author: BabNARd, P. J.: Peatt, J.

text:
    JAMES H. WATSON and JAMES H. PITTINGER, Respondents, v. WILLIAM W. BUTCHER, as Assignee, etc., of GEORGE W. BROWN, Appellant, Impleaded, etc.

      General assignment — when the assignee may he authorized thereby to finish incompleted buildings.

    A general assignment for the benefit of creditors contained a clause relating to certain incompleted houses then being erected by the assignor, which read as follows, viz.: “And it is further provided that, should it be necessary and to the better performance of the trust, that the party of the second part shall have full power and authority to finish such work as is unfinished, .to complete such buildings as are incompleted, and to pay all necessary charges and expenses for such completion prior‘to the payment of all debts and liabilities herein-before mentioned.”

      Held, that as this clause gave to the assignee no additional right beyond that which the law gave and imposed in all cases of trusts, its insertion in the assignment did not render it fraudulent as to creditors or require it to be set aside. (Pratt, ,T., dissenting.)

      Dunham v. Waterman (17 N. Y., 9) distinguished.

      Appeal from an order made and entered herein, appointing a receiver of the property of the defendant George W. Brown.
    This action is brought by the plaintiffs as judgment creditors of the defendant Brown, to set aside a general assignment made by him to the defendant Butcher, on the ground that the same is void upon the face thereof. The assignment contains the following provision : “ And it is further provided that, should it be necessary and to the better performance of the trust, that the party of the second part shall have full power and authority to finish such work as is unfinished, to complete such buildings as are incompleted, and to pay all necessary charges and expenses for such completion prior to the payment of all debts and liabilities hereinbefore mentioned.” On the 4th day of May, 1885, a motion was made at Special Term, before Hon. Edgar M. CulleN, by plaintiffs, that a receiver be appointed herein, pending the trial of this action. Said motion was granted, Mi-. Justice CulleN holding: “ I think the provision for completing the unfinished buildings is illegal and vitiates the whole assignment.” Upon said decision an order was entered herein, on the 9th day of May, 1885, appointing a receiver. From said order the defendant now appeals.

      William Q. CooTce, for the appellant.

      JSdgar J. Phillips, for the respondents.
   BabNARd, P. J.:

The assignment gives no additional right to the assignee beyond that imposed by law in all cases of trusts. The assignment was by a debtor for the benefit of creditors. A portion of the assigned property consisted of unfinished buildings. A clause was inserted in the assignment in respect thereto in the following language: “ And it is further provided that, should it be necessary and to the better performance of the trust; that the party of the second part shall have full power and authority to finish such work as is unfinished, to complete such buildings as are incompleted and to pay all necessary charges and expenses for such completion prior to the payment of all debts and liabilities hereinbefore mentioned and provided.” While it may be conceded that cases might arise which would not justify the use of this power, it is certain that there are «ases when its exercise would not only be proper but imperative. The general rule is, that the trustee must preserve the estate and that the estate must pay for its preservation. An assignment for the benefit of creditors must absolutely and at once devote the property assigned to the payment of the debts. This is also a general rule, but a necessary delay in advertising the property would not vitiate the assignment. So, also, permission in an assignment to collect an assigned claim by installments does not invalidate an assignment. (McConnell v. Sherwood, 84 N. Y., 522.) In the present case the discretion given is one subject to supervision by a court, and is not absolute and does not, in effect, even interpose .any delay in the right of the creditors to enforce the execution of the assignment. The case is not like Dunham v. Waterman (17 N. Y., 9), where there was an express provision that the assignee should complete unfinished work.

In the case under consideration .the assignee gets no power by ■deed which is not subject to control of courts of equity, the same as if no such words were contained in the deed. It is a narrow •distinction at best that a power conferred by law may be exercised by the assignee, but the same power expressed by the deed renders it void. We think, however, that in this case no power is conferred by the deed which renders the assignment void under the case of Dunham v. Waterman, above cited. It is rather embraced within the scope of the decision in Jessup v. Hulse (21 N. Y., 168). There the assignment provided that the assignee was to “ sell, dispose of and convey the said real estate and personal property at such time or times and in such manner as shall be most conducive to the interest of the creditors.” It was held that this language did not •clothe the assignee with any power not conferred by law, and the ^assignment was held good.

The order appointing a receiver should therefore be reversed, with costs and disbursements.

DyxmaN, J., concurred.

Peatt, J.

(dissenting):

We think the assignment in question in this case is void, for the reasons stated iu Dunham v. Watermam, (17 N. Y., 9), and kindred eases. The provision in respect to the completion of the unfinished buildings, in effect, although it does not in form, confers upon the assignee discretionary power to complete such buildings and to pay the expense therefor before paying the assignor’s creditors. Á debtor can grant to his assignee no such power. (Smith v. Beatty, 31 N. Y., 545.) The assignment being void, it was proper to appoint a receiver in order to preserve the estate and to protect the rights of the plaintiffs and the other creditors. (Bloodgood v. Clarke, 4 Paige, 577; People v. Chalmers, 60 N. Y., 154.)

The order appealed from should be affirmed, with costs.

Order appointing receiver reversed, with costs and disbursements, and motion denied.


source: Caselaw Access Project

author: Barnard, P. J.:

license: Public Domain

text:
    WALTER C. COLE, Respondent, v. THE NEW YORK, LAKE ERIE AND WESTERN RAILROAD COMPANY, Appellant.

      Statute of frauds — assignment of the claim of an employee for wages — the assignor may empower the assignee to fill in the Hants therein.

    An employee of the defendant, being indebted to one Cuff, assigned his wages to the latter by a pzlnted form, in which the names, amounts and dates were left blank, it being agreed between the parties, at the time of the execution of the assignment, that Cuff should have power to fill in the blanks when necessary. Cuff having filled in the blanks, and assigned his claim to the plaintiff, the latter brought this action against the defendant to recover the amount thereof.

