author: Smith, J.: Talcott, J.

text:
    CHRISTINA WENTE, Respondent, v. MARY YOUNG and PETER YOUNG, Appellants.

      Actions by — in banJcruptcy — jurisdiction of State courts in.

    Section 2 of chapter 178 of the acts of Congress of 1874, providing “■ that the court having charge of the estate of any bankrupt may direct that any of the legal assets or debts of the bankrupt, as contradistinguished from equitable demands, shall, when such debt does not exceed $500, be collected in the courts of the State where such bankrupt resides, having jurisdiction of claims of such nature and amount,” simply permits the federal courts to decline to entertain actions brought to recover legal assets not exceeding that amount, and does not in any way limit or take away the jurisdiction of the State courts. (Talcott, J., dissenting.)
    Section 711 of the United States Revised Statutes, which provides that the jurisdiction of' the United States courts in “ all matters and proceedings in bankruptcy ” shall be exclusive of the courts of the several States, does not extend to actions by assignees in bankruptcy to collect the assets of the bankrupt (Talcott, J., dissenting.)

      Under tlie provision of tlie Devised Statutes of tlie United States, as amended by said act of 1874, tlie State courts have concurrent jurisdiction with tbe federal courts over all actions brought by an assignee to collect the assets of the bankrupt, whether legal or equitable, and without regard to the amount thereof. (Talcott, J., dissenting.)

      Goodrich v. Wilson (119 Mass., 439) followed.

      Frost v. Hotchkiss (1 Abb. N. 0., 37) and Olcott v. Maclean (10 Hun, 377) not followed.
    Appeal from a judgment in favor of the plaintiff, entered upon the report of a referee.
    This is an action in the nature of a creditor’s bill, to set aside a conveyance of real estate alleged, to be fraudulent as against the creditors of the grantor. The plaintiff is the owner of a judgment against the grantor, for seventy-seven dollars damages, and costs, recovered 12th January, 1875, in a court of a justice of the peace, by Henry E. Warne, as assignee in bankruptcy of one Clemenz Wente, and assigned by Warne to the plaintiff. Warne was appointed assignee of the bankrupt by an order of the District Court of the United States for the northern district of New York, 7th October, 187J. No order was made by the District Court directing the assignee to bring such action in a State court. This cause was tried by a referee and the plaintiff recovered a judgment for the relief demanded in her complaint.

      Sunt da Werner, for the appellants.

      Wilkin da Stone, for the respondent.
   Smith, J.:

The several members of the court concur in the opinion that this case should be affirmed, unless it is to be held that the judgment recovered in the Justice’s Court is void, by reason of want of jurisdiction in the State courts to entertain a suit brought by an assignee in bankruptcy to recover assets belonging to the bankrupt’s estate, A majority of the court are of the opinion that the Justice’s Court had jurisdiction to render the judgment.

Whatever power congress may possess, under the Constitution of the United States, to confer upon the federal courts exclusive jurisdiction of matters in bankruptcy, and whatever actions and proceeding snob, matters may include, it is well settled that prior to the adoption of the Code, known as “ The Revised Statutes of the United States,” which was approved on the 22d of June, 1874, the courts of’ the several States had jurisdiction to entertain actions brought by assignees appointed by the federal courts in bankruptcy, to collect assets belonging to the estates of their bankrupts. (Cook v. Whipple, 55 N. Y., 150; Eyster v. Gaff and others, 91 U. S. R., 521.)

It is insisted by the appellant’s counsel that certain provisions of the Revised Statutes have the effect to divest the State courts of their jurisdiction to entertain actions of that description. It is not claimed that the revision contains any express enactment to that effect, but that the result contended for is necessarily to be implied from certain provisions contained in the statutes as revised. Section 711, which is most relied on, provides that “ the jurisdiction vested in the courts of the United States, in the cases and proceedings thereinafter mentioned, shall be exclusive of the courts of the several States; ” and it then proceeds to enumerate eight classes of cases to which its provisions apply, the sixth of which is, “ all matters and proceedings in bankruptcy.” That section does not aid the aj^pellant, unless the words, all matters and proceedings in bankruptcy,” as used therein, were intended to include actions brought by assignees, to collect the assets of bankrupts. We do not think that was the intention. On the contrary, we regard the section as merely declaratory of the law as it had been laid down by the courts, State and federal, and as it existed at the time of the revision. Prior to, and at that time, the federal courts had exclusive jurisdiction in each of the eight classes of cases mentioned in section 711, including matters and proceedings in bankruptcy, strictly so called; but actions by assignees to collect the assets of the bankrupt were not included in that category, but were regarded as ancillary to, and in aid of, the proceedings in bankruptcy, and in respect to them the State courts and the Federal courts had concurrent jurisdiction.

But it is contended that section 4972 of the revision defines the term, “ all matters and proceedings in bankruptcy,” as used in section 711. We do not so understand it. That section is not new. It is almost a literal transcript of section 1 of the act of 1867 (chapter 176), ruder which the concurrent jurisdiction of the State and federal courts was judicially recognized and affirmed. The section does not profess to define the meaning of the words in question. It declares to what cases the jurisdiction conferred upon the district courts, as courts of bankruptcy, shall extend, including, among others, “ the collection of all the assets of the bankrupt,” but it does not declare that in all cases to which the jurisdiction is so extended it shall be exclusive. That the provision of the section relating to the collection of assets was designed to extend the jurisdiction of district courts to eases not strictly embraced within the words, “ all matters and proceedings in bankruptcy,” is reasonably to be inferred, not only from the language of the section itself, but also from the consideration that, unless so designed, the provision was wholly unnecessary, for, by a previous section (section 503, subd. 18), the district courts were vested with original jurisdiction in all matters and proceedings in bankruptcy,” in their respective districts. Section 4972 includes not only matters of which the district courts, as courts of bankruptcy theretofore had exclusive jurisdiction, but also those in respect to which a concurrent jurisdiction was possessed by the State courts. Except for its provisions giving the district courts jurisdiction to collect the assets of the bankrupt, and to determine controversies between the bankrupt and his creditors, it may well be doubted whether the district courts would have had jurisdiction of an action by the assignee to collect a debt due to the bankrupt, when both parties were citizens of the same State ; as was said by Grover, J., in Whipple v. Cook (supra), of the similar provisions in the act of 1867. We find nothing in the language of the Revised Statutes which, in our judgment, warrants the conclusion that they were intended to take away or impair the jurisdiction of the State courts, in actions of the nature above stated, as it existed at the time of their adoption.

The appellant also relies on the act of 1874 (page 178, § 2) which amended section 1 of the act of 1867, by adding to it the following words: “ Provided, that the court having charge of the estate of any bankrupt may direct that any of the legal assets or debts of the bankrupt, as contradistinguished from equitable demands, shall, when such debt does not exceed $500, be collected in the courts of the State where such bankrupt resides, having jurisdiction of claims of such nature and amount.” The only effect of that amendment, as we read it, is to permit the federal courts to decline to entertain actions brought to recover legal assets of a bankrupt, not exceeding $500 in amount. It does not limit or take away the jurisdiction of the State courts, but it authorizes the federal courts, in their discretion, to relieve themselves of a class of cases which, it may be supposed, can be more conveniently disposed of in the State courts. Subject to the authority thus conferred, the concurrent jurisdiction of the federal and State courts over all actions brought by an assignee to collect the assets of the bankrupt, whether legal or equitable, and of whatever amount, remains as it was before the amendment. The amendment and the [Revised Statutes were passed at the same session, and were approved on the same day, and they are tobe read together, so far as they are in pari materia. It seems, to us their obvious meaning is, that the federal courts have exclusive jurisdiction of all matters and proceedings strictly in bankruptcy; that they have concurrent jurisdiction with the State courts of actions which are plenary or ancillary to the proceedings in bankruptcy, among which are actions by assignees to collect the assets of their bankrupts; and that as to such actions, they may, in their discretion, direct them to be brought in the State courts, when the subject of the action is of a legal nature, and does not exceed $500 in amount.

If congress has power, under the Constitution, to divest the State courts of them jurisdiction over a class of ordinary common-law actions, by reason of the fact that one of the parties has, or claims, title to the subject-matter of the action, through an adjudication in bankruptcy (a point which it is not necessary to consider in this case), it is but reasonable to expect that the intent to exercise the power will be expressed in direct and unambiguous language, and will not be left to doubtful construction.

Wc have not overlooked the decisions of our brethren in the first and second departments, in the eases of Frost v. Hotchkiss (1 Abb. N. Cas., 27) and Olcott v. Maclean (10 Hun, 277), holding that the State courts have not jurisdiction in actions of this nature.

In Frost v. Hotchkiss no reasons are given for the decision, except that an opinion is expressed that the jurisdiction was taken away by the United States [Revised Statutes ; while in Olcott v. Maclean, the conclusion of the learned judge who wrote the opinion is based entirely upon the effect of the amendment of 1874. They .are the only cases in this State of which we are informed, in which the question has been passed upon. As they appear to have proceeded upon different grounds, we have felt it our duty, in consideration of the importance of the question, to treat it as res nova. The views we entertain are in accordance with those of the Supreme Court of Massachusetts, in the case of Goodrich v. Wilson (119 Mass., 429). The judgment should be affirmed.

Mullin, P. J., concurred.

Talcott, J.

(dissenting):

This action is in the nature of a creditor’s bill to set aside a conveyance of real estate in the city of Syracuse, made by the defendant, Peter Young, to his wife, Mary Young, on the ground that it was made to hinder, delay and defraud the creditors of said Peter. The referee has reported in favor of the plaintiff holding the conveyance invalid for the causes assigned in the complaint. I am of the opinion that the plaintiff occupies no such position as enables her to attack the conveyance as a fraud on creditors.

The plaintiff claims the right to impeach the conveyance by reason of the following circumstances: On the 7th of October, 1874, Henry E. Warner was appointed the assignee in bankruptcy of one Clemenz Wente, by an order of the District Court of the United States for the Northern District of New York, and as such assignee he afterwards recovered a judgment in a Court of the Justice of ‘the Peace of Onondaga county, against the defendant Peter Young, for an indebtedness due to the estate of Wente, the bankrupt. A transcript of said judgment was filed in the office of the clerk of Onondaga county, and an execution issued thereon which was returned wholly unsatisfied. The judgment was subsequently assigned to the plaintiff in this action, and upon the judgment and return of nulla bona, the plaintiff bases her claim to institute this action to set aside the conveyance mentioned in the complaint as a fraud upon creditors.

The answer, among other things, denies the jurisdiction of the justice to render the judgment in question. On the trial it was admitted, and is found by the referee, that no order was made by the District Court of the United States, having charge of the proceed’ ings in bankruptcy, whereby the assignee in bankruptcy was permitted to bring the action in which the said judgment was obtained in a State court. It is well settled that a creditor at large, without a specific lien, cannot impeach a conveyance of real estate as fraudulent as against creditors. The question is, therefore, fully presented, whether the assignee in bankruptcy, suing as such, to recover the assets of the bankrupt, could bring action in the Justice’s Court of the State without leave of the District Court of the United States, and whether in such a case the Justice’s Court had jurisdiction of the subject-matter, or whether the judgment rendered by him is not wholly void for want of jurisdiction.

It does not appear whether the judgment recovered was rendered on default, or whether the defendant in that suit appeared and answered, but however this fact may have been, it could probably make no difference in regard to the question of jurisdiction, since consent cannot confer jurisdiction upon a State court to entertain an action in relation to a subject-matter, as to which jurisdiction is vested exclusively in the courts of the United States. (Dudley v. Mayhew, 3 Comst., 9.) By section 711 of the Bevised Statutes of the United States in force from the 1st of December, 1813 (see § 5595), and when the assignee in bankruptcy was appointed, it is provided that “the jurisdiction vested in the courts of the United States in the cases and proceedings hereinafter mentioned, shall be exclusive of the courts of the several States.” Subdivision 6 of the same section specifies as among those cases and proceedings “ all matters and proceedings in bankruptcy.”

The expression “ all matters and proceedings in bankruptcy ” is somewhat vague and indefinite, and might be supposed to refer only to the proceedings provided by the bankrupt law, touching the commencement and conduct of proceedings, for the purpose of having a party declared a bankrupt, appointing an assignee, notifying creditors and the like, which are generally characterized as the practice in bankruptcy cases. Though an enactment confining the jurisdiction in such cases exclusively to the courts of the United States would seem to be wholly unnecessary and inoperative, since the power to institute those proceedings is created by the bankrupt law of congress, and the powers conferred thereby in regard to fclio proceedings, are confered wholly upon the District Courts of the United States.

It is intimated in Cook v. Whipple (55 N. Y., 150, op., p. 161), that the language giving to the District Courts of the United States, jurisdiction of all matters and proceedings in bankruptcy has relation only to the proceedings adjudging one a bankrupt, vesting the title to his property in an assignee, etc. The case of Cook v. Whipple arose before the passage of the United States Revised Statutes, and the question then was, whether the State courts were deprived of their original jurisdiction in matters of law and equity by the provisions of the bankrupt law as originally passed in 1867, which contained no words of exclusion. And it was held that the State courts were not deprived of such jurisdiction because the act of congress contained no language conferring exclusive jurisdiction upon the courts of the United States.

But the Supreme Court of the United States seems to have taken a different view of the meaning of the expression, “ all matters and proceedings in bankruptcy,” from that which was suggested in Cook v. Whipple in the case of Lathrop Assignee, etc., v. Drake et al. (1 Otto, 516). The original bankrupt act (14 U. S. Stat. at Large, 517), by the first section, conferred upon the District Court jurisdiction of “ all matters and proceedings in bankruptcy,” and then, in the latter part of the same section, went on to specify the matters of which the said court should have jurisdiction, as follows: “And the jurisdiction hereby conferred shall extend to all cases and controversies arising between the bankrupt and any creditor or creditors who shall claim any debt or demand under the bankruptcy; to the collection of all the assets of the bankrupt; to ascertainment and liquidation of the liens or other specific claims thereon,” etc., substantially as now specified in section 4972 of the Revised Statutes. The act of 1867, it is seen, speaks of the jurisdiction thereby conferred, obviously referring to the jurisdiction conferred by the words “all matters and proceedings in bankruptcy” in the same action. The case of Lathrop v. Drake (supra,) involved the question whether, under the act of 1867, the District and Circuit Courts had jurisdiction in suits brought by assignees appointed in other districts. Bradlky, L, delivering the opinion of the court, speaking of this jurisdiction of the District Court conferred by the words “ all matters and proceedings in bankruptcy ” says, “ of this ” jurisdiction of the "District Courts “there are two distinct classes. First, jurisdiction as a Court of Bankruptcy over the proceedings in bankruptcy initiated by the petition and ending in the distribution of assets among the creditors, and the discharge or refusal of a discharge of the bankrupt. Secondly, jurisdiction as an ordinary court, of suits at law or in equity brought by or against the assignee in reference to alleged property of the bankrupt, or to claims alleged to be due from or to him. The language conferring this jurisdiction of the District Courts is very broad and general. It is that they shall have original jurisdiction in their respective districts in all matters and proceedings in ba/nkrvptcy. The various branches of this jurisdiction are afterwards specified, resulting, however, in the two general classes before mentioned.”

From this, I understand that the Supreme Court of the United States intends to hold, that the entire jurisdiction more particularly specified in the subsequent part of section 1 of the act of 1867, and which is now specified in section 4972 of the Bevised Statutes, was in fact embraced and included in the expression, “ all matters and proceedings in bankruptcy.” That these latter are the “ broad and general ” terms by which the jurisdiction was conferred which was afterwards more particularly described — thus putting a more enlarged construction upon the expression “ all matters and proceedings in bankruptcy,” than that suggested by Grover, J., in Cook v. Whipple (supra), and that in order to ascertain the full meaning and' intention of the legislature as to what is included in the expression “ all matters and proceedings in bankruptcy,” as contained in section 711, we must have recourse to those provisions of the Bevised Statutes, which again enact a more specific description of the cases in which such jurisdiction" arises. It is to be remembered that the provision of section 711, confining the jurisdiction “of all matters and proceedings in bankruptcy” to the courts of the United States so far, are an amendment of and addition to the bankrupt law of 1867, and that under the law of 1867, it had been held that actions might be maintained in ¿he State courts by and against assignees in bankruptcy as such, drawing in question in various ways his rights, powers and duties as such assignee, and involving all conceivable questions respecting the liens and priorities of the creditors of the bankrupt, ano in respect to the marshaling of the assets of the estate, and that various and more or less conflicting decisions bearing on this subject had been made in the judicial tribunal of the thirty-eight States, which much detracted from the “ uniformity ” of the system designed to be inaugurated by the bankrupt law, but it had not been attempted, to commence or carry on bankrupt proceedings, strictly so called, within the suggestion so enunciated in Cook v. Whipple, in any of the State courts, nor was it anywhere claimed that the State courts had any jurisdiction to entertain any such proceedings.

It was well settled that congress might, if it should deem it desirable so to do, confer upon the courts of the United States exclusively, the jurisdiction to entertain any suits or proceedings touching the rights, assets or estate of the bankrupt, and the rights and powers of the assignee. (Dudley v. Mayhew, 3 Comst.; Claflin v. Houseman, 3 Otto, 130.) If “all matters and proceedings in bankruptcy” embraced and includes the collection of the assets of the bankrupt estate, then it is undeniable that jurisdiction of actions for that purpose is inhibited to the State courts, except in cases in which the District Court shall permit such actions to be brought in the State courts in the cases provided in the amendment of June 22, 1874, whereby was added a proviso to subdivision 6 of section 4972, to the effect that the court having eliai’ge of the estate of any bankrupt may direct that any legal assets or debts due the bankrupt, as contradistinguished from equitable demands, shall, when such debt does not exceed $500, be collected in the courts of the State where such bankrupt resides, having jurisdiction of claims of such nature and amount. This amendment seems to afford evidence that congress well understood that the “ matters and proceedings in bankruptcy” mentioned in section 711 included, in accordance with the decision in Lathrop v. Drake (supra), all those matters which are more particularly specified in section 4972. The conclusion that the effect of the Eevised Statutes is to confer upon the United States courts exclusive jurisdiction in such matters, has been reached by the General Terms of two of the departments in this State since the passage of those statutes. (Frost v. Hotchkiss, 1 Abb. N. C., 27; Olcott v. McLean, 10 Hun, 277.)

I am aware that the Supreme Court of Massachusetts has reached a different conclusion, and perhaps the question is not free from doubt, but in this diversity of judicial opinion, I think it better to follow the decision of the two General Terms of our own State, rather than that of the Court of Massachusetts, especially as the reasoning of the latter court seems to be fallacious.

The Massachusetts court seems to hold that the right of, the District Courts to direct certain actions to be brought in the State courts by the amendment of 1874, was solely to confer upon the district courts the power to rid themselves of litigation before them in the cases which are embraced within the amendments, but if so, why the limitation as to the amount, and also in respect to the nature of the cases, as legal demands only, as contradistinguished from equitable ? Do not those limitations rather indicate that congress intended that the more important and intricate questions arising out of a bankruptcy, should be retained to be disposed of by the courts of the United States, presumed to be more familiar with the scope and effect of the bankrupt law, and better calculated to administer ■its various provisions, with a degree of uniformity scarcely to be expected from the courts of the various States, or perhaps the amendment was adopted in view of the fact that the cases specified, might be prosecuted in the inferior tribunals of a State at much less • expense than in the courts of the United States, at all events, it seems to me that the amendment of Juné 22, 1874, affords the occasion for the application of the rule, “ expressio uni/us exohisio esi vtieriusP

The case at bar is apparently one in which the District Court of the Northern District of New York might have ordered the collection of the demand in favor of the bankrupt, against Peter Young, by the assignee in bankruptcy of Clemenz Wente in the State court, but not having seen fit to do so as iii this case expressly appears, the Justice’s Court which rendered the judgment against Peter Young, which the plaintiff claims by assignment, did not have jurisdiction of the subject-matter, and the judgment was consequently void. It follows that the plaintiff in this suit has no right upon the basis of that void judgment and execution to call in question the validity of the conveyance from Peter Young‘to his wife, for want of any specific lien upon the propex’ty in case the deed should be declared void. The difficulties which exist in the case cannot be cured upon a new trial, and thex’efox’e, for the foregoing reason, I am in favor of reversing the judgment and dismissing tlie complaint.

Present — Mullin, P. J., Talcott and Smith, JJ.

Judgment affirmed.


source: Caselaw Access Project

author: Smith, J.:

license: Public Domain

text:
    THOMAS SIMS, Respondent, v. ELIAS SIMS, Appellant.

      Conviction of felony — 2 B. S., 701, § 23, rendering a person convicted of felony incompetent as a witness — application of— Power of a Special Term granting a new trial, to vacate its own order.

    Upon the trial of this action, the defendant having been examined as a witness in his own behalf, the plaintiff’s counsel offered in evidence a record of his conviction in the State of Ohio for having counterfeit money in his possession with intent to pass it.
    The defendant, having given evidence tending to show that he had been pardoned, was asked whether he was guilty of the offense with which he was charged, which question was, upon plaintiff’s objection, excluded. Held, that its exclusion was proper; that although, if the record only affected his credibility, it might be competent to show by parol any circumstance consistent with the record, tending to mitigate the offense, and thus lessen the stain upon his credit, he could not contradict it by showing that he was, in fact, innocent of the crime whereof he stood duly convicted.

      Qucei'e, whether the statute (2 R. S., 701, §23) which, before the new Code, rendered a person convicted of a felony incompetent to testify, applied to a conviction in a foreign State.
    After a judgment had been rendered in favor of the plaintiff herein, the defendant applied to a justice, at a Special Term, and procured an order granting a new trial on the ground of surprise. Subsequently, upon affidavits presented by the defendant, an order to show cause why the same should not be vacated was granted by the same justice; and upon its return at Special Term the order granting a new trial was accordingly vacated. Held, that the justice had power to so act.
    This is an appeal from a judgment in favor of tlie plaintiff, entered on a verdict rendered at tlie Erie Circuit in December, 1874, and also from an order of tbe Erie Special Term denying tbe defendant’s motion for a new trial upon a case containing exceptions, and from an order of the Erie Special Term vacating an order granting a new trial herein on the ground of surprise.

      Mr. Gwmeg, for the appellant.

      Mr. Jno. C. Strong, for the respondent.
   Smith, J.:

The action was brought upon a contract made by the parties at Buffalo, in December, 1868, by which the defendant undertook and agreed to convey and deliver to the plaintiff a tug, called the “ William Allen,” a dredge known as the Milwaukee Dredge,” her two or three scows, and the tackle, tools, furniture, etc., belonging to them all, on or before the opening of navigation on Lake Erie in the spring of 1869. It was proved at the trial, that "on the 12th of March, 1869, at Buffalo, the plaintiff received from the defendant a bill of sale of'the property included in the contract, the property being then at Cleveland. The plaintiff gave testi- ' mony, which was controverted, tending to show that in the latter part of March, 1869, at Cleveland, the plaintiff demanded of the defendant delivery of the possession of the property, which was refused, and that the property was then of the value of $15,000. The jury rendered a verdict in favor of the plaintiff for $14,034.72.

After a careful reading of the case, we concur in the opinion of the learned judge at Special Term, that the testimony, although conflicting, is sufficient to support the verdict, and for the reasons stated by him we think the motion to set aside the verdict as against the weight of evidence should be denied.

We are also of the opinion, that neither of the exceptions stated in the case is well taken. They may be briefly noticed.

The plaintiff, being examined as a witness in his own behalf, was asked “ what the property in question was worth in Cleveland in the spring of 1869.” The question was objected to, on the ground that the witness was not shown to have any knowledge of the value of such property in Cleveland, and that Cleveland was not the proper place to prove value. He was then examined as to his acquaintance with the subject, and testified that his business, which he had stated to be that of dredging and docking, extended all over the lakes, and that the value of such property in Cleveland did not differ much from that of such property in Buffalo, where the witness resided. The question which had been objected to was then repeated, the objection was renewed on the same grounds, it was overruled, and the witness answered that the value of the property in good order in Cleveland would have been $15,000, and that he thought it would have been worth more in Cleveland than in Buffalo. We think the objection was properly overruled. That Cleveland was the place of delivery contemplated by the parties (no place being specified in the agreement), is evident from the fact that the defendant resided at Cleveland, and that the property was there at the time when the contract was made. The witness showed himself qualified to give his opinion as to the value of tlie property at that place.

The defendant was examined as a witness and gave evidence in his own behalf. Subsequently the plaintiff’s counsel offered in evidence a record of the conviction of the defendant in 1839, which was received and read in evidence without objection. -The defendant was then recalled, and after giving evidence which tended to show that he had been pardoned, he was asked by his counsel whether he was guilty of the offense with which he was charged, to wit: with having in his possession counterfeit money with the intent to pass it. The question having been objected to by the plaintiff, the objection was sustained, and the defendant excepted. It is now assumed by the defendant’s counsel, that the conviction was had in a foreign court, to wit, in a court in the State of Ohio, and it is argued that the record did not exclude the defendant from being a witness, but merely affected his credit, and that it was competent for him to repel the imputation upon his credit, by showing that he was, in fact, guiltless of the offense. The conviction is not set out in the case, nor does the case state in what aourt it was rendered, but the defendant testified that he was never convicted except on a charge in the State of Ohio, and it is fairly to be inferred that the conviction in question was had in that State. The argument of the defendant’s counsel assumes that the statute of this State which renders a person convicted of a felony incompetent to testify (2 R. S., 701, § 23), does not relate to a conviction in a foreign State. We are not aware of any reported case in which, the question has been decided or discussed, and as the statute referred to has recently been repealed \ Code of Civil Procedure, § 832), the question is of little' practical importance. In the case of The People ex rel., Daggett v. Noyes, tried at the Livingston Circuit in November, 1876, it was held, that a person convicted of felony in the State of Michigan, was not thereby rendered incompetent to testify in this State, but that the fact of the conviction went only to his credibility. To the same effect is the case of The Commonwealth v. Green (17 Mass., 515), where the question received great consideration, and an able opinion yras written by Parker, Oh. J., which was concurred in by the whole court. (See Greenlf. Ev., § 376, and note 2.) It is unnecessary, however, to pass upon the question in the present case, since we are of the opinion that, whether the conviction had the effect to exclude or merely to discredit the witness, it could not be contradicted by parol. It may be, that if the record only affected the credit of the witness, it was competent for him to show by parol any circumstance, consistent with the record, tending to mitigate the offense, and thus to lessen the stain upon his credit, but not to contradict the record by showing that he was in fact innocent of the crime whereof he stood duly convicted. (See Gardner v. Bartholomew, 40 Barb., 325.)

The only remaining subject for consideration, is whether an error was committed, to the prejudice of the defendant, in the order made at Special Term in respect to the motion for a new trial on the ground of surprise. The affidavit on which the motion was founded alleged, as one of the two grounds of the motion, that the defendant was surprised by the discovery, shortly before the trial, that certain papers which had been filed in the cleric’s office in Cleveland, and which he supposed could be obtained thence at any time, were not there in fact, and on search could not be found. The papers referred to, related to certain suits against the present plaintiff, in which the property involved in this suit, or some part of it, had been attached, and it was alleged in the moving affidavits that the papers would show that the present plaintiff gave a bond with sureties in one or more of said suits, and thereupon the property was released from said attachments. Upon that state of facts, Justice Daniels, at Special Term, granted the motion for a new trial on the ground of surprise. Subsequently, and before any action had been taken under the order granting a new trial, affidavits were presented to the same judge on the part of the plaintiff, alleging that the papers in the suits referred to had been found, and that it appeared from them, that the 'bonds in the attachment suits were not given or procured by the present plaintiff, but were given at the instance of the plaintiffs in the actions in which the property had been attached, and without the concurrence or knowledge of the plaintiff in this suit. Thereupon Justice Daniels granted an order requiring the defendant herein to show cause, why the order granting a new trial on the ground of surprise should not be vacated, and on the return of that order, and after hearing both parties at Special Term, he vacated the order previously made by him. It is now objected, that the action of the Special Term in that regard was unauthorized. But we think that the power of the Special Term to vacate its own order, under the circumstances above stated, is undoubted, and that the exercise of the power in this instance was well warranted.

The other ground of the motion for a new trial was, that the defendant was surprised by the testimony of one Williams, given at the trial, to the effect that he heard a conversation on Superior street, in Cleveland, in the spring of 1869, between the plaintiff and a person whom he believed to be the defendant, they being on the opposite side of the street from the witness, and that the plaintiff demanded the tug, and the person whom he addressed replied that he could not have it, that it was attached and he meant to heat him out of it. The motion, so far as the latter ground was concerned, was founded on an affidavit of Williams, the witness, stating in substance that he did not intend to testify that he heard the conversation which he stated, but only that the plaintiff told him that he had had such a conversation with the defendant, and upon affidavits of other persons, alleging contradictory statements made by Williams after his testimony was given, and also stating that Superior street is of such width and so noisy that conversation in an ordinary tone of voice could not be heard across it. That branch of the motion, also, we think was properly decided. The affidavit of Williams in opposition to his testimony, is not, of itself, sufficient ground for granting a new trial. His affidavit and testimony could not be reconciled on tbe theory of a mistake. One or the other is false intentionally. Williams’ affidavit, in effect, asserted that he committed perjury on the trial, in testifying that he heard the conversation stated by him. The Special Term, therefore, properly refused to grant a new trial on account of liis affidavit. (People ex rel. Stemmler and another v. McGuire, 9 N. Y. S. C. R., 269 ; Sterling v. Insurance Co., Monroe Special Term, February, 1870, MS. op. of J. C. Smith, J.)

The contradictory admissions made by Williams were made and were communicated to the defendant’s counsel, for aught that appears, before the testimony was closed, and could have been given in evidence on the former trial. And' it is to be presumed that the width and condition of Superior street in Cleveland could have been testified to on the trial, by the defendant himself, or any other person in attendance acquainted with the streets of that city. The defendant was recalled after Williams had testified, and denied explicitly the conversation sworn to by him.

We are of the opinion that the judgment and each of the orders appealed from should be affirmed.

Present — Talcott, P. J., Smith and Merwin, JJ.

Judgment and orders appealed from affirmed.


author: Smith, J. :

text:
    LYDIA S. NEWMAN, Appellant, v. Le GRAND MARVIN, Respondent.

      Failure of parties — power of court or referee to bring in-new parties —Laches— Statute of limitations.

    This action was brought to recover moneys belonging to the plaintiff, alleged to have been received by the defendant. Upon the trial, before a referee, it appeared that the money had been received by the defendant and one George L. Marvin as partners. 'A motion on the part of the plaintiff to have the latter brought in as a party was denied by the referee, on the ground of want of power. Held, that the power to cause a party to be brought in by compulsory process, was vested in the court alone.

      Semble, that the power to bring in additional parties, vested in the court by section 122 of the Code, only applies to cases in which one or more of the original parties had such an interest as would enable him to sustain the action, but in which the controversy could not be completely settled without the presence of other parties, and not to cases in which the plaintiff’s right to maintain tiie action depended upon the presence of such additional party.
    Tiie plaintiff insisted that he should be allowed to bring in Gr. L. Marvin as a party for the reason that a new action against the firm would now be barred by the statute of limitations. Held,

    That as the plaintiff was advised of the necessity of bringing him in by the answer, which set up his absence as a defense, he was'guilty of laches in not making his application sooner.
    That even if Gr. L. Marvin were now brought in, the defense of the statute of limitations would be available to him.
    Appeal from a judgment in favor of tbe defendant, entered-upon tbe report of a referee.
    Tbe action was brought to recover moneys alleged to bave been received by tbe defendant, arising from tbe sale of certain lands wbicli belonged to tbe plaintiff’s husband, and to which money tbe plaintiff was entitled.
    Upon tbe trial before a referee, it appeared that tbe money bad been received by tbe defendant and one George L. Marvin, as partners. A motion was thereupon made by tbe plaintiff to bave George L. Marvin brought in as a party defendant. This motion was denied by tbe referee, on tbe ground that be bad no power to grant it.

      John 0. Strong, for tbe appellant.

      U Grand Marvin, for tbe respondent.
   Smith, J. :

Tbe conclusion seems irresistible, from tbe testimony, that tbe moneys claimed in this action were received by tbe firm of Le Grand and George L. Marvin. So far as appears, all that tbe defendant did in relation to tbe Canada lands referred to in tbe case, including tbe receipt of tbe moneys claimed in this action, was done by him as a member of tbe firm. His partner, G eorge L. Marvin, is, therefore, a necessary party, and as bis non-joinder as a defendant was pleaded in tbe answer as a defense, tbe referee, up<?n tbe proofs before him, could come to no other conclusion than that the plaintiff was not entitled to recover against the defendant Le Grand Marvin alone.

And the referee was clearly correct in declining as lie did, on the ground of a want of power, to order the said George L. Marvin to be brought in as a defendant on the application of the plaintiff. The appellant’s counsel insists that the power was conferred by section 272 of the Code of Procedure (which was in force when the trial was had). That section provided that referees shall have the same power as the court has “to grant adjournments and to allow amendments to any pleadings, and to the summons.” The power thus given, probably included the power to amend any pleading or the summons by “ adding or striking out the name of any party,” which was given to the court by section 173 of the sixth chapter of title 6, entitled “ mistakes in pleading and amendments.” But it did not include the power to order a new party to be brought in by compulsory process. That power was conferred upon the court by section 122 of the Code of Procedure, which was a part of title 3, entitled “ of the parties to civil actions.” In short, the power to order a new party to be brought in was vested in the court; alone. The power to amend the summons, or any pleading, by adding the name of a party who had been duly brought in, but whose name had been omitted by mistake or otherwise, was conferred upon referees as well as the court. The distinction appears to have been preserved in the Code of Civil Procedure (sections 1023, 452).

Even if the referee had the power, given to the court by section 122, it is questionable whether this case is within it. That section authorized the court to “ determine any controversy between the parties before it when it can be done without prejudice to the rights of others, or by saving their rights ; but when a complete determination of the controversy cannot be had without the presence of other parties, the court must cause them to be brought in.” . True, it has been held that the latter clause quoted was imperative, and left no discretion, the word “must” having been substituted for “may” subsequently to the adoption of the Code. (Shaver v. Brainard, 29 Barb., 25.)

But we incline to the opinion that the present case is not within the intent of that section. It was said by Denio, Ch. J., in Davis v. The Mayor, etc. (14 N. Y., 527), “ that section 122 evidently refers to cases where one or more of the original parties had such an interest as would enable him to sustain the action, but where the controversy would not be completely settled without the presence of other parties. This was a familiar rule of the Court of Chancery, which would have been properly stated in the precise words of this section.” In McMahon v. Allen (12 How., 39 ; S. C. affirmed, 3 Abb., 89), it was held by the New York Common Pleas, that the court will not allow the plaintiff to bring in a new party defendant when the plaintiff’s right to recover depends upon the presence of such party, as this would be equivalent to the commencement of a new action. In that case, the action had been brought against the defendant in his individual character, and leave was sought to make him a defendant in a representative capacity, it having appeared at the trial that he was liable in such capacity only. The construction seems reasonable, and by force of it the plaintiff, in this case, should not be allowed to bring in George L. Marvin as a defendant, since, as the plaintiff has no right to recover without the presence of George, that would be equivalent to the commencement of a new action.

It is urged by the plaintiff’s counsel, however, that injustice will result if his client is not allowed to bring in George L. Marvin, as a new action is now barred by the statute of limitations. To this claim there is a perfect answer. The plaintiff was advised of the necessity of making George L. Marvin a party, by the answer setting up the defense of non-joinder, long before the statute had run. At that time the plaintiff might have discontinued, and commenced a new action against both partners. So, that if the plaintiff has lost the right to bring a’ new trial, it has been caused by her own laches. But we think there can be no doubt, that if George L. Marvin were now made a defendant in this action, the statute of limitations would bo, to him, a complete defense. That must be the case unless the pendency of the present action has had the effect to take the demand out of the statute, as to him; a position which can hardly be maintained, since the action was against Le Grand Marvin alone. After the dissolution of the copartnership, the Marvins, if liable to the plaintiff, were liable as joint debtors. Part payment by one would not have taken the claim out of the statute, as against the other. (Van Keuren v. Parmelee, 2 Coms., 523.) Even if the action had been commenced by naming both as defendants, and Le Grand alone had been served, a recovery against him would not have prevented the running of the statute in respect to George. The effect of such recovery would have been to entitle the plaintiff to enter a judgment against both defendants, so far only as that it might be enforced against the joint property of both, and the separate property of the defendant served. (Code of Procedure, § 136.) And under the provisions of the Code relating to proceedings against joint debtors, the defendant George, not having been originally summoned, might have been summoned to show cause why he should not be bound by the judgment in the same manner as if he had been originally summoned. (§ 375.) Upon such summons any defense would have been available to him which lie might have made to the action if the summons had been served on him at the time when the same was originally commenced, and, also, any defense which had arisen subsequently to such judgment. (§ 379.)

The language of section 379 is broad enough to include the defense of the statute of limitations; and the intention of the legislature to include that defense was expressly shown by the amend ment of 1866, which struck out the words “ except the statute of limitations,” contained in the section as originally adopted in 1849. (L. 1866, chap. 824, § 15.) In that respect .the Oode of Procedure conformed to the law as it had been laid down by the courts under previous joint-debtor acts. The case of Bruen v. Bokee (4 Den., 56) arose under 1 Revised Laws, chapter 56; the thirteenth section of the act provided, in substance, that joint debtors should be answerable separately for their joint debts, and that in a suit against all of them judgment might be taken against su“ch as were served with process and such as were not, but that it should not be lawful to issue’or execute any execution against the body or against any lands or goods the sole property of any defendant not brought into court. It was held, in the case cited, that where joint debtors were sued, some of whom were served with the process or declaration, and judgment was obtained against all pursuant to the statute, such judgment did not prevent the running of the statute of limitations in respect to the defendants on whom service was not made, and, therefore, that in debt on a judgment against a defendant not served with process in the former suit, he might plead that it was recovered without the service of process on him, and that the cause of action did not accrue within six years next before the commencement of the suit on the judgment. The provisions of the Revised Statutes relating to proceedings against joint debtors are similar to those of the Revised Laws and of the Code of Procedure; they give no effect to the judgment, as against the defendant not brought into court, beyond allowing the execution to be collected of the personal property which he owns as a partner with the other defendants. (2 R. S., 3VT, §§ 1 to 4.) In Oakley v. Aspinwall (4 Coms., 514) and Denny v. Smith (18 N. Y., 561) the Court of Appeals gave the same construction, in effect, to the provisions of the Revised Statutes as was given to the previous act by the Supreme Court in the case of Bruen. The decisions rest upon the fundamental principle of jurisprudence, that no one shall be condemned, nor.made to suffer, either in his person, fame or estate, before he has had an opportunity to be heard in his defense. It seems clear’, therefore, on principle and authority, that a recovery in an action against both Le Grand and George Marvin (Le Grand alone being served), would not have impaired the right of George to set up the defense of the statute of limitations in an action on the judgment or in statutory proceedings to enforce it; certainly, then, the mere pendency of an action against Le Grand alone, has not had the effect to take the demand in suit out of the statute, as against George. It follows, that an order directing George L. Marvin now to be brought in as a defendant would be of no avail to the plaintiff.

There may be cases not within section 122 of the Code, where the court, in its discretion, may allow an additional defendant to be brought in on such terms as may be just. If, however, the statute of limitations is a defense as to George L. Marvin, this is not such a case. If it is not a defense as to him, then we are of the opinion, as the case appears, that in view of the delay of the plaintiff to proceed against him, the court would not be justified in requiring him to come in and answer to the plaintiff’s claim, after the lapse of time that has occurred since the claim accrued, and since the plaintiff was advised by the answer in this action of the necessity of making him a party. In chancery, although the usual rule was not to dismiss a bill for want of parties, yet, when the objection, for want of parties, was distinctly taken by the defendant by plea, demurrer or answer, and the complainant, notwithstanding, went to hearing without amending liis bill by bringing in the necessary parties; the court, in its discretion, might refuse to permit the cause to stand over, and might dismiss the bill with costs. ( Van Epps v. Van Deuzen, 4 Paige, 64.)

For another reason, the bringing in of George L. Marvin as a defendant would be of no avail to the plaintiff. The cause of action alleged in the complaint accrued originally to several persons, of whom the plaintiff was one ; she claims that the interest of her co-owners was assigned to her before the commencement of this action; the assignment is in evidence, and it purports to transfer a claim against Le Grand Marvin alone, and not against Le Grand and George jointly. If George was a party, the plaintiff could not establish a claim against him, so far as we can judge from the evidence before us.

For these reasons, we decline to direct that George L. Marvin be brought in, and wo affirm the judgment, with costs.

Present — Taloott, P. J., Smtth and Merwin, JJ.

Judgment affirmed.


author: Talcott, J.:

text:
    MORTIMER WILKIE, in behalf of himself and others, Stockholders of THE ROCHESTER AND STATE LINE RAILWAY COMPANY, Respondents, v. THE ROCHESTER AND STATE LINE RAILWAY COMPANY and others, Appellants.

      Coi'poration — injunction,- restraining its ordinary business — chap. 151 of 1870 — Action by stockholders, in behalf of corporation — when maintainable.

    Upon an ex parte application made to a justice out of court, an injunction was granted restraining tlie defendants, tlie directors of tile R. and S. L. R. Co., from passing, voting upon, or considering a resolution declaring tlie office of treasurer vacant; removing tlie treasurer; electing any other person to to perform tlie duties of his office, or to take the hooks or papers of the company from him. The action was commenced hy the plaintiff, a stockholder of the corporation, on the ground that two former treasurers had, hy means of false entries in the hooks, defrauded the company of a large sum, and that certain of the defendants intended to pass the resolution for the purpose of preventing any further investigation and the company from recovering th« amount due, and plaintiff asked that the said defaulting treasurers, defendants herein, should be adjudged to pay to the company the amount due to it from them.
    Upon an appeal from an order denying a motion to vacate the injunction made by certain of the defendants, held,

    That as the injunction was granted ex parte, in violation of chapter 151 of 1870, prohibiting the granting of any ex parte injunction suspending the general and ordinary business of a corporation, it was void.
    That the defendants did not waive the right to insist upon this irregularity by moving to vacate the void injunction.
    That as the action sought to recover money belonging to the corporation, it could not be maintained by the plaintjff, a stockholder, as the complaint did not allege that the corporation had been applied to and had refused to bring the action.
    Appeal from an order made at a Special Term, denying a motion to vacate an injunction.
    The action was brought to restrain the directors of tbe Rochester and State Line Railway Company from adopting any resolution Removing the present treasurer, or electing any other in his place, or taking from his control the books and papers of the company. The complaint alleged that two of the former treasurers of the company had defrauded it by making false entries in the books, and that certain of the defendants were desirous of preventing any further investigation and keeping the company from recovering the amount due from the said treasurers, and prayed that the defendants, and each and every of them, be enjoined from passing said resolution introduced by the defendant Brown, and from passing, voting upon, or considering any resolution, offer or project for the removal of the said Upton from his office as treasurer of said railway, or substituting any person in the place of the said Upton as such treasurer, and from authorizing or appointing any person to perform the duties of said office, and from doing any act in the premises whereby the right of the said Upton to his office or his possession thereof may be impaired, and from taking any steps for the taking away or removal of the books, papers and accounts of said railway company, now in his possession or under the control of the said Upton as aforesaid; that the defendants Mumford and McNaughton, and each of them, account for their doings as treasurer of said railway company; that each of said defendants Mumford and McNaughton be adjudged to pay to said railway company the amount found due from him to said company; that the defendants, Mumford, McNaughton, Hanls and Brown, may be suspended or removed from their offices as directors of the Rochester and State Line Railway Company; that this plaintiff may have judgment for his costs of this action against the defendants, or some of them, and that this plaintiff may have such other, further or different relief as shall be agreeable to equity.

      G. F. Danforth, for the appellants.

      J. B. Perkins, for the respondent.
    The injunction granted was not within the provisions of the statute of 1870. The power to grant an injunction ex pañete restraining some specific illegal act has been recognized without question in the following cases arising since the statute of 1870. (Bach v. Pacific M. Steam. Co., 12 Abb.-[N. S.], 373; Joslyn v. Same, id., 329; Caldwell sr. Commercial Warehouse Co.,'A S. C. R., 179; 1 Hun, 718; Phoenix Ins. Co. v. Cont. Ins. Co., 14 Abb. [N. S.], 26.6; Van Pcmst v. Ff. 7. College, etc., 4 Hun, 620.)
   Talcott, J.:

This is an appeal from an order of the Special Term of Monroe county, refusing to dissolve an injunction.

The injunction restrains the defendants from passing, voting upon, or considering a certain resolution introduced by Dyer D. S. Brown, one of the defendants,' at a meeting of the directors of the railway company, declaring the office of the treasurer of the company vacant, and from considering, voting upon or passing any resolution, offer or project, for the removal of Charles E. Hpton, one of the defendants, from the office of treasurer of the company, and from voting for, electing or appointing any other person to perform the duties of the office, and from talcing any steps for the removal of the books, papers and accounts of the said corporation, now in the possession or control of the said Upton, as treasurer of the said railway company.

The complaint in the action sets forth that the same is commenced in behalf of the plaintiff and all other stockholders of the corporation who may come in and make themselves parties.

The claim for the injunction is founded on certain allegations, in substance, that George E. Mumford and Donald McNaughton, former treasurers of the company, have by certain false and fraudulent entries in the books, and by other similar means, defrauded the railway company and are actually indebted to it in a large sum; that these facts appear from the books of the company, and that the motives of such of the defendant’s directors as favor the resolution, is to supress the evidence contained in the booM, and the complaint contains the following averment, and this plaintiff further says: that if the said defendants are allowed to pass such resolution and remove said Upton as treasurer, and to obtain said books and accounts and to prevent any further investigation, and to prevent said company from recovering the sums justly due to it, great and irreparable damage will be done to the plaintiff and all others holding the stock of the said company.”

Certain of the defendants have appeared and put in an answer denying the whole equities of the bill, and on said answer, and on an affidavit, showing that the injunction was granted exparte and without notice to the defendants, they moved at a Special Term to dissolve the injunction. First. Upon the ground that the injunction was granted by a justice and not by the court. Second. That it was granted without notice to the defendant, the railway corporation, and thirdly, they moved for a dissolution upon the merits.

By the act of 1870 (ch. 151; see Laws of 1870, p. 421) it is provided that an injunction to suspend the general and ordinary business of a corporation or joint stock association * * * or to restrain or prohibit any director, trustee, or manager of a corporation or joint stock association from the performance of his duties as such, shall not be granted except by the court, and upon a notice of at least eight days of the application therefor to the proper officers, or the director, trustee or manager, to be enjoined or restrained, and that an injunction granted for any of the said purposes, except by the court and upon the notice prescribed, shall be void.

This injunction prohibits the directors of the corporation from taking any action to remove its treasurer, or even considering a resolution declaring the office of treasurer vacant. The injunction seems to have been originally granted in direct violation of tbe statute referred to, and to bave been by tbe express terms of tbe statute, a void order. (Town of Middletown v. Rondout Railroad, 43 How. Pr., 144; op., pp. 152, 153, 154.) The question is, then, was tbe irregularity in granting tbe injunction waived by tbe motion of tbe appellants, a portion of tbe defendants moving to dissolve tbe same upon tbe ground that it was irregularly granted. We cannot agree with tbe respondent’s counsel that tbe attempt on tbe part of some of tbe defendants to obtain an order of tbe court that tbe void injunction be dissolved, operated in any manner to render it valid or effectual.

It is true, perhaps, that a motion for tbis purpose was unnecessary, and tbe injunction order might bave been treated as void, and a nullity by virtue of tbe provisions of tbe statute itself. It is undoubtedly void as against- the corporation and tbe other defendants who bave not answered, but that furnishes no good reason why it should not bave been dissolved on a motion for that purpose, founded on tbe express ground that tbe order was made contrary to tbe statute. A void process or order may be set aside on tbe ground that it is void, and tbe party aggrieved by such a process, though be may treat it as a nullity, is not compelled to do so, but may apply to bave it set aside, and thus bave tbe sanction of tbe court to bis views as to tbe invalidity of tbe order. There is also another reason apparent from tbe complaint why tbe order for an injunction should not bave been granted, or if granted, should bave been dissolved. Tbe action is to collect a debt due to tbe corporation by reason of tbe alleged frauds of tbe former treasurers, Mumford and McNaugliton, and tbe plaintiff, as one species of relief claimed by him, prays that said Mumford and McNaugliton be each adjudged to pay to the railway company tbe amount found due from him to tbe said company. It is now, at all events, tbe settled law of tbis State, that an action to collect' a debt due to a coiporation cannot be maintained by a stockholder thereof, unless that tbe complaint shows that tbe corporation has been applied to, to bring tbe action and has refused to do so. (Greaves v. George, 49 How. Pr., 79; S. C. at General Term, 1 N. Y. Weekly Digest, 526, and S. C., affirmed in tbe Court of Appeals, Albany Law Journal, vol. 15, p. 334, April 28, 1877.)

The complaint in this ease contains no such averment, and therefore does not state a case enabling the plaintiff to maintain the action.

If it be true, that the ex-treasurers are indebted to the corporation in the manner and upon the accounts stated in the complaint, the corporation is the party to sue and recover- the indebtedness, and not an individual stockholder, even in a suit brought, not only in his own name, but in behalf of all other stockholders, unless the attention of the directors has been called to the circumstance, and they have refused to assert the rights of the corporation, which would afford some evidence of collusion with the debtor, or violation of their trust by neglect of their duties.

We think it manifest that the injunction should have been dissolved, for the reason that it was granted ex parte and without notice, and also upon the merits, because the complaint does not state a case which authorizes the plaintiff to maintain the action.

Order of Special Term reversed and injunction dissolved, with ten dollars costs of the motion, and ten dollars and disbursements, costs of the appeal.

Present — Talcott, P. J., Smith and Merwin, JJ.

Order denying motion to vacate and dissolve the injunction order, reversed, with ten dollars costs and disbursements.


author: Rawson, J.:

text:
    THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, Respondent, v. GEORGE M. CUYLER and others, Appellants.
    Usury— who may set it up— Counter-claim — what constitutes.

    This action, was brought to foreclose a mortgage upon property, the title to -which was in the defendant Bingham. The defendant Cuyler interposed an answer containing first a general denial “ and for a second and further defense ” he alleged that Bingham acquired title to the land from him in pursuance of an agreement by which he was to convey the same to Cuyler upon certain terms therein specified; that at Cuyler’s request, and for his benefit, Bingham gave the bond and mortgage in question to tbe plaintiff; that they were void for usury, and demanded judgment that they be so declared, and that they be delivered up and canceled.

      Held, that Cuyler was the equitable owner of the land, and as such a “ borrower ” within the meaning of the statute relating to usury, and therefore entitled to interpose that defens 3.
    That the usury, set forth in the form that it was in the answer, did not constitute a counter-claim, but simply a defense to the action, and that no reply thereto was necessary.
    Appeal from a judgment in favor of the plaintiff, entered upon the trial of this action by the court without a jury. The action was brought for the foreclosure of a mortgage, given by the defendant Charles L. Bingham, who held the legal title to the mortgaged property. The defendant Cuyler interposed an answer in the action, which first denied any knowledge or information sufficient to form a belief as to the allegations of the complaint. It then proceeds: “ And for a second and further defence, this defendant says, ‘ that Bingham acquired title to the land from him in pursuance of an agreement by which he was to convey the same to Cuyler, upon certain terms therein specified; that at Cuyler’s request, and for his benefit, Bingham gave the bond and mortgage in question to the plaintiff; that they were void for usury,’ and demanded judgment that they be so declared, and that they be delivered up and canceled.
    /S'. Hubbard, for the appellant.

      George F. Hcmforth and James Wood, for the respondent.
   Rawson, J.:

The only question raised in this case is whether the motion for judgment made by the defendant at the close of the plaintiff’s case should have been granted. This motion was made upon the pleadings, upon the ground that the answer sets up a counter-claim, to which no reply was served by the plaintiff.

It is claimed by the respondent that this motion was- properly denied for the reason that the defendant Cuyler, in whose behalf this motion was made, is not in a position to raise the question; that he was not a “ borrower,” within the meaning of the statute, and could not, therefore, commence an action to have the bond and mortgage canceled, or accomplish, the same tiling by a counterclaim in the foreclosure action.

If the term borrower ” is to be understood to refer simply to the person whose name appears in the bond and mortgage, then Mr. Cuyler is not a borrower within the meaning of the statute.

If we are to look only at the transaction as between the plaintiffs and Bingham, then Mr. Bingham is the only borrower,” and Mr. Cuyler is not known in the transaction.

But no good reason can be perceived why any such narrow construction should be given to the statute.

In this case the facts found are that the money was procured upon the application of Cuyler and for his benefit; that Bingham took the legal title by agreement with Cuyler that he should do so simply for the purpose of raising the money and making the bond and mortgage. He held the naked legal title only, and made the bond and mortgage at the request of Cuyler, and for his benefit. Cuyler in this case, then, I think, is really a “ borrower,” within the statute, and therefore a person who may by proper legal proceedings have a usurious bond and mortgage canceled.

The defendant Cuyler had, I think, such an interest in the property that he might maintain an action to have the bond and mortgage declared void, and canceled, as a cloud upon the land. He was in possession of the farm and was the equitable owner. Bingham, holding a mortgage upon Cuyler’s farm, agreed to foreclose and take the legal title, and then allowed him to redeem, upon certain terms, stated in their contract.

At the time of this trial he was holding the farm under and b;y virtue of this contract.

This gave him such an interest that he might file a bill to set aside the bond and mortgage, or accomplish the same object by counter-claim in the foreclosure suits. The defendaht, Cuyler, was then in a position to make the motion, and the motion should have been granted if, as claimed by him, he has fairly set up a counterclaim in his answer, to which there is no reply.

It is beyond question that the. defense of usury may be pleaded as a legal defense to an action, and it may be pleaded as an equitable defense. In the latter case there must be alleged, beyond the mere legal defense of usury, certain facts which entitled the party to affirmative relief. It has been held, and I think correctly, that the defense of usury, merely, is not sufficient to entitle a par ij to affirmative relief. That there must exist some other facts, such as that usurious securities are a cloud upon his title to real estate, or something beyond the naked legal defense of usury.

The defense of usury may be set up as a legal defense and also as a counter-claim, in the same answer. They should be set up, however, separately and distinctly, the one as a defense and the other as a counter-claim.

The defendant in this case first pleads a denial; he then says: “ And for a second and further defense this defendant says,” etc.; he then sets out his relation to the transaction in suit, to wit, that he was the equitable.owner of the land on which the mortgage was given, and the substance of his contract with Bingham. It was necessary for him to allege these facts as a part of his legal defense' of usury. The bond and mortgage were made by Bingham, and it did not appear that Cuyler had any connection with the transaction. It was therefore necessary for him to allege his contract with Bingham and his equitable ownership of the property, to put himself in a position to set up the legal defense of usury; and these allegations were a necessary part of such defense.

The defendant then proceeds to set out the making of the loan and the usury, in the usual form, and demands judgment that the bond and mortgage be adjudged to be usurious and void, and that they be delivered up and canceled, and for further relief, etc.

Now, I am unable to find any thing in this answer beyond the mere legal defense of usury. There are no allegations unnecessary to set up usury as a legal defense. ' He calls it a defense.

But it is said that a counter-claim is a defense. This is true, but it is something more ; and if the defendant means to avail himself of any benefit under it to which he would not be entitled under a legal defense, strictly, he must call it something more than an ordinary defense.

The Code gives the defendant the right to have the allegation of his answer stand, as admitted, if no reply be served when he sets up a counter-claim. Now, the facts set up should not only constitute a counter-claim, but they should be pleaded as such. This privilege, or right, to have an answer stand as admitted, is a privi lege to wbicb a defendant should only be entitled when be baa strictly complied witb tbe requirements of tbe rules of law and practice wbicb give it to bim. Tbe plaintiffs, on tbe other band, should not thus be compelled to submit to judgment against bim, until be has been fairly notified by tbe defendant that be lias served a pleading upon bim wbicb requires a reply.

Tbe plaintiff should not be compelled to spell out and guess what an answer is, and whether it requires a reply, but be should be distinctly notified by tbe defendant that bis answer is such; that if not replied to, be shall claim it is admitted.

Judge Boswoeth says, in tbe case of Burrall v. De Groot (5 Duer, 379), “when tbe facts alleged in an answer may possibly constitute a counter-claim, but are such as always constituted a fiat bar at law to tbe plaintiff’s right to recover, by showing, if true, that be never bad any cause of action, they should be deemed to be set up as a defense merely, unless tbe answer expressly states that they are set up by way of counter-claim. A verdict and judgment upon it in favor of tbe defendant would fully protect bim against a future action. To preclude a plaintiff from a recovery upon tbe idea that be has admitted tbe allegations of such an answer to be true, by omitting to reply to it, when tbe same allegations, viewed as a full defense, and that only, would be put at issue by tbe Code, would operate as a surprise in all actions in wbicb tbe defense of usury is interposed.”

Tbe same principle was applied in tbe ease of Bates v. Rosekrans (23 How., 98), and is, I think, equally applicable to this case.

There is nothing in this answer wbicb fairly designates it as a counter-claim, or gives any notice to tbe plaintiff that it is intended to be pleaded as such; and tbe defendant must be held to have intended it as a defense of usury merely..

It follows that tbe judgment appealed from must be affirmed, witb costs.

Talcott, J., concurred; MulliN and Smith, JJ., not sitting.

Judgment affirmed.


author: SMITH, J.:

text:
    WILLIAM H. PARSONS, Respondent, v. SOLON TAYLOR, Appellant.

      Exchange of property — decision of umpires — forfeit—liquidated, damages — wager contract.

    The plaintiff and defendant having been negotiating for an exchange of certain articles of personal property, it was agreed to leave it to two persons, one to he selected by each, to decide how they should exchange, and that if either refused to abide by their decision he should forfeit ten dollars to the other. The umpires having decided that defendant should pay to the plaintiff $115 on the exchange, and he having refused so to do, the plaintiff brought this action to recover the ten dollars. Held, that by the agreement the ten dollars were liquidated damages; that the agreement was not void as a wager contract, and ■ that plaintiff was entitled to recover.
    Appeal from a judgment of tbe Chautauqua County Court, .affirming a judgment rendered in a Justice’s Court in favor of the plaintiff.

      J. G. Record, for the appellant.

      J. A. Parsons, for the respondent.
   SMITH, J.:

No testimony was introduced by the defendant on the trial before the justice, and the case made by the testimony on the part of the plaintiff was this: The parties having -been in negotiation for an exchange of property without coming to terms, agreed to leave it to two other men, one to be chosen by each of the parties, to decide how they should trade, and if either refused to abide by their decision he should forfeit to the other the sum of ten dollars. The plaintiff’s property was a horse, buggy and harness, and the defendant’s was a watch. In pursuance of the agreement each party chose a man, and put into his hands the property which he proposed to trade. The men thus selected, examined and appraised the property, valuing the plaintiff’s horse, buggy and harness at $230, and the defendant’s watch at $115, and they decided that the defendant should pay the plaintiff $115 on an exchange of the property. The defendant refused to abide bj the decision, and neglected to pay the ten dollars forfeit money, for which sum this suit was brought, and the plaintiff recovered.

The judgment was clearly right. The parties mutually promised to abide by the decision of the umpires, or in other words, to exchange at their valuation, or pay ten dollars by way of damages; and the promise of each was a good consideration for the promise of the other. So, also, was the delivery by each, of his property, into the hands of the umpire, to be examined and valued, in pursuance of the agreement. The sum fixed was obviously intended not as a mere penalty, but as liquidated damages, there being but a single act to be performed by either party, and the damages being uncertain, such as loss of time, inconvenience and trouble in and about selecting the umpires and getting them together, and attending before them with the property for the purpose of appraisal. (Astley v. Weldon, 2 B. & P., 346; Dakin v. Williams, 17 Wend., 447; Williams v. Dakin, 22 id., 201; Cotheal v. Talmage, 5 Seld., 551; Clement v. Cash, 21 N. Y., 253.)

It is suggested, in the points submitted by the counsel for the appellant, that the agreement sued on was a wager contract, and therefore the money claimed cannot be recovered. It is difficult to see that any element of hazard or chance entered into the agreement. The counsel cites Ruckman v. Pitcher (1 N. Y., 392), and Bigelow v. Benedict (9 Hun, 429). The first was an action to recover bach money bet upon a horse-race and paid over by the stakeholder. The second was brought upon a contract to sell and deliver gold coin at a stipulated price at a future day. On demurrer the contract was held to be a mere bet or wager contract, but subsequently, on trial at the Circuit, without a jury, the court found, as matter of fact, that the contract was made by the defendant in the usual course of his business as a banker, and was not a betting contract, and the plaintiff had judgment which was affirmed on appeal to the General Term. The judgment has also been affirmed, recently, by the Court of Appeals. (5 "Weekly Digest, 82.) The rule laid down in that and in other cases there cited, is that where an optional contract for the sale of property is made and there is no intention on the one side to sell or deliver the property, or on the other to buy or take it, but merely that the difference should be paid according to the fluctuation in market values, the contract would be a wager within the statute. But in the present case the agreement was to exchange properties at the valuations which would be put upon them by the umpires, or to pay stipulated damages. The property was in existence, and was owned by the respective parties, and an actual exchange was intended. The only uncertainty related to the valuations, but they were to depend not on chance, but upon the judgment of the umpires to be formed after an examination of the property. If, however, the agreement by any proper, construction could be regarded ás a gaming contract, the justice must be presumed to have held that it was not so intended in fact, but that it was a mode adopted by the parties in good faith for the purpose of effecting an exchange, and the evidence well warrants that conclusion.

The objections taken to certain rulings of the justice upon questions of evidence have no merit. Tlie award was a collateral matter, and parol evidence of its contents was properly received. The question put to the witness Ellis, one of the umpires, whether he had a right to examine the buggy, was wholly immaterial, and his answer, I suppose so,” though irrelevant and improper, did no possible harm.

The judgment of the County Court should be affirmed.

Present — Talgott, P. J., Smith and MekwiN, JJ.

Judgment affirmed.


text:
    THE PEOPLE OF THE STATE OF NEW YORK ex rel. JOHN DONAHUE, Respondent, v. THOMAS B. FRENCH, as Superintendent, etc., Appellant.

      Fke department of Buffalo — removal of members of— chap. 519 of 1870. ■
    By tlie charter of tlie city of Buffalo, chapter 510 of 1870, the superintendent of the fire department is authorized to “ suspend, and for cause and after a hearing dismiss, any fireman or employe of the department,” and by a city ordinance he is authorized to employ the employes thereof. Ifeld, that he had no authority to remove any employe except for cause and after a hearing.
    Upon the hearing of this application to compel the defendant to reinstate the relator in Ms position in the department from wMcMhe had been removed, it was iusisted’by defendant’s counsel that the aforesaid restriction upon the power of removal only applied to employes appointed by the superintendent who removed them. Held, that the restriction applied to all employes, whether appointed by the superintendent attempting to remove them, or by his predecessor in office., 1)
    Appeal from an order of the Erie Special Term, and also from a judgment entered thereon, directing that a writ of peremptory mmir damus issue to the defendant, as superintendent, etc., commanding him to reinstate the relator in his position as stoker of the steamer Alberger, owned by the city of Buffalo.
    The city of Buffalo, by the terms of the act of 1870 revising its charter (Laws 1870, chap. 519), has power to establish and maintain a fire department, to be under the supervision of an officer, to be termed a superintendent of fire, who shall be appointed by the mayor, by and with the advice and consent of the common council, and shall hold office for the term of two years. Section 3 of title 13 of the act provides that “the superintendent shall be at the head of the department, and shall, under the ordinances, have the supervision and management thereof.” * * * “ The firemen and employes of the department shall be subject to his orders and directions. He may suspend, and for cause and after a hearing dismiss, any fireman or employe of the department.”
    An ordinance of the city provides that the superintendent shall have “ the ¿barge, control and management of the fire department, and all the engines and apparatus belonging thereto. Each member of the department shall be subject to his orders. He has power to appoint one person, and as many more as the common council shall direct, to take charge of, and preserve under his direction, apparatus belonging to the department, and to act as porters and keepers of the houses of the engine, hose, hook and ladder, and protection companies ; and he shall have power, and it is his duty, to- employ engineers, drivers and firemen for the steam engines, and drivers for the hose carts belonging to the department.”
    On the 10th of January, 1876, the defendant was appointed superintendent. At that time the relator occupied the position of stoker of the engine Alberger, and was then discharging its duties and receiving compensation therefor, and had been in that position ever since tbe 1st day of June, 1875, when be was appointed thereto by Joseph K. "Williams, the immediate predecessor of the defendant in the office of superintendent. On the 17th of January, 1876, the defendant, as such superintendent, discharged and dismissed the relator from his said position and employment, without a hearing and without any charge being made against him. The Special Term held that the superintendent had no power to remove the relator without cause and a hearing.

      John B. Gre&ne, for the appellant.

      E. G. Bobbins, for the relator.
    The superintendent had no right or authority to dismiss the relator except “for cause and after a hearing,” and the dismissal and discharge of the relator was without warrant under the city charter, and wrongful an d unlawful. (1 Dillon on Manic. Corp., §§ 179-194, and cases cited; People ex rel. Gorman v. Bd. of Police, 35 Barb., 527; People ex rel. Titus v. Same, 35 id., 535; People ex rel. Dunn v. Same, 35 id., 544; People ex rel. Ilamrahan v. Same, 35 id., 644; People ex rel. Pede v. Same, 35 id., 651; People ex rel. McGmie v. Same, 19 N. Y., 188; People ex rel. Miller v. Same, 52 How. Pr., 289, 301; State ex rel. Gill v. Common Council, 9 Wis., 254, 261; Murdoch v. Phillips Academy, 12 Pick, 261-268; Bacher's Oase, 20 Penn. St., 425; State v. Trustees, 5 Ind., 89; Charles v. Ilobolten, 3 Dutch. [N. J.], 203 ; Angel & Ames on Corp., §§ 704-707; Singleton v. Commissioners, 2 Bay’s B. [S. C.], 105, 107; Ex parte Mennen, 13 Peters, 230.)
   Smith, J.:

The place held by the relator as a stoker or fireman on one of the steam engines belonging to the fire department of the city of Buffalo is not a public office, in the full sense of the word. The incumbent takes no official oath, and is not liable to indictment for official misconduct as such. He is an employe, not an officer. In Sullivan v. The Mayor (53 N. Y., 652; S. C., in full, 47 How., 491) the Court of Appeals held, that the janitor of a public building in the city of New York, appointed by official authority, is not a public officer, but an employe. But although the relator was not a public officer, his employment was of a public character, and not a mere private contract, limiting his remedy, in case of a breach, to an action against the other contracting party for damages. The position held by the relator is of like nature.

The position occupied by him was created by public statute, which aiso prescribed the mode of appointment and removal by official action, and the compensation was fixed by the common council of the city under the authority of the statute, which prescribed that such compensation should not be increased or diminished during the term of service of the incumbent. (Act of 1870, chap. 519, title 3, § 4.) We think, therefore, the position and the duties and rights attached to it, were of such a nature, although not strictly official, as that the relator, if wrongfully displaced, has a remedy by maeidamus.

The power of the superintendent of the fire department to remove employes in his department, is given by the statute, in these words: “ He may suspend, and for cause and after a hearing, dismiss, any fireman or employe of the department.” This is a distinct limitation of the power of removal to cases in which cause for removal is found to exist, after a hearing has been had. The maxim expressio unius est exclusio alternes, is applicable to statutes as well as to contracts. (Broom’s Legal Maxims, 637 [6th Am. ed.], and cases cited in note 3.) It is especially applicable to the clause of a statute defining the powers of a new office created by the statute itself. The clause being restrictive, is to be construed as if it read, “ he shall not dismiss, etc., except for cause and after a hearing,” in which case the limitation could not be questioned. (People ex rel. McCune v. Board of Police, 19 N. Y., 188; People ex rel. Miller v. Same, 52 How. Pr. R., 289, 301; People ex rel. Gorman v. Same, 35 Barb., 527.)

The counsel for the defendant is understood to concede that the clause is thus restrictive in respect to cases to which it is applicable, but he 'contends that it applies only to firemen and employes appointed by the same superintendent who attempts to exercise the power of removal, and not to those appointed by his predecessors in office. Or, to state the position of the counsel in another way, no superintendent can remove any fireman or employe appointed by himself, except for cause and after a hearing, but he may remove, at his discretion, those who were appointed before he was inducted into office. That construction does violence to the language, and as we think, to the intent of the statute. The words of the statute are very plain, and they cannot be construed as above suggested, without interpolating language which the legislature ha3 not seen fit to employ.

Our attention has been called by the defendant’s counsel to a clause of the charter not referred to in the opinion of the learned judge at Special Term, which provides that “ all persons appointed under this act shall, unless otherwise provided, hold during the pleasure of the person or body by whom they were appointed. (Title 2, § 62.) If it is supposed by counsel that this clause applies to the term of employes appointed by the superintendent of the fire department, the position cannot be maintained. The provision relates exclusively to officers appointed under the act. This is apparent from the subject-matter of the title in which it is found, and from the context. The title relates to “officers,” and the latter clause of the same section shows that the appointees referred to are those having terms of office. The language of the remainder of the section is, when it is provided that the appointee shall hold for one or more years, the term of office shall expire on the first Monday >f January; but such persons may hold over until his successor eiders upon his office.” Again, if the provision applies to employes appointed by the superintendent of the fire department, then all such appointees are removable by the incumbent of that office at his pleasure, whether appointed by himself or by his predecessor. Such a construction is inconsistent with the language of the last clause of section 3, title 13, in whichever way it be interpreted.

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

Ten other cases, depending upon the same question, were submitted with this case, and the parties stipulated that the same order shall be entered in them as in this. The like order may be entered in each of them accordingly.

Present — Talcott, P. J., Smith and Merwin, JJ.

Order and judgment affirmed, with costs in this and ten other cases mentioned in the stipulation submitted herein.