author: Clement, Ch, J.

text:
    August Witte, Resp’t, v. The Brooklyn City Railroad Co. App’lt.

      (City Court of Brooklyn, General Term,

      Filed June 26, 1893.)

    Negligence—Use op street car tracks.
    While plaintiff,who had been driving on the car tracks, was trying to turn off, an electric car struck the hind wheels of his wagon and overturned it. Feld, that it was plaintiff’s duty to turn off seasonably to avoid the car, and while doing so the motur-man was bound, to exercise proper care to-avoid a collision, and that the questions of negligence on the part of each, were for the jury to determine.
    Appeal from judgment in favor of plaintiff, entered on verdict, and from order denying motion for a new trial.

      Jas. & T. H. Troy, for resp’t; Morris & Whitehouse, for' app’lt.
   Clement, Ch, J.

The counsel for the seeks a reversal in this case only on two grounds, first, that the evidence showed contributory negligence on the part of plaintiff; second, that there was no proof of negligence of the defendant. The plaintiff drove a beer wagon in a southerly direction along the track of defendant, on Third avenue in this city, until he reached Thirty-second street, where he swung his wagon to the east, in order to get out of the track, and then turned to the west. The wagon was nearly off the track when an electric car struck the hind wheel and. overturned it.

This case was properly submitted to the jury. It was the duty of plaintiff to turn off seasonably to avoid the car approaching from the rear, and, while so doing, the motor-man was bound to exercise proper care to avoid a collision with the-wagon. Whether the plaintiff was guilty of contributory negligence, and wlimher the motor-man was negligent, were questions of fact for the jury. Quinn v. The Atlantic Avenue R. R. Co., 34 St. Rep., 801; affirmed court of appeals, without opinion, 134 N. Y., 611; 45 St. Rep., 935.

Judgment and order denying new trial affirmed, without costs. Osborne, J., concurs._


source: Caselaw Access Project

author: Haight, J.

license: Public Domain

text:
    Hugh Merancy Murphy, Resp’t, v. James W. Whitney, Aurelia W. Moore and Mary Murphy, App’lts.

      (Supreme Court, General Term, Fifth Department,

      Filed June 23, 1893.)

    1. Trust—Specific performance—Part performance.
    The complaint herein alleged that the heirs of plaintiff’s grandfather entered into an oral agreement that the lands left by him should be held - by them as property in common for the joint use of all as they might be living, and on the decease of any of them the interest of such deceased person was to vest in the survivors until it was concentrated in the last survivor, and upon the death of the last survivor was to vest in the plaintiff; that by deeds and wills of the parties the property has become vested in the defendant Mary, who is the last survivor; that she is weak and feeble, and unable to properly transact business ; that the other defendants have, by false statements, prejudiced her against plaintiff and induced her to convey certain of the lands to them without consideration, and to .sell other lands, the proceeds of which they have converted. Held, that (he complaint set forth a good cause of action; that although, as to the original share of the defendant Mary, the agreement may have been void under the statute against the suspension of alienation or the statute of frauds, yet as to the other shares, the agreement having been executed by the other parties thereto, it would be inequitable to allow her to repudiate it, and the court could decree specific performance.
    2. Same—Parties.
    Plaintiff being the equitable owner of the reversion could maintain the action to set aside such conveyances and for an accounting.
    Appeal from an interlocutory judgment overruling demurrer to the plaintiff's complaint.

      Q. Van Voorhis, for app’lts; M. H. Peck, Jr., for resp’t.
   Haight, J.

This action was brought for the purpose of establishing a trust agreement, the setting aside of various conveyances of real estate from the defendant, Mary Murphy, and her sister, to the defendants, James W. Whitney and Aurelia W. Moore, and for an accounting, etc. The defendants demurred upon the ground that the complaint did not state facts sufficient to constitute a cause of action.

The complaint is very voluminous, and a detailed statement of the facts would fill many pages. We are aslced to consider three questions, and the allegations upon which they are founded may be briefly stated.

Hugh Murphy, the grandfather of the plaintiff, died at Le Eoy, Genesee county, in the year 1826, possessed of the real estate in question, and leaving him surviving three sons and four daughters. Upon his death, the seven children became tenants in common of such real estate. One of the sons, Joseph Merancy Murphy, was married about the year 1837, and the plaintiff is the issue of such marriage. Hone of the other children married. After they had reached their majority, “ by a common agreement and understanding between them it was understood and agreed that the said lands, and buildings constructed thereon, were to be held by them as property in common for the joint use of all, as from time to time they might be living; and on the decease of any of them the interest of such deceased person was to vest in the survivor, or survivors, for the purpose aforesaid, until the title and interest in the same was, and was to be, concentrated in the last of such survivors ; and that the title and interest of and in said property, on the death of the last of such survivors, was to pass to and become vested in the said Hugh Merancy Murphy, plaintiff herein, as the sole representative of the family name and estate of the Murphy family aforesaid; that such transmission of interest and estate was to be made through descent or by will, as might best serve to accomplish the purpose so agreed upon.” This understanding or agreement was respected by the brothers and sisters. And for the purpose of carrying it out the brothers conveyed their interest in the real estate to the sisters. The sisters, on the 20th day of April, 1857, each executed a will in which she devised her interest, in the real estate to such of her sisters as survive, and if none survived, then to the plaintiff:. Later, one of the sisters conveyed her interest to the surviving sisters. And, still later, other wills were made by the survivors, containing provisions in substance the same as in the former wills so far as concerned the real estate, but containing some slight variation as to bequests of the personal estate. Thus was the title transmitted to the survivors. One after another of the brothers and sisters died. And the defendant Mary, who, at the date of the bringing of this action, was ninety-five years of age, alone survives with the plaintiff, her nephew. It is alleged that she is weak, feeble, infirm, and mentally and physically unable to properly transact business; that the defendants "Whitney and Moore have, by false and fraudulent statements, prejudiced her against the plaintiff, and induced her to convey to them, without any consideration, from time to time, the lands and property of the estate; that they have induced her to sell lands to other parties, and they, or one of them, have converted the proceeds, etc.

It is claimed, first, that the alleged agreement is void under the statute which provides that “ the absolute power of alienation shall not be suspended by any limitation or condition whatever for a longer period than during the continuance of not more than two lives in being at the time of the creation of the estate.” 1 R. S., 723, § 15.

Second. That the agreement is void because not in writing. 2 R. S., 134, § 6.

Third. That the plaintiff has not such an interest in the real estate as will authorize him to maintain this action.

The first two questions we shall consider together, and shall assume for the purposes of this case that the agreement, in so far as it remains wholly unexecuted, is void under the provisions of the statutes referred to. The agreement remains unexecuted so far as the defendant Mary Murphy is concerned. She, as a tenant in common with her brothers and sisters, was the owner of an equal undivided one-seventh part of the real estate. The agreement being void, she cannot be compelled to convey or devise the same to the plaintiff. But her situation as to the other six-sevenths is different. Her title to that has come through her brothers and sisters with the understanding and agreement that she should have the use of it during life, and that the remainder should go by descent or devise to the plaintiff. The agreement has been fully executed by all of her brothers and sisters who were tenants in common with her. They have each conveyed by deed, or devised by will, the real estate to her in accordance with the terms of the agreement. She was a party to the agreement, has taken title under it, the agreement has been executed as to all of her co-tenants in common, and to permit her now to repudiate it would be to sanction a fraud upon all of her deceased brothers and sisters. This cannot be done, either under the principles of estoppel, or under the statute. Section 10 of the statute referred to provides, “Nothing in this title contained shall be construed to abridge the powers of courts of equity to compel a specific performance of agreements in case of part performance of such agreement.” As we have seen, the agreement has been already performed by all of her co-tenants in common.

Under this provision of the statute the power is expressly reserved to courts of equity to compel specific performance in such cases. And in Ryan v. Dox, 34 N. Y., 307, 311, Davies, Ch. J., in delivering the opinion of the court, says: “ It is well settled that courts of equity will enforce a specific performance of a contract within the statute when the parol agreement has been partly carried into execution. 2 Story Eq., § 759. And the distinct ground upon which courts of equity interfere in cases of this sort is, that otherwise one party would be enabled to practice a fraud upon the other, and it could never be the intention of the statute to enable any party to commit such a fraud with impunity. Indeed, fraud in all cases constitutes an answer to the most solemn acts and conveyances, and the objects of the statute are promoted, instead of being obstructed, by such a jurisdiction for discovery and relief. An'd when one party has executed his part of the agreement, in the confidence that the other party would do the same, it is obvious that if the latter should refuse, it would be a fraud upon the former to suffer his refusal to work to his prejudice.”

In Wood v. Rabe, 96 N. Y., 414, 422, Andrews, J., says: “ But there is a large class of so called constructive trusts, or trusts ex maleficio, where courts of equity treat the holder of the legal title to land as a trustee, and, through the medium of an assumed trust, makes that title subservient to the circumvention of fraud and the attainment of justice. Trusts of this character are not, I assume, within the exception in the statute.” See also, Moyer v. Moyer, 21 Hun, 67.

Has the plaintiff such an interest as to enable him to maintain the action ? It is alleged, as we have seen, that the defendant, Mary Murphy, has conveyed away all of the farm. By this act she has put it beyond her power to perform the agreement. If, as we have seen, she held six-sevenths of the real estate in trust under an agreement to devise, or to permit it to descend under the statute to the plaintiff, then he was the equitable owner of the reversion, and as such, we think, could maintain the action. Youngs v. Carter, 10 Hun, 194; Piper v. Hoard, 107 N. Y., 73; 11 St. Rep., 375.

The judgment should be affirmed, with costs, but with leave to the defendants to withdraw demurrer, and answer within twenty days, upon payment of the costs of the demurrer and of this .appeal.

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


author: Dwight, P. J.

text:
    William H. Huffman, Resp’t, v. William Beever, Impl’d, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed June 23, 1893.)

    Reference—Findings—Direction of judgment.
    The report of a referee should not he sent back for further findings or further directions as to the form of judgment where the referee has passed upon all the requests to find and embodied them to a large extent in his-■report, and has made distinct conclusions of law and directed a judgment accordingly. Such direction is sufficient and indicates the judgment which is to be entered and from which either party may appeal, but its deficiencies or errors cannot be corrrcted by an order for a further direction of judgment.
    Appeal by the defendant, William Beever, from an order of the Erie special term, entered in Allegany county, sending back a referee’s report with directions to make further findings and to prescribe the form of judgment to be .entered against the defendant, William Beever.

      William, Spargur, for app’lt; Rufus Scott, for resp’t.
   Dwight, P. J.

We are at a loss to understand why this order-should have been asked for. At the time of the submission of the case the plaintiff’s attorney submitted to the referee a list of no less than fifty-one requests to find on matters of fact, and the referee has not only noted on the paper his disposition of each of such requests, finding as requested in all but three instances, but he has embodied such findings in his report to a far greater extent than was at all necessary, because many of such findings, while they may have been pertinent as matters of evidence, cannot have been material to support any judgment asked for by the plaintiff. We say “ any judgment asked for ” because the pleadings in the action are not before us and we do not know, except as we infer from the findings of the referee, what were the issues between the parties, nor what the judgment asked for in the complaint. But in a careful comparison of the report with the requests to find we are unable to discover any fact, likely to be material to the judgment, covered by the plaintiff’s requests which is not embodied in the report of the referee besides being passed upon in response to the requests to find. There, was, therefore, clearly no occasion for a motion for further findings, even if, as contended, the practice affords that form of relief in any case.

But counsel for the plaintiff are especially tenacious of that part of the order appealed from, which directs the referee to prescribe the form of a judgment against the defendant, William Beever; and here, again, -we deem the motion unnecessary and the order not to be upheld. The report of the referee, after finding with great fullness and particularity upon the matters of fact which we may suppose were in issue between the parties, proceeds, separately, to find nine distinct conclusions of law, and directs a judgment accordingly, after providing for a dismissal of the complaint as to the defendant, Lewis.

There can be no doubt about the effect of this direction. The judgment so directed is to be entered against both defendants other than Lewis. It is judgment in accordance with the conclusions of law. Whatever matters are found as conclusions of law are to be adjudged by the judgment to be entered. This may be less than the plaintiff is entitled to, and it may be more, nevertheless it is the judgment which either party is entitled to enter and from which either party is at liberty to-appeal. Its deficiencies or its errors cannot be corrected beforehand by an order for a further direction of judgment.

We are unable to discern any good ground for the order appealed from, and are of opinion that it should be reversed, and the motion denied.

Order appealed from reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs.

Lewis, Macomber and Haight, JJ., concur.


text:
    Edward K. Fuller et al., Resp’ts, v. Arthur M. Artman, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed June 23, 1893.)

    1. Contract—Consideration—Evidence.
    The consideration actually paid or promised may be shown to have been other than that recited in the instrument, or the fact of payment of the consideration agreed upon may be contradicted in an action for its recovery; but the existence of a sufficient consideration when expressed in an instrument under seal is not subject to dispute.

      2. Same—Rescission.
    Defendant entered into a contract under seal with plaintiffs’ assignors, by the terms of which, in consideration of one dollar and other valuable considerations, he agreed at any time within five months which they might designate, that he would convey by full covenant deed certain real property at a certain price or mining rights therein at a certain other price. Within the time mentioned, and before learning of the assignment, defendant notified plaintiffs’ assignors that he withdrew all offers for the sale of the property. Thereafter and within the time limited plaintiffs notified defendant of their election to take the mining rights, and made a tender of the purchase price, which was refused. Feld, that the contract, although without mutuality in its covenants, was not void for want of consideration, and defendant was not at liberty to rescind it during the time given for the exercise of the option, and that specific performance was properly decreed.
    Appeal by the defendant from a judgment entered, in Genesee county, on the report of a referee.

      M. H. McMath, for app’lt; C. F. Bissell, for resp’ts.
   Dwight, P. J.

The plaintiffs are the assignees of the persons named as parties of the second part in the contract hereinafter set forth, and they bring this action to enforce the specific performance by the defendant, the party of the first part named therein.

The contract was in the following terms:

This memorandum of agreement, made and executed this 23rd day of September, 1890, between Arthur M. Artman, of the town of Le Roy, county of Genesee, and state of Hew York, of the first part, and David J. Bissell and Emory Elmore, of the town of Le Roy, county of Genesee, and state of Hew York, associates or assigns, of the second part, witnesseth; that the party of the first part, in consideration of one dollar and other valuable considerations, the receipt whereof is hereby acknowledged, hereby covenants and agrees to and with the said second party, his heirs, associates or assigns, at any time which the said second party may designate within five months from the date hereof, that he will execute and convey to the said second party, heirs or assigns, a full covenant deed of the following described premises, situate in the town of Le Eoy aforesaid, consisting of about 120 acres of land, and more particularly described as follows, to wit: Being the premises now occupied by him as a homestead; reserving to party of the first part all growing crops at time tender is made. In case the party of the first part having chance to sell above premises to a bona fide purchaser prior to time above mentioned, then party of the second part shall have first chance to purchase at same price upon receiving thirty days notice in writing or forfeit this option. At and for the agreed price of $135.00 per acre; and that whenever the said second party shall notify him that he will purchase said premises above, that he, the said first party, will forthwith procure an abstract of title of the said premises, and will, whenever a tender shall be made of such price of said premises, forthwith execute and deliver to said second party such deed of said premises as is above specified. Should there be any liens or incumbrances upon said premises, the amount of such liens or incumbrances shall be deducted from the amount of the purchase price. And the second party will take said premises subject to such liens or incumbrances. Provided, however, that at the option and election of said party of the second part and upon such tender of the sum of $15 per acre and notice as aforesaid within the time for that purpose above limited, instead of executing such absolute conveyance for such land, the party of the first part shall, and will, execute a proper conveyance to the party of the second part or to their assigns, of the right and privilege of mining for salt or other minerals under the same, but without the right of entry upon or injury to the surface of the same in any respect whatsoever. Unless second party shall give notice of or make tender of purchase price before the expiration of the time above mentioned, then this instrument shall be null and void.

In witness whereof, the said party of the first part has hereunto set his hand and seal the day and year above written.

(Signed), Arthur M. Artman, (L. S.)

D. J. Bissell, (L. S.)

Emory Elmore, (L. S.)

On the 18th day of October, 1890, the parties of the second part assigned all their interest in and rights under the contract to the plaintiffs, but the defendant was not informed of such assignment until the 21st day of February, 1891, mentioned below.

On the.3rd day of January, 1891, the defendant personally served on each of the parties of the second part a notice in writing as follows:

“To David J. Bissell and to Emory Elmore: I, Arthur Artinan, hereby withdraw any and all offers heretofore made by me to you or to either of you for the sale' of my farm, and for sale of the rights and privileges of mining on said farm for salt or minerals, and particularly the offer in writing dated September 23rd, 1890.

Dated January 3rd, 1891.

(Signed) Arthur Artman.

Ón the. 21st day of February 1891, the plaintiffs notified the defendant of the assignment of the agreement to them and that they had elected to take a conveyance of the mining rights specified therein, and to pay him the $15 an acre therefor, and tendered to him the full price thereof, viz. ; the sum of $1,815, in money; and at the same time presented to him an instrument purporting to be a deed prepared for execution by himself and wife, in due form to convey such mining rights in accordance with the alternative provisions of the agreement aforesaid.

The defendant declined to accept the money or to execute the deed; he made no objection to the sufficiency of the tender made, nor to the form of the deed presented for execution, but declared that he had changed his- mind and had decided not to make any conveyance under the agreement. The plaintiffs thereupon notified him that they should deposit the sum in a bank named, to be paid to him whenever he should execute the deed presented, and they did so.

On the trial of the action the defendant offered evidence to show that no consideration was in fact paid to the defendant under the agreement for the option given by him thereby to the plaintiffs’ assignors..- The evidence was objected to by the plaintiffs and was excluded. We think the exception to this ruling raises the only substantial question in this case.

It is apparent on the face of the agreement in question that as an executory contract it was wholly without mutuality. It contains no covenant or promise of the parties of the second part. They agree to do nothing. The defendant proposes to let them have his farm or certain mining privileges therein at prices specified, and gives them five months in which to decide whether they will take either or neither. What they take under this contract, if it is a valid one, is simply a refusal of the choice. Of course if ther9 has been no consideration for the agreement it is nudum pactum, is not valid and cannot be enforced, and the evidence now in question was offered for the purpose of showing that no consideration was in fact paid by the plaintiff’s assignors for the option and the refusal which the contract purports to assure to them.

The evidence was no doubt properly excluded. If admitted it would have done violence to some elementary principles of the law of evidence bearing upon the credit and validity belonging to instruments in writing and under seal. The principles referred to may perhaps be embodied in a rule to the effect that while the mere presumption of a consideration which arises from the use of seals in the execution of the instrument is subject to rebuttal. Code of Civ. Pro., § 840, the expression of a consideration in such an instrument is not subject to contradiction for the purpose or with the effect of invalidating the instrument. Murdock v. Gilchrist, 52 N. Y., 246; Rockwell v. Brown, 54 id., 213.

The recital of a consideration in a deed is conclusive as to the fact that there was a consideration to the c|eed. Grout v. Townsend, 2 Denio, 336; Murdock v. Gilchrist, supra. The consideration actually paid or promised may be shown to have been other than that'recited in the instrument, or the fact of payment of the consideration agreed upon may be contradicted in an action for its recovery, but the existence of a sufficient consideration when expressed in an instrument under seal is not subject to dispute.

The contract in question, although without mutuality in its covenants, was not void for want of consideration, and the defendant was not at liberty to rescind it during the time given for the exercise of the option by the parties of the second part or their assigns.

The tender by the plaintiffs was sufficient in amount, as was admitted by the defendant, and the evidence shows that it was kept good in the manner proposed by the plaintiffs and not objected to by the defendant, either at the time it was made or by his answer in this action or on the trial. Halpin v. Phenix Ins. Co., 118 N. Y., 165, 178 ; 28 St. Rep., 788. The conditions annexed to the tender seem to have been only those upon which the plaintiffs had a right to insist, and no objection was made to them at any time. See case last above and cases cited at page 176.

The objection to equitable relief is plainly not tenable in this action. In the nature of the case there could be no assessment of damages for the failure to perform the covenant .to convey the mining privileges, the value of which could only be ascertained by their actual exercise.

We find no error in the disposition of the case by the learned referee. And the judgment entered upon his report should be affirmed.

Judgment appealed from affirmed, with costs.

Lewis, Macomber and Haight, JJ., concur.


text:
    John J. P. Read, App’lt, v. Louis Knell, Impl’d, Resp’t.

      (Supreme Court, General Term, Fifth Department,

      Filed June 23, 1893.)

    Executors and administrators—Purchase of assets by, voidable only
    AT INSTANCE OF PERSONS INTERESTED IN ESTATE.
    An assignment of assets of an estate to the executor is not void, but voidable only at the instance of a person interested in the estate, and hence it is not competent for the owner of the equity of redemption in an action to foreclose a mortgage so assigned to object to the validity of the assignment.
    Appeal by the plaintiff from a judgment, entered in Erie county, on the findings and decision of the court at special term. 0. 0. Cottle, for app’lt; A. Moot, for resp’t.
   Dwight, P. J.

The action was to foreclose a mortgage of real estate, made by one Joseph Armbruster to Elizabeth Bead, the mother of the plaintiff, since deceased. The answer of the defendant, Louis'Knell, the owner of the property, pleaded payment of the mortgage in full; denied, on information and belief, that the plaintiff was the owner of the mortgage, and alleged facts tending to show a defect of parties.

The proof was that the plaintiff was duly appointed and acted as administrator of his mother’s estate; that, as such, he assigned the mortgage for a nominal consideration to a friend, who, in turn, for a similar consideration, assigned it to him in his individual name. His mother left surviving her one daughter and himself, as her sole next of kin, and no husband ; the daughter died, before the assignment of the mortgage to the plaintiff, without issue. She was reputed to have been married, and a person claiming to be her husband presented a paper purporting to be her will to the surrogate of Erie county, by whom it was admitted to probate, but the decree was reversed by this court and issues were awarded to be tried by a jury. Such issues were twice tried, but no verdict was reached on either trial.

The learned court at special term made no finding whatever bearing upon the question of defect of parties, but found only, in substance, that the plaintiff held the mortgage in his representative capacity as administrator of his mother’s estate, and that the assignment to him was absolutely void and vested in him in his individual capacity no title whatever to the security. It was on 'this ground solely that the judgment was based dismissing the complaint

The judgment was clearly erroneous. The assignment was not void, but voidable only; and that at the instance of some person interested in the estate, Perry on Trusts, 205; Hawley v. Cramer, 4 Cow., 719 ; Forbes v. Halsey, 26 N. Y., 53, 65 ; Harrington v. Brown, 5 Pick., 519, 521, and all the authorities are to the same effect. It was not, therefore, competent for the defendant, Knell, to object to the validity of the assignment to the plaintiff. Harrington v. Brown, supra. He might, perhaps, have established his defense of the defect of parties, but that question, as we have seen, was not considered nor passed upon by the court at special term.

The judgment must be reversed for error in the conclusion of law upon which it was based, and which was duly excepted to. A new trial will be granted, upon which the other defense mentioned may receive consideration.

Judgment appealed from reversed and a new trial granted, with costs to abide the final award of costs.

Lewis, Macomber and Haight, JJ., concur.


text:
    Frank M. Hunting, Pl’ff, v. Ferdinand S. M. Blun, Def’t.

      (Supreme Court, General Term, Fifth Department,

      Filed June 23, 1893.)

    Manufacturino companies—Stockholders—Sequestration action.
    In an action to enforce the personal liability of a stockholder of a manufacturing corporation, the plaintiff, to excuse a failure to recover judgment and issue execution against the company, introduced in evidence the judgment roll in an action in the supreme court for the sequestration of the property of the company, the appointment of a receiver and continuance of an injunction restraining creditors from bringing actions against it, under objection that the court was without jurisdiction because the judgment on which such action was founded was rendered by a court which had no jurisdiction. Meld, that llie evidence was properly received; that the objection did not go to the jurisdiction of the court but to the sufficiency and effect of the evidence which must have been given on the trial or application for said judgment; that such judgment was valid until set aside on appeal or direct proceeding in that action, and was a sufficient reason for not complying with the condition precedent for the maintenance of this action.
    Motion by defendant for a new trial on a case and exceptions ordered to be heard in the first instance at general term, after verdict, at the Cayuga circuit, for- the plaintiff, rendered by direction of the court.

      B. T. Wright, for the motion; E. C. Aiken, opposed.
   Dwight, P. J.

The plaintiff is the assignee of a number of claims for the wages of employes of the Rheubottom & Teall Manufacturing Company, and brings this action to enforce the statutory personal liability of the defendant as a stockholder of that company. Laws of 1848, chap. 40, § 18. But it was a condition precedent to the maintenance of such an action that an action for the same debt should have been commenced against the company itself within one year from the time the debt was contracted, and that an execution against the company should have been returned unsatisfied, in whole or in part. The due commencement of such an action against the company, the recovery of judgment therein and the return of an execution thereon wholly unsatisfied was alleged in the complaint, and an attempt was made to prove it by the offer in evidence of a judgment in favor of the plaintiff against the Rheubottom & Teall Manufacturing Company recovered in the city court of Auburn and docketed in Cayuga county clerk’s office February 20, 1891; also an execution issued thereon and the return of the same unsatisfied. It was conceded that die location and residence of the company was the village of Weedsport and not the city of Auburn. The evidence was objected to on the ground that the city court of Auburn had no jurisdiction of the action; the objection was sustained and the evidence was excluded on the ground that the judgment was void.

The plaintiff then, having recourse to another allegation of his complaint, offered in evidence the judgment roll in an action in the supreme court for the sequestration of ^ the property of the company, the appointment of a receiver thereof, etc., in which action a judgment to that effect was entered April 10, 1891, by the provisions of which an injunction which had been theretofore granted enjoining the creditors of the company from bringing any actions against it was made perpetual. The object of this proof was to excuse compliance on the part of the plaintiff with the condition of the statute above stated in respect to the commencement of an action, recovery of judgment, etc., on the principle that such condition having become impossible it was no longer in force. Hardman v. Sage, 124 N. Y., 25, 32; 35 St. Rep., 54; and the cases cited therein.

But upon inspection of the judgment roll so offered in evidence it was disclosed that the judgment alleged in the complaint as a foundation for the action of sequestration was, like the one previously offered in evidence in this action and held to be void, a judgment of the city court of Auburn, and thereupon the defendant objected to the reception of the judgment roll in the sequestration action in evidence, on the ground that the court was without jurisdiction to entertain that action for the want of a valid, judgment upon which to found it. This objection was overruled ; the action and judgment of sequestration and the order therein were held a sufficient excuse for not prosecuting an action against the company for the debt sought to be recovered in this action, and, the amount of that debt being admitted, a verdict.therefor in favor of the plaintiff was directed by the court, and the defendant’s exceptions were ordered to be heard in the first instance at, general term.

The only exception which requires to be considered is that to the ruling of the court last mentioned, viz. : to the admission in evidence of the judgment roll in the sequestration action. We-think that exception was not well taken. The objection did not go to the jurisdiction of the court in that action, but to the sufficiency and effect of evidence which must have been given on the-trial on application for judgment therein. The supreme court had unquestioned jurisdiction of the action, viz. : for the sequestration of the property of a domestic corporation; and, equally, jurisdiction of the person of the defendant, by personal service of process on its president. There was no question of jurisdiction, of the court to entertain and determine the action, and the question whether the plaintiff was entitled to maintain the action under the statute, Code Civil Procedure, § 1784, was not a question of jurisdiction but of proof; and if, in determining that question, the court erred in the admission of evidence, or based its-judgment upon illegal evidence, the only remedy of any person aggrieved by the judgment is by appeal or by direct proceeding-in the actior) in which it was rendered. Moeschler v. Lochte, 12 St. Rep., 855. Certainly a party restrained by an order made, infarlocutur, in that action and made permanent by the judgment, will not be justified in disregarding the order on the ground of such error, so long as the judgment stands neither vacated nor reversed.

The judgment of sequestration was rendered during the year which the statute gave to the plaintiff in which to bring his action against the company, and the order and judgment therein were a sufficient reason for his not complying with the condition precedent for the maintenance of this action.

We find none of the authorities so industriously collected by counsel for the appellant quite in point to support his contention in this case, but are of opinion that the motion for a new trial must be denied, and judgment directed for the plaintiff on the verdict

Defendant’s motion for a new trial denied, with costs, and judgment ordered for the plaintiff on the verdict.

Lewis, Macombee and Haight, JJ., concur.


author: Per Curiam.

text:
    Albert G. Smith, Pl’ff, v. Charles E. Mott, Def’t.

      (Supreme Court, General Term, Fifth Department,

      Filed June 23, 1893.)

    Bills and notes—Evidence.
    In. an action on a Bohemian oat note, where the defense was that defend" ant relied on a representation that the company was worth $100,000, anda bond given by it to sell a portion of his produce the following year, two annual reports of said company filed in the office of the secretary of state of Michigan, showing its assets to be only $10,000, were offered in evidence to prove the falsity of the representation, but were rejected. Held, error; that they should have been received and submitted to the jury on the question of fraud in procuring the note from defendant.
    Motion by the defendant for a new trial on a case and exceptions directed to be heard in the first instance at general term, •after verdict for the plaintiff directed by the court at Monroe circuit.

      Jno. Desmond, for the motion; C. A. Widener, opposed.
   Per Curiam.

On a former hearing of this motion (48 St. Rep., 300) it was considered that, although evidence of the annual reports of the “ Bohemian Oat & Cereal Company,” filed in the office pf the secretary of state of Michigan, may have been improperly excluded, yet, that the defendant was probably not prejudiced by such ruling. A further examination of the case of Matson v. Blossom, 18 St. Rep., 726, affirmed without opinion by the court cf appeals, leads us to the conclusion that that evidence should have been received and submitted to the jury upon the question ■of fraud in procuring the note from the defendant. And such being the case, the exception to the exclusion of such evidence should be allowed, and the motion for a new trial granted.

Defendant’s motion for a new trial granted, with costs to abide the event

Dwight, P. J., Lewis, Macombee and Haight, JJ., concur.


text:
    Alexander Rich, App’lt, v. The Manhattan Railway Co. et al., Resp’ts.

      (Court of Appeals,

      Filed June 27, 1893.)

    Appeal—Conditional dismissal op complaint.
    A judgment adjudging that plaintiff is not entitled to equitable relief, and directing a dismissal of complaint unless plaintiff, within twenty days from its entry or after entry of order on final appeal, serves notice that he elects to trv the action as one at law for damages, is not a final judgment, and is not appealable to the court of appeals.
    Appeal from judgment of the New York common pleas, general term, affirming interlocutory judgment denying injunctive relief, and directing dismissal of complaint, unless plaintiff, within a specified time, elect to try the action as one for damages before a jury.

      Leo C. Dessar, for app’lt; Brainard Tolles, for resp’ts.

       See 46 St. Rep., 673.

   Per Curiam.

The judgment in this action adjudged that the plaintiff was not entitled to equitable relief, and directed a dismissal of the complaint, with costs, unless within twenty days from its entry or, if an appeal was taken within twenty days after the enty of the order on the final appeal, the plaintiff 'served notice upon the defendants that he elected to try the action for damages to the premises described as an action at law before a jury and pay the costs incurred to the date of notice, and if the plaintiff failed to make such election within the time specified the defendants might enter an order dismissing the complaint, with costs.

This was plainly not a final judgment, and hence not appealable to this court, and we cannot, therefore, now consider or determine any of the questions involving the merits which have been discussed upon the briefs of the counsel for the plaintiff and the other property holders similarly situated.

The appeal must be dismissed, with costs.

All concur.


author: O’Brien, J.

text:
    Henri Schorestene, Pl’ff, v. Adrian Iselin, Def’t.

      (Supreme Court, General Term, First Department,

      Filed May 12, 1893.)

    'Contract—Reorganization of railroad under foreclosure.
    Defendant advertised that, having purchased at foreclosure sale a certain railroad, he had organized a new company, and would exchange one share of the new stock for every four shares of the old with such stockholders of the old company as should, before a certain date, deposit their certificates of stock, with transfer and power of attorney, with a certain trust company. Plaintiff never saw the offer, but hearing of it, his brother presented to the trust company a certificate of stock, which was in the name of a third person, indorsed by such person with a transfer and power in blank. The certificate was rejected, and from that time nothing was done by the plaintiff or his brother until some time after the time fixed for making the exchange had expired, when plaintiff sought to avail himself of •the offer, and, tailing, brought suit for breach of contract, without accounting for his ladies. Held, that no contract existed between the parties, as plaintiff had failed to accept the terms and comply with the conditions of the offer.
    Motion for a new trial upon exceptions directed to be heard in the first instance at general term.

      Livingston & Olcott (J. Van Vechten Olcott, of counsel), for pl’ff; Miller, Peckham & Dixon (Wheeler H. Peckham, of counsel), for def’t.
   O’Brien, J.

On a trial, at the close of plaintiff’s case, the ■complaint was dismissed, and certain exceptions of the plaintiff ■ordered to be heard in the first instance at the general term. Plaintiff sued for a breach of contract that he alleges was made between him and defendant. Defendant, on October 31, 1885, advertised an offer in the following language:

“ To the Stockholders of the Rochester & Pittsburg Railroad Company: At the recent foreclosure sale I purchased the property of the Rochester & Pittsburg Railroad Company, covered by its second mortgage. I have organized two companies, one in New York and one in Pennsylvania, and they are about to be consolidated. To such stockholders of the Rochester & Pittsburg Railroad Company as shall, on or before the 20th day of November,, 1885, deposit their certificates of stock, with transfer and power of attorney to transfer on the books signed in blank, with the-Union Trust Company of New York, 1 will, upon the organization of such consolidated company, give one share of the common stock of such consolidated company for every four shares of the: stock of said Rochester & Pittsburg Railroad Company so deposited. Said trust company will give its receipt for stock so deposited as being deposited pursuant to this offer, and to be delivered to me, on receipt from me, for the depositor, of one share of such common stock of such new consolidated company for every four shares of Rochester & Pittsburg Railroad Company stock so deposited. In case if the stock of such consolidated company is-not ready for delivery within forty days after the organization thereof, said depositors to have the right to withdraw the stock so deposited by them. The stock of such consolidated company will be six millions of dollars preferred six per cent, non-cumulative stock, and six millions of dollars common stock. This offer is limited strictly to the stock deposited on or before the 20th November, 1885. The Union Trust Company will be prepared to receive deposits of stock on or after Nov. 6.

“ Oct. 31,1885. Adrian Iselin.’’

Defendant, on December 14, 1885, advertised a further offer in the following language:

“ New York, December 14, 1885.

“ To the Stockholders of the Rochester & Pittsburg Railroad Company: A considerable number of Rochester & Pittsburg

stockholders having stated that they had not seen my circular on the 31st October, and have not, therefore, deposited their stock in accordance with its conditions, I have decided to give all outstanding stockholders another opportunity to deposit their stock with the Union Trust Company, and receive therefor receipts entitling them to one share of-stock of the consolidated reorganized company for every four shares deposited by them. This offer is-limited strictly to the stock deposited on or before the 31st December, 1885.

[Signed.] “Adrian Iselin.”

The plaintiff, as shown by the testimony, never saw either of these notices until after December 31, 1885, but as the result of information received, either by himself personally, or by his brother from a broker, the brother, prior to December 31, 1885, took a certificate of stock for 100 shares, which was in the name of one James Champ, and upon the back of which was indorsed a transfer and power in blank purporting to be signed by James Champ. to the office of the defendant, and was there referred to the trust -company. What then occurred at the trust company is thus detailed by the plaintiff’s brother:

“ I at once went, in accordance with this direction, to the office of the Union Trust Company, and presented the same certificate to a clerk or employe at a window, made the same request, saying that I had been directed there by the office of Adrian Iselin to make the exchange in question. I handed the certificate through the window to this clerk, who took it, looked at it, went off witli it to some other part of the office, and returned in a few minutes, and pushed the certificate back to me through the window with the response that it was no good. To the best of my remembrance the words, 1 This is no good,’ were the words employed. I asked him to explain why, but he gave no intelligible explanation, to the best of my remembrance merely stating that he had nothing to say about it; it was no good. I thereupon took said certificate, -came back to our office, and locked it up again in the safe.”

This visit to the trust company he fixes as some time between the 10th and 20th of December, 1885, and from that time nothing was done by either the plaintiff or his brother until 1886, when, through the intervention of a friend, and by letters directed personally to the defendant, the plaintiff sought to avail himself of the terms of the offer, and his efforts having failed, this suit was ■commenced. The plaintiff’s theory is that the offer presented by the published notices made a con tract between the parties, and that for a breach thereof the defendant was liable in damages. Upon the theory, however, that the offer of the defendant, and a strict compliance therewith by any stockholder, would constitute .a contract, which is doubtful, we fail, upon the testimony, to find evidence that the plaintiff complied with the terms of such offer. The offer was to give one share of the new stock for four shares of the old to such stockholders as should, before the date fixed in the notice, deposit their certificates of stock, with transfer and power of attorney, with the Union Trust Company of New York, for which the latter was to issue its receipts. The plaintiff failed to make the deposit within the time fixed, and the only justification for laches in this regard was his brother’s inability to apprehend the objection of the trust company to receiving the certificate without some proof of the genuineness of the signature of Champ -on the back of it. This objection of the trust company was capable of being intelligently communicated, and could then have been obviated by having the certificate transferred on the books of the -company in plaintiff’s own name, indorsing the same in blank, and depositing it with the trust company. Instead, however, of doing this, or in fact of doing anything, the plaintiff allowed the time to go by, and, upon the theory that the defendant in some way was responsible for the action of the trust company, brought this suit to recover damages upon an express agreement From the reference already made to the testimony, we think that the error in this contention is manifest, for, whatever grievance the plaintiff may have as against the trust company, we fail to see how the defendant is to be held responsi ble therefor. The defendant’s offer was to exchange the stock of the reorganized company for such stock as was deposited by holders, and for which they were to receive the receipts of the trust company. In the very nature of things it would have been impossible for the defendant to ascertain how many stockholders had deposited their stock, or what amount of stock had been deposited, except from evidence furnished by the trustee; and, while it is true that to some extent the trust company became the agent of the defendant, this, upon the facts here appearing, did not subject the defendant to liability in favor of the plaintiff. Undoubtedly, had the offer been complied with, and the stock deposited with the trust company, the latter, and perhaps the stockholders themselves, would have an action against the defendant. But where, as here, the stock was never deposited, and the omission so to deposit was due to the plaintiff’s misapprehension of the exact terms of the offer and a failure to comply therewith, no contract was entered into between the parties, and no resultant action for damages would follow.

There are subsidiary questions presented by plaintiff’s exceptions ; but in view of the conclusion we have reached with respect to the main question, as to whether a contract arose out of the offer made by the defendant and the subsequent conduct of the plaintiff, these need not be noticed. We think that the plaintiff could not acquire any right, either against the trust company or the defendant, unless by a precise acceptance of the offer within the time limited, and his failure tó accept the terms and comply with the conditions of the offer, whether this was the result of misapprehension, inadvertence, or neglect on his part, did not result in the meeting of the minds of the parties upon a definite proposition, did not result in the making of a contract between them, and gave no right to an action for damages to the plaintiff' upon the theory of a breach of an express contract. We think, therefore, that the exceptions should be overruled, and that judgment should be ordered upon the dismissal of the complaint in the court below, with costs and disbursements in the court below and upon this application.

Yan Brunt, P. J., andFoLLETT, J., concur.


text:
    The Hanover National Bank of New York, App’lt, v. William R. Stebbins, Resp’

      (Supreme Court, General Term, First Department,

      Filed May 12 1893.)

    Attachment—Residence.
    The word “ residence,” as used in § 686 of the Code, means the abode or place where one actually lives, and not one’s legal domicil.
    2. Same.
    Where a resident of New York stores his furniture, leaves the state, and with his family remains therefrom about a year, an attachment may properly be granted on the ground that he is “ not a resident of the state,” although he has not acquired a residence elsewhere and intends soon to return to New York.

      Appeal from an order vacating an attachment, granted on the ground of defendant’s alleged non-residence.

      Thomas S. Moore, for app’lt; Wm. R. Shepard and E. L. Prentiss, for resp’t.
   Per Curiam.

The original affidavit upon which the warrant of attachment was granted justified the issuance of such warrant upon the ground of defendant’s non-residence. It is insisted, however, that the affidavits used on the motion to vacate such attachment, by their weight, more than counter-balanced such original affidavits, and, if they did not conclusively show that defendant was a resident of the state, they left the question in such doubt that the burden placed upon the plaintiff, of showing non-residence of the defendant, was not sustained, and therefore that the attachment should be vacated. This was the view taken by the judge on the motion to vacate, and it remains, on this appeal, to determine whether such conclusion was right. No doubt exists but that prior to June, 1891, the defendant was a resident of this city. According, however, to his own account, in that month he gave up housekeeping in this city, stored his furniture, and departed with his family for Europe, where he remained until August following, when he returned, and, after spending a 'few days in some hotel in this city, he departed for Kansas City, and various places in the west, where his interests were situated, and in which places most of his time has been spent since August, 1891. His wife and a portion of his family remained in Europe, where some of his children were being educated, and had not returned at the time the warrant was granted, in July, 1892. The defendant states that he never acquired a residence in Europe or in Kansas City, or in any place in the west, and that it was his intention, as soon as his wife returned, in the fall of 1892, to resume housekeeping in the city of New York. Taking, however, the statements of the defendant as to his residence during all this period, can there be any doubt as to his being, since June, 1891, a nonresident of this state ? The Code, § 636, provides that a plaintiff shall be entitled to an attachment upon showing by affidavit, to the satisfaction of a judge, among other things, that the defendant is “ not a resident of the state.” In determining this question of residence for the purpose of an attachment, the distinction must always be kept in mind between it and domicil. The fact that the defendant never acquired a residence in another place, and that he had all the time since 1891 an intention to return, and resume housekeeping, with his family, in this city, would be sufficient to constitute a domicil within this state. But the1 word “ residence,” as used in § 636 of the Code, means the abode or place where one actually lives, and not one’s legal domicil. In other words, a reading of this section will show that it was intended to supply a method for the collection of debts by appropriating property of the debtor to be found within the state, when proceedings against the debtor personally are impossible, or liable to be made ineffectual, and thus it allows the use of the process in rem when process in personam could not be served. As said in Drake on Attachment, § 65 : “ The court of appeals in New York recognized the compatibility of domicil in that state with actual nonresidence, so as to authorize the party to be proceeded against by attachment as a nonresident, even where the intention to return existed, and there was no abandonment of domicil.”

And in Waples on Attachment, 34, 35, it is said: “ The condition upon which attachment issues is not that the debtor be a resident of another state or country, but that he be not a resident •of the state in which the suit against him is brought, and the attachment issued. * * * The essential charge is that he is not residing or living in the state; that is, that he has no abode or home within it where process may be served so as effectually to reach him. In other words, his property is attachable if his residence is not such as to subject him personally to the jurisdiction of the court, and place him upon equality with other residents in this respect.”

These views are supported by the cases of Frost v. Brisbin, 19 Wend. 11; Haggari v. Morgan, 5 N. Y., 423; Mayor, etc. v. Genet, 4 Hun, 487; Wood v. Hamilton, 14 Daly, 41; 1 St. Rep., 779 ; Weitkamp v. Loehr, 53 N. Y. Super Ct. 79.

Taking the defendant’s own statements, and applying thereto the Code provisions relative to attachments, interpreted in the light of the decisions above referred to, we think that the defendant, at the time the attachment was issued, was not a resident of New York, nor could it be claimed that he was even constructively such resident. Neither his home nor family was here, and, though it is sought to be shown that his absence was necessary for his business and health, the principal fact is apparent that his residence again in New York was entirely dependent on the time of the return of his family, who had been in Europe for more than a year at the time the attachment was issued, and who were to remain abroad at least for months subsequent thereto. The fact that his furniture was stored here, coupled with his intention to resume his residence on the return of his family, would give him a domicil here ; but, upon all the facts, we think that at the time the attachment was issued the defendant was not a resident of this state, within the meaning of § 636 of the Code, and that, therefore, the attachment was properly issued against his property within this state. Our conclusion, therefore, is that the motion to vacate the attachment should have been denied, and that the order vacating the attachment, from which this appeal is taken, should be reversed, with ten dollars costs and disbursements.

Van Brunt, P. J., O’Brien and Lawrence, JJ., concur.


text:
    The Union Square Bank of the City of New York, Resp't, v. Theodor Reichmann, Impl’d, App’lt.

      (Supreme Court, General Term, First Department,

      Filed May 12, 1893.)

    Appeal from an order denying a motion to vacate a warrant of attachment.

      A. W. Kent, for app’lt; Fromme Bros., for resp’t
   Per Curiam.

The order appealed from should be affirmed, with ten dollars costs and disbursements, for the reasons stated in the opinion in the case of Hanover Nat. Bank v. Stebbins (decided herewith.)

Van Brunt, P. J., and Follett, J., concur.


text:
    Thomas M. Hart, Resp’t, v. The Mayor, etc., of the City of New York, App’lts.

      (Supreme Court, General Term, First Department,

      Filed May 12, 1893.)

    Attorneys—Lien.
    The lien secured to an attorney, by § 66 of the Code, does not debar a person who has agreed to give his attorney as compensation for his services in an action a portion of the recovery from settling without the consent of such attorney, although if the party is irresponsible, so that a payment to him might result in prejudice to the attorney, the court should allow the latter to proceed with the action for his own benefit, unless within a fixed time his proportion of the amount given on settlement be paid to him.
    Appeal from an order granting the plaintiff’s attorney of record leave to carry on and prosecute the above action for his own benefit for the purpose of recovering his fees and prosecuting his lien on the cause of action for his compensation.

      William H. Clark (Sidney J. Cowen, of counsel), for app’lts; John C. Robinson (L. E. Chittenden, of counsel), for resp’t.
   O’Brien, J.

This action was brought for the recovery of $3, ■040, plaintiff's salary as an inspector of masonry. An agreement was made between the plaintiff and his attorney, Bobinson, that in consideration of professional. services to be rendered in the action the attorney was to have half of the claim, or fifty per cent, of the recovery. Hotice of this agreement was served on counsel for defendants. The latter endeavored to reach a settlement with the plaintiff and his attorney, but an impediment to this was ■encountered in the person of the attorney, who refused to assent to a settlement. Subsequently the defendants settled with plaintiff, in the face of the attorney’s notice of lien, for the sum of $800. This settlement, and the release to defendants, were then interposed by an amended answer. The plaintiff’s attorney then moved for an order to be permitted to prosecute the action for his ■own benefit, which at first was denied upon the ground that no leave was necessary, and that the attorney could proceed with the action. Thereafter, on the case being reached for trial before the same judge who denied the motion, he concluded, contrary to his former opinion, that leave of the court was necessary, and thereupon granted leave to apply anew, which was done, and such leave was granted by an order from which the defendants now appeal.

The question of an attorney’s lien and the mode of its enforcement have frequently been before our courts, and many cases might be cited which carefully review these subjects as they existed prior to and since the enactment of present § 66 of the Code of Civil Procedure. As the latter is now controlling, it would be useless to go over the ground already covered, it being sufficient, upon the facts here appearing, to refer to a few of the cases which have come before the courts since the enactment of the section of the Code referred to, and deduce therefrom our conclusion. Section 66 of the Code provides that “ the compensation of an attorney or counselor for his services is governed by agreement, express or implied.” In addition, it gives the attorney a lien upon the client’s cause of action, and prescribes that it is not to be affected “by any settlement between the parties before or after judgment.” The construction placed upon this section is that the lien which thus attaches in the attorney’s favor cannot be impaired of destroyed by collusion or fraud ; and in cases where this is made to appear the court has undoubted power, and will exercise it, to set aside a judgment, if such has been procured in an action, to the end that, an attorney may proceed and enforce the lien or claim upon the cause of action. The authorities, therefore, which bear upon cases-wherein the element of fraud or collusion is present are to be carefully distinguished from a case which presents facts similar to those in the case at bar. There is no suggestion here of fraud or collusion, but a question as to whether or not a person who has-given to his attorney a right to one-half of any amount that may be recovered by judgment or by way of settlement as and for his compensation is thereby debarred and prevented from settling the action without such attorney’s consent, and, if the client makes such settlement in good faith, whether the action can thereafter be prosecuted for the benefit solely of the attorney. As already shown, the section (66) provides that the compensation is to be determined by agreement, express or implied. The notice served upon and "which binds the defendants states that the attorney has “ a lien on the cause of action herein to the amount of one-half of any judgment, settlement or recovery therein for professional services rendered to the plaintiff in this action, and I request you to make no settlement thereof with any person except myself, 'without due notice to me, and provision for the payment of the amount of said lien.” We do not think that it can be seriously contended that this form of notice should be so construed as to be extended in favor of respondent’s view that the plaintiff had divested himself of all right of settlement Its language is plain that the attorney was to have one-half of the amount of any settlement for his professional services, and this is followed, it is true, by a request that the defendants should make no settlement except with the attorney. After having attempted, however, to negotiate such a settlement with the attorney, and failed, it was entirely legal for the defendants to settle with the plaintiff, and thus buy their peace.

As said in Lee v. Vacuum Oil Co., 126 N. Y., 579 ; 38 St. Rep., 662, “We are of the opinion that the existence of such a lien in favor of the attorneys does not confer a right on them to stand in the way of settlement of an action which is desired by the parties, and which does not prejudice any right of the attorneys. We do not think that such an agreement deprives a party of the right to control the management of his own cause, and to determine when the litigation shall cease, and how far it shall be extended. The client still remains the lawful owner of the cause of action, and is not bound to continue the litigation for the benefit of his attorneys when he judges it prudent to stop, providing he is willing and able to satisfy his attorneys’ just claims. In fact, the lien under the agreement was intended for and operates only as a security for the attorneys’’ legal claims, and, unless those are prejudiced by the client’s contract, she has unrestricted control of the subject of the action and the terms upon which a settlement shall be effected.”

And in Poole v. Belcha, 131 N. Y., 204; 42 St. Rep., 856, it is said: “ The lien secured to an attorney by § 66 of the Code does not prevent the party who owns the judgment from receiving payment thereof, and executing a discharge. When it is shown that such payment or discharge will operate to deprive the attorney of his costs, the court has power to protect him; but it cannot be assumed that a settlement is in fraud of his rights. Until the lien of the attorney is asserted in some way, the judgment remains the property of the client.”

And in the same case it is said: “ In order to warrant the court in disregarding a settlement and release made in an action, it must be shown that to give full effect to them will operate as a fraud upon the attorney, or at least to his prejudice, by depriving him of his costs, or turning him over to an irresponsible client.”

Here, it is made to appear that the plaintiff is not responsible, and the payment of the whole amount of $800 might result in prejudice to the attorney; and we think that, upon this fact appearing, it was the duty of the court to have permitted the attorney to proceed with the action, unless, within a time to be fixed in the order, one-half of the amount given upon the settlement was paid to the attorney.

The order should, therefore, be so modified, and, as thus modified, affirmed, without costs to either party.

Van Brunt, P. J., concurs.


text:
    Katherine Palmer, Resp’t, v. George Jones et al, App’lts.

      (Supreme Court, General Term, First Department,

      Filed May 12, 1893.)

    1. Usury—Device to avoid statute.
    Defendants were known as the "American Guaranty Association.” 'Plaintiff owed them money, and attempting to gain an extension of time for payment, was refused. To obtain a further loan and to gain time on a note due defendants, plaintiff executed a note payable to herself, which, defendants indorsed as “ The American Guaranty Association,” and charged as commissions for the indorsement a sum greatly in excess of the legal rate of interest procured the discount of the note by their attorney and paid the proceeds to plaintiff. A chattel mortgage was given to defendants by plaintiff as security. The payments of the commissions and of the note were to be paid to defendants by instalments before the maturity of the note. Held, that the transaction was usurious, and that the payment of the note could not be enforced.

      2. Pleading—Equity.
    Where the complaint in an action to cancel a mortgage and note did not state an equitable cause of action or allege that plaintiff had no adequate remedy at law, and no demurrer was interposed, or allegation made in the answer that plaintiff had an adequate remedy at law, Held, that the court could conform the pleadings to the proof and grant relief.
    Appeal from a judgment at special term directing the delivery of certain notes and chattel mortgages and annulling the same.
    Plaintiff desiring to secure an extension of time and to procure a further loan from defendants, was induced by them to make a note payable to herself, which they indorsed in their business name of “ The American Guaranty Association,” procured to be discounted by their legal adviser and paid the proceeds to her. For making the indorsement they charged a commission largely in excess of legal interest, and also took' a chattel mortgage as security.
    The following is the opinion of the court below.
    Patterson, J. The plaintiff is entitled to the relief she demands. It is evident, not only from her testimony, but on the face of the exhibits in the case, that the defendants, Forgotston, were principals in the transactions of the loans of money mentioned in the pleadings and testimony, and that the device of their doing, business as the “American Guaranty Association ” is a method of concealing their identity. The whole transaction, as testified to by the plaintiff (and Í believe her), consisted of the most oppressive usury for the loan of a small sum of money to a' girl struggling with adversity, who gave the security directly to the defendants, Forgotston, to be enforced by them before the payment of the note to which it was collateral, in case of default in partial payments. All these payments, both of the alleged compensation for the guaranty, and of the note itself, were to be paid by instalments into the hands of the Forgotstons before (except as to a final instalment) the note matured, and these facts are sufficient to indicate the true nature of the transaction. It was simply a way of extorting money from a person in distress, or necessitous circumstances on the pretext of an alleged compensation for indorsing an indebtedness, every dollar of which would come into the hands of the defendants named before they were liable to pay anything to any person who might be made to appear as the principal creditor. The whole scheme is apparent on its face as being a mere clumsy device to make money by charging exorbitant interest, and it has not even the merit of cleverness. Contracts of guaranty, whether of collection or payment, make the guarantor liable secondarily ; but here the whole transaction, from beginning to end, both as to the amounts to be paid as commissions for the asserted guaranty and of the principal indebtedness, were to be paid in instalments to the Forgotstons. It is plainly a mere trick to cover an illegitimate business under a supposed legal form.
    There are two points suggested by the counsel for the defendants to defeat the action, and the first is the want of an allegation in the complaintthat the plaintiff lias no adecúate remedy at law; but that sufficiently appears from the whole complaint, and is clearly established by the proofs, and if necessary the complaint may be made to conform to them. The object of the suit is to restrain the enforcement of the chattel mortgage, and to compel the surrender of the note to which that chattel mortgage is collateral ; the plaintiff having more than paid her real debt, with lawful interest. The form of the security itself is sufficient to show that there is no adequate remedy at law, for if it is to be enforced the defendants could at once take possession of the mortgaged property, and all that would be left would be a right to replevy. That would be ineffectual, for the reason that before an action could be instituted the household effects and furniture covered by the mortgage might be scattered to the four points of the compass, and the plaintiff and .her family left without even a chair to sit on. What is sought by this action is to prevent the taking possession bv the mortgagee of this property, and an adequate remedy at law, under the peculiar circumstances of the case, would not consist in leaving a person situated as this plaintiff is to an action of replevin to try title after the wrong is done which she seeks to restrain.
    The other point suggested is that the mere fact of usury in a contract for the loan or forbearance of money does not constitute-a ground of jurisdiction in equity. That is so, unless there is no adequate remedy at law; and the principle may be stated even more strongly, viz., that the right to have a usurious contract annulled exists only where a defense to that contract cannot be made at law. And that is just this case. It is difficult to perceive how a defense can be made to the enforcement of a chattel mortgage which, on default in any of its conditions, operates as a bill of sale, and gives the apparent right to the holder of that mortgage to take immediate possession of the property, without suit, and remove it, before the rights of the parties can be ascertained. .There is no opportunity offered to interpose a defense. The mere fact that a person has given a security which may be avoided for usury is, of course, not sufficient to authorize a court of equity to annul a contract; but where the form of the security is such that the party giving it cannot be heard in a court of law by way of defense to an action brought upon it, it would be a failure of justice if a court of equity could not exercise its power and interpose to restrain the irreparable injury which in a case like this would result from the taking of the property by the mortgagee.
    There is another consideration in this matter, and it is that the extortion of this money from the plaintiff by the Forgotstons is purely and simply a fraud. All the circumstances indicate that, under the cover of a technically worded guaranty, the defendants named attempted to carry out an illegitimate transaction of loaning money at ruinously extortionate rates of interest. The very adoption of the high-sounding name under which they did business ; the absurd attempt at concealment of their real relation to the borrower of the money ; the scheme to provide for the payment of some part of the so-called commission for guaranty before any part of the principal sum became due; the arrangement of partial payments in the mortgage while the note given for the money borrowed was payable in one .sum; the whole atmosphere of the transaction;_ and to cover all, the fact that the Forgotstons never signed a guaranty at all to bind them in their proper names, but resorted to the fictitious company name, and made the so-called association an ostensible guarantor, make out such a case that it is idle to talk of there being anything but a device to evade the law, and to extort money from the distress of the plaintiff. Such a scheme for grinding the faces of the poor cannot be tolerated.
    Concerning the defendant De La Mare, as the proof is made, the complaint must be dismissed as to him, but without costs. As to the other defendants the relief prayed for is granted, with costs.

      James C. De La Mare, for app’lts; John V. Bouvier, Jr., for respt.
   O’Brien, J.

This suit was brought in equity for the cancellation of certain promissory notes made by plaintiff, and indorsed by her in blank, secured by a chattel mortgage, and for the cancellation of said mortgage, upon the ground that both notes and mortgages were tainted with usury. The evidence was sufficient to support the conclusion of the learned trial judge that the whole scheme arranged by defendants, the Forgotstons, was resorted to as a cloak to evade the statute against usury. Nothing upon the facts need be added to the very satisfactory opinion of the court below. The claim that the extortionate amounts exacted from plaintiff were compensation for the guaranty given by defendants is effectually disposed of in such opinion. It is entirely competent for one to lend his credit to another, and receive a compensation therefor, but this rule of law will afford no protection to persons who resort to a legal form with a view of covering up a usurious transaction.

The only serious questions urged relate to the sufficiency of the complaint as setting forth an equitable cause of action, and the failure therein to allege that the plaintiff had no adequate remedy at law. The complaint does allege “ that the said chattel mortgage constitutes the vital part of the said loan, and is tainted with the same fraud and illegality that affects the promissory notes given by plaintiff to defendants upon the same transaction, which said notes are still in the defendants’ possession; that the defendants have threatened to sell and remove the furniture of this plaintiff, summarily, under the aforesaid chattel mortgage, by reason whereof irreparable loss and damage will be sustained by the said plaintiff, the amount of which it is at present impossible, definitely, to compute.” These allegations are claimed to be insufficient, and we are referred to Allerlon v. Belden, 49 N. Y., 373, which has been cited with approval in subsequent cases, and which holds that “ the mere fact that the party has made an agreement, or given a security, which is void for usury, is not sufficient to entitle him to apply to a court of equity to have the contract annulled. The right to this relief exists only when, from the form of the security, the defense cannot be made available at law, or where the instrument sought to be avoided is a cloud upon the title to land, or some other necessity for the interposition of a court of equity is shown.”

It will be noticed that in that case, as in others that might be referred to, the question was presented by a demurrer to the coim plaint. In this case, however, no demurrer was interposed, nor was there any allegation in the answer that the plaintiff had an adequate remedy at law. Instead, the defendant submitted himself to a court of equity, and for the first time availed himself of this objection by a motion at the opening of the case. The court, having taken the motion under advisement, proceeded with the proof, and thereafter held, upon the complaint as supplemented by such proof, that it was evident that the plaintiff had no adequate remedy at law, and that within the cases it was clear that, if the plaintiff was obliged to resort to an - action to replevy the property after it had been taken from her possession, this would have resulted in irreparable damage, which the court, upon the evidence presented, should not allow. As shown by the terms of the mortgage itself, it acted as a bill of sale, and under it the defendants could have entered into possession, and forcibly taken from under plaintiff’s control the property covered by the chattel mortgage, leaving her thereafter to her remedy by an action of replevin, which, as clearly shown by the opinion of the court below, would fail to repair the injury thus resulting from a seizure of the property. In denying the motion, therefore, at the end of the proofs, the learned trial judge correctly held that, even though the complaint might have been insufficient, yet, supplemented as it was by the evidence, to which the complaint might be made conformable, it was the duty of the court to proceed to give the plaintiff such relief as, upon the evidence, it was shown she was entitled to. We see no reason to interfere with the conclusion thus reached. The defendant having interposed an answer, and proceeded to trial without in any way raising this point, or including it in any way by way of defense, it is doubtful if, for the first time, it could be raised when the trial was actually begun. In other words, where the answer does not allege that , the plaintiff has an adequate remedy at law, it is questionable whether this can be availed of upon the trial to defeat such relief as the plaintiff may show that she is entitled to. In Mtropolitan El. R. Co. v. Manhattan R. Co., 14 Abb. N. C., 208, it is said by the learned judge writing the opinion in that case: “ Even if I, however, could find that there was no ground for equitable relief, yet, if the facts proven showed that the party was entitled to relief, the bill could not be dismissed.” In the i*e-porter’s notes to this case will be found several cases that fully sustain this view. Thus in Van Voorhis v. Kelly, 65 How. Pr., 300, it was held that where the plaintiff was entitled to some equitable relief the action must be retained for that purpose. And again, in the reporter’s note at page 104, it is said: “ If the complaint states facts constituting a cause of action, and defendant answers, the court should afford the proper relief, whether the frame of the complaint bo legal or equitableciting Marquat v. Marquat, 12 N. Y., 336, and other cases. While, therefore, under the provisions of the Code, the objection that a complaint does not state facts sufficient to constitute a cause of action is available at any stage, yet, where a cause of action is set forth, and an answer thereto is interposed, the court is at liberty to afford such relief, legal or equitable, as, upon the facts proved, should be accorded. Here the compliant alleged the making of the chattel mortgage and promissory notes, and that the defendants threatened to sell and remove the furniture of the plaintiff summarily, and that, by reason thereof, plaintiff would sustain irreparable loss and damage. While it is true the exact character of the mortgage, and its terms and conditions, to support this statement, are not set forth, we think this was sufficient to permit the court to proceed, and on proof bejng presented showing that the mortgage itself was practically a bill of sale, under which the defendants could summarily remove the property, a case was made out which conferred upon a court of equity the right to interpose to prevent the threatened injury, and it could, as suggested by the trial judge, conform the pleadings to such proof. Having seen therefrom that the plaintiff had no adequate remedy at law, the judge was not obliged, either at the beginning of the trial, or at the close of the testimony—the question not being raised by the answer—to turn the plaintiff out of court. We are of opinion, therefore, that the case was correctly disposed of, and that the judgment should be affirmed, with costs and disbursements.

Van Brunt, P. J., and Ingraham, J., concur.


text:
    Hermann Isaac, App’lt, v. Robert Wilisch et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed May 12, 1893.)

    1. Bill of pabticulabs—Bbeach of cohteact.
    Plaintiff was defendant’s sales agent in the United States, and brought suit for their failure to deliver goods on orders forwarded by him and alleged to have been accepted by defendants. Annexed to the complaint, as an exhibit was a schedule of the orders and their numbers, and of the amount of each order and its value. fieM.that a hill of particulars of the names and addresses of the persons to whom plaintiff made the alleged sales was properly required of him.
    2. Same.
    Plaintiff claimed to have an exclusive contract with defendants for the sale in the United States of their goods, and brought suit against them for an alleged violation of such contract, in that they sold goods to other parties, and for the violation of a subsequent agreement whereby plaintiff was to forbear to prosecute the claim, in consideration of which defendants were to pay him a certain percentage of the total goods before that time shipped. Held, that plaintiff should not he required to furnish defendants with a bill of particulars of the names of the parties other than the plaintiff from whom defendants took orders and to whom they sold and delivered goods, as such information was thoroughly with defendants.
    3. Same.
    In an action for breach of an agreement arising from short deliveries and defects in quality, whereby, in consideration of plaintiff’s forbearing to prosecute such claim, defendants agreed to pay him a. certain sum, Held, that defendants’ demand for a bill of particulars of the numbers of the orders i-> which there were shortages and defects, the amount of ihe shortages anil the natn e of the defc'-tk was properly refused.

      Appeal from an order directing plaintiff to furnish, a bill of particulars of the causes of action set forth in the complaint
    Butler, Stillman & Hubbard (A. H. Van Brunt and John Notman, of counsel), for app’lt; George J. Greenfield, for resp’ts.
   Per Curiam.

The plaintiff, doing business in this city, entered into a written contract with the defendants, who were manufacturers of colored paper in Germany, the construction of which contract, as expressed in its terms, and contended for by plaintiff, would confer on the latter the exclusive sale of the goods of defendants’ manufacture in the United States. Assigning breaches of this written agreement, the plaintiff seeks to recover upon four separate and distinct causes of action, the first being defendants’ failure to deliver colored paper upon orders' received by plaintiff, from customers, which purchase orders it is alleged the defendants duly accepted, and by reason of their failure damaged the plaintiff to the extent of the difference between the price to be paid by plaintiff and the price at which he had resold the same to the customers. Annexed to-the complaint, as an exhibit, is a schedule of those orders, and of their numbers, and of the number of reams of paper covered by each order and the value thereof. In addition, however, the-defendants ask for a bill of particulars of the names and addresses of the persons to whom the plaintiff made sales, as alleged, which particulars, we think, should have been furnished, as directed by the order appealed from, because the damages-claimed by reason of the breach assigned are in the nature of special damages, and although certain particulars are given in the exhibit attached to the complaint, such particulars are not sufficient means of identifying the purchase orders as being the same as those alleged to have been taken by plaintiff, nor do-they state the number of reams sold to any purchaser, or the-dates of such sales. As this is information peculiarly within the knowledge of the plaintiff, we can see no hardship in requiring him to furnish the same. On the other hand, the absence of such particulars, by preventing the defendants from identifying the orders, and rendering them unable to meet the-proof offered upon the trial by plaintiff, might result in surprise and possible injury.

The second cause of action is for accepting and delivering orders in the United States from parties other than the plaintiff, in violation of the agreement, and a subsequent agreement made, as-alleged, between the parties, by which the plaintiff was to forbear to prosecute the claim, in consideration of which the defendants were to pay the plaintiff a certain percentage of the total goods-before that time shipped. With regard to this cause of action, the defendants demand the following particulars: (1) The names-of the parties other than the plaintiff from whom defendants’ firm took orders, and to whom they sold and delivered their colored paper goods manufactured by them, in violation of the agreement ; and (2) the names of the parties from whom the defendants took orders and sold and delivered their colored paper goods manufactured by them, in violation of a previous agreement. These particulars being as much in the possession of the party asking as in that of the plaintiff, no good reason has been assigned why the plaintiff should be compelled to furnish them. The court is not disposed to compel plaintiff to furnish specific details solely with a view to limiting the witnesses whom plaintiff otherwise might produce to prove the extent to which defendants had gone in breaking their contract. Upon such facts appearing, this court has frequently refused to require bills of particulars. Upon the ground alone that it appears that knowledge of the acts complained of is peculiarly and thoroughly with the defendants, it is but just that plaintiff should not be required to furnish the particulars. Fink v. Jetter, 38 Hun, 163 ; Passavant) v. Cantor, 48 id., 546; 16 St. Rep., 252.

The third cause of action is for breach of the agreement arising from short deliveries and defects in quality, in consideration of plaintiff’s forbearing to prosecute which claim one of the defendants, on behalf of his firm, agreed to pay to the plaintiff the sum of $1,120.50. In regard thereto the defendants demand the following particulars: (1) The numbers of the orders in which there where shortages in packages and rolls of paper purchased by the plaintiff of defendants’ said firm; (2) the amount of such shortages, respectively ; (3) the numbers of the orders in which there were defects in the quality of the goods; and (4) the peculiar nature of such defects. With regard to these particulars, what has already been said about their being as much within the possession of the defendants as of the plaintiff is applicable; but, in addition thereto, it may be added that the cause of action is to recover a liquidated amount as the result of an agreement by reason of such defects in quality and shortage, which, as alleged, were conceded by one of the defendants.

As it would not be necessary, in order to recover for such amounts, to prove every item of shortage or defect in quality, we fail to see how this information can be at all essential to enable the defendants to prepare for their defense. In other words, the defects and shortage are averred by way of inducement or consideration, as the basis of an agreement between the parties by which, to indemnify the plaintiff for the loss resulting therefrom, he was to receive a fixed sum agreed upon between the parties. As to the first cause of action, apart from the affidavit of the attorney used upon the motion, it can be seen, from an inspection of the complaint, that it was a proper application made to the court for the desired particulars, and it is for that reason that we are not disposed to interfere with the order. In regard, however, to the second and third causes of action, the right to the particulars demanded could not be determined upon a mere inspection of the complaint, and it was therefore essential for the defendants to make out a case showing want of knowledge, and the reasons for the particulars demanded. These reasons are sought to be furnished by the affidavit of the defendants’ attorney, instead of by one of the defendants themselves. We have had occasion fre■quently to advert to the fact that it is impossible for an attorney to know what knowledge his clients may have as to particular facts, and hence the necessity of requiring the parties themselves to make affidavits with respect to such knowledge as they may possess, instead of attempting to delegate this office to an attorney. Assuming, however, in this case, with the explanation given of the absence of the defendants in Europe, and the possession of information by means of letters and communications, that the defendants were in a position, to presentísima facie evidence to the court, this has been met by the counter affidavits of the plaintiff in resisting the motion, which tend to support, upon the merits, the conclusions at which we have arrived, that most of these particulars sought to be obtained are in the possession of the defendants, and that the purpose sought is to find out just what ■evidence and what witnesses, together with their names, the plaintiff may have in order to sustain his causes of action. We .are of opinion, therefore, that the order requiring particulars to be given as to the first cause of action should be affirmed, and as to the second and third causes of action reversed, without costs to ■either party upon this appeal.

O’Brien and Ingraham, JJ., concur.