      Held, that the assignment of the wages of the employee, and the authority given to the assignee to fill in the blanks, constituted a valid contract within the statute of frauds, and that the plaintiff was entitled to recover.
    Appeal from a judgment, entered upon the trial of this action by the court without a jury.
    The action was brought to recover upon assignments of claims of various employees of the defendant agreed for as wages. The right of the plaintiff to enforce the claim of one Sexton was contested upon the trial, and upon the hearing of this appeal. The court found as to this claim that during the month of December, 1883, one Andrew Sexton was in the employ of the defendant in the capacity of a hostler, and for the said month the defendant became and was indebted to said Sexton in the sum of sixty-five dollars for wages earned by said Sexton during said month. That on the 31st day of December, 1883, said Sexton was indebted to one Andrew Cutí in an amount exceeding said sum of sixty-five dollars, and prior thereto executed and delivered to said Cuff an assignment of his said wages from the defendant, which assignment was a printed form therefor, as follows t
    The New Yoke, Lake Eeie and Westeen Raileoad CoMpant;
    I, , in consideration of $ , to me paid by , the receipt whereof is hereby acknowledged, have sold and assigned, and hereby do sell and assign to the said a certain debt due to me from the New York, Lake Erie and Western Railroad Company, amounting to sixty-five dollars, for labor and services performed for said company by me on the division during the month of , 18 .
    And I do hereby make, constitute and appoint the said my true and lawful attorney for me; and in my name, place and stead, to receipt to said company for all such wages or salary, as above stated, in my name, or otherwise, upon the books, pay-rrolls, or other vouchers or papers of said company for the same, the same as though I were personally present and acting in the premises, hereby ratifying all that my said attorney may do in the premises*
    And I do further agree to and with said in consideration of the premises aforesaid if I shall at any time draw or receive such wages or salary so assigned by me to , or any part thereof^- that I will receive the same solely as a servant of said •o , and that I will bring and transport the same immediately to said and deliver it to , and that the consideration of the assignment received by me, as aforesaid, shall and is hereby accepted by me as my full compensation for such services. Nothing contained herein shall be deemed to authorize me to draw or receive such wages as an agent or servant of said without his consent first to be obtained.
    Witness my hand at Port Jervis, N. Y., the day of, 18 .
    (Signed) ANDREW SEXTON.
    Signed and delivered in presence of
    John Cuff.
    And that the blanks in the printed form of said assignment were not filled in at the time the same was executed, but were filled in on the said 31st day of December, 1883, pursuant to an agreement between said Sexton and said Cuff at the time said assignment was executed in relation thereto, and that thereupon said Cuff became the legal owner of said claim of said Sexton for said wages earned by him for and during said month oí December, 1883. That thereafter said Cuff caused said aforesaid assignment to be presented to the defendant and demanded payment thereof to him, and that the defendant refused and neglected to pay the same, or any part thereof. That about the 21st day of February, 188é, said Andrew Cuff, for a valuable consideration, duly assigned and transferred to the plaintiff all his right, title and interest in and to said claim of said Sexton. and that the plaintiff is now the legal owner thereof.

      Lewis E. Carr, for the appellant.

      John W. Lyon, for the respondent.
   Barnard, P. J.:

The case presented does not seem to be covered by the principles invoked by the learned counsel for the appellant. There must be a complete contract in writing to take a case out of the statute of frauds. (Drake v. Seaman, 97 N. Y., 230.) The paper in question is perfect and complete. One Sexton was an employe of the defendant. £Le was trading with Cuff. The papers were made out to be filled up by Cuff so as to apply to the period of the default by Sexton. Sexton failed to pay in December, 1883, and Cuff filled up the blanks by express authority of Sexton, given at the date of the execution in blank. When this power was exercised the paper became a completed paper as if executed by the assignor himself. There are cases which hold that the delivery of a paper in blank carries with it the implied power to fill up the blanks. It is not necessary to go so far in this case, as the power was given in fact to fill the blanks. A power may be created by parol to execute a paper under seal so as to escape the operation of the statute of frauds. (Worrall v. Munn, 1 Seld., 229.) The fair meaning of the verbal assignment is, that the assignment was made to cover any default “ if he failed to pay for any wages for any month. It was not intended to be so restricted that there must be a failure to pay in November before it could be filled up for December wages. It could be filled up as of thirty-first December for a default in December. The salary was earned at the date of the assignment. It was not intended to operate until there was a default, and it was not filled up until a default had happened.

These conclusions apply as well to the portion of plaintiff’s claim acquired by assignment from Middaugh. There was the same power given to fill up the blanks and executed in the same way upon a default. The controversy as to .the payment under this part of the plaintiff’s claim must be left as found. The evidence is conflicting, but not so preponderating as to call for a reversal of the finding. The part of the claim of the plaintiff devised by assignment from Aber was entirely disputed. Aber testified that he did not execute the assignment of Langton through whom the plaintiff derived title. Langton testifies he did. "Whether the debt was represented by a note of thirty dollars and ninety-six cents, and an account for a small sum in addition, or whether the note included all, is of no moment in itself. Even a mistake upon this point does not very materially tend to solve the question of the signature to the assignment in April, 1883.

We are led, therefore, to the conclusion that the judgment is right, so far as it is appealed from, and that it should be affirmed, with costs.

DtkmAN and Pkatt, J J., concurred.

Judgment affirmed, with costs.


author: DvKman, J.:

text:
    HILEND R. ROSE, Appellant, v. JAMES HENRY, Respondent.

      Justices judgment — no time is prescribed within which a transcript must be filed in the county clerk's office — subdivision 7 of section 882 of the Code of Civil Procedure does not limit the right of a pa/rty to issue an execution on a judgment so docketed.

    In March, 1885, a transcript of a judgment, recovered by the plaintiff against the defendant in a Justice’s Court in October, 1877, was docketed in the office of the county clerk of Dutchess county.

      Held, that it was error for the County Court to deny a motion made by the plaintiff for leave to issue execution upon the judgment upon the ground that the transcript was not filed within six years from the date of the entry of the judgment in the Justices’ Court.

      Subdivision 7 of section 382 of tlic Code of Civil Procedure, barring action upon a judgment recovered in a Justice’s Court, after the lapse of six yeárs from the time it was rendered, has no effect upon the right of the party to issue an execution in the County Court upon such a judgment after a transcript thereof has been docketed in the office of the county clerk.
    No time is prescribed within which the transcript of a justice’s judgment must 1 be docketed in the county clerk’s office.
    Appeal from an order of tbe Dutchess County Court, refusing leave to the plaintiff to issue an execution upon a judgment docketed in that court.
    The application was denied upon the ground that the judgment was docketed upon the filing in the county clerk’s office of the transcript of a judgment recovered in a Justice’s Court more than six years prior thereto.

      Abram J. Rose, for the appellant.

      Ransom Baker, for the respondent.
   DvKman, J.:

The plaintiff obtained a judgment in a court of a justice of the peace against the defendant in October, 1877. A transcript of the judgment was issued by the justice and the judgment was docketed in the office of the county clerk of Dutchess county, in March, 1885, more than six years after the rendition of the judgment. Thereupon the plaintiff made a motion in the County Court of Dutchess county for permission to issue execution on the judgment, which was denied and the plaintiff appealed from the order.

A judgment of a court of a justice of the peace is barred by the statute of limitations after the lapse of six years from the time of its rendition. (Code Civil Pro., § 382, sub. 7.) But the statute operates only on the remedy by action. (Coleman v. Burr, 25 Hun, 239.) The judgment was neither extinguished nor dead. Even a civil action could have been maintained upon it if the statute of limitations had not been interposed as a defense. It follows, therefore, that the judgment in question was not annihilated by time when the transcript thm-eof was filed and the judgment was docketed in the office of the county clerk, and the statute providing for the filing of the transcript and docketing of the judgment prescribes no time within which the same must be done. But the provision ii peremptory that the justicé must deliver the transcript, and the county clerk must file the same and docket the judgmentas of the time of the receipt of the transcript.” * * * Thenceforth the judgment is deemed a judgment of the county court of that county and must be enforced accordingly. (Code of Civil Pro., § 3017.) So that, unprejudiced by the lapse of time, the party obtaining a judgment in a court of a justice of the peace may procure the same to be docketed as of the time of the receipt of the transcript by the county clerk, and from thenceforth the judgment is deemed a judgment of the County Court. No intention to limit the time is expressed or implied.

Statutes of limitation do not impair the obligation of contracts nor discharge legal rights. They are simply provided to operate on the remedy from principles of public policy, when their aid is invoked, and they are to receive strict construction being in derogation of common-law rights. Such being the rule the six years’ statute of limitations can have no application here, because it is in terms confined to the particular remedy by action.. The remedy by execution is not subverted, but fully provided without restriction or limitation, and there is no statutory provision to interfere with its pursuit.

The order appealed from should be reversed, with costs and disbursements, and the motion should be granted without costs.

BarnaRD, P. J., concurred.

Order refusing leave to issue execution reversed, with costs and disbursements.


author: DyKMAN, J.:

text:
    FRANK M. THOMPSON, Appellant, v. TOWN OF MAMAKATING, Respondent.

      Town bonds — bonds issued beyond the amount assented to by the taxpayers are mid — 1866, ehap. 398.
    Pursuant to chapter 398 of 1866, bonds of the defendant to the amount of $175,000 were; in 1870, duly issued by commissioners appointed in the manner provided in that act. By mistake an additional bond for $1,000, numbered 405, was issued by the commissioners to one David, who, upon the demand of the commissioners, promised to return the same, but failed to do so. The bond was purchased by the plaintiff in 1879, in good faith and for value. At that time the coupons, then already due thereon, had been detached from it and were not given to the plaintiff, although none of them had ever been presented for payment. The coupons falling due from July, 1879, to January, 1883, were on the bond when purchased by the plaintiff, and the amounts thereof were paid to the plaintiff with money furnished by the supervisor of the town, but not from money raised by tax on said town for that purpose.
    In this action, brought to recover the amount of two'overdue coupons:

      Meld, that the commissioners had no authority to issue the bond; that the plaintiff was chargeable with notice of that fact, and that the bond was void , in his hands.
    Appeal from a judgment in favor of tbe defendant, entered upon the trial of this action by the court without a jury.
    By chapter 398 of the Laws of 1866, the taxpayers of the town of Mamakating were authorized to consent to the issue of bonds of the town'to aid in the construction of the New York and Oswego Midland Railroad, and to subscribe and take the capital stock of the company equal to the amount of bonds so authorized. Upon filing such consent in writing in the town and county clerk’s office, duly acknowledged, in the form and manner prescribed for the acknowledgment of deeds, the commissioners appointed under the act were empowered to subscribe for the stock of the company, and to issue the bonds of the town to the amount fixed by such consents. Consents were filed pursuant to the act, fixing the amount at $175,000. The commissioners subscribed for the amount of stock authorized by the consents and issued the bonds of the town for an equal amount in payment therefor, the last of which were issued in November, 1870. These bonds being in different denominations and numbered, of which 104 was the highest number, were regu~ larly reported annually to the board of supervisors of the county,, and a sufficient amount to pay the interest thereon semi-annnally was raised by a tax on the town, and the coupons from these bonds were regularly presented, paid and canceled each year. The bond in suit was issued in excess of the amount authorized by the consents, without any consideration therefor, and delivered to William David, who, immediately after receiving it, upon demand of the commissioners, agreed to surrender it for cancellation; but, instead thereof, fraudulently and unlawfully withheld and disposed of it. Up to the time it was [sold to the plaintiff, in January, 1879, the interest coupons were detached, but none of them were ever presented for payment, and neither the bond nor any of the coupons issued with it ever came to the knowledge of any of the officers of the town from the time David agreed to surrender it until after the plaintiff purchased it. The interest coupons for July, 1879, and up to and including the coupons for January, 1883, were paid to the plaintiff, but such coupons wrere paid from money furnished by the supervisor of said town during said period and not by money raised by a tax on said town for that purpose. At the annual town meeting, held soon after it was discovered that the bond-was in existence, the town by a resolution protested against its payment. The court at the trial held that the bond was void, and directed that it should be surrendered and canceled. Judgment was entered accordingly, from which this appeal is taken.

      D. D. McKoon, for the appellant.

      T. F. Brush, for the respondent.
   DyKMAN, J.:

The towns of this State have been, from their organization, much more than mere political subdivisions of territory. They have ever possessed some of the attributes of municipal corporations. They were corporations of a low grade with limited powers, and were not inappropriately termed quasi corporations, because they partook so far of their nature that the designation was employed to denote the resemblance. But from time to time,'in later years, our legislature has invested the towns with powers beyond those of former times, until their character and capacity is now more akin to a municipal corporation than before. They have been authorized to issue bonds and incur obligations, and, with the capacity has been imposed, the consequential liability for their payment and discharge; yet their powers are derivative and not inherent. Their action must cease or be nugatory and ineffectual when they reach the limit of their delegated authority, and all persons dealing with them must take notice of the extent of their powers and ascertain, at their peril, that all the conditions requisite to their exercise have been observed and performed.

Obligations of towns have vitality and validity only to the extent of the capacity bestowed on the agents or officers through whom they act, and even in the hands of honest holders they cannot be enforced if there was no authority for their issuance. The sole and only source of authority to issue such evidence of debt is the consent of the people ascertained and collected in the manner prescribed by the legislature. Without such consent they are repugnant to the fundamental principles which control all contracts and are absolutely void. (People ex rel. D., etc., R. R. Co., v. Batchellor, 53 N. Y., 128.)

It must follow, therefore, that towns are liable and responsible on their obligations to the extent of such assent and no further, for beyond that they are not consensual and can have no binding force. It is far beyond the province of the legislature to enforce the making of contracts, either by individuals or corporations of any kind.

If, therefore, it turns out, on examination, that the bond in question in this action was issued without legislative authority, and without the assent of the town or the persons who assumed to represent and bind it, the plaintiff will be left without remedy, although she be an innocent holder for value, for the reason that there never was any authority for its issuance and it, therefore, never had any legal inception or life.

It is a fundamental principle of law that only authorized acts of an agent are binding on the principal. There is a marked distinction between the apparent powers of an agent and his acts which seems to be under his power. The apparent and manifest power of an agent are conferred by the terms of his appointment, and whatever he does under such authority is binding on his principal who is always bound by the appearance of such power. But lie is not bound by the appearance of an act assumed to be within such powers, but which in reality is not. In all cases the authority must include the transaction.

These views are not in conflict with anything decided in the case of New York and New Haven Railroad Company v. Schuyler (34 N. Y., 30), where it was decided that if the authority of the ■agent depends upon some fact outside the terms of his powers, and which rests within his knowledge, the principal is bound by his representations respecting the existence of such facts, though false in point of fact. Chapter 398 of the Laws of 1866 made it the duty of the county judge of Ulster county, on the written application of twelve freeholders of any town in that county, to appoint not more than three commissioners of such town to carry into effect the purposes of that law.

Then it was made lawful for such commissioners to borrow on the credit of such town such sum of money as the tax-paying inhabitants should fix upon by their assent in writing, or by votes, not exceeding thirty per cent of the valuation of the property, real ■and personal, of the town. Under and in pursuance of this statute the taxable inhabitants of the town of Mamakating fixed upon the sum of $175,000 as the sum to be raised and borrowed on the faith ■and credit of that town. Neither the regularity of the proceeding nor the constitutionality of the law are brought in question, and the commissioners issued bonds of the town to the amount authorized, of different denominations in regular numbers, the number of the last bond to make up the amount being 404. By some inadvertence the bond in question was issued and numbered 405, for ;$1,000. It was in excess of the amount authorized by the consent ■of the taxpayers, and was delivered by mistake.

The bond was purchased by the plaintiff for value, aud the ■coupons were paid to her down to January, 1883, by the supervisor of the town. This action is for the recovery of two coupons attached to that bond for thirty-four dollars each, due July 1, 1883, and January 1, 1884, respectively, for interest. Within the principles already laid down this bond had no legal inception, because it was issued without authority of law. The power of the commissioners to issue bonds was restricted to the sum of $175,000, and was exhausted before this bond was made or issued. It had neither commencement of days nor beginning of existence, and therefore the plaintiff cannot invoke the aid of that principle of law which imparts vitality to negotiable instruments in the hands of bona fide holders, as all the powers of the commissioners were conditional and they could make no bonds until the conditions were fulfilled*

Moreover, the bond boz’e on its face a reference to- the law to which it owed its existence and so called on the plaintiff and all others proposing to buy it to ascertain whether it had validity aud vitality under the provisions of the act. If good heed had been paid to the warning, the plaintiff would have found that the statute-distinctly defined the power of the commissioners, and that they had been exhausted before the issuance of this bond, so that it was not embraced within their authority and was unauthorized and invalid. They were empowered to execute the consent of the taxpayers obtained in the manner prescribed by the statute, and could not act without it or in excess of it. That consent fixed the amount at $175,000, and all their action beyond that sum was a violation of' the Constitution and the law, and was null and. void. If the limitation prescribed by the consent be not effectual as a prohibition against an excessive issue, then the taxable inhabitants have but flimsy security, and their property is at the disposal of their appointed agents: If consent be the source of power and the measure of liability, as we have seen it is, then such results cannot ensue.

Something is claimed for the plaintiff, on the principle of ratification founded on the payment of interest on this bond, but the-claim cannot be allowed. The power to confirm the bond did not reside with the officer who paid the interest, and he was not the-agent of the town invested with authority to impart vitality to the obligation by recognition. The town can be rendered liable in no-manner except that prescribed by the statute under which the commissioners acted, or by the collected will of the taxable inhabitants ascertained in the manner defined by law.

No view of the case will justify a recovery by the plaintiff, and the judgment should be affirmed, with costs.

BaeNAbd, F. J., concurred.

Judgment affirmed, with costs.


author: DyKman, J.:

text:
    JOHN M. GRAFF and Others, Respondents, v. JOHN P. KINNEY and FREDERICA M. KINNEY, Appellants.

      Husband and wife —may form a partnership and give notes m the firm name.

    This action was brought upon a promissory note alleged to have been made by the defendants under their firm name of J. P. Kinney & Co. The complaint alleged that the defendants were husband and wife; that they were carrying on business as partners, and that the wife had real property.

      Held, that a demurrer interposed to the complaint, upon the ground that it did not state facts sufficient to constitute a cause of action, was properly overruled; that the husband and wife could form a partnership for the purpose of carrying on a business, and that notes given in the course of such business were valid and enforceable.

    Appeals by the defendants severally from a judgment overruling, with costs, separate demurrers interposed by them to the complaint.
    This is an action on a promissory note made by the defendants, husband and wife, to the plaintiffs, for the sum of $685, under their firm name of J. P. Kinney & Co. The complaint alleged that the ■said note was given for materials which were furnished for and did benefit the separate estate of the defendant Frederica M. Kinney.
    The defendants demur to the complaint; the defendant Frederica M. Kinney, on the ground that the complaint does not state facts sufficient to constitute a cause of action; the defendant John Kinney, on the same ground; and on the further ground that there is a defect of parties defendants, in that he is improperly joined with his wife, the defendant Frederica.

      G. Storms Garjpenter, for the appellants.

      Edwm'd Dak/, for the respondents.

       The contrary was held by the General Term of the Fifth Department in Kaufman v. Schoeffel (ante p. 140); see, also, Fairlee v. Bloomingdale (24 Am. L. Beg. [N. S.], 648, and note). — [Rep.

   DyKman, J.:

It is alleged by the plaintiffs in the complaint in this action that on the 4th day of October, 1883, the defendants, under the firm name of J. P. Kinney & Co., made their certain promissory note in writing, dated that day, whereby they promised to pay to the order of tbe plaintiffs, two months after the date thereof, the sum of $685, for value, and delivered the same to the plaintiffs. It is further alleged that the defendants are husband and wife and that the wife has real property. Then judgment is demanded against the defendant, and a prayer is made that her separate estate be applied to its payment and that a receiver be appointed.

Notwithstanding the prayer the action is on the law side of the court, and the defendants have demurred to the complaint and assigned for cause the insufficiency of the allegation to constitute a cause, of action. The complaint was upheld at the Special Term and the defendants have appealed.. The paper does not wear the specific signature of the wife, but the conceded charge is that it was-made by the defendants under their firm name.

The names of the defendants are John P. Kinney and Frederica M. Kinney, and they have a copartnership named J. P. Kinney & Co., of which the wife is a member. So much is to be collected from the complaint and stands conceded. The correct conclusion from these facts must result from the law as we can gather it. The obligation was created by the married woman in a business which she was carrying on, and the debt was created for property furnished for the benefit of her separate estate. Was the wife in possession of legal capacity to make a copartnership contract with her husband to conduct and carry on business jointly with him Í The answer to this must be deduced from the statutes for the protection of married women, for without them she possessed no such power. By these statutes many of the incidents and disabilities of marriage are swept away, and a married woman is authoxdzed to bind herself by contract in many ways unknown before. She may now contract a business partnership and form one of the firm with all the power and liabilities which that relation implies. (Bitter v. Rathman, 61 N. Y., 512; Scott v. Conway, 58 id., 619.) She may contract with her husband in relation to her separate estate, and employ him as her agent. (Bodine v. Killeen, 53 N. Y., 93; Knapp v. Smith, 27 id., 277.) She may receive from her husband a chose in action by assignment. (Seymour v. Fellows, 77 N. Y., 178.)

If these decisions are to be allowed the full force and effect of the doctrine they teach they comprehend this case. If a married woman may constitute her husband her agent for one purpose, she may for another. A partner is an agent of the partnership and of his copartner. So far as lie acts for his partner he is but an agent, and although he has a community of interest in the partnership property, yet the reciprocal engagement is to share the profits and account therefor. If a married woman may intrust her money or her property to her husband under' a contract to use and manage the same and return her the profits as her agent, she may do the same with him as her copartner in business. Logic discloses no difference.

The judgment should be affirmed, with costs.

BabNARD, P. J., concurred.

Judgment overruling defendants’ demurrer to the complaint affirmed, with costs.


author: DykhaN, J.:

text:
    THE PEOPLE OF THE STATE OF NEW YORK, Respondent, v. PAUL BAUER, Appellant.

      An appellant cannot object to an error which was advantageous to him — power of the court to sentence for a part only of the term fixed by a statute —Penal Code, sec. 851 — in case of an erroneous sentence the case will be remitted for further sentence.

    The defendant having plead guilty to an indictment charging him with a viola-lation of .section 351 of the Penal Code, in having permitted a building owned by him to be used for the purpose of registering bets and wagers, was sentenced to pay a fine of $750, and be imprisoned for three months. The said section of the Penal Code provides that a violation of it “ is punishable by imprisonment for one year, or by fine not exceeding two thousand dollars, or both.”
    Upon an appeal taken by the defendant, he claimed that the court could not sentence him to imprisonment for three months, but must sentence him for one year or not at all.

      Held, that even if the sentence were irregular, yet the error could not be assigned by the defendant, as it was beneficial to him.
    That the statute was intended to authorize an imprisonment for any term not exceeding one year.
    That as there was no error in the conviction, the court could, in any view it might take of the case, only reverse the sentence and remit the record to the court below to pass such sentence as the appellate court might direct.
    Appeal from a judgment convicting the defendant of a violation of section 35 L of the Penal Code.

      Jerry A. Wernberg, for tbe appellant.

      James W. Itidgway, for tbe respondent.
   DykhaN, J.:

Tbe defendant was indicted in February, 1885, in the Court of Sessions of Kings county, for permitting a building which be owned to be used for the purpose of registering bets and wagers, and be plead guilty to tbe indictment.

The statute, under which the indictment was framed, provides that a person guilty of the offense charged therein is punishable by imprisonment for one year or by fine not exceeding $2,000, or both. A fine of $750 was imposed on the defendant and he was also sentenced to imprisonment in the penitentiary for the term of three months. The defendant paid the fine and appealed to the Supreme Court from the judgment of conviction and the sentence. The complaint is against the sentence and the claim is, that the time fixed for the imprisonment is too short and therefore unauthorized. If the validity of this complaint be assumed a ready answer to it is that the defendant is unprejudiced by the error and ought not to be heard against it. Being advantageous to him he cannot assign it for error.

Proceeding, however, with the examination we find the defendant to be punishable by imprisonment for one year or by fine, or both. The statute does not declare that the defendant, or persons in like case offending, shall be punished by imprisonment for a year or for not less than a year or a fine or both, but that he is punishable, or may be punished, in that way; that is, the trial court is vested with discretion to punish a defendant on conviction in one or both of the modes specified. Bearing in mind the rule prescribed for the construction of the Penal Code by which all its provisions must be construed according to the fair import of the terms to promote justice and effect the objects of the law, it seems not unreasonable to assume that, under the statute in question, imprisonment may be inflicted for a term not exceeding a year.

But, again, assuming all that can be conceded to the defendant’s insistence, he presents at most but an irregularity. His conviction is valid and his sentence to imprisonment is alone unlawful. The most that can be done for him, therefore, on this appeal is to reverse übe judgment for error in tbe sentence, and remit tbe record to tbe •court in wbicb tbe conviction was bad to pass - sucb sentence as we •direct. (People v. Bork, 96 N. Y., 201.)

We cannot reverse the conviction because it stands unchallenged; no complaint is raised against it; and if we could review tbe discretion of tbe trial court in laying tbe punishment on the defendant we should find nothing to condemn. It bad jurisdiction of tbe person of tbe defendant and of tbe subject-matter,, and tbe sentence •conforms to tbe provisions of tbe statute. Tbe only objection being that tbe length of tbe term is insufficient. There was, therefore, no •attempt to exert power beyond its jurisdiction. It did not exceed tbe time authorized by statute.

On tbe whole case our conclusion is, that tbe judgment should be affirmed.

BaRnaed, P. J., concurred.

Conviction affirmed.


author: BaeNArd, P. J".:

text:
    MILDRED L. PETTUS, Respondent, v. JOHN T. McGOWAN, Individually, and as Receiver of the GUARDIAN SAVINGS INSTITUTION, Appellant, Impleaded, etc.

      Recording acts — when the recording of an assignment of a mortgage is not a notice to the mortgagor of that fact — 3 B. 8. ('1th ed.), 2222, sec. 41.
    ,In October, 1870, one Phraner, who was the owner of a lot of ground in Brooklyn, gave a mortgage for $6,000 thereon. Thereafter on November 14,1870, he gave another mortgage for $2,000 thereon to one Barnard, who assigned the same to an insurance company by a written instrument, dated November 18, 1870, which was recorded in the clerk’s office on January 24,1871. February 10,1871, the premises were sold by Phraner to the plaintiff for $13,000, $7,000 being paid in cash, and the premises being taken subject to the $6,000 mortgage. •On that day Phraner, in the presence of the plaintiff, paid the amount of the $2,000 mortgage to Barnard, in whose possession the bond and mortgage then were, and he then delivered a satisfaction-piece thereof duly executed, which was thereupon duly filed and recorded in the clerk’s office. At this time neither Phraner nor the plaintiff knew that the bond and mortgage had been assigned to the insurance company.
    In this action, brought against a receiver of the insurance company, to have the mortgage declared satisfied and discharged.

      Held, that the plaintiff was entitled to recover.

      That the payment to Barnard was protected by section 41 of 3 Revised Statutes-(7th ed.), 2222, and that the mere recording of the assignment was not notice to-plaintiff of the fact of the assignment.
    ■ Appeal by the defendant John T. McGowan, individually and as receiver, etc., from a judgment of the Kings County Special Term, adjudging that a certain mortgage had been paid and satisfied, etc.
    On October 11, 1810, one William Phraner was the owner of the premises in Brooklyn known as No. 22 Cambridge Place. On that day he, with his wife, mortgaged said premises to the Brooklyn Life Insurance Company to secure $6,000, which mortgage was-then duly recorded. On November 14,1810, said Phraner and wife mortgaged the same premises to one John T. Barnard to secure Phraner’s bond of same date for $2,000, and the mortgage was-recorded November 11, 1810, in Kings county register’s office, liber-963 of Mortgages, page 8. Barnard assigned his bond and mortgage to the Guardian Savings Institution by a written instrument dated November 18, 1810, and recorded in the clerk’s office on January 24, 1811. In January, 1811, plaintiff agreed with said Phraner to purchase from him said premises for $13,000, of which $1,000 was to be paid in cash and the balance by assuming the-$6,000 mortgage held by the Brooklyn Life Insurance Company. On February 10, 1811, the parties met to close the matter. The-jsersons present were Mr. Pettus, acting for the plaintiff, David Barnett, plaintiff’s lawyer, said William Phraner and his wife, and said John T. Barnard. Pettus paid to Phraner the entire purchase-money, less the cash ($1,000) paid on signing the contract and the-$6,000 mortgage and interest held by the Brooklyn Life Insurance Company. Thereupon Phraner (the mortgagor) paid to Barnard (the mortgagee) $2,000 for the mortgage in question, and Phraner received from Barnard the original bond and mortgage and a satisfaction-piece, and the satisfaction-piece was filed and recorded, and the deed delivered to the plaintiff or her attorney. The register filed and recorded the satisfaction-piece and canceled and discharged: of record the mortgage. At that time neither Phraner, the plaintiff, Mr. Pettus nor Mr. Barnett knew of any alleged assignment of this mortgage. The deed received by plaintiff from Phraner and wife of these premises was a full covenant warranty deed, eon-veying the premises for the consideration of $13,000, free from all incumbrance, except said $6,000- mortgage to tlie Brooklyn Life Insurance Company, which plaintiff assumed. Mr. Phraner died on the night of February 10, 1871, or the next day, immediately after the sale of the said premises to plaintiff, and Barnard is also dead. On this state of facts plaintiff brought this action, claiming, first, that this $2,000 mortgage had been properly paid and asking judgment to that effect in order to clear the record title, and, second, that she was entitled (if the $2,000 mortgage had not been properly paid) to be subi’Ogated to the first mortgage of $6,000, and to have that mortgage reinstated and foreclosed, the amount of it with the accrued interest being sufficient to absorb-the whole value ($9,500) of the premises, and to this end the Brooklyn Life Insurance Company and Farrington Hanford were also made defendants. On the trial the court held that the mortgage had been properly paid, whereupon plaintiff took no judgment upon her claim for subrogation.

      Luther S. Marsh, for the appellant.

      Frederick JEL. Mann, for the respondent.
   BaeNArd, P. J".:

This case seems a plain one. One Phraner had given a mortgage for $2,000 to John F. Barnard in 1870’. The mortgagee Barnard' assigned the mortgage to the Guardian Savings Bank in the same year, and early in 1871 the bank put the assignment on record. "Within a short time after the assignment was recorded, the plaintiff agreed to buy the property free and clear, except a $6,000 mortgage held by the Brooklyn Life Insurance Company, also given by Phraner. The plaintiff knew nothing of the assignment, and when she took her deed in 1871, she paid Phraner all over the $6,000, and Phraner then and there paid Barnard the $2,000 and took a satisfaction of the mortgage from him. The plaintiff never knew of the assignment or of its record until about a year since, when she agreed to sell the property and her purchasers refused the title. The statute in respect to the recording of assignments provides that “ the recording of an assignment of a mortgage shall not be deemed in itself notice of such an assignment to a mortgagor, his beirs or personal representatives, so as to invalidate a payment made by them, or either of them, to the mortgagee.”

The payment falls within 3 Revised Statutes (Banks’ 7th ed.), 2222. Phraner made the payment to Barnard in plaintiff’s presence, and in the absence of other proof of knowledge of the assignment, other than the recording of the assignment, he made a good payment. (Van Keuren v. Corkins, 66 N. Y. 77) The statute is not so limited in its operation as to exclude the plaintiff from the protection designed to be afforded. "Whenever a landowner is subject to a mortgage, when he executes it or it was executed by another person, and he being subject to it, whether the mortgage is held by the morgagee or by an assignee of the mortgagee, notice of the change of title to the mortgage must be brought home to him by means other than the mere recording of an assignment, so as to invalidate a payment. He may treat his creditors as such until notice of a change, otherwise no payment of either principal or interest would ever be safe in very many cases without a full search of the record for assignments. There are reasons presented by the evidence tending to show that the mortgage was actually-paid. Phraner and Barnard are both dead. The Guardian Company has failed. The bond and mortgage was not found among its assets. A list produced by plaintiff of the assets contains a mark paid opposite this bond and mortgage. Barnard actually had the bond and mortgage in 1871 at the time of the payment, and it has not been heard from since until the defendant claims from the record solely.

The judgment should be affirmed, with costs.

DykmáN, J., concurred; Pbatt, J., not sitting.

Judgment affirmed, with costs.


author: BaeNAkd, P. J.: PRATT, J. :

text:
    THE BROOKLYN CROSSTOWN RAILROAD COMPANY, Appellant, v. THE CITY OF BROOKLYN, Respondent.

      Common council of Brooklyn — power of, to pass ordinances — it cannot compel street cars to hare a conductor as well as a driver.

    Tie common council of tlie city of Brooklyn passed an ordinance providing that from and after a time therein fixed all horse railroad companies should provide for every street car run in the city of Brooklyn a conductor as well as a driver, and that no car should he run without a conductor as well as a driver. A penalty of fifty dollars was imposed for each violation of the ordinance.

      Held, that neither the act under which the plaintiff was incorporated— which provided that in the construction, maintenance and operation of the said road the company should he subject to any and all laws or ordinances that have been or may be established and in force by the common council of the city for the regulation of horse railroads generally — nor the power “to regulate and license common carriers, carriers of passengers,” etc., conferred upon the common council by the charter of the city, authorized it to pass such an ordinance, and that the same was void. (Dykman, J., dissenting.)
    Upon the trial of an action, brought to test the validity of the ordinance, the court excluded all testimony bearing upon the reasonableness of the ordinance.

      BLeld, that this was error.
    Appeal from a judgment in favor of the defendant, entered upon the trial of this action by the court without a jury.
    This action was brought to test the validity of the follow, ing ordinance, passed by the common council of the city of Brooklyn :
    “ SeotioN 15. The said railroad companies shall provide for every street car run in the city of Brooklyn on and after May 1, 1883) a conductor as well as driver, and no car shall be run without a conductor as well as a driver.
    “ Sec. 16. The said companies shall be liable to a penalty of fifty dollars for any violation on their part of any provision of this article; and any conductor, driver or other person violating any provision of this article shall be liable to a penalty of ten dollars, and it shall be the duty of the police to enforce the provisions of this article.
    “ Seo. VI. It shall be the duty of the police to daily report all violation of laws or ordinances and regulations appertaining to railroads or other public conveyances, to tbe attorney of tbe corporation.”
    Tbe power of the common council to pass tbe ordinance was claimed to exist under tbe act consolidating tbe companies which created tbe plaintiff (chapter 576 of 1868), which act “provided, further, that in the construction, maintenance and operation of said road, said new company shall be subject to any and all laws or ordinances that have been or may be established and in force by the common council of the city of Brooklyn for the regulation of horse railroads generally.” It was also claimed to be given by chapter 564 of 1880, amending section 13, title 2, chapter 863 of 1873, so as to authorize the common council to “ regulate and license common carriers, caniers of passengers, etc.” * * * “The common council shall also fix an annual license fee, not exceeding the sum of twenty dollars, for each street or horse car daily operated or used in said city. * * * Said license fees shall be taken in full satisfaction for the use of the streets or avenues, but the same shall not relieve said companies from any obligation now required by law to keep such streets and avenues, or any part thereof, in repair.”

      William, O. De Witt, for the appellant.

      John, A. Taylor, for the respondent.
   BaeNAkd, P. J.:

The parties derive their existence from the same source. 'Both are created by legislative act. They are entirely independent, except when by positive law one.has dominion over the other. In the first place the plaintiff, by the act of consolidation of the companies which constitute the line on which the plaintiff operates its cars, is made subject to the city. This is not a general subjection, but only that the “ construction, maintenance and operation of said road” shall be subject to all laws of the city “for the regulation of horse railroads generally.” I do not think this power sufficient to legalize an ordinance requiring a conductor on the plaintiff’s cars as well as a driver.

The power assumed by the ordinance requires that the number of employees should be included in the term “ opez-ation ” of the road. "While this may be doubted, it is clear that the city can only exercise a general power as to all roads. If the ordinance affects the plaintiff only, or if the city had no power over railroads generally, the ordinance cannot be based upon this section in the consolidation act. Had the city power to make such an ordinance as to railroads generally? By the charter of the city of Brooklyn, 1854, power to regulate the running of cars on certain railroads was given. The new charter passed in 1873 omits this power. The direct power in the present charter must therefore be upheld under the power to regulate common carriers and carriers of passengers. The plaintiff fills both characters. There is a strong foundation for the inference that the substitution of the words carriers and carriers of passengers was intended to cover street railroads. Such an inference is rendered’ questionable by the fact that the legislature left out words which had no doubt and substituted those which had. But if the case rested upon the law of the charter of ‘ 1873 it would seem to be plain that when the legislature had granted power to the plaintiff to run cars in the manner it should deem best, that the defendant, under the power of regulating common carriers of passengers, could not provide for the number of the employees •on each car, or the number of horses it should use. The legislature has, however, gone a step farther. By chapter 564, Laws of 1880, while'an amendment is made to the charter of 1873, and the general power to regulate and license common carriers is left untouched, it is provided that the common council shall fix an annual license fee for street railroad cars not exceeding twenty dollars each. By this act, taken in connection with the omission to re-enact the language in respect to railroads, it seems to. have been the intention of the legislature to regulate the license for railroads of its own undele-gated power, whether a railroad shall have large or small cars, with or without a conductor, and how often the cars shall run, and when, are subjects left with the companies under their charters and subject to legislative control. No reason can be given why a ■conductor is necessai’y to public safety or to the security of the passengers. The lines of omnibuse's in - all large cities have been run always without a conductor. No complaint has been ever made, and no practical injury has been suffered which a conductor would have prevented. These are not, however, questions for courts. The legislature can remedy evils, .actual or anticipated, and can delegate the power to a municipality. It does not seem plain' that it has done so, and in view of the injurious effect it is to have upon the plaintiff the ordinance should not be upheld.

The judgment should, therefore, be reversed and a new trial granted, costs to abide event.

PRATT, J. :

This action was commenced to test , the validity of an ordinance passed by the common council requiring every street car and railway company to provide a conductor as well as a driver “ for every street car run in the city of Brooklyn after May 1, 1863,” and fixing a penalty of fifty dollars against the offending company for every violation of the requirement. The trial judge held the ordinance valid as within the province of the common council, and dismissed the complaint. The plaintiff appeals from that judgment. The judge excluded all the testimony as to the reasonableness of the ordinance.

In my opinion the reasonableness of this ordinance was fairly raised by the pleadings and proceedings, and any testimony relevant to that question ought to have been admitted. The validity of every ordinance or by-law of a corporation which is not passed in strict compliance with statutory delegation of power depends upon its reasonableness.

The eases cited by the plaintiff’s counsel abundantly establish this principle. To these may be added, as a further illustration of the principle, Hurst v. Litchfield (39 N. Y., 377), and hence that point was a proper subject for judicial examination as a question of fact.

Sometimes the nature of the case permits the determination of the reasonableness of an ordinance upon a mere inspection of the act itself, but in this case the proposition of the plaintiff’s counsel was to show that the enforcement would 'be utterly destructive of the plaintiff’s franchise. It is probable, from the nature of the case, that the reasonableness of this requirement depended upon a great variety of circumstances. Anything which would influence the common council in the exercise of its legislative power was a proper subject of judicial scrutiny. It is obvious that the general jurisdiction to enact ordinances regulating the use of streets does not authorize an arbitrary and unlimited exercise of power, otherwise: it might require’ two men to operate a wheel-barrow or- a hand cart. It was, therefore, the duty of the trial judge to look into all the: circumstances which bore upon this question.. The experience, of persons engaged in the business of using one horse cars in other cities:,, the liability of danger from their use, the ease with which one man might manage them, differences of construction between these and two horse cars which, are usually operated by two men, so far as it would illustrate the'point at issue, any special circumstances in the grade of the road, the width of the streets along the line and a widespread variety of considerations suggested by the experience of practical railroad men.

I entertain no doubt that among these relevant considerations was the question of expense to the company, not that mere, inconvenience or diminución of profits would be sufficient to determine the point, but that these matters, along with others, might throw some light upon the question at issue. This company has a right to operate its road and exercise its franchise without any unreasonable limitations, until the sovereign power interferes by making arbitrary requirements. Suppose it possible that it could be shown that this kind of car could be more easily operated by one man than a two-horse car could be managed by two and with the same or even greater assurances of safety to the passengers and the public, and with less obstruction and inconvenience upon the streets and greater convenience to the traveling public, would not this state of things help to test the reasonableness of this requirement ? It is apparent from an inspection of the case as settled, that the trial judge proceeded upon the defendant’s theory, and hence excluded and refused to consider this class of testimony.

For this reason the judgment should be reversed, and we also think that it was error to exclude testimony showing that this ordinance was discriminating, although upon its face it does not so appear. It could only apply to those railroad companies that were using what are called one-horse cars. There is a wide distinction between regulating the use of the public streets and entering into the management, of the private business of those who have occasion to use them. The public have a right to the reasonable use of the streets, and if the power to pass this ordinance can be maintained,' I see no limit to the obstructions that may be placed on a business or why a footman and outriders should not be required for every private carriage sought to be driven through the streets.

This court has heretofore held that the general ordinance power of the common council, did not apply to a railroad company having a special grant from the legislature, so as in any way to restrict its rights and privileges. (Brooklyn Cent. R. R. Co. v. Brooklyn City R. R. Co., 32 Barb., 358; Brooklyn City R. R. Co. v. Furey, 4 Abb. Pr. [N S.], 364). The legislature in 1873 struck out from that part of the city charter relative to ordinances the power to pass ordinances to license and regulate all railroad cars running on any railroad established since January 1, 1853. (See tit. 2 of charter of 1854, and the charter of 1873, subd. 4, p. 23, laws and ordinances of Brooklyn.) By chapter 564 of the Laws of 1880, it provides that a license fee for such car “ shall be in full satisfaction of all use of streets and avenues of said city.” In view of the fact that the statutes give to the trustees of horse railways the power-to manage the affairs of railway companies “and to regulate the manner in which passengers shall be transported,” it is quite clear that the indefinite power to “license and regulate common carriers,” remaining in the city charter does not warrant the passage of an ordinance regulating the manner of the interior facilities of a car or necessitating the use of a large instead of a small car. The argument based on the assumption that there was a covenant in the appellant’s charter binding it to abide by such ordinances as the common council might pass, irrespective of the charter, is without foundation. The appellant is only bound by the provisions in chapter 576 of the Laws of 1868, “to be subject to such regulations as the common council shall have or may prescribe as to railroads generally.” The cognate provisions in the charters of antecedent companies have no connection with the appellant, and under well settled authorities these provisions are wholly abrogated and repealed by implication by the provisions in the consolidation act of 1868, under which the appellant was incorporated. (Werner v. German Savings Bank, 2 Daly, 406; Bartlet v. King, 12 Mass., 537; In the Matter of P. P. & C. I. R. R. Co., 67 N. Y., 371; Moore v. Mausert, 49 id., 372. The court below likewise held tbe provisions of the act of 1858 to be alone appli-cable. It is clear, therefore, that the application of the ordinance in question to the appellankdepends wholly upon the power of the •common council to pass such an ordinance with respect to railroads generally, which must be found in the charter and not in any special act. It needs no argument to show that the common council, under the general power to license and regulate common carriers, cannot pass an ordinance relative to the domestic management of the •affairs of a railway corporation the effect of which would be to reduce such corporation to insolvency, and thus nullify its charter •after it has complied with every statutory regulation at great expense and invested its capital in good faith upon a completed franchise.

The judgment should be reversed, and new trial granted, costs to •abide event.

DyKMAN, J., dissented.

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


author: DykmaN, J.: PRATT, J.:

text:
    ARAMINTA H. BEDELL, Appellant, v. CHARLES C. BEDELL and Others, Respondents.

      Hra/ud — a pa/rty cannot retain the benefit of a contract procured through fraud, although it be not committed by his procurement.

    'This action was brought to set aside a written instrument executed by the plaintiff, by which she released the defendant, her husband, from an obligation to pay to her the sum of $250 a year, which had been imposed upon him by a judgment for a limited divorce theretofore recovered by her. She sought to set aside the release upon the grounds that she received no consideration for executing it, and that it was procured by false'and fraudulent representations. Upon the trial the court refused to allow the plaintiff to show the falsity of representations made to her by one Holdridge, and that she received no consideration for executing the release, unless it was shown that Holdridge was then acting as the agent of her husband.

      Held, that this was error; that if the instrument was procured through fraud the husband could not avail himself of the benefit secured by it even although the fraud was unauthorized by him aqd committed without his knowledge or procurement.

      Appeal from a judgment in favor of tbe defendant, entered upon an order dismissing tbe complaint at circuit, and from an order denying a motion for a new trial made upon a case and exceptions..

      W. I Thorn and H. A. Nelson, for tbe appellant.

      Wm. B. Woodm, for tbe respondents.
   DykmaN, J.:

Tbe plaintiff commenced an action against ber husband, tbe-defendant, Charles C. Bedell, for a limited divorce and obtained a judgment in her favor. Tbe judgment required tbe defendant to-pay ber $250 a year for ber maintenance and to give ber security for such payment. In obedience to tbe requirements of tbe judgment tbe bond was fnrnisbed, and tbe condition was complied with by tbe payment of tbe allowance for several years. On tbe 26th day of January, 1882, tbe defendant executed an instrument in writing purporting to be an agreement between herself and her bus-band, by which she agreed to cancel tbe bond for tbe allowance- and release him from all obligations for future support and maintenance.

This action is brought to set aside that agreement ana restore tba bond and tbe judgment on thea allegation that tbe same was procured by fraud and misrepresentation. