text:
    People ex rel. Michael J. Dady, App’lt, v. Supervisor of Thirty-first Ward of City of Brooklyn, Resp’t.

      (Supreme Court, General Term, Second Department,

      Filed December 2, 1895.).

    Appeal—Record—Rearguhent.
    The appellate court is necessarily bound by the record and cannot consider any facts that were not before the special term upon which the order-appealed from was made, when brought to its notice for the first time on a motion for a reargument of the appeal.

      Appeal from an order denying a motion for a peremptory writ of mandamus. 'Motion for reargument.

      James C. Church, for relator;

      H. B. Hubbard, for resp’t.
   Brown, P. J.

This motion is based upon two grounds: First, that the court misapprehended the facts in relation to the resolution of the board of supervisors relating to the opening and grading of Neptune avenue; second, upon newly-discovered evidence.

Upon the last ground the affidavit of counsel is as follows:

“Since the argument and decision of this case, however, I have discovered by accident that the board of supervisors, before the supervisor of the town of Gravesend appointed the grading commissioners on the point in question, on January 30, 1893, passed a specific resolution amending the resolution of June 13., 1892, by .striking therefrom the provision for the grading of Neptune avenue between West Fifteenth street and West Sixth street. After the passage of this amending resolution the supervisor of the town of Gravesend, on the 1st day of February, 1893; appointed grading -commissioners of Neptune avenue, between old lot 47 and West Fifteenth street; and the said grading commissioners duly filed dheir oaths of office on Februaiy 5, 1893.”

The general term being an appellate court, it would seem hardly necessary to state that we are necessarily bound by the record, and that we cannot consider any facts that were not before the special term, and upon which the order appealed from was made. We cannot therefore determine whether the resolution referred to in the affidavit had any vitality when the grading commissioners were appointed, or whether, as claimed by the respondent, it took effect only when approved by the supervisor at large.

Upon the other ground of the motion, it is said that the court, ■in its opinion, appears to have assumed (1) that the grading commissioners were appointed prior to the resolution of December 12, 1892, whereas, in fact, they were not appointed until February 1, 1893; (2) that the resolution of June 13, 1892, provided for the opening as well as the grading of Neptune avenue, whereas the ■opening had been provided for by a resolution of the board passed .November 25,1885. I fail to see that these criticisms, if true, are of any materiality to the decision of the case. The fact is, as -stated in the opinion of the court, that the contract which the relator holds was made with the grading commissioners; that the resolution of June 13th directed the grading of Neptune avenue from “West Sixth street to the westerly line of old lot forty-seven •excepting that portion between the Sliell road and .West Eighth .street,” and authorized the appointment of grading commissioners “to cause the same to be graded, constructed, and improved; ” that the resolution of December 12, 1892, made no reference to the resolution of June 13th; that it shifted the avenue forty feet to ■the south between West Sixth and West Fifteenth streets, and •provided new proceedings for the opening and grading of the southerly one-half of the avenue as changed. This left the resolution of June 13th in full forre as to the whole avenue therein directed to be graded, except the northerly half between West Sixth and West Fifteenth streets, which by the resolution of December 12th, was closed.

The power of the supervisors was therefore, under these two .resolutions, confined to the appointment of grading commissioners for the district stated ; and he had no power, in appointing commissioners, to ignore that part of the avenue between West Sixth street and West Fifteenth street. In vindication, however, of the charge that the court misapprehended the facts of the ease, the attention of appellant’s counsel is called to the appeal papers. It nowhere appears that the resolution for opening Neptune avenue was passed by the board of supervisors in November, 1885, or that the grading commissioners were appointed on February 1, 1893. These facts, if they are material to the appellant’s case, •are stated for the first time on this motion.

The counsel is probably correct in stating that resolution of June 13th provided only for the grading of Neptune avenue, but the point is of no importance, as we assumed that the report of the •opening commissioners had been confirmed. The resolution is, however, a long one, and covers very many streets; and by section -23 it provided that all the provisions for opening and grading Voorhis avenue should apply to “Neptune avenue, from West Sixth street to the westerly line of old lot forty-seven.”

The motion is denied, with $10 costs.

All concur.


source: Caselaw Access Project

author: O’Brien, J. Follett, J. (dissenting).

license: Public Domain

text:
    William E. D. Stokes, Resp’t, v. Edward S. Stokes et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1895.)

    1. Evidence—Books oe account—Corporations.
    In an action by the receiver of a coporation against one of its directors to recover for money and property alleged to have been improperly appropriated, the books of account of the corporation are not per se competent evidence to establish a liability, but the knowledge of such director as to the existence of such accounts in the corporate books may make them competent evidence against him.
    3. Same. - ’
    "Where a party introduces in evidence one side of a book account, his adversary may introduce the other side of said account.
    8. Corporation—Director—Accounting.
    The mere fact that a director or officer has transactions with the corporation, appearing on the books, which show at the time the action is brought a credit balance, the correctness of which accounts is not successfully assailed, cannot be made the basis for a decision and an interlocutory judgment directing an accounting by such officer in an action brought, under section 1781 of the Code, to compel such officer and director to account for his official misconduct.

      4. Same.
    In an action, brought under the above sections of the Code to cotnpel such officer to account for official misconduct and not for the examination of a long account, an accounting cannot be ordered until" there is some proof to sustain the allegation that there has been some official misconduct and a determination to that effect reached by the court.
    Appeal from an interlocutory judgment in favor of plaintiff.

      John J. Adams, for app’lt;

      Frank H. Platt, for resp’t.
   O’Brien, J.

The complaint charges “ that the defendants, Stokes, Foote, Cornish, have since its organization, and now hold, the control of said corporation and have been guilty of official misconduct therein, and in the management' and disposition of its funds and property committed to their charge, and that the said defendant Stokes has wrongfully acquired to himself, and transferred to others, money and property of the corporation, and has lost or wasted the same, with t[m knowledge and concurrence or acquiescence of ” the defendants.. From the complaint as construed in the former opinion of this court (87 Hun, 153 ; 67 St. Rep. 760), and by the concession of the respondent, it is clear, to quote from the opinion, that:

“ The object of this action was to compel the defendant officers to account for official misconduct, and not for the examination of along account; and the latter could not be ordered until there was some proof to sustain the allegations that there had been some official misconduct, and a determination to that effect reached by the trial judge, and put in the form of an interlocutory judgment directing the accounting. The issue here presented was as to whether the defendants, or one of them (Stokes), had been guilty of official misconduct. Without, however, reaching any determination upon this question, the trial judge, as already stated, appointed a referee. For such practice we can find no authority. * * * ”

And the orders directing a reference upon this ground were reversed. Thereupon the plaintiff, without any additional testimony being taken or proceedings had, obtained a decision, among other things— '

“ That said corporation (the Hoffman House) being under the control of said Edward S. Stokes, as an officer and • director thereof, he received to his own use funds of said corporation, as appears by three accounts on the books of account of said corporation, entitled, respectively, ‘ The E. S. Stokes Account/’ ‘The E. S. Stokes Yacht Account/ and ‘The Fenwick Hall Account.’ ”

And thereafter an interlocutory judgment was entered directing" a reference to take and state an account of the dealings and transactions between the said Stokes and said corporation on said three accounts. This decision eliminates any and all questions of fraud or misconduct on the part of the defendant Stokes, and does not find that any of the specific charges of misconduct alleged in the complaint are sustained; but the ground upon which the issues were decided is the fact of the existence of the three accounts mentioned in the books of the corporation, and that, as these show a debit balance against the defendant Stokes, he accordingly received moneys to that extent to his own use, from the corporation, and that he should account for all his dealings and transactions appearing in such accounts. We held on the former appeal that the action was brought “ under section 1781 of the Code of Civil Procedure, to compel ‘the defendants to account for their official conduct in the management and disposition of the funds and property of the corporation; ” and, as shown by the provisions of such section and our former opinion, its object “ was to compel the defendant officers to account for official misconduct, and not for the examination of a long account.” The issues in such an action do not concern or affect the defendant Stokes, as a -debtor, unless such debt was caused by official misconduct or fraud on 1ns part. That the learned trial judge did not find fraud or official misconduct appears, not only from his decision, but also from his opinion-, wherein he says:

“ When an officer of a corporation makes the corporation his banker, as it were,—where he draws on the corporation, managing the corporation as its officer, and at the same time allowing the corporation to occupy the position of a banker,—it seems to me the corporation has a right, at the termination of the relation, to come and say, ‘We want an account taken of our relation between us as an officer of the corporation and our president, and as a depositor who has occupied that relation.’ There js no objection to such a relation existing, that I know of,—no reason why an officer of the corporation, if the corporation has a mind to act in that position, there is no reason why he should not do it; but I think he puts himself in the position of having the corporation come and say, ‘ We want our accounts, as between us, settled.’ I don’t see why that is not so. If an officer occupies that position, I don’t see why the corporation has not a right to come in and say, (We want a regular accounting between our president and ourselves, the corporation.’ * * * I don’t want to be understood as saying there is the slightest impropriety in it, but there were money transactions between Mr. Stokes and the corporation. Very likely it was necessary, to carry on the business of the corporation, that it should be so. I don’t know anything about that. It is not necessary to determine that, one way or the other. But he had money transactions between himself and the corporation; he was the corporation’s agent; he was the corporation’s trustee; and it seems to me that, occupying that relation, the corporation has a right to come in and ask to have the account settled in the usual way.” '■

Were this a mere action for an accounting, these views might be controlling; but we think now, as we did upon the former appeal, that the learned judge has misconceived the nature of this action, which brought as it is by the plaintiff in his capacity either of stockholder or creditor on behalf of the corporation itself, is made to depend upon the official misconduct of the defendants; and this involves issues of fraud, misconduct, willful neglect, or other willful culpability of the defendants. The defendant Stokes was justified in concluding that the action was not one intended to hold him as a debtor on an account which ran on the books of the corporation, but to show that his official misconduct" as a director had been willfully corrupt, and that he had been guilty of gross misconduct in his office as president and trustee of the corporation. Had this been an actiop to recover a debt on the balance of an account, the pleadings and the issues would necessarily be different, and the defendant would have had the opportunity of showing, if he could,—as he claimed to be able to do,^-that the corporation, at the time the action was commenced, was indebted to him. As said, however, he was not sued upon, nor was the issue presented to him of, an indebtedness, but he was charged with having fraudulently converted the property of the corporation to his own use. And such charges not having been sustained, in the opinion of the trial judge, there is no proper basis for the-judgment directing the defendant to account. The plaintiff realized the burden thus placed upon him, and, to support the charges in his complaint, he introduced a voluminous correspondence, replete-with charges of official misconduct, and upon the trial selected certain of these, with a view of proving that the accounts were in some respects fictitious and fraudulent, and that certain money-taken from the corporation had not been entered upon its books. It is unnecessary for us to refer to the evidence upon these points, .in view of the conclusion of the trial judge that such evidence failed to establish fraud or other misconduct; his opinion and decision showing clearly 'that the existence of these accounts on the books of the corporation, between the defendant. Stokes and the corporation, of themselves, .was sufficient to require the defendant Stokes to account for all transactions thus. appearing. With respect to such accounts (and upon their competency and strength this decision must rest), although the case of Rudd v. Robinson, 126 N. Y. 113; 36 St. Rep. 500, is authority for the proposition that “ in an action by the receiver of a corporation against one of its directors to recover for money and property alleged to have been improperly appropriated, the books of account of the corporation were not per se competent evidence to-establish a liability,” but assuming, from the additional fact which appears in this case that the defendant Stokes had knowledge of the existence of such accounts in the books of the corporation,, that this fact made them competent evidence against him, we have-still to consider what was the result and effect of such evidence. It appears that the personal account of the defendant Stokes was-commenced with a cash credit of $35,000; and while, during different periods, this amount was lessened by withdrawals until afc times there was a debit balance against him, it yet appears that at the time the action was brought there was in such account a. credit balance in his favor. The plaintiff, for the purpose of proving the withdrawal of moneys or property of the corporation,, attempted to introduce but one side of the account, namely, the debit side; but-the learned trial judge, upon the other side being-offered by the defendant, correctly held that, if either, then both sides of the accounts were admissible, which therefore went in together, showing the results already outlined. The effort to falsify these accounts, as made by the plaintiff, was not, in the opinion of the judge below, successful. With respect to the suggestion,, therefore, that the debit side of the account furnishes evidence-that the defendant Stokes has funds of the corporation in his-hands, the answer is that the credit side of the account shows that, he has not only accounted' and returned them to the corporation, but, in addition, has something in his favor.

So we are brought back again to the proposition with which we started,—as to whether or not the mere fact that a director or officer has transactions with the corporation, appearing on the books, which show at the time the action was Brought a credit-balance, the correctness of which accounts is not successfully assailed, can be made the basis for a decision and an interlocutory judgment directing an accounting by such officer in an action brought, as this is, under section 1781 of the Code, to compel such officer and director to account for his official misconduct. The conclusion reached that such evidence was sufficient is equivalent to a finding that an officer and director who has any transactions with the corporation can be proceeded against for official misconduct under section 1781 of the Code. We have been referred to no authority which supports this proposition, nor do we think any case has gone so far as to hold that there is any such penalty attached to or involved in a transaction carried on between an officer and director of a corporation and the corporation itself. We know from common experience—and must therefore take notice of the fact—that it.does frequently happen that the affairs of corporations require at times the advancement of sums of money by such officers which are clearly for the benefit of the corporation. Where such moneys are advanced, it is not wrongful for the person making such advances to withdraw from the corporation when its treasury will permit enough to reimburse him therefor ; and such transactions we do not think would expose the officer or director occupying such a relation to the corporation to a successful action being maintained against him for misconduct. In this, as in all other actions, the judgment should be secundum allegata et probata. Here, however, while the allegations charge fraud, violation of duty, and gross misconduct, the trial judge finds that such allegations or charges are not sustained, but nevertheless renders a judgment subjecting the defendant to the same penalties and burdens as would be entailed had they been sustained by competent proof. If these accounts in the Books of the corporation are competent evidence in favor of the corporation, as-against the defendant Stokes, we fail to see why they are not equally good in his favor, as against the corporation; assuming as we do, from the conclusion reached by the learned trial' judge, that the correctness of these has not been successfully assailed, and that his conclusion has been derived, not from the fact that-there was any fraud or deceit or falsity in the accounts themselves, but that the transactions, being those bétween an officer and a corporation, entitled the latter to an accounting, notwithstanding a comparison of the debit and credit sides of such accounts would show at the time the action was brought, and is now made to appear by the accounts filed, a large credit balance in favor of the defendant We think now, as we did upon the former appeal, that as this action, brought under section 1781 of the Code, is to compel the defendant officers to account for official misconduct, and not for the examination of a long account,” the latter could not be ordered until there was some proof to sustain the allegations that there had been some offipial misconduct, and a determination to that effect reached by the trial judge.” The absence of such a determination we think fatal to the judgment, which-should be reversed, and a new trial ordered, with costs to the appellant to abide the event.

Yan Brunt, P. J., concurs.

Follett, J. (dissenting).

(dissenting).—This This case has been once before this «jourt, and for a statement of the facts and the relief sought, reference is made to 87 Hun, 152 ; 67 St. Rep. 760. Since that decision the case has again been submitted to the special term, and a decision signed and an interlocutory judgment entered, from which this appeal is taken. In the decision filed the court foutid as follows:

“ The court states the grounds of its decision to be that the plaintiff William E. D. Stokes is a stockholder of said corporation, as alleged in the complaint; that the relations of said Edward S. Stokes to said corporation were such that an application by the plaintiff to the board of directors of said corporation to bring an action against said corporation were futile and unnecessary ; that said corporation being under the control of said Edward S. Stokes, as an officer and director thereof, he received to his own use funds of said corporations, as appears by three accounts on the book of account of said corporation, entitled, respectively, ‘ The E. S. Stokes Account,’ ‘ The E. S. Stokes Yacht Account,’ and '• The Fenwick Hall Account’ ”

These facts and those admitted in the pleadings are sufficient to entitle the plaintiff to maintain this action, and are quite sufficient to sustain the interlocutory .judgment, which simply directs the defendant to account for such moneys as he has received, belonging to the corporation, of which he is an officer. Brinckerhoff v. Bostwick, 88 N. Y. 52. The learned counsel for the appellant urges that, because the conduct of his client in receiving to his •own use the funds of the corporation is not characterized by the trial court as fraudulent," the interlocutory judgment cannot be ■sustained. This position is not tenable, for if the defendant has money in his hands belonging to the corporation, which he received as an officer, and which he is unwilling to pay over, as he seems to be, he is liable to account therefor, and it is quite immaterial whether or not he acquired it fraudulently.

On the trial the defendant showed by oral evidence that receivers for the Hoffman House had been appointed by the court of chancery of the state of New Jersey, and offered in evidence the order of that court appointing the receivers, which was rejected on the ground that the defect of parties had not been pleaded. Not having pleaded that there was a defect of parties, the defendant has waived the objection. Oode Civ. Proc. § 499. The sums recovered in this action will be paid into the treasury of the corporation, and will eventually reach the hands of the receivers, -unless they have been or shall be discharged. Shóuld the receivers desire to be admitted as parties to the action, they undoubtedly wpuld be, upon their own application; but the defendant, by neglecting to raise the objection by answer, has lost his right now to do so.

Ro question relating to the reception or rejection of evidence is argued, excepting the one considered; and, believing that the judgment is right, it should be affirmed, with costs.


author: Parker, J.

text:
    New York Security and Trust Company, Resp’t, v. Ernst Lipman et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 18, 1895.)

    1. Appeal—First instance.
    The objection that an action in equity will not lie, not raised in the answer, cannot be taken for the first time upon the appeal.
    3. Factor—Pledge.
    A factor may secure a loan made to himself by assigning a warehouse receipt for packages of goods not identified by number or mark, and after-wards substitute for those receipted for, other packages, which he-holds as factor.
    3. Same.
    The statute is not violated nor is it against public policy for a bailee to agree with his bailor that, if he shall at any time have on storage a greater amount of goods of the same kind and quality, he may substitute the surplus for the like quantity of that which was originally pledged
    4. Same—Consideration.
    The surrender of the original goods covered by a negotiable warehouse receipt upon thé order of the factor constitutes a valuable consideration for the giving of the new goods by the factor in substitution, and the pledgee, as to the latter goods, is a holder for value in the usual course of business.
    Appeal from a judgment entered in favor of plaintiff.

      S. Sidney Smith, for app’lts Antony Gibbs & Sons and Hongkong & Shanghai Banking Corp.;

      Michael H. Cardozo, for app’lts Cotesworth & Powell;

      William B. Hornblower, for resp’t.
   Parker, J.

This suit was brought on the equity side of the ■court, for the purpose of obtaining a determination of the controversy relating to the title of the proceeds of 200 bales of burlap which had been sold by the plaintiff under a warehouse receipt, issued by the Terminal Warehouse Company. The plaintiff claimed to be entitled to the greater. part of the proceeds. Some thirty of the defendants each preferred a claim to the proceeds of some portion of the 200 bales. The several claims of these appellants were as follows: Antony Gibbs & Sons asserted title to fifteen of the bales, the Hongkong & Shanghai Banking Corporation to 'twenty-two bales, Cotesworth k Powell to nine bales, and each party claimed to be entitled td the proceeds of the sale of the several bales to which they asserted ownership.

The point made by one of the appellants that no case was made for any relief in equity, and that the complaint should have been dismissed, citing the decision of this court in New York Security & Trust Co. v. Blydenstein, 70 Hun, 216; 53 St. Rep. 762. Blydenstein & Co. opposed a motion made in this suit for a preliminary injunction restraining any of the defendants from prosecuting any other suit against the plaintiff affecting the title to any of the 200 bales. Their opposition was unsuccessful at the special term, and Blydenstein & Co. appealed, resulting in a reversal of the order, so far as they were concerned, at general term. This order was subsequently affirmed in the court of appeals. 139 N. Y. 657; 54 St. Rep. 934 Had the appellant who now makes the point seasonably made objection that an action in equity would not lie, the decision of the court in Blydenstein’s appeal would sustain his position. But all of the defendants, except Blydenstein & Co., seemed to have acquiesced in the form of the action ; and the appellant did not, by his answer, raise the question whether the suit was properly brought on the equity side of the court. For do we find in the record that he made such an objection during the progress of the trial. It is now too late to make the objection for the first time, and as to these appellantsit must be held that the form of the action is good. Town of Mentz v. Cook, 108 N. Y. 504; 13 St. Rep. 845; Ostrander v. Weber, 114 N. Y. 95; 22 St. Rep. 979.

After the decision of the court of appeals on the appeal of Blydenstein & Co., to which we have referred, they prosecuted their action in the federal court against the trust company (this plaintiff), for a conversion of the proceeds of the bales claimed by them; and it resulted in a judgment in favor of the trust company. Subsequently this judgment was affirmed in the circuit court of appeals. The decision of the special term is based upon the decision of that court, and we should be content to rest an affirmance of the judgment upon the discussion of the court in that case were it not that appellants apparently take a different position than did the counsel for Blydenstein & Co. in the circuit court of appeals. The argument of the court in Blydenstein’s Case, leading to the-conclusion that these appellants had so clothed Lipman & Co. with the indicia of ownership, as to the bales of burlap in question, as to protect any one who, within the terms of the factor’s act, dealt with Lipman & Co. upon the faith of such apparent ownership, seems to us conclusive. The appellants have apparently reached the same conclusion, for neither of them, on this appeal, undertakes any discussion of that question. On the contrary, one of the counsel states in his brief that:

“ It may very well be, if Lipman & Company had sold the goods, and had been paid for them, or had pledged them to some one who had parted with something on the faith of their possession, the title of Gibbs & Sons and the Hong Kong & Shanghai Banking Corporation would have been lost; but this would be-because they would be estopped under the factor’s act.”

While a discussion of that question is now wholly undesirable, for the reasons given, it is, nevertheless, necessary to state briefly the leading facts, in order to appreciate fully the questions which the appellants bring to our attention.

September 7,1892, Lipman & Co. issued their notes for $50,000-to the Few York Security & Trust Company, the plaintiff. As security for the loan, Lipman & Co. pledged to the trust company 500 bales of burlap, in the bonded warehouse of the Terminal Warehouse Company of New York city. The evidence of the pledge consisted of five negotiable warehouse receipts, for 100 bales each, issued by the Terminal Warehouse Company. Each of the receipts bore the date of December 1, 1891, at which time they were issued to Lipman & Co., and by them, at about that time, delivered to the plaintiff, as collateral for a loan of like amount with that made von September 7, 1892. In October and November, 1892, Lipman & Co. reduced the amount of the loan by payments aggregating $30,000, and received from the plaintiff three of the warehouse receipts, representing 300 of the 500 bales of burlap. The situation of the loan on December 15, 1892, was that Lipman & Co. still owed the trust company, on account of the loan $20,000; and its security consisted of the pledge of 200 bales of burlap, which was represented by the warehouse receipts. These receipts were in the name of Lipman & Co., which firm had indorsed them in blank. On the day last named, the trust company presented the two receipts at the warehouse, and received in exchange a single warehouse receipt for 200 bales, made out in its own name. Shortly prior to this action being taken, Lipman & Co. failed, without having paid the $20,000 then owing to the plaintiff on account of the loan. Thereafter the 200 bales were sold, the amount realized being $22,823.84. The judgment directs the payment of plaintiff’s claim in full, and awards to the appellants ajpro rata share in the sum remaining after satisfying plaintiff’s claim. The appellants severally insisted then, as now,' that they should receive the total proceeds of the bales which they claimed to own.

In order to avoid confusion, we shall only discuss the facts relating to the claim of Antony Gibbs & Sons. Their case is taken, rather than that of the other appellants, because in its facts it is, at least, as favorable to the position taken by the appellants as any. The bales claimed by Antony Gibbs & Sons were stored' in the Terminal Warehouse Company’s warehouse on the 8th day of December, 1892, three months after the loan by the trust company was made, and only seven days before it surrendered to the warehouse company the warehouse receipts, which had been indorsed to it in blank by Lipman & Co., and received from the warehouse company a receipt, in its own name, for the 200 bales. When the last-named warehouse receipts were given, there were but 200 bales of burlap which had been stored there by Lipman & Co., and included among the 200 bales were the fifteen bales of Antony Gibbs & Sons, which Lipman & Co. stored in the warehouse seven days before.

As we have already observed, the appellants, in effect, concede that nowthstanding Antony Gibbs & Sons were the owners of the fifteen bales stored December 8th by their factors, Lipman & Co., still they had so clothed Lipman & Go. with the indicia of title that, had the plaintiff thereafter made a loan to Lipman & Co. upon a pledge of the fifteen bales secured by a negotiable warehouse receipt, the trust company would have been entitled to so much of the proceeds of the bales as should be necessary to satisfy the loan. In such case, say the appellants, the trust company would have been entitled to the protection of the third section of the factor’s act, which reads as follows:

“ Every factor or other agent intrusted with the possession of any.bill of fading, custom house permit or warehouse keeper’s receipt for the delivery of any such merchandise, and every such factor or agent not having the documentary evidence of title, who shall be intrusted with the possession of any merchandise for the purpose of sale, or as security for any advances to be made or obtained thereon, shall "be deemed to be the true owner thereof, so far as to give validity to any contract made by such agent with any other person, for the sale or disposition of the "whole or any part of-such merchandise, for any money advanced, or negotiable instrument or other obligation in writing given by such other person upon the faith thereof. 4 Rev. St. (8th ed.) p. 2518.

The advance of Lipman & Co. by the trust company having been made long before December 8th, and it appearing that the trust company never saw the bills of lading or the shipping documents which Antony Gibbs & Sons sent to Lipman & Co., furnishes the basis for the claim of the appellants that the section of the factors’ act quoted does not apply. They insist that it necessarily follows from such facts that the trust company did not advance any money or take any action upon the faith of the fifteen bales of burlap. If there were no other facts than those to which the appellants refer, their position would be well taken. Moors v. Kidder, 34 Hun, 536.

It is further insisted by the appellants that, if it be assumed that the plaintiff received the bales of Antony Gibbs & Sons through the act of Lipman & Co., they took them as security for an antecedent debt or demand, and hence áre denied the right to hold them by the fourth section of the factors’ act, which provides that:

“ Every person who shall hereafter accept or take any such merchandise in deposit from any such agent as a security for an antecedent debt or demand shall not acquire thereby or enforce any right or interest in or to such merchandise or document other than was possessed or might have been enforced by such agent at the time of such deposit.”'

Summarized, the appellant's position is that, if there were any evidence that Lipman & Co. pleged the fifteen bales to the trust company after their storage, it was done to secure an antecedent debt, and the trust company acquired no rights thereunder; that the plaintiff advanced nothing upon the faith of the documents intrusted to Lipman & Co., nor upon the bales in the warehouse; and that such bales were not in fact pledged by Lipman & Co. to the trust company. In taking this position, the appellants ignore certain important, and, we think, controlling, facts. When the five warehouse receipts were issued, December 1, 1891,, there were 801 bales in the possession of Lipman & Co., and stored in the warehouse. Prior to that time the representative of Lipman & Co. had informed the officers of the Terminal Warehouse Company that, when he called for negotiable warehouse receipts, he wished to have them made out without bale marks, so that he could substitute other bales for them whenever he should desire to do so. So, while Gfatman, the representative of Lipman & Co., testified that there was nothing said about substitution at the time he obtained the five negotiable warehouse receipts, dated December 1, 1891, he also testified that, when he first took out negotiable receipts, “ they (the officers of the warehouse company) asked me whether I wanted any particular bales, and I said, ‘No.’ I wanted to have no bale marks, so that I could substitute whenever I like. But since that time, when I sent down for negotiable warehouse receipts, they-always made them out the same way; so that, when these particular warehouse receipts were made out, there was no conversation on the subject.” It further appears from his testimony that, under these negotiable warehouse receipts, Lipman & Co., from time to time, substituted bales of burlap for others which had been taken out and sold. The absence of any special conversation on the subject at the time the warehouse receipts in question were taken out does not affect the situation, because, having informed the plaintiff that, when he called for negotiable warehouse receipts, he wanted them made out without bale marks on, so that "he could make substitution from time to time, the request for open negotiable warehouse receipts representing the 500 bales, and their issuance by the warehouse company, were necessarily under their previous agreement, which provided for substitution in such cases. Bach of the receipts issued expressed an agreement by the warehouse company to deliver to Lipman & Co., or to their assignees, 100 bales of burlap upon the return of the receipts. By it the warehouse company further agreed that, while the receipts were outstanding, it would keep on hand, ready for delivery, the number of bales called for by it, but ' not that it would deliver bales bearing any particular marks; and at the time of issuing the five open receipts, as we have observed, there were in the warehouse 801 bales, or 301 more than the amount covered by the receipts. Lipman & Co., in accordance with the usual custom in such cases, and its agreement with the warehouse company, continued thereafter to,deposit bales of burlap in the warehouse, as they were received from time to time, and to sell burlap which was stored, and to call for deliveries to their purchasers; the oldest bales being always held for delivery on the open receipts, and, when they were delivered, the next oldest bales were substituted. Thus, the bales which were on hand at the time the warehouse receipts in question were given were after a time all disposed of by this process of substitution, new bales being put in the place of the old as fast as they were taken out, so that there was always in the possession of the warehouse company a sufficient number of bales to make good the agreement which the warehouse company expressed in its receipts: and the arrangement which Lipman & Co. had with' the warehouse company made it possible to take out the old bales from the warehouse, and put in new ones, without the necessity of making new receipts every time there was a sale. Such was the agreement, and of its validity there seems to be no doubt

No statute is violated nor is any reason apparent for deeming it against public policy for a bailee to agree with his bailor that, if he shall at any time have on storage a greater amount of goods of the same kind and quality, he may substitute the surplus for a like quantity of that which was originally pledged. It was precisely that which the Terminal Warehouse Company-and Lipman & Co. agreed should be done, and it was that which they in fact did. Bales of burlap were never delivered upon the order of Lip-man & Co., unless there were present in the warehouse other bales, apparently the property of Lipman & Co., to substitute in their place. By this process of substitution, it so happened, in the course of time, that the entire 801 bales which were in the warehouse on the 1st day of December, 1891, were delivered to persons to whom they had been sold by Lipman & Co., and other bales stored in the warehouse were substituted in their place and stead. On the 8th day of December, 1892, when Lipman & Co. stored with the warehouse company the fifteen bales to which Antony Gibbs & Sons claim to have the title, there were in the storehouse the 200 bales called for by the open negotiable receipt of the trust company. But, between that date and the 15th of the same month, the warehouse company delivered to the purchasers, on the order of Lipman & Co., fifteen bales, and substituted the fifteen bales in question for them, after which there were in the warehouse only the 200 bales called for by the trust company receipt. We have already asserted that the agreement in pursuance of which this was done was one the parties were entirely competent to make, and we next observe that the" surrender of the original bales of burlap covered by the negotiable warehouse receipt upon the order of Lipman & Co. constituted a valuable consideration for the giving of the new bales by Lipman & Co. in substitution, and that the pledge, as to the latter, is a holder for value, in the usual course of business. And that rule applies to the substitution of appellant’s bales, and brings the transaction within section 8 of the factors’ act, instead of section 4, as contended by the appellants. They were not taken by the trust company as security for an antecedent debt, but in consideration of the surrender of other bales, on the faith of which the loan had been made .by the trust company. There was therefore a present parting of value, independent of the antecedent debt.

The judgment should be affirmed, with costs.

All concur.


author: Per Curiam.

text:
    La Fayette E. Pruyne, as Trustee, etc., Resp’t, v. Adams Furniture and Manufacturing Company, Limited, et al., App’lts.

      (Supreme Court, General Term, Fourth Department,

      Filed December 26, 1895).

    1. Mortgage—Acknowledgment—Corporation.
    The acknowledgment oí a mortgage by a corporation is sufficient, where it is made by the secretary, and recites due authority to execute the instrument and attests the genuineness of the signature of the president and oi the seal thereto affixed.

      3. Same—Payment.
    The surrender of bonds for the purpose and an express agreement or understanding that they are not to he canceled, hut to bo resold to raise money to coueluct the business of the company, does not operate as a payment and consequent discharge of the mortgage given to secure them.
    Appeal from a judgment in favor of plaintiff.
    The action was to foreclose a mortgage or trust deed executed by the Adatns Furniture & Manufacturing Company, Limited, to the plaintiff. It was dated the 15th of August, 1889, recorded on the 28th of the same month, and given to secure thirty-six bonds of $500 each, payable on the 15th day of August, 1899, with semiannual interest, payable on the 15th day of February and August of each year. It was given pursuant to the consent of the stockholders and to a resolution passed at a meeting of the directors of the corporation. It was attested:
    “In witness whereof, the party of the first part has caused its corporate seal to be affixed hereto, and these presents to be subscribed by its president and secretary, and by the party of the second part, the day and year first above written.
    “ [Signed] De Alton Dwight, President.

    “L. E. Prdyne.
    “Attest: John Sinclair, Secretary.”
    The proof or acknowledgment was as follows:
    “State of Hew York, County of Jefferson —ss.: On this 22d day of August, 1889, before me personally came John Sinclair, to me known and known to me to be the secretary of the Adams Furniture & Manufacturing Company, Limited, of the village of Adams, Hew York, the corporation mentioned and described in the foregoing mortgage or deed of trust as the party of the first part thereto, who, being by me duly sworn, did depose and say that he resided in the village of Adams, N. Y.; that he is the secretary of the Adams Furniture & Manufacturing Company, Limited, and knows the corporate seal thereof; that the seal on the foregoing mortgage or deed of trust is the corporate seal of said company, and was affixed thereto by the order of the board of directors of said company, and especially authorized by the stockholders of the company in meeting duly assembled; and that he signed his name thereto by like order as secretary of said company. And deponent further says that he is acquainted with De Alton Dwight and knows him to be the president of said company; that the signature of said De Alton Dwight, subscribed to the foregoing mortgage deed of trust, is in the genuine handwriting of said Dwight, and was thereto subscribed by like order of said board of directors in the presence of said deponent.
    “[Signed] John Sinclair.
    “Sworn to before me August 22, 1889.
    “A. F. Saunders, Hotary Public, Jefferson County.”
    It was acknowledged on the 27th of August by such trustee.
    The thirty-six bonds secured by the mortgage or trust deed were issued and sold at par to the stockholders of the company. A year or so after, the company failed, and went into the hands of a receiver. Subsequently, the capital stock was increased, and the then holders of the bonds were requested to surrender them and take stock therefor, which they did. They were surrendered for the purpose of being guaranteed, and then sold to persons not connected with the corporation. It was expressly agreed and understood that they should not be canceled when surrendered, but be resold for the benefit of the company. In pursuance of this understanding the bonds were surrendered, guaranteed by individual stockholders, and resold by the officers of the company, without any new consent of the stockholders or any written resolution of the directors. The defendants the Citizens’ National Bank of Adams and Martha A. Sinclair are judgment creditors of the corporation, their judgments having been obtained in March, 1895.
    On the trial, the special term held that the plaintiff’s mortgage was a lien prior of the judgments of the defendants, and ordered the usual j udgment of foreclosure.

      Lansing, Lansing & Jones, for app’lts;

      Rogers & Atwell, for resp't.
   Per Curiam.

The appellants insist that the lien of the mortgage or trust deed given to the respondent by the Adams Furniture & Manufacturing Company, Limited, is inferior to the lien of their judgments, because it was not properly acknowledged,, or attested by one witness, as required by the statute. Rev. St. (8th ed.) p. 2451, § 137. We are of the opinion that the proof or- acknowledgment was a sufficient compliance with the statute, and that the trust deed or mortgage, when thus acknowledged and delivered, became effectual against subsequent purchasers or incumbrancers. We find no statute which prescribe® any particular form of proof or acknowledgment of a deed or mortgage made by a corporation. It was in form like the precedent in Jenkins’ Clerk’s Assistant, which has been in use and followed for many years. No case is cited and none has been found where the precise question involved has been decided, yet the cases we have examined, so far as they bear upon the-question, tend to sustain the validity of the acknowledgment. Lovett v. Association, 6 Paige, 54; Trustees v. McKechnie, 90 N. Y. 618, 621.

In Merrill v. Montgomery, 25 Mich. 73, where a conveyance was sealed by the corporate seal and signed by the president and cashier it, was held that an acknowledgment.by the cashier was sufficient.. The same doctrine was laid down in Devi. Deeds, § 468. In Claflin v. Smith, 15 Abb. N. C. 241, 248, the rules of construction applicable-to certificates of acknowledgment are collated and commented upon. In the opinion in that case, among other things, it is in effect said that where no form of certificate is prescribed, it need not be in any particular form, and that:

“ It is the policy of the law to uphold a certificate when substance is found, and it should be the aim of courts, in cases of defective certificates, -to preserve and not to destroy, and the court should be astute to find means to make official acts effectual; ” citing Morse v. Clayton, 21 Miss. 373; Wells v. Atkinson, 24 Minn. 601.

If correct in our conclusion that the mortgage or trust deed was properly acknowledged or proved, it follows that it was a lien upon the premises superior to that of the appellants’ judgments.

The appellants, however, insist that, even if the mortgage -was valid, it was discharged by payment of the bonds it was given to secure. When this mortgage was given, the capital stock of the corporation was $20,000. The bonds were all taken by stockholders. It was subsequently determined that the capital stock should be increased to $40,000. The stockholders who held the bonds were then requested to, and in pursuance of a resolution adopted by the board of directors of the corporation did, exchange them for stock of the company. The bonds were then surrendered to the company by the holders for the purpose of having them guaranteed by individual stockholders and sold to persons who were not connected with the corporation. It was expressly agreed and distinctly understood that the bonds were not to be canceled when surrendered, but were to be thus resold. This was done. The contention of the appellants is that this mortgage was discharged by the surrender of the bonds, and that their resale, without the further consent of the stockholders, or a further resolution of the directors, before the rights of the appellants had accrued, rendered the mortgage invalid as to them. If these bonds had been surrendered for the purpose and with an intent to discharge the debt secured thereby, it would, perhaps, follow that the mortgage would be invalid as to the appellants’ judgments. But, manifestly, that was not the intent. The bonds were surrendered for the purpose and under an express agreement or understanding that they were not to be canceled, but were to be resold to raise money to conduct the business of the company. Under these circumstances, there was no merger, as clearly such was not the intention of the parties. Beach, Mod. Eq. Jur. § 450; Smith v. Roberts, 91 N. Y. 470; In re Estate of Gilbert, 104 id. 200; 5 St. Rep. 673; Asche v. Asche, 113 N. Y. 232; 22 St. Rep. 799. Indeed, there does not seem to be any question of merger involved in this case. The question is whether the surrender of the bonds, in pursuance of the agreement between the holders and the corporation, operated as a payment and consequent discharge of the mortgage given to secure them. As a general rule, the payment of a debt secured by a mortgage will extinguish the mortgage.

But the intent of the parties will govern, and the mortgage will not be extinguished by the payment if it was the intention to still keep it alive. Beach. Mod. Eq. Jur. § 57; Coles v. Appleby, 87 N. Y. 114; Harbeck v. Vanderbilt, 20 id. 395; Kellogg v. Ames, 41 id. 259, 263; Champney v. Coope, 82 id. 543; Hubbell v. Blakeslec, 71 id. 63; Houseman v. Bodine, 122 id. 158; 33 St. Rep. 332. It is manifest that it was ■ not the intention of the parties that this mortgage should be extinguished. But the agreement between them shows conclusively that thev intended that it should continue in existence as security for the bonds after they were resold by the corporation.

Thus we are led to the conclusion that the contention of the appellants cannot be sustained, that the mortgage was a valid security for the payment of the bonds, and was a lien upon the premises prior and superior to that of the appellants’ judgments Judgment affirmed, with costs.


text:
    Challenge Corn-Planter Company, Resp’t, v. Frank Diel, App’lt.

      (Supreme Court, General Term, Fourth Department,

      Filed December 26, 1895.)

    Guaranty—Release-Modification of contract.
    The guarantor of a contract for the payment of goods at a specified date is released where, by a new arrangement between vendor and purchaser before the delivery of the goods, the time for making payment is extended.
    Appeal from a judgment entered on a verdict directed by the -court in favor of plaintiff.

      Goodelle & Nottingham, for app’lt;

      Jenney & Marshall, for resp’t.
   Per Curiam.

In February, 1892, an agent of the plaintiff -went to the store of the defendant, to sell him refrigerators manufactured by the plaintiff; and an arrangement was entered into between them by which the defendant was to have the sale of the plaintiff’s refrigerators in the city of Syracuse for the year 1892, and the defendant was to give the plaintiff an order for á car load •of refrigerators. After this arrangement was consummated, the •defendant suggested to the plaintiff’s agent that he help him by going to and selling S. M. Fort refrigerators for his account. The agent went, and obtained an order directed to the plaintiff, which, so far as material, was:

“ Please send me on or about May 1, 1892, the below refs, and chests, the No. 8 to cost $7.00 each, net; all others at a discount of 45 per cent., your 1892 list. Terms, payable July 1st, or note, or 2 per cent. May 10th, ’92; freight allowed to Syracuse, N. Y.
“(Signed) S. M. Fort.”

The order was delivered to the defendant, who entered it, and •wrote the following, which was directed to the plaintiff:

“Please enter my order for one carload of Challenge refrigerators, at fifty and five per cent. List delivered. Terms, May 1st sixty days, or two per cent, cash ten days. And the inclosed order from S. M. Fort to apply on the car load, you to charge and bill the refrigerators direct to him, and collect pay for same .as specified in the order, and to credit with' me with the difference in amt. between forty-five per cent, and fifty and five per cent, and I to guaranty the payment of same. Will send specifications for ¡balance of car load in time to ship with Fort’s order.
“ [Signed] Frank Diel.”

The defendant then delivered the Fort order and his own to the agent, who mailed them to the plaintiff. On March 4th, the plaintiff wrote the defendant:

‘‘ Tour order accepted, and will go forward as per jour order. Many thanks.’

On March 21st, a bill of the refrigerators was sent to Fort, which, so far as material, was :

“ Challenge Corn-Planter Co. * * * Sold to S. M. Fort, Syracuse, N. Y. Due July 1st, 1892. Interest after due. (Then follows the list of refrigerators and prices.) Payment on above guaranteed by Frank Diel, Syracuse, N. Y.

On the 26th of the same month, Fort wrote the plaintiff :

“I have to-day received your invoice of March 21st, amounting to $409.73. I am somewhat surprised at this, as, according to order given your agent, it was conditioned, and so accepted in writing by him ; that was, that, if you accepted my order, you were to advise me by return mail. After waiting and not hearing from you, I concluded you had decided not to accept, and so within the past few days have placed my order with another house. In view of the facts, the goods must remain at the depot at your disposal, or at least until I hear from you."

It seems that, on the 29th of March, Fort's letter was sent to the defendant, after which he wrote the plaintiff:

“Yours of 29th, also Mr. Fort’s letter, received this A. M., and I am at loss to know why you should send his letter to me, as I have nothing to do with the transaction. Your man made the sale, and he must have known what he was about; and if you have Mr. Fort’s order and signed by him, I would make him take the goods. As far as his having placed his order with another house is all bosh, for I know better. He is trying to crawl out, :and thinks he has ordered too many. I shall take mine when they arrive, and will have nothing to do with those consigned to Mr. Fort.”

On April 5th, the defendant’s son,,who was in charge of his business, wrote plaintiff:

“ The refrigerators came this A. m., and as Mr. Fort’s refrigerators came first, and near the door, I went over, and told him they were there, and to get them, so we could get ours out; and, to my astonishment, he replied that he would not touch them, and absolutely refused to receive or have anything to do with them, •claiming that you violated your agreement with him in selling us the goods. Mr. Diel is out of town, and won’t be home until Saturday night; and, as I am not familar with the particulars of the case, I would not take his lot or pay the freight on them. They are laying over in the freight yard, and I won’t touch them until I hear from you. So please advise me on receipt of this, by wire, what to do in the matter, or what course you intend to pursue with Mr. Fort. Awaiting your reply, I am, * *

On April 7th, the plaintiff telegraphed the defendant:

“ Beceive the refrigerators, and draw on us for freight.”

On the same day it wrote:

uThis refrigerator transaction is an unknown quantity to us. We only know Mr. Neal, of N. Y., sent us the -order, and we notified the party upon receipt of same ; further we know not. We wire you to receive, pay freight, and draw on us for freight. If you can sell them all right; if not, will order away. One thing-sure: Whatever is honorable or fair on the part of our Co., between you and us, will be carried out to the letter. Matters not what-Mr. Neal or Mr. Fort has to say in the matter. Hoping this, is satisfactory, we remain. * * * ”

On the 12th of April, Fort sent the plaintiff this letter:

. “In the latter part of March, we wrote to .you about the refrigerators named in an invoice, dated the 21st of March. We have not had any response from you on the subject, and would be» glad of a reply by first mail. ”

On April 14th, the plaintiff replied:

“ Yours of the 12th inst. at hand. It seems our correspondence- ■ is quite unsuccessful. First, upon receipt of you order here (given Mr. Neal, of N. Y.), we acknowledged receipt the same day. Not hearing anything from, never dreamed you did not receive our letter of acknowledgment, of course, we shipped the goods. Upon receipt of invoice, we read your letter saying you would not receive them, as you had not received notice from us that we accepted the order, with the statement you did not understand,— that others were to handle the same line in Syracuse. This is a thunderbolt to us, as we were ignorant of any talk, promises ; in fact, all we knew was the order to ship so and so. Upon receipt of same, w6 wired our old customer, Frank Diel, to pay freight, receive them subject to our order; and there they are, as we suppose, not knowing anything to the contrary. We are very sorry, as it must be annoying to you, as well as expensive to us. Of course, we can dispose of the refrigerators, but that does not restore the confidence between us that ought to exist. You understand, as a business man, that manufacturers’ and their customers’’ interests are mutual, and we endeavor to please our customers-rather than displease them. We aim to do so. We cannot read the hearts and minds of men, and we do not know what salesmen say to our customers ; but we do intend to deal fair and just, and we don’t make refrigerators enough to change us one inch» from doing the square thing to all. We would like to have you take-the goods, but if you cannot see your way clear, under the circumstances, we shall, of course, accept the situation as. it stands. If you wish and know who we are, ask Hy. Lacy, cashier ; he will tell you. Trusting explanation satisfactory, we remain, * *

On April 16th, Fort again wrote the plaintiff:

“Yours of the 14th inst. to hand, and must say that our correspondence has, at least, been unfortunate. Now, although I was not notified of the acceptance of my order, and. in consequence ordered other goods, yet, although it will almost double up my stock, T will take them, provided you will take the payment on them by note for half the amount dated July 1st, and note for the balance in a reasonable time thereafter. The goods-are now at the depot warehouse, and, if you agree to my proposition, you will please wire me, at my expense.”

In response to this, the plaintiff, on April 18th, wired Fort:

“We accept of your proposition.”

—And on the same day wrote :

“ This is to confirm my message to-day, ‘ We accept of your proposition.’ We hope same will be satisfactory to you.”

On the 14th of July, the plaintiff sent a blank note to Fort, accompanied by this letter:

“ In reply to yours of 12th. Please fill out, sign, and return to us, the inclosed blank note, making it due at a time you can conveniently pay it.”

On the 14th of Sepiember, 1892, the defendant sent the plaintiff his check for $236, to balance the account for the refrigerators purchased by him, and in the account was included $55.76, for commission on the refrigerators sold to Fort. On September 16th the plaintiff wrote the defendant:

“ Yours of the 14th inst., inclosing cash $236.00, in full of account, is received, with thanks. Soliciting your valued future orders, were are, * " .”

On February 23, 1893, the plaintiff wrote the defendant:

“We have not as yet been able to get a settlement with S. M. Fort, of your place. We have done everything we could in regard to the matter, and have waited as long as we can, and shall expect you to settle for this at once, as per contract. Let us hear from you.”

To this, the defendant, on March 4th, replied:

Yours of Feby. 23rd received, and, in reply, would say that I •am very much surprised at its contents,—that..,you should ask me to pay for Mr. Fort’s refrigerators, after my having written you, on March 31st, 1892, that I would have nothing whatever to do with them, and I refer you to my letter of that date, and I positively refuse to pay for them, and think it a great imposition and nerve •on your part to ask anything of the kind.”

Ón March 6, 1893, the plaintiff wrote:

“Yours of the 4th inst. at hand. We hold your guaranty for the acct., and we shall look to you for the payment of the acct. If we are forced to collect the acct. from you, we shall do so.”

The foregoing is a brief synopsis of the evidence so far as it is material to the questions involved on this appeal. The trial court held that the defendant’s letter of February 24, 1892, and the plaintiff’s acceptance, constituted a guaranty of the payment of the bill of goods sold to Fort; that, as a matter of law, the plaintiff was entitled to recover of the defendant the amount of such bill and interest; and directed a verdict accordingly.

The appellant challenges the correctness of this desicion, and insists that the contract resulting from Fort’s order and its acceptance was dissolved by a new and different one, or was at least so far modified or changed as to relieve the defendant from any liability upon his guaranty. Whatever controversy may have formerly existed in respect to the rule governing courts in the construction of guaranties, it now seems to be settled in this state that they should be construed according to the apparent intention of the parties. But, when the meaning is ascertained, the surety cannot be held liable beyond the precise terms of his contract. Bank v. Kaufman, 93 N. Y. 273, 281; Powers v. Clarke, 127 N. Y. 417, 424; 40 St. Rep. 196; McShane Co. v. Padian, 142 N. Y. 207, 210; 58 St. Rep. 651. Any alteration of a contract as to which a third person has become a guarantor or surety, without his consent, extinguishes his liability, irrespective of the question whether the alteration would work any injury to him or not. This is because the surety has never made the contract upon which he-is sought to be charged. People v. Vilas, 36 N. Y. 459; Paine v. Jones, 76 N. Y. 274, 278; Page v. Krekey, 137 id. 307, 314; 50 St. Rep. 650. Persons who are competent to make a. contract are-equally competent to waive or abandon it; and, where both concur in a waiver or abandonment, the contract is dissolved, and the-rights of each under it are at an end. Graves v. White, 87 N. Y. 463; McEachron v. Randles, 34 Barb. 301; Tayleur v. Wildin, L. R, 3 Exch. 303; Kay v. Groves, 6 Bing. 276. An agreement to-guaranty the payment by another for goods to be sold in the future, not founded upon any present consideration passing to the guarantor, until acted upon, imposes no obligation and creates no-liability of the guarantor, and is revocable by him at any time before it is acted upon. Jordan v. Dobbins, 122 Mass. 168; Offord v. Davies, 12 C. B. (N. S.) 748; Bank v. Strever, 18 N. Y. 502, 514: Hunt v. Roberts, 45 id. 691, 696.

When we consider the facts in this case, and apply to them these principles, we think it is obvious that the court erred in holding, as a matter of law, that the plaintiff was entitled to the recovery directed. An examination of the correspondence between the parties tends to show that there was a waiver or abandonment, of the original contract between the plaintiff and Fort; but, be-that as it may, that it was altered there can be no doubt. The undisputed evidence shows that, under the original contract between the plaintiff and Fort, the terms of payment were: “Payable July 1st, or note, or two per cent. May 10th, 1892.” Under-that contract, Fort refused to take the goods, upon the ground that he had received no notice from the plaintiff of the acceptance of his order. Subsequently, he proposed to the plaintiff that he would take them if the plaintiff would “ take the payment on them by note for one-half the amount, dated July 1st, and note for the-balance in a reasonable time thereafter. This proposition was accepted by the plaintiff. Construing Fort’s original order as favorable to the plaintiff as possible, Fort was required by it to pay the amount July 1st, or then give his note therefor. By the subsequent agreement, he was required to give his note for only one-half of the purchase price at that time, and for the remainder he was to give his note in a reasonable time thereafter. Eence there was an essential change in the time of payment; which might materially affect the defendant. The defendant might have been willing to guaranty payment under the first contract, and unwilling to guaranty it under the second. His contract with the plaintiff was to guaranty the payment under the precise terms of the original order. When a new agreement was made, the defendant; was not liable because he had never made any contract to guaranty the payment under the latter.

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


author: Putnam, J.

text:
    People ex rel. Gramercy Company, App'lt, v. James A. Roberts, as Comptroller; etc., Resp’t.

      (Supreme Court, General Term, Third Department,

      Filed December 28, 1895.)

    Taxes—Corporation.
    Where a corporation invests its capital in an apartment building, giving-to each of its stockholders a lease of apartments therein during the existence of the corporation without rental, other than their contract to contribute ratably to the deficiency in its annual expenses, the value of its-stock, for the purpose of determining the amount of the franchise tax, is-measured by its investment in the building, and not by its income.
    Certiorari to review the action of the comptroller assessing a franchise tax upon relator.

      Peabody, Baker & Peabody (Fisher A. Baker, of counsel), for relator;

      T. E. Hancock, Atty. Gen. (G. D. B. Hasbrouck, Dept.. Atty. Gen., of counsel), for resp’t.
   Putnam, J.

This is a proceeding to review the determination of the comptroller in assessing a franchise tax against relator for the four years ending November 1, 1894, under the provisions of chapter 542 of the Laws of 1880, and the several acts amendatory and supplementary thereto. The relator is a domestic corporation incorporated under the manufacturing act of 1848, with a"paid-up capital of $165,000, solely invested,in an apartment house in G-ramercy Park, N. Y. The company purchased the building with said capital, subject to a mortgage of $225,000, since reduced to $205,000. At the organization of the company, leases in perpetuity, or during the existence of the corporation, were made to its eighteen stockholders of eighteen apartments in the building. The lessees contracted to pay in certain proportions the deficit in the annual expenses of conducting the corporate business. The trustees fixed the amount of the assessment in proportion to the number of shares of stock owned by those to whom the leases were made. Bight apartments were reserved by the relator, and have been from time to time rented to others, not stockholders. The expenses of the company were: Interest on the mortgage, taxes, insurance, water rents, elevator, engineer, machinery, and janitor’s services, and amounted to between $30,000 and $35,000 annually. The gross income from the apartments leased to those not stockholders was about $12,000, leaving an annual deficit of about $20,000. This deficit was proportioned among and paid by the holders of the eighteen perpetual leases, as before stated, in proportion to the amount of stock held by them, respectively There are three classes: In the third class, the assessment was based on forty-five shares of stock; in the second, eighty shares: and in the first, a number above eighty shares. The papers submitted do not contain a copy of the articles of association of the ■corporation, or a statement of the provisions of the leases, but I infer that a sale of stock necessarily accompanied a transfer of a lease. It is not denied that relator is liable to pay a franchise tax, under the act of 1880, on the cash value of its capital stock. But it is urged that the evidence produced before the comptroller on the rehearing made it appear that the relator’s capital stock had ■no cash value whatever.

In a-proceeding to review an assessment againat a corporation under the act of L880, the burden rests upon a relator to show the error of the comptroller, if any. People ex rel. Western E. Co. v. Campbell, 80 Hun, 466; 62 St. Rep. 304; id. 145 N Y. 587; 65 St. Rep. 526; People ex rel. American C. & D. Co. v. Wemple, 129 N. Y. 565; 42 St. Rep. 400; People ex rel. Roebling & Sons Co. v. Wemple, 138 N. Y. 583; 53 St. Rep. 297. The question, therefore, to be determined by us, is, does the relator show error on the. part of the comptroller in his valuation of its capital stock? He -clearly had some basis for his valuation of such stock. It was ■shown that the whole amount of -relator’s capital, $165,000, was paid up, and invested by it in the Gramercy Park apartment house, which the corporation purchased for said sum, subject to a mortgage of $225,000, since reduced to $205,000. The fact that the corporate capital of $165,000 was recently invested by the company in real estate yet owned by it was sufficient, in the first instance, to justify the action of the comptroller. He had at least some grounds for not believing that the capital stock of relator, of $165,000, so invested in real estate, was, as claimed by petitioner, of no value whatever. The corporation raised by the subscription of its stockholders $165,000, for which sum it purchased the apartment house in Gramercy Park, issuing to its subscribers $165,000 of stock. The stockholders, so to speak, are the corporation. They own the corporate stock, control corporate action, are entitled to the profits resulting from the corporate business, and ultimately, on the dissolution of the company, to so much of the fund created by their subscriptions as remains unimpaired, and is not liable for corporate debts. Beiator, on the rehearing before the comptroller, took on itself the burden of showing that its •capital stock, $165,000, recently raised, and invested in real estate, was of no value, or of- less value than the amount at which it was assessed by the comptroller. As none of the stock had been sold, the question was not as to its market, but its intrinsic value. In the absence of other satisfactory evidence, the sum raised by the stockholders, paid over to the coporation, and by it invested in real estate, was some evidence of the value of the capital stock issued for the amount thus raised. Had relator, on the rehearing, made it appear that the Gramercy Park apartment house,' for-which it had paid $165,000, was worth nothing, or a less sum than the amount so paid, the fact would have tended to show that the comptroller had not reached a correct conclusion. But no such fact was shown. On the contrary, the evidence rather indicated that the interest of the corporation in the house in •question was worth more than when it first made the investment. It had reduced the mortgage on the premises, subject to which it purchased, $20,000. For all that appears in the case, should the company elect to dissolve and sell the premises,— which it could do, as the leases are only made to continue during the corporate existence, — the corporation, on such sale, might receive a sum equal to the whole amount of the capital stock invested; and, as it was not claimed that it had incurred debts, such sum" could be divided among the stockholders. Again, it appeared that the annual expenses of carrying on relator’s business was about $82,-000. If it had shown that the rental value of the rooms in the Gramercy Park apartment house did not exceed $32,000. or very slightly exceeded that sum, such fact would have tended to show an error in the calculation of the comptroller. It might well have been inferred therefrom that the corporation had made a poor investment, and in consequence thereof the value of its capital stock was not equal to the amount invested in the building. But relator did not show any such state of facts. According to the statement of the witness Peabody, cf the eighteen apartments leased to stockholders, six or seven were of the first class, and worth-$2,000 each per year (one of them worth $2,500); six of the second class, worth$1,600each; and five of the third class, worth $900 each. The eight apartments rented to those not stockholders brought ■$12,000 per year. The real value of the apartments of the Gramercy Park apartment house, as far as the evidence discloses, therefore, were as follows :

—A sum equal to a fair interest on the capital stock of the corporation.

The evidence before the comptroller therefore tends that if the corporation, instead of leasing to its stockholders, should lease to others, at the real value of the apartments, it would derive from rents a fair interest on its capital. But, instead of so leasing, the stockholders take the apartments, and thus, by a reduced rent, obtain the benefit of their stock investment. As may be inferred from the evidence, they are called upon to pay $20,000 rental for apartments worth $27,500. The witness Peabody, in giving the value of the several apartments, said: to show

“We have set off, as involving each one, a simultaneous assumption of a certain number of shares of capital, which fixed the assessment pro rata, as nearly as we could estimate its value then.”

Again he says:

“My stock is worth less than nothing, if I may express it that way. * * * It is utterly unsalable, because such a thing as a. sale of stock has never taken place, unless except the necessary transfer on the stock books in connection with the sale of the lease, or, as we call it, the sale of an apartment.”

I do not think this evidence .avails relator. It appears that a lease of an apartment is made to the several stockholders, and goes with the stock. Had the witness testified that his stock, together with his lease of an apartment, was of no value, the case-might have been different. As the corporation conducts its business, a lease of an apartment is, so to speak, appurtenant to the stock held by the several stockholders. In estimating the present value of the capital stock of relator, therefore, it is necessary to take into consideration the value of the several leases that go with the stock.

On the whole, I reach the conclusion that the comptroller was justified, in the first instance, in assuming that the value of the capital stock of relator, $165,000,—which represented a building for which it,had paid that sum,—was the sum so paid; that the corporation has failed to show any impairment of its capital stock so represented by said building, or that its stockholders do not receive a benefit on account of their stock, in the way of reduced rentals, or that the determination of the comptroller in any regard was erroneous.

The decision of the comptroller should be affirmed, and thecertiorari quashed, with $50 costs and disbursements.

All concur.


author: Brown, P. J.

text:
    People ex rel. Thomas J. Kenna, App’lt, v. Henry H. Adams, as County Treasurer, etc., Resp’t.

      (Supreme Court, General Term, Second Department,

      Filed December 2, 1895.)

    1. Statutes—Construction.
    The provisions, in chapter 365 of 1864 as to reindexing deeds, etc., already recorded, were not postponed to January 1, 1895, but took effect at once.
    2. Same—Appropriations.
    The bills incurred before January 1, 1895, for reindexing the records, should, when properly audited, be paid by the treasurer, though the board of estimate failed to make an appropriation therefor, and, if no funds wer& available, it was his duty to issue bonds, to raise the money.
    Appeal from an order denying a peremptory writ of mandamus.

      Almet F. Jenks, for app’lt;

      George F. Elliott, for resp’t.
   Brown, P. J.

The relator, during the year 1894, was the register of the county of Kings, and as such caused certain conveyances and mortgages recorded in his office to be lexicographically indexed. The bill for such work, having been audited by the auditor of said county, was presented to the county treasurer, who refused to pay it, whereupon this proceeding was instituted-The application for the writ was denied by the special term, and the order states that such denial was on the ground “ that the relator was not legally entitled thereto.” The determination of this appeal requires us to construe certain sections of chapter 865 of the Laws of 1894. Authority for the reindexing of the conveyances and mortgages is claimed by the relator to exist by reason of that provision in section 14 of said act which provides that:

“The register shall cause all conveyances and mortgages now recorded in his office to be lexicographically indexed where not already done, in the same manner and form as conveyances and mortgages are now lexicographically indexed in his office, and the auditor of said county shall audit monthly and the treasurer of said county shall thereupon pay to said register his charges for said work at the rate now paid for like .work in said office, but no more."

The contention of the respondent is that the statute authorized such work to be performed only after January 1, 1895, but this argument has not, we think, any support in the provision of the law. The title of the act is “An act to provide for indexing and reindexing conveyances, mortgages and other instruments relating to lands and liens thereon in the county of Kings," and its purpose was to introduce and establish in that county the block system of recording and indexing. It provides that after January 1, 1895, every instrument affecting real estate or chattels real in said county which shall be recorded in the register’s office of said county shall be recorded and indexed pursuant to the provisions of that act. In other respects it took effect on April 25, 1894, the date of its passage. It was made the duty of the register forthwith to make the preparations necessary to inaugurate and put in operation the new system established by the act. This work consisted of the preparation and publication of a map of the county, subdivided into sections and blocks, the procurement of block index books, daily indexes, and ticklers, and record books. The act also provided that after January 1, 1895, the register should keep in his office alphabetical indexes, prepared in lexicographical or such other form as he should think proper, which indexes were to take the place of those theretofore required to be kept in said office, and said register was directed, in the language which I have above quoted, to reindex lexicographically, where it had not already been done, all conveyances and mortgages which, at the time of the passage of the act, were recorded in his office. There is nothing in the scope or purpose of the law which required that the indexing should be postponed until January 1, 1895. Indeed, there was every reason for its immediate performance. The intent of the law was that all conveyances and mortgages in said county then recorded or those to be recorded should be reindexed in the manner provided, and it is very evident that the public interests would be subserved by reindexing the old conveyances as expeditiously as possible; aud we are of the opinion that the register was required to do this work immediately upon the enactment of the law.

The second contention of the respondent is that no funds have been provided by the board of estimate of the city of Brooklyn and county of Kings for the'payment of the work. This contention is based upon the following sections of the act:

“ Sec. 20. The said board of estimate is hereby authorized and directed from time to time, to determine the amounts of money not herein otherwise provided for which may be required to carry out the provisions of this act until the first day of January, eighteen hundred and ninety-five, and to appropriate said moneys therefor, and the county treasurer of Kings county is authorized •to raise such money, from time to time, by the issue of bonds of said county, as hereinafter provided.
“ Sec. 21. No expenditure shall be made or obligation incurred under any provision of this act, unless otherwise herein specifically authorized and provided for, until an appropriation therefor, shall have been made by the said board of estimate, nor in excess of any such appropriation.’’
“Sec. 30. For the purpose of carrying out all the"various provisions of this act the register and county clerk may employ an expert who shall act as superintendent, and such clerks and assistants and other expert persons as may in their respective judgment be required in their own offices, provided, however, that all of the expenses, including printing, stationery and material as may be necessary lor the purposes of this act, and for carrying out all of the provisions of this act, shall not in any event exceed the amount or amounts authorized by the said board of estimate or otherwise specifically provided for by this act, or other existing law.
Sec. 31. The board of estimate of the city of Brooklyn and county of Kings is hereby authorized to include in the final estimate of the moneys to be raised by taxation in said county for the year eighteen hundred and ninety-five, and the succeeding years if required, until said block index or reindexed liens and compilations are completed, the amounts of money which may be required by said register and county clerk to carry out the provisions of this act in respect thereto and not otherwise -provided and to ap- ■ propriate said moneys therefor, and the county treasurer of said county is authorized and directed to pay, out of the amounts so required and appropriated, the expenses authorized by this act, ' upon the requisition of the said register and county clerk for the amounts required by each in his own office, and said county treasurer is authorized to raise whatever may be required not otherwise provided for from time to time by the issue of county bends in such amounts in such series and payable at such times as the county treasurer may determine bearing interest at a rate not to exceed four per cent, and not to be sold at less than par, provided that the total amount of such bonds shall not exceed the amount actually appropriated or required to carry out the provisions of this act.”

It will be observed that all of these provisions contemplate for •some of the expenses arising under the act a source of payment other than an appropriation by the board of estimate. Thus, during the year 1894, said board is authorized to determine the amount of money required to carry out the provisions of the act, not therein “otherwise provided forand expenditures, by section 21, are limited to such appropriations, “ unless otherwise specifically authorized and provided for ” by the act. A similar limitation and exception is made in sections 80 and 31. The only provision of the law to which the exception can have any application is that contained in section 14, which requires the county treasurer to pay the bills for reindexing the old conveyances; and bills for such work appear to be placed, with reference to their payment, upon a different basis from any other services performed under this act. They are required to be audited by the auditor of the county before they can be paid, while all other expenses incurred under this act are, by the thirty-first section, required to be paid by the county treasurer upon the requisition of the register and county clerk.

Again, section 14 appears to have reference to some other law ' directing the lexicographical index of conveyances and mortgages by the register, and fixing the amount to be paid therefor. The command of the section is to reindex all conveyances and mortgages “where not already done,” and the register is to be paid for the work “at the rate now paid for like work.” We are of the opinion; therefore, that the payment of the relator’s bill is not dependent upon an appropriation by the board of estimate under sections 20 and 81, but that it is payable generally as a county charge, independent of any particular provision of the statute referred to. The affidavit of the relator sets forth that he has from time to time presented bills for similar work to the auditor for audit and to the treasurer for payment, and, with the exception of the bill of which payment is now sought, that all had been paid as provided by section 14 of said act. The treasurer made no affidavit in reply to that of the relator. It is not denied that other bills for similar services have been audited and paid, nor claimed that the work now claimed for has not been performed, and it is not asserted that the treasurer has not in his hands funds from which to pay the relator’s bill as a county charge. Under these facts there is no defense to the claim. The law made it the duty of the relator to do the work, and fixed the compensation therefor, and has directed the respondent to pay the bills. If no provision has been made to obtain the money with which to make payments, that fact should have been stated. In view of the undisputed fact that other bills for similar services had been audited, we must assume that there is a fund from which the relator’s bill may be properly paid, or else that lawful means of borrowing the money exists. And we are of the opinion that ample authority exists for raising the money necessary to pay bills of this character in the thirty-first section of the act, which authorizes the county treasurer to issue bonds of the county, “ provided that the total amount of such bonds shall not exceed the amount actually appropriated or required to carry out the provisions of this act.” This provision of the state, we think, authorizes the county treasurer to raise money for the purpose of paying the relator’s bill by the issue of bonds, in the absence of any funds in his hands out of which said bill could be properly paid.

The order must be reversed, and. the motion granted, without costs.

All concur.


text:
    Matilda G. Johnson, Resp’t, v. William H. Cochrane et al., App’lts.

      (Supreme Court, General Term, Second Department,

      Filed December 2, 1895.)

    1. Wills—Competency—Proof.
    Proof that testator made a will only two weeks before he died, that he had suffered two strokes of paralysis, the last but eight months before his death, from which time until his death he deteriorated materially, both physically and mentally, and that four or five days after making his will he became violently insane and remained so until his death, is sufficient to sustain a finding that he was incompetent to make a will.
    2. Same—Action to determine validity of probate.
    The requirement of section 2653a of the Code that the complaint shall be filed with the clerk of the court, and that the clerk shall certify to the clerk of the surrogate’s court the fact that the action has been commenced, and that the surrogate 'shall transmit to the supreme court a copy of the will, testimony and all papers relating thereto, and a copy of the decree of probate, is not jurisdictional, and a failure to comply with it cannot be attacked by motion to dismiss.
    3. Witness—Competency—Section 829 of Code.
    In an action to determine the validity of a will, the wife of a devisee, who is made a defendant with her husband on account of her contingent dower interest in the land devised to him, is incompetent to testify as a witness on behalf of the defendant, to a conversation with testator.
    4. Evidence—Opinion.
    A layman may state acts and conversations of testator of which he has personal knowledge, and then may be permitted to state his opinion as to whether such acts and conversations were rational or irrational, or those of a rational or irrational person.
    5. Appeal—Harmless error.
    Where it appears that the result would have been the same if the incompetent testimony had been excluded, the error arising from its admission furnishes no ground for reversal of the judgment.
    Appeal from a decree refusing probate.

      Hugo Hirsh, for app’lts;

      M. L. Towns, for resp’t.
   Brown, P. J.

Joseph H. Hamilton died in the city of Brooklyn on November 11. 1892, leaving a last will and testament, bearing date October 29, 1892, and leaving, surviving him, as his heirs-at-law, the plaintiff and the defendants, Elizabeth Stocking, Mary H. Johnson, William Johnson and William ÍI. Cochrane. By his will, all the estate of said deceased, with the exception of $Í00, was given to the defendant William H. Cochrane. The plaintiff and the defendant Mary H. .Johnson objected to the probate of the will, on the ground that the testator had not the mental capacity to make and execute the same; and, after a trial, the surrogate adjudged the will to be valid, and it was admitted to probate on March 1, 1893. Thereafter this action was commenced, under section 2653a of the Code of Civil Procedure (Laws 1892, c. 591); and, after a trial at the circuit, the jury found that the paper admitted to probate was not the will of said deceased, and from the judgment entered upon that verdict-the defendants have appealed.

We are of the opinion that the verdict of the jury has ample support .in the testimony. It appeared that the testator had had two attacks of paralysis prior to the execution of the will. The last was in March, 1892, and, from that date until his death, his physical and mental condition deteriorated materially. On November 2d or 3d he became violently .insane, and remained so until his death, on November 11th. It would serve no useful purpose to review the great amount of testimony contained in the record submitted to the court, and it is sufficient to say upon the -merits of the case that the evidence permitted the conclusion reached by the jury, and we find no just or proper ground to interfere with the verdict.

Our attention has been called by the appellants to numerous -exceptions appearing in the record, which it is claimed are fatal to the judgment, and require its reversal.

Before the opening of the case, the defendants moved to dismiss the complaint, upon the ground, that the plaintiff had failed to comply with the provisions of section 2653a of the Code, in that the complaint had not been filed with the clerk of the court, and that the said clerk had not certified to the clerk of the surrogate’s court the fact that this action had been commenced, and that the surrogate had not transmitted to the supreme court a copy of .the will, testimony, and all papers relating thereto, and a copy of the decree of probate. This motion does not appear to have been made upon an affidavit or certificate of either the clerk of the supreme court or the clerk of the surrogate’s court, and there was nothing before the trial court to show that the statute had not been complied with.

The record before us shows that all the papers enumerated in the motion, which the statute required should be transmitted by the surrogate to the supreme court, were immediately upon denial of the motion, put in evidence by the defendants. None of these facts were, however, jurisdictional, and none of them were required to be set forth in the complaint. The motion was not properly made at the trial, and had no relation to any of the issues raised by the pleadings. If the statute had not been complied with, the motion should have been addressed to the special term, to have the omission corrected. There was no ground for the dismissal of the complaint, and the motion was properly denied.

Minnie Gr. Cochrane, the wife of the defendant William H. Cochrane, was called as a witness, and asked to testify to a conversation had with the testator in the month of October preceding his death. An objection that this evidence was inadmissible under section 829 of the Code was sustained, to which the defendants excepted. This ruling was correct. This witness was a party to the action, and, if the will was valid, acquired under it an inchoate right of dower in the real estate therein devised to her •husband, She had appeared in the action and served an answer setting up her interest in the land. Her testimony was therefore inadmissible under the 829th section of the Code, which declare» that a party to an action shall not be examined as a witness in his or her own behalf. The appellants cite the case of Eisenlord v. Clum, 126 N. Y. 542; 38 St. Rep. 446, to sustain their contention that this testimony was inadmissible. But in that case the-witness was not a party to. the action, and the objection to the admission of her testimony was made upon the ground that she was interested in the event. The court held that a person was-not “ interested in the event” unless he would gain or lose by the result of the action, or had “ an interest in .the record for the purpose of evidence”; that the witness was not, within that rule, uninterested person, and therefore her testimony was admissible. This case is not an authority upon the question here .presentedr as Mrs. Cochrane was a party to the action, offering to testify in her own behalf, and had a direct and certain interest in the result, of the suit. i

There were many lay witnesses called by the plaintiff, who,, after testifying to conversations with and acts of the deceasedr were permitted, against the defendant’s objections, to characterize such acts and conversations as irrational. The record presents-very many exceptions to rulings upon this class of testimony, and they form a very large part of the argument made by the appellants. The rule as to this class of testimony is well settled. A layman is not to be permitted to give an opinion as to the mental-capacity of a testator, nor to say whether he was rational or irrational. But he may state acts and conversations of which he has-personal knowledge, and then he may be permitted to state his opinion as to whether such acts and conversations were rational or irrational, or those of á rational or irrational person. Paine v. Aldrich, 133 N. Y. 547; 44 St. Rep. 308; Holcomb v. Holcomb, 95 N. Y. 316. We are of the opinion that nearly all of the rulings of the court were kept within this rule, but in a few instances witnesses were permitted to answer questions which were probably objectionable. The answer to - the question, “Did you ever see him act rationally from August until the last time you saw him?” should probably have been excluded. There are-others to which the objections might possibly have been sustained,, but we do not deem it necessary to refer to them.

It does not follow that the judgment should be reversed, because some testimony was admitted which should have been excluded. In order to warrant a reversal, the court must be satisfied, upon an examination of the whole case, that the appellant was prejudiced. An appellate court will judge for itself the materality of testimony improperly admitted ; and, if it appears that the result would have been the same if the testimony had been excluded, the error arising from its admission furnishes no ground for the reversal of the judgment. People v. Fernandez, 35 N. Y. 59; McGean v. Man. Railway Co., 117 id. 219 ; 27 St. Rep. 337. There is abundant testimony in the record to sustain the finding of the jury if the testimony referred to is excluded from the case, and we think'that it is impossible that the jury was controlled bj the testimony of witnesses which characterized in a general way the conduct of the testator as irrational. Nearly all the testimony in the case appears to have been read to the, jury from the record of the trial in the surrogate’s court. The statute permits this to be done where the witnesses are out of the jurisdiction of the court, or dead, or have become incompetent subsequent to the probate of the will. The case does not show upon what ground this testimony was read, but, so far as I have observed, only three or four witnesses were called to testify at the trial. We have assumed that the testimony was read upon stipulation, and that the objections and exceptions were taken at the trial; but, after a careful examination of the whole case, we are of the opinion that none of them require a reversal of the judgment.

The judgment must be affirmed, with costs.

All concur.