants’ brief, where it was held that the will granted afee notwithstanding the words indicating an intention to devise only a life estate, are cases where the granting clause was plainly and obviously inconsistent with an intent to give an estate less than a fee.

In Byrnes v. Stilwell, 103 N. Y., 453; 4 St. Rep., 241, the devise was “ to the lawful child or children of my said daughter, his or their heirs forever.”

In Clarke v. Leupp, 88 N. Y., 228, the testator gave his widow the property, with power to retain and dispose of it for the benefit of herself and children.

In Crain v. Wright, 114 N. Y., 307; 23 St. Rep., 245, the will gave fifty acres of land to the widow, to have and to hold for her benefit and support.

It was held in these cases that the will devised a fee. The language used showed that intent, and there was nothing in the wills indicating a contrary intent. The testator here, in language that is clear and unambiguous, says he gives to his sons the residue of the estate, share and share alike, to have and to hold the same so long as they shall live. This clause has a well understood meaning, and we are not at liberty to conjecture or surmise that the testator meant something else than what his words clearly import. While, under the Revised Statutes, the use of the word “heirs,”- or other words of inheritance, are not requisite to create an estate in fee, and the devise will pass all the estate of the testator unless the intent to pass a less estate or interest shall appear by express terms, or be necessarily implied in the terms of such grant, that intent is here expressed, we think, in language so plain that it cannot be misunderstood.

The case of Sutherland v. Snyder, 84 Virginia, 880, was for the construction of a will. One clause of the will was in these words:

“ I leave my two daughters, Ida E. and Mollie E. Snyder, my homestead tract, containing 275 acres of land, more or less, during life. In case of Ida Elizabeth’s death without an heir, I wish her portion to revert back to Mollie E. Snyder, or her living heir or heirs.”

At the close of the will, the testator said “ having disposed of what I leave,” etc., and because of this clause it was argued that he evidently intended to dispose of his whole estate and hence the daughters took a fee. Judge Lewis, speaking for the court, said:

“To this, however, it is sufficient to answer that if he so thought or intended, he has not so said, nor is such an intention a necessary implication from the words used.”

In another part of the opinion it is stated :

“ In the construction of wills effect must be given to the intention of the testator, if that can be discovered and is consistent with the rules of law. But the intention to dispose of his estate must be manifested with legal certainty, otherwise the title of the heir or heirs at law will prevail, for conjecture cannot be made to supply what the testator has failed to sufficiently indicate on the face of the will,” and the court held that the concluding words of the will did not overcome the effect of the express limitation.

In Loveacres v. Blight, Cowp,. 352, Lord Mansfield said that though the introduction of a will declaring that a man means to make a disposition of all his worldly estate is a strong circumstance connected with words to explain the testator’s intention of enlarging a particular estate, it will not do so alone. See Mixter v. Woodcock, 147 Mass., 613, and Howland v. Cledenin, 30 St. Rep., 527. (Since preparing this opinion, our attention has been called to a decision of our court of appeals, In the Matter of the Will of James McClure, reported in 49 St. Rep., 203. It is authority upon questions in this appeal.) Couch v. Eastham, 29 West Va., 784.

The case of Evans' appeal from probate, 51 Conn., 435, is in its facts very like the case at bar. John Evans died without issue; his wife, the appellant, surviving. He left a will which provided:

“ After all my lawful debts are paid and discharged, the residue of my estate, both real and personal, I give, bequeath and dispose of to my beloved wife, Ann Evans, for her sole use and benefit, as long as she lives,” naming her as executrix. He left a brother and nephew, subjects of and resident in Great Britain, but no relatives in this country, It was claimed that the testator intended to give a fee to the widow, but the court held that he had added words of qualification and limitation, namely, “ for her sole use and benefit as long as she lives,” and added:

“ These aptly and plainly define an use, an estate for life, and bar out any other or greater one. The intention must be found, in the will. The will cannot be framed from intentions contrary to expressions.’’

Our attention is called to the clause requiring the four sons to pay the testator’s debts and funeral expenses, as evidence of an intention on the part of the testator to give them the fee; and if is suggested that the amount of money required to pay the debts might exceed the value of the life estate. There is some force in the suggestion, but when the language of a will is clear and unambiguous, and gives an estate less than afee, although it charges the devisee personally with the payment of legacies, the payment thereof will not enlarge the estate to an absolute fee. Nellis v. Nellis, 99 N. Y., 505.

We think the testator’s intent to pass an estate less than a fee is so clearly expressed that it must be held that the will gave to the four sons a life estate only, and it, therefore, follows that the judgment appealed from should be affirmed, with costs to the respondents, to be paid out of the estate.

Dwight, P. J., and Macomber, J., concur.


text:
    Andrew J. Applebee et al., Ex’rs, Resp’ts, v. William Duke Impl’d, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed January 18, 1893.)

    Partnership—Accounting—Parties—Discovert.
    In an action brought by plaintiffs, as executors, to compel an accounting as to the partnership transactions between their testator and W., M. and H., infant children of testator, were joined as defendants, and appeared by guardian ad litem, upon whose petition the court made an order granting a discovery of the books and, papers of the firm composed of testator and W. Held, that such infants were proper parties; that an inspection of the books and papers was important; and plaintiffs not having instituted a proceeding to obtain such inspection, it was proper for the guardian so to do, and the order was properly granted.
    Appeal by the defendant William Duke from an order entered ■ in the Allegany county clerk’s office granting a discovery of the books, papers, etc., of a copartnership firm composed of Joseph Duke and William Duke.

      Fdward A. Washburn, for app’lt;

      Clarence A. Farnum, for resp’ts.
   Lewis, J.

This action was brought by the plaintiffs, as executors under the will of Joseph Duke, to compel an accounting as to the partnership transactions between the said copartners Joseph and William Duke. The defendants Emily Duke, Hanford Duke and Myron Duke are the heirs at law and next of kin of the said Joseph Duke, deceased, and as such, under the will of the said Joseph Duke, are entitled to the distribution of his estate.

Joseph died December 23, 1884.' He and William had been, for many years prior and up to the time of his death, copartners in the lumber and oil producing business, and, as such, were owners in fee of a large amount of real estate purchased with the funds of the company. The title to a portion of these lands was in William’s name and a part in the name of Joseph respectively. They also owned leasehold interests in oil producing lands. After Joseph’s death William continued the business as surviving partner. Books of account of the business were kept in this state, and also in the state of Pennsylvania, both before and after the death of Joseph. The defendants, Hanford and Myron Duke, were at the.time of the commencement of the action infants, and appeared by their guardian ad litem, Charles S. Cary. The defendant, Emily Duke, is the widow of Joseph, and did not interpose any answer. The complaint contained the usual allegations as to the copartnership, as to the business carried on by the firm, as to the unsettled state of the accounts, and further alleged that the said William Duke, after the death of the said Joseph, continued to operate for and produce petroleum oil from the lands and leasehold interests of Joseph and William, and that the lands and interests of said Joseph are now owned by the defendants, Emily, Hanford and Myron Duke ; that the defendant, William Duke, has sold the timber, lumber, lath and shingles and oil taken from the lands, and has so commingled the funds received therefrom with his own that it is impossible for the plaintiffs to ascertain exactly the amount that should go and belong to these plaintiffs as executors of said will, and the amount that should be paid to said devisees, and be treated as a fund received from the real estate owned by them, and these plaintiffs cannot safely adjust and settle the said matters and accounts with the said William Duke without the said defendants, Emily, Myron and Hanford Duke, the devisees of said Joseph Duke, be made parties herein and he bound by such settlement.

And the complaint demands that an account may be taken of the partnership dealings and transactions from the time of tho commencement of such partnership to the time of its dissolution by the death of Joseph ; that William Duke may account with the plaintiffs for all his dealings with and transactions in regard to the property, the assets and effects of the said firm since its-dissolution by the death of said Joseph, and the moneys collected and paid out by him on account thereof, and that the copartnership business be closed and a receiver appointed, and that the said William Duke be decreed to pay to the defendants, Emily, Hanford and Myron, any amounts which may be due them on account of money received from the avails of the real estate devised to them by Joseph, and "that the defendants, Emily, Myron and Hanford, be bound by the accounting and decree to be made herein, and that the said William Duke pay to these plaintiffs, as executors, as aforesaid, one-half of the sums due from him to said firm for moneys received before and after the death of said Joseph. The order appealed from was granted upon the petition of Charles S. Cary, as guardian ad litem, as aforesaid, the affidavit of Joseph B. Jewell, as counsel for the defendants, Emily Duke and Hanford Duke, the affidavit of Emily Duke, and upon the pleadings and all the papers in said action.

It is the contention of the counsel for the defendant, William Duke, that the defendants Emily, Hanford and Myron Duke, are unnecessary and improper parties to the action and have no standing in court for any purpose. If they can be bound by the accounting, as is claimed in the plaintiffs’ complaint, they are certainly necessary parties to the action. In any event they are proper parties. This is an equity action instituted and prosecuted by the executors in the interest, and for the benefit of these defendants. It is fitting and proper for them to appear upon the trial of the action to look after their interests. The plaintiffs appear simply in a representative capacity. In order to the proper and intelligent trial of the cause, an inspection of the copartnership books is manifestly important.

■No proceeding having been instituted in the name of the plaint-/ iffs to obtain such inspection, it was proper for- the guardian, aá| an officer of the court, appointed to look after the interests of the wards of the court, to take proceedings to ascertain the contents of the books, to the end that he might be prepared to look after the infants’ interests upon the trial. Notwithstanding they are joined as defendants with William Duke, their interests are adverse to his, and they are, within the meaning of § 803 of the Code, “ another party to the action,” and are entitled to the benefit of the provision of that section as against the defendant William.

It is contended by the appellant that the infants’ answer makes no claim against William Duke. The answer is, as we have seen, the usual infants’ answer, submitting their interests to the protection of the court. They have a right to appear upon the trial and avail themselves of the claims set forth in the plaintiffs’ complaint. We think it was within the discretion of the court to grant the order appealed from, and it should be affirmed, with ten dollars costs and the disbursements of the appeal.

Dwight, P. J., and Macomber, J., concur.


author: Dwight, P. J.

text:
    Clarence L. Dunn, Administrator, App’lt, v. Cornelius R. Parsons, Resp’t.

      (Supreme Court, General Term, Fifth Department,

      Filed January 18, 1893.)

    1. Bulls and notes—Evidence.
    In an action on a promissory note, the defense was that the defendant, an indorser, had never received nor been served with notice of protest. The action was begun in 1874; an amended answer was served February 20, 1878; the trial took place in 1888; the defendant was permitted to put in evidence over an objection that it was not served within the time required by Code Civ. Pro., § 923, an affidavit, verified by him February 20, 1878, reiterating the denial of his answer that he never received notice of protest, the same having been served on plaintiff’s attorney February 23, 1878. UM, that the affidavit was properly admitted in evidence, the objection not being tenable, although it was immaterial and irrelevant under § 934 of the Code, and incompetent and improper as common law evidence.
    2. Evidence—When not necessary to strike out improper.
    Where the court allowed certain evidence to be given, under objection, and when it became apparent that it did not tend to establish any defense, distinctly withdrew from the attention of the jury the whole subject to which it related, it is not error to refuse to “ strike out” the evidence.

      Appeal by the plaintiff from a judgment dismissing his complaint, entered on the verdict of a jury at the Erie circuit, and from an order made at the same term denying the plaintiff’s motion for a new trial on the minutes of the court.

      K Morey, for app’lt;

      George Clinton, for resp’t.
   Dwight, P. J.

This was an action, begun in 1874, against the defendant as indorser of two promissory notes made by J. Getz & Co. There were three defenses litigated, viz.: (1) that the defendant had never received nor been served with notice of protest of either of the notes in suit; (2) that the plaintiff’s intestate had purchased the notes and a judgment which had been recovered thereon against the makers, with the money of, and as the agent of, the makers, and that the notes were thereby paid; (3) that the plaintiff’s intestate, being owner of such judgment, had released from the lien thereof certain property of the makers of the notes, whereby the defendant, if charged as indorser, being an accommodation indorser, had been discharged to the extent of the value of the property so released, over and above prior encumbrances. The first and second of these issues were joined by the original answer of the defendant in October, 1874'; the third was pleaded by an amendment to the answer which was served on the 20th day of February, 1878.

On the trial, which took place in December, 1888, the plaintiff made proof of presentation, demand and protest of both notes by the original certificates of the notary public, who was dead, and of service of notices of protest by entries in the notary’s register. On the other hand, the defendant was permitted to put in evidence an affidavit, verified by him on the 20tli day of February, 1878, reiterating the denial of his answer that he had ever received any notice of the nonpayment or protest of either of the notes in suit. The introduction of this affidavit in evidence was objected to by the plaintiff on the grounds, (1) that it was not annexed to the answer which was originally served;' (2) that it did not comply with the statute, being a mere denial in the form of pleading; (3) that it was not served in the time required by the-statute.

The objection on the first ground specified was evidently taken under the statute in force at the time the original answer was served. Laws of 1833, chap. 271, § 8. That statute, after making the notary’s certificate presumptive evidence of demand and notice, provides that the rule shall not apply in any case where the defendant shall annex to his plea an affidavit denying the fact of having received notice, etc. This ground was plainly untenable, because at the time of the trial the statute of 1833 had been repealed, and the provisions of § 923 of the Code of Civil Procedure had been substituted therefor ; and, the question being not of the right, but of the remedy, the latter statute, as between the two, necessarily furnished the rule of evidence for the case. It was apparently under the later statute that the objection to the affidavit on the remaining grounds specified was taken, viz. : that it was not in the form nor served in the time required by the statute. By the later statute the certificate of the notary was made presumptive evidence unless the defendant had served upon the plaintiff, with his answer, or within ten days after joinder of an issue of fact, an original affidavit to the effect that he had not received notice, etc. It was apparently to bring the case within the restriction here provided, and thus to deprive the notarial certificates of their effect as presumptive evidence, that this affidavit was produced and offered in evidence. It would seem that the offer, the objection thereto and the ruling thereon were all made in momentary inattention to the provisions of the next section of the statute last cited. That section, Code of Civ. Pro., § 924, contained the provision precisely applicable to this case, viz.: where the notary who made the presentation, demand and protest was dead before the trial of the action. In such case his original protest duly attested is made presumptive evidence of demand of payment, and the entry in his register presumptive evidence that notice of non-payment was given at the time and in the manner stated in such entry; and this without any provision for an affidavit of the defendant either annexed to his answer or served within a specified time after an issue joined. In other words, the section last cited abolishes the affidavit in the case described, and gives to the notarial certificate and memorandum, without restriction, the character of presumptive evidence of the facts stated therein.

The affidavit of the defendant in this case was, therefore, immaterial and irrelevant as evidence under the statute, and as common law evidence it was . plainly incompetent and improper. But it was not objected to on any such grounds. The grounds of the objection taken were expressly limited to the requirements of “the statute.” We have seen that the statute referred to in the first ground of objection was the statute of 1833, and that the objection was, so far, untenable. It was, we think, equally untenable on the second ground, under § 923 of the Code. The affidavit consisted of a positive denial that the defendant had ever received notice of the non-payment or protest of either of the notes in suit, and it does not seem to admit of discussion that this was in substantial compliance with the requirement of the section in that respect

The third ground of objection was that the affidavit was not served in the time required by the statute. The reference is here, plainly, to the provision of § 923 of the Code, supra, which took effect September 1,1877. The time limited thereby for the service of the affidavit was “ within ten days after the joinder of an issue of fact,” and we have seen that an issue of fact was joined in this action by an amended answer, which, as the record shows, was served on the 20th day of February, 1878, that being the same day on which the affidavit in question was verified. When that affidavit was offered in evidence, counsel for the defendant accompanied the offer with the statement that they had proof of its service on the 23d day of February, 1878, and, although that proof is not in the record, there was no objection to the affidavit on the ground that such proof was not made, but the statement of counsel seems to have been accepted, and the only objection in that respect was that the service was not within the time limited by the statute. The objection to the affidavit, on the same grounds only, was renewed, at the close of the proofs, by a motion to strike out, which was denied. We think no error was committed by the court in either of its rulings on this subject.

The greater part of the evidence in the case was received on the issue of the release of property of the makers from the lien of the judgment held by the plaintiff’s intestate; and this evidence related to several parcels of land in and about the city of Buffalo. Among them was a parcel known as the Amherst street, or Black Rock property, concerning which some evidence was received, under the objection of the plaintiff, chiefly on the ground that it was not covered by the allegations of the answer. The court overruled the objection for the present, remarking that when the evidence on that subject was all in it might appear not to establish any defense for the reason stated.

The evidence showed that the makers of the notes acquired title to the property in 1864, subject to a small mortgage to the Erie County Savings Bank; that in December, 1870, they encumbered it, with other property, by a mortgage to E. R. Jewett, of $15,000, both of which mortgages were prior in lien to the judgment recovered by Childs on the notes in suit, which was after-wards assigned to the plaintiff’s intestate. It also appeared that the $15,000 mortgage above mentioned was foreclosed in 1874-5, and that the property was sold on the judgment of foreclosure to one Dodge for the sum of $10,000. Upon this and other evidence plainly showing that the evidence in respect to the Amherst street property did not establish any defense to the action, counsel for the plaintiff moved to strike out the testimony and exhibits relating thereto, which motion was denied, but in his charge the learned judge plainly withdrew the Amherst street property from the consideration of the jury. In speaking of the several parcels of real estate upon which the judgment was a lien, he said: “I shall not discuss the Amherst street property.” Again, after recapitulating all the evidence which it was proper for the jury to consider as bearing upon the question of the release of property from the lien of the judgment, and which did not include any evidence relating to the Amherst street property, the court said: “ There was still other real estate that this judgment was a lien upon, but the title to the other real estate has passed from the Getzes under forclosure of mortgages and has been cut off in that way, and I do not understand that Mr. Dunn would be responsible therefor, and consequently it will not be necessary for me to discuss the question further.” Again, in response to a request to charge that the defendant must not be allowed on this trial any sum which Dunn has received on sales of any of the Amherst street property since the deed thereof to him from Dodge, the court said : “ I have virtually taken the Amherst street property from the jury already ; ” and further, “ The jury has nothing to consider in that respect.”

It seems very clear that none of the exceptions to rulings of the court in this connection point to any error to the prejudice of the plaintiff. It is apparent that the admission of the evidence on the subject of the Amherst street property was tentative, merely, the court remarking more than once, in substance, that the evidence objected to would be of no materiality unless it was followed up by further proofs; and when it became finally apparent that the evidence in question did not tend to establish any defense the whole subject to which it related was distinctly and wholly withdrawn from the attention of the jury. After this it would have been an idle ceremony to “ strike out ” the evidence relating to that subject.

We have examined the other exceptions to which our attention has been called, and find none which seem to require discussion.

The several issues litigated were presented to the jury by the court in a full and careful charge, and with instructions which seem to us to have been, in all respects, correct, and the verdict must be conclusive upon the questions of fact so submitted.

The judgment and order appealed from must be affirmed.

Macomber and Lewis, JJ., concur.


text:
    William H. Ordway, Resp’t, v. The Village of Canisteo, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed January 18, 1893.)

    1. Municipal corporations—Diversion op water-course.
    A municipal corporation which, as a riparian owner, by its wilful act, diverts the waters of a natural stream from its accustomed channel and causes them to flow upon the lands of an individual, is liable for the resulting damage.
    2. Same—Damages.
    In such a case, some acres of the lands of the individual being washed away, the measure of his damage is the previous value of such land.
    Appeal by the defendant from a judgment entered in Steuben county, December 2, 1892, on the report of a referee.

      Eli Soule, for app’lt;

      F. II. Robinson, for resp’t.
   Dwight, P. J.

The farm of the plaintiff adjoined the territory of the defendant on the east, and Bennett’s Creek formed the boundary of the latter on the south-east and south, and then flowed easterly through the former. It was a non-navigable stream, subject to high and sudden freshets in times of heavy" rains or melting snows, and at such times overflowed its banks at the points where they were lowest. In its normal state it flowed in a natural channel and between fairly well defined banks. In its flow past the village it made a bend nearly at a right angle around the point of a hill on the opposite side, and, as was natural, its waters, in the coarse of years, impinging upon the left bank at the apex of the bend, had caused the bank at that point to recede and widened the bend of the creek to nearly twice its width a short distance above. At this point, also, which was about eighty-five rods above the west line of the plaintiff’s farm, there had been, as the referee finds, for more than thirty years a natural depression in said left bank, extending down the creek from a distance of from twenty to twenty-five rods, over and through which depression the waters of the creek had, for all that time, been accustomed to flow in times of freshets, in no particular course or defined channel, but northerly, to the village and through its streets, doing more or less injury to the walks, streets and property of the village.

About the 1st of June, 1889, there was an extraordinary rise in the waters of the creek, from heavy and protracted rains, causing a general overflow of its banks, particularly at the line of depression above mentioned, so that the waters flowed through the streets of the village and did much damage therein. At that time the water also overflowed portions of the plaintiff’s farm, lying north of, and next to the creek, but, as the referee finds, did not cut or wash those lands and did little or no damage thereto, but rather, apparently, improved and enriched them by the deposit of soil and sediment from the water coming thereon.

In the fall, and previous to November 1 of the same year, 1889, the defendant constructed a line of piling, planked on the side toward the stream, conforming, generally, to the course of the left, or northerly bank, of the creek, but at such distance therefrom, toward the center of the channel, as to narrow the stream by about one-third of its width, for a distance of about forty-five rods, including its widest part, in.the bend of the stream and opposite the depression in its north bank above mentioned. At the widest point in the bend the structure of piling and planking was placed in the stream at a distance of more than one hundred feet from the north bank. This distance was gradually diminished as the stream grew narrower, until the structure was abruptly terminated, at a distance of about one hundred and fifty feet west from the plaintiff’s west line.

At about the same time, and previous to November, 1889, the defendant plowed up and loosened large bars of gravel which had formed years before in the bed of the stream, south of where the planking was placed, and left the gravel loose to be washed out and carried down the stream by subsequent floods, with the purpose of forming a new channel for the stream.

Throughout some portion of the structure thus erected in the bed of the stream, especially in the bend and in front of the depression in the bank above described, the piling and planking was made considerably higher than the natural banks, while as the structure approached the line of the plaintiff’s land it was cut down to or lower than the height of the natural bank.

In the month of November, 1889, and again in May, 1890, freshets occurred in Bennett’s creek, during which, as the referee finds, in substance, the waters were turned from their natural currents, piled up and confined by the structure above described, prevented from escaping at the points above the plaintiff’s land where they had been accustomed to overflow, accelerated in their current by the smooth surface of the planking, and, so changed in direction and increased in volume and velocity, were cast upon. the plaintiff’s farm, cutting away his banks, flowing with a swift current over his land, cutting holes and channels therein, carrying away the soil and depositing banks of gravel thereon. The referee finds that three acres of the plaintiff’s land was thus rendered practically worthless; estimates the previous value of the land at $150 an acre, and makes that estimate the measure of the damages to be awarded to the plaintiff.

There can be no question but that if the defendant had been a private person who had sought thus to protect his own laud at the expense of his adjoining riparian proprietor, he would have been liable for all the injury caused to the latter by reason of such acts on his part. The case would have been directly amenable to the maxim sic utere tua ut non, etc. It would have been in its essential features identical with the case of Hartshorn v. Chaddock, lately considered in this court and in the court of appeals, 40 St. Rep., 953; 47 id., 838. It is unnecessary to do more than refer to the opinions in the two courts in that case, and to the authorities cited therein, to sustain the general proposition stated by Judge O'Brien in the latter opinion, that “ irrespective of any question of negligence or malice a riparian owner who, by his wilful acts, diverts the waters of a natural stream from its accustomed channel and causes them to flow upon the lands of his neighbor, is liable for the resulting damage.” Citing McKee v. D. & H. C. Co., 125 N. Y., 353; 35 St. Rep., 12.

The same decision in both courts is also authority in favor of the rule of the measure of damages adopted by the referee in this case.

The only question remaining seems, therefore, to be whether the municipal character of the defendant, and the fact that the acts on its part complained of were done in the supposed exercise of its authority, conferred by law, to protect the public and private property within its corporate limits from damage by floods, takes the case out of the rule above stated.

It seems to us very clear that this case upon its facts is no exception to the general rule. It is clearly not within the principle of the cases of Radcliff v. The Mayor, 4 N. Y., 200; Ely v. Rochester, 26 Barb., 133, and Atwater v. Canandaigua, 56 Hun, 293; 30 St. Rep., 587; S. C. on appeal, 124 N. Y., 608; 37 St. Rep., 234. In these cases the work authorized or directed by law was special in its character and required to be done in a particular place and, within very narrow limits of discretion, in a particular manner, and the resulting damage was temporary and purely consequential. In this case the infringment of the plaintiff’s right, viz : to have the stream which flowed through his land continue to flow in its natural channel, direction and volume as it had been accustomed to flow, was direct and immediate, and the damage complained of was certain to result therefrom in a time of flood, and was permanent in its character. The case is, clearly, rather within the principles recognized in Noonan v. City of Albany, 79 N. Y., 470; Seifert v. City of Brooklyn, 101 id., 136; Byrnes v. City of Cohoes, 67 id., 204; N. Y. C. & H. R. R. R. Co., v. City of Rochester, 127 id., 591; 40 St. Rep., 193; Gould v. Same, 105 N. Y., 46; 6 St. Rep., 503.

Granting to the defendant full authority to take such action as might be necessary and proper to protect its property and that of its inhabitants from the floods, yet even here the principle applies that it is bound so to use its own as not to injure another’s, so to protect its own that the loss and damage which it averts from itself is not cast upon another.

There is, in truth, no principle upon which a municipal corporation can claim immunity from such liability as would attach to an individual for acts in disregard of the rights of others such as are portrayed in this case.

We find no error in the trial of the action or in its determination which should vitiate the judgment.

The judgment should be affirmed.

Judgment appealed from affirmed.

Macombeb and Lewis, JJ., concur.


text:
    John M. Dunn, App’lt, v. Thomas J. Whalen et al., Resp’ts.

      (Supreme Court, General Term, Fifth Department,

      Filed January 18, 1893.)

    Fraudulent conveyance—Trust.
    In an action by a judgment creditor to set aside a conveyance of real estate by the defendant T. to B., his mother, it appeared that the indebtedness out of which the judgment in favor of plaintiff arose was contracted by T. prior to November 10, 1888; that in 1884 one M. conveyed to T. the premises in question, the consideration therefor was paid by B., and the agreement between defendants was that T. should hold the title in trust . for B. and convey to her upon request, which was done November 10, 1888. The judgment against T. was obtained in 1890. Held, that the complaint was properly dismissed.
    Appeal from a judgment of the supreme court entered in Monroe county, upon a decision of the trial judge dismissing the plaintiff’s complaint. The action was brought by the plaintiff as a judgment creditor of Thomas J. Whalen, to set aside a conveyance of real estate in the city of Rochester by the defendant Thomas to his mother, Bridget Whalen, on the ground that the same was made with the intent to hinder, delay or defraud the creditors of Thomas J. Whalen.

      Frederick W. Smith, for app’lt;

      Wilbur S. Osborn, for resp’t
   Lewis, J.

In the month of September, 1887, the plaintiff and the defendant, Thomas J. Whalen, entered into a copartnership, upon the terms that each should contribute equally to the capital stock and share equally in the profits and losses. After carrying on business for a time, the firm was dissolved, and the plaintiff adjusted the liabilities of the firm, and thereby became a creditor of the defendant, Thomas, and on the 26th day of January, 1889, commenced an action against Thomas for an accounting, and on the 3d day of January, 1890, recovered a judgment against him for $192.34. Judgment was duly docketed in the clerk’s office of Monroe county, and an execution issued for the collection thereof, which was, on the 5th day of July, 1890, returned unsatisfied. The indebtedness out of which the judgment in favor of the plaintiff arose was contracted by the firm prior to November 10, 1888.

On the 30th day of December, 1884, one Michael Me Roden conveyed to the defendant, Thomas J. Whalen, by deed dated that day, the premises sought to be reached in this action. The consideration for the conveyance was paid by the defendant Bridget Whalen. The conveyance was made subject to, and with the verbal understanding and agreement between said defendants that Thomas should hold title to said premises in trust for the defendant Bridget Whalen, and should convey said premises to her at any time when she might request him so to do.

On the 10th day of November, 1888, at the request of Bridget Whalen, Thomas executed and delivered to her a deed of the premises described in the complaint. Mrs. Whalen was in possession of the property, paying taxes and repairs thereon, during all the time the title was held by Thomas. Bridget paid no consideration to Thomas for this conveyance.

The trial justice found, upon evidence sustaining the findings, that this conveyance to Bridget was made by Thomas in good faith, and in pursuance of the agreement thei’etofore made, and under which Thomas held the title; that the conveyance was not made by Thomas for the purpose or with the intent of cheating or defrauding his creditors, or the plaintiff in this action ; and that the conveyance was not received nor accepted by Bridget for the purpose, or with the intent of aiding or assisting Thomas 'to cheat or defraud his creditors.

It is true, as is claimed by the plaintiff’s counsel, that there was no valid or legal trust which could have been enforced by Bridget Whalen. The conveyance by McRoden to Thomas vested in him the fee to the land, and no trust resulted in favor of Bridget because of the fact that she paid the consideration for the conveyance; and had the title remained in Thomas until the recovery of the judgment by the plaintiff, it would have been a valid lien upon the property. The plaintiff, however, had acquired no lien upon the property prior to its conveyance by Thomas to his mother.

The evidence tended to show that at the time of the conveyance of the property to Thomas, Mrs. Whalen was threatened with litigation, and, upon the advice of her counsel, she had the title taken by Thomas. At the time of the conveyance by Thomas her affairs had been adjusted, and the conveyance was made at her request. In conveying the property to his mother, Thomas discharged an equitable obligation that he was under to convey the property, and until the plaintiff acquired a lien u]3on the land by the docketing of his judgment, he had no legal or equitable claim upon it superior to that of Mrs. Whalen.

The case of Davis v. Graves, 29 Barb., 480, is in all of its essential features like the case at bar; and is an authority to sustain the judgment in this case. The doctrine of the case of Davis v. Graves has not been disturbed, but is approved in Holden v. Burnham, 2 Hun, 678.

This case was affirmed in 63 N. Y., 74.

It was also approved in Brooks v. Wilson, 53 Hun, 173; Ocean National Bank v. Hodges, 9 Hun, 161; Wait on Fraudulent Conveyances, § 176, and in 2 Bigelow on Fraudulent Conveyances, 123, 430 and 431.

The case was properly disposed of by the trial justice, and the judgment appealed from should be affirmed, with costs.

Dwight, P. J., and Macomber, J., concur.


text:
    Sophronia King, Resp’t, v. The New York, Lake Erie & Western Railroad Co., App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed January 18, 1893.)

    Appeal—Vebdict.
    Where the question was clearly one for the jury, the evidence conflicting and no exception taken to the charge, the verdict cannot be disturbed.
    Appeal from a judgment in favor of the plaintiff, entered on the verdict of a jury at the Cattaraugus circuit, and from an order denying the defendant’s motion for a new trial on the minutes of the court.

      J. H Stevens, for app’lt;

      T. H Dowd, for resp’t.
   Dwight, P. J.

The plaintiff received the injury of which she complains in her attempt to leave a train of the defendant upon its arrival at the station for which she had taken passage. The name of her station was called by a brakeman who went through the car from rear to front, while the train was slowing down; then the train stopped, the plaintiff rose from her seat, some three or four seats back from the front of the car, and went forward to the front door, and as she was in the act of stepping out of the door the car made a sudden lurch backward and she was thrown forward, face downward, onto the platform of the car. This is the plaintiff’s narrative of the occurrence, and it is corroborated in its material particulars by another witness, a lady who was riding in the same car, who testified that she did not leave her seat until after the car had stopped; that she followed the plaintiff to the door, and that it was after she, the witness, had reached the door that the lurch or jerk came and the plaintiff was thrown down.

This witness testified that the sudden movement of the car was first forward and then backward, quite severe, an unusual movement such as she had never observed before. This, with evidence of the nature and extent of the injury received, was the plaintiff’s case. It was met by the testimony of the conductor, the engineer and the brakeman of the train, all of whom testify that there was no starting up of the train, or second stop, after. it once came to a stand-still on the occasion in question, and that of two passengers in the same car with the plaintiff, who observed only one stop of the train and nothing unusual about that. The conductor knew nothing of the accident until the train reached the next stopping place. The engineer testifies that after the train stopped once it was not moved again, either backward or forward, until it moved away from the station ; that the Westinghouse air brakes were in use on the cars of this train, that they were in perfect order, and applied in the usual manner; and he testified that in the proper application of those brakes the train is brought gradually to a stop, without jerk or shock, and that there is no motion whatever of the train when the air brakes are released. The brakeman was the only witness who professed to have seen the plaintiff fall, and he says she fell out of the door, on all fours, at the moment the train stopped, and that the train stopped but once and made no motion after it stopped.

The case is thus shown to present but a single question, and that one of fact, viz: whether the plaintiff left her seat,"reached the door and was passing out of the door before the train came to a stop, and was thrown down by the unavoidable reaction which occurs at the moment of stopping; or whether she kept her seat until the train had come to a full stop, then passed to the door while the train was stationary and was thrown down by a sudden lurch or motion of the car as she was passing through the door. Whatever we may be inclined to believe from the,evidence here, and our own observation of the stopping and starting of trains and the operation of air brakes, we are concluded by the verdict of the jury in this case. The question was clearly one for the jury; the evidence was conflicting, and the jury was the judge of • its weight and credibility. The question was very clearly presented to the jury by the court in a charge to which no exception was taken, and the verdict cannot be disturbed.

The judgment and order appealed from must be affirmed.

Macomber and Lewis, JJ., concur.


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    Charles A. Phillips et al., Resp’ts, v. George L. Mason et al., App’lts.

      (Supreme Court, General Term, Fifth Department,

      Filed January 18, 1893.)

    Stock—Sale—Agreement to repurchase.
    The action was brought to recover back money paid by plaintiffs to defendants under a written agreement whereby defendants agreed that plaintiffs should not be called upon for a second payment on certain shares of stock, and that they would buy back such shares of plaintiffs “ at any time at the price paid and one per cent a month added, provided they wish to sell.” Plaintiffs tendered the stock to defendants and demanded the price paid with the one per cent, which was refused. On the trial defendants set up usury. Plaintiffs put in evidence the agreement, testified to the payment for and delivery of the stock, and the subsequent demand, and rested; defendants gave no testimony, but moved for a nonsuit. Held, that the court properly directed a verdict for plaintiffs.
    Appeal by the defendants from a judgment entered on the verdict of a jury in favor of the plaintiffs, rendered at the Monroe circuit by direction of the court.

      A. Becker, for app’lts;

      G. C. Werner, for resp’ts.
   Dwight, P. J.

The action was to recover back money paid by the plaintiffs to the defendants under an agreement in writing, of which the following is a copy:

“ Rochester, R Y., Feb'y 27, 1891.

“ We hereby agree that Charles A. and Edward A. Phillips will not be called upon for second and third payments on share Rx —•, in the Empire Ratural Gas Land Association of Buffalo, R. Y. We also further agree to buy back share R). —, Empire R G. L. Ass’n, at any time,' at the price paid for the same, and one per cent a month added, provided, they wish to sell the same.

“ (Signed) Mason, Wiley & Butler.”

The agreement was delivered, with a certificate of stock answering the description therein, by the defendants to the plaintiffs, on the day of its date. The stock was paid for by the plaintiffs with the note of a third person, which was afterwards discounted by the plaintiffs themselves; and at the expiration of nine months the plaintiffs tendered to the defendants a return of the stock certificate and demanded “ the price paid for the same and one per cent a month added.”

It must be said that this transaction strongly suggests a device to cover usury, so that we are not surprised to find the defense of usury interposed in the action brought by the plaintiffs to enforce the agreement above set forth; but we do not find that defense established by the proofs.

On the trial the plaintiffs put in evidence the agreement; testified to the payment for and delivery of the stock certificate, and to the subsequent demand by them upon the defendants for the repayment of the price with the increase of one per cent a month,| and the refusal of such demand, and rested. The defendants gave no testimony, but their counsel moved for a nonsuit and counsel for the plaintiffs moved for the direction of a verdict. There was no request on the part of either to submit any question to the jury. This devolved upon the court the duty of deciding every question of fact as well as of law which might exist in the case. Dillon v. Cockcroft, 90 N. Y., 649.

The only question, whether of law or fact, in the case was whether the agreement on which the action was brought was a contract for the loan and borrowing of money at a usurious rate of interest. It was, undoubtedly, a contract which, at the option of the plaintiffs, would have the effect of a loan of money, insomuch that the money paid for the stock might be recovered by the plaintiffs, and the payment of the money was a sufficient consideration for the agreement to repay it. Eno v. Woodworth, 4 N. Y., 249. And it may be that it was the understanding of the parties, at the time the agreement was made, that this option would be exercised, and that the transaction was, thus, a mere device to cover the exaction and allowance of usury. But there is no evidence to that effect outside of the agreement itself. By the terms of the agreement, to which in the absence of evidence to the contrary full effect must be given, it was a sale of the stock, with the privilege to the plaintiffs to have their money back, with the increase stipulated, at any time when they should desire to resell. It was capable of being construed as in the nature of a guaranty, on the part of the defendants, that the stock would appreciate in value at the rate of at least one per cent a month during the time it should be held by the plaintiffs. Under the agreement the plaintiffs obtained full' title to the stock, and might dispose of it as they saw ñt; so that if the market price increased beyond the rate mentioned they were at liberty to sell it for the better price.

Certainly it cannot be said, as matter of law, that the agreement was, in its inception, a contract for the loan of money, nor that the increase agreed to be paid by the defendants, at the option of the plaintiffs, was interest reserved, or compensation for the loan.

If evidence had been given by the defendants tending to show that the negotiation between the parties was, in the outset, to effect a loan of money, and that the scheme for a sale and resale of stock was suggested as a mode of accomplishing that purpose, there would then, no doubt, have been a question for the jury or the court whether the scheme was not a device to cover usury. In the absence of any evidence to that effect, and on the face of the agreement itself, no case was made for the submission of that question to either tribunal. The direction of a verdict was properly given, and the judgment and order must be affirmed.

Judgment and order appealed from affirmed.

Macomber and Lewis, JJ., concur.


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    Margaret Mills, Ex’rx, Resp’t, v. M. Dwight Munger et al., App’lts.

      (Supreme Court, General Term, Fifth Department,

      Filed January 18, 1893.)

    Trespass—Forcible ejection.
    While an owner of premises has a right to obtain, if he can, peaceable possession thereof, and would not be liable in an action of trespass for so doing, he has no right to forcibly eject the wife of the former owner, or her furniture therefrom, and is liable to her for so doing for such damages as she sustained.
    Appeal from a judgment entered in Ontario county clerk’s office and from an order denying a motion for a new trial made upon the minutes of the court.

      Spencer Gooding, for resp’t;

      John Gillette, for app’Its.
   Lewis, J.

This action was brought to recover damages sustained by the plaintiff’s testator for injuries to her person by being forcibly ejected from a dwelling house and farm upon which the testator was at the time residing, and also for injuries to her household furniture by its removal from her dwelling house, and its exposure to the elements. She also sought to recover the value of the crops growing upon the farm, which she claimed were converted by the defendants. After recovery of the verdict, Mrs. Martin died, and the plaintiff was substituted as plaintiff. Mrs. Martin was residing with her husband, Ira E. Martin, upon the farm. The appellant, Munger, was the owner of a judgment against Mr. Martin, and he instituted proceedings supplementary to execution upon the judgment, and procured the appointment of a receiver, and obtained an order from the county judge of Ontario county in such proceedings, directing the said Ira E. Martin to deliver possession of the farm to said receiver. Martin had theretofore conveyed his title and all interest in the farm. At the time of the removal of Mrs. Martin, the title of the farm was held by the defendant, Munger. The defendant, Wheeler, as sheriff of the county, by virtue of the said order, forcibly removed Mrs. Martin and a quantity of her furniture from the premises. The defendant Munger assisted in such removal.

The order under which the defendants assumed to act in removing Mrs. Martin and her furniture was held by this court to be void in the action of the First National Bank v. Martin, 49 Hun, 571; 18 St. Rep., 414.

The jury found a verdict for the plaintiff against-both defendants for $835, and, under the instruction of the court, itemized their verdict. They found that the damage to plaintiff’s personal effects, by the removal, was $218.40, and that the injuries to plaintiff’s person were $125.

They further found that the value of the interest of plaintiff in the crops was $491.60. By order of the trial court, and by the stipulation of the plaintiff’s counsel, the item of $491.60, the value of the crops, was deducted from the verdict, and judgment was entered for damages, $343.40, being for the amount of the first two items. While Munger had the right, as owner of the premises, to obtain, if he could, peaceable possession thereof, and would not be liable in an action of trespass for so doing, he had no right to forcibly eject the plaintiff or her furniture therefrom,' and the defendants were liable for so doing for such damages as the testator sustained. The plaintiff’s testimony tended to show that she was forcibly ejected from the house, that she was, at the time, in feeble health, that she was exposed to the elements, and caught cold, and was, in consequence, made sick. The testimony on the part of the plaintiff as to the damages to her household furniture -was mainly given by herself. She testified that the furniture was taken out of the house and roughly thrown upon the ground ; that much of it was broken by the removal, that it was allowed to remain outdoors through the night, that it rained during the night, and that her bedding and furniture were wet and injured. She was permitted, without objection, to give her estimate of the extent of the damage to the furniture. Her testimony tended to show that the injuries to the furniture exceeded the amount the jury found as damages. Her testimony was corroborated by other witnesses. A large number of witnesses called by the defendants controverted the plaintiff’s evidence as to her being forcibly ejected from the house and as to the furniture sustaining injuries. The evidence presented questions of fact for the decision of the jury, and their verdict should not be disturbed on the ground that the damages were excessive.

It appears from the itemized verdict that no exemplary damages were allowed by the jury. The direction of the court to the jury to itemize their verdict was proper, even if objected to, and as no objection was made, it is too late now to raise the question.

The weight of the evidence tends to 'show that Mrs. Martin gave an exaggerated estimate of the damages to her furniture. The jury so concluded, for the verdict was not for as large an amount of damages as her testimony tended to show she had sustained.

We find no reason justifying a reversal of the judgment and order appealed from.

Judgment and order appealed from affirmed.

Dwight, P. J., and Macomber, J., concur.


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    George F. Perkins et al., Pl'ffs, v. David O. Batterson, Receiver, Def't.

      (Supreme Court, General Term, Fifth Department,

      Filed January 18, 1893.)

    Chattel mortgage—Title to proceeds of mortgaged goods.
    A pulp and paper company, being indebted to plaintiffs in a large sum, gave to them a chattel mortgage to secure the payment thereof, on demand, as well as for further advances; the mortgage, by its terms, covered all the straw pulp manufactured, or in process of manufacture, in the company’s mills, and all thereafter to be manufactured or on hand; it provided that, in case of default, plaintiffs might enter the premises and take the property; this they did, giving notice thereof to the company’s officers, and leaving a man in charge until he was forcibly removed by the company. The following day a receiver of the company was appointed in an action brought for its dissolution, and he took possession of and sold the pulp in question. Held, that plaintiffs'were entitled to the entire fund arising from the sale of the pulp, it not equalling the amount of their debt.
    Submission of á controversy without action, under § 1279 of the Code of Civil Procedure.

      G. D. Ridgway, for pl’fiis;

      J. S. Hunn, for def’t.
   Dwight, P. J.

The plaintiffs are chattel mortgagees, and the defendant is the receiver of the “Whiteman Pulp & Paper Company,’’ a domestic corporation, lately doing business at Da'nsville, in Livingston county; and the controversy relates to a fund in the hands of the defendant, arising from the sale by him, under an order of the court, of a quantity of gulp made by the company, and which was in the mill at the time the defendant took possession. The plaintiffs claim the fund by virtue of their chattel mortgage, upon the following facts:

On the 13th of October, 1891, the company was indebted to the plaintiffs in the sum of $18,500, for borrowed money, used in its business, and on that day gave to the plaintiffs its chattel mortgage to secure the payment of that sum, on demand, as well as any further advances to be made, not exceeding $20,000 in all. The mortgage, by its terms, covered all the straw pulp manufactured and in process of manufacture at the company’s mills, and all the manufactured straw on hand, and also all the straw pulp thereafter to be manufactured, or in process of manufacture, at said mills, and all the manufactured straw thereafter to be on hand. •

The mortgage provided that in case of default the plaintiffs might enter the premises and take and sell the mortgaged prop-. erty and out of the proceeds pay themselves the amount due, etc.

On the 19th day of January, 1892, the indebtedness of the company to the plaintiffs had been increased, by advances made subsequent to the date of the mortgage, to the sum of $22,000, and upwards, all of which was due on demand. On that day the plaintiffs made demand of payment, which was refused, and they, thereupon, by virtue of their chattel mortgage, took possession of all the mortgaged property outside of the mill. They also, on the same day, went into the mill and made an inventory of the pulp manufactured and in process of manufacture therein, and gave notice to the superintendent and the secretary of the company that they took possession of it under their mortgage. On the next day, January 20th, they again entered the mill and put a keeper in charge of the pulp manufactured and in the process of manufacture, and again notified the superintendent that they took possession of the pulp under the mortgage. The superintendent denied their right to take the property and ordered them to quit the premises; they refused to do so, and retained the keeper in charge of the pulp until in the afternoon of that day he was forcibly removed from such charge and from the premises by the officers and servants of the company.

On the same day that the plaintiffs took possession of the pulp (January 20fch), Alonzo J. Whiteman, president of the company, verified the complaint in an action to be brought by himself as plaintiff, against the company as sole defendant, alleging its insolvency and praying for its dissolution; and on the next day (January 21st), he made application to the supreme court at special term on that complaint and his affidavit, for the appointment of a receiver. On his application the company itself, and certain creditors other than the plaintiff in this action, were represented, and on their consent the order was made appointing the defendant, herein, such receiver. He took possession of the pulp in question after the plaintiff’s keeper had been forcibly ejected from the mill. The plaintiffs thereupon gave him notice that they had taken possession of the pulp under their mortgage, and procured an order for the receiver to show cause at the next special term of the court why he should not deliver the pulp to them. On the return of the order to show cause the court made an order by which the receiver was directed to sell all the pulp manufactured and in process of manufacture in said mill, and hold the proceeds of such sale, separate from all other moneys coming into his hands as such receiver, subject to the further order of the court.

Pursuant to that order the receiver sold the pulp, realized as the net proceeds thereof the sum of $2,393.42, which he holds subject to the order of the court, and this submission was agreed upon to obtain an adjudication by the court of the question of the title to the property and, therefore, to the fund.

In addition to the facts above stated, the following are among those agreed upon for the purposes of the submission :

“ That a small portion of the straw, out of which the pulp covered by said order was made, was straw purchased by the said company and stored by it upon its premises after the execution and filing of said chattel mortgage, and was paid for by the said company in its regular course of business; that the amount of the said straw was about one-sixth of the amount of straw used in the manufacture of the said pulp; the remainder of the straw used was straw which was covered by the chattel mortgage.”

That the value of said pulp, as manufactured, was represented by about one-third straw, and, the remainder by chemicals and labor sold and furnished to said company after the execution and filing of said chattel mortgage, and which have not been paid for, and there are now no funds in the receiver’s hands applicable to the payment of said chemicals or labor. That said pulp, as manufactured, was composed of the straw used, none of the said chemicals used remaining as constituent parts thereof.

Upon the foregoing statement we can have no doubt that the plaintiffs’ contention must prevail to the full extent. Though the mortgage, as such, and as to third persons whose rights might-have intervened, could not be upheld as to that portion of the pulp which was in any sense “ after acquired property,” Coats v. Donnell, 94 N. Y., 177, yet, as between the 'parties to the mortgage, that instrument was to be construed as a contract to give a lien upon straw to be thereafter purchased, and upon the pulp to be made therefrom, which took effect as soon as the property of either kind came into the ownership of the mortgagor. Kribbs v. Alford, 120 N. Y., 519; 31 St. Rep., 564; Deeley v. Dwight, 132 N. Y., 59; 43 St. Rep., 409. This contract was without suggestion of fraud, and was given as security for an actually existing indebtedness to an amount greatly in excess of the total value of the property then or thereafter to be covered thereby.

But it is not by virtue of the lien, merely, created or to take effect under the provisions of the contract, that the plaintiffs claim the fund in question. The contract, besides its provisions for a lien, gave to the plaintiffs the right to take possession of all the pulp, manufactured or in process of manufacture, at any time in possession of the debtor company, for the purpose of applying it to the payment of the debt; and this they did, in all respects in accordance with the contract, before any rights of the defendant had intervened. They were in possession of the pulp under their contract, and entitled to sell it for the payment of their debt, before any steps, even, were taken for the appointment of a receiver. It was no longer, therefore, a question of lien, but of title to property actually vested in the plaintiffs, and there was nothing in the appointment of the receiver which could operate to divest that title. By his appointment he became vested with title only to such property as was then in the company, and he took no interest in or control over the property which had been actually reduced to possession by the plaintiffs under their unquestioned contract with their debtor. The wrongful act of the latter in forcibly ejecting the custodian of the plaintiffs from the mill could have no effect to divest them of their absolute title which they had acquired by taking possession under their contract.

We are clearly of the opinion that the plaintiffs are entitled, under the submission, to judgment for the whole of the fund arising from the sale of the pulp.

Judgment ordered for the plaintiffs, on the submission, for the fund in question.

Macomber and Lewis, JJ., concur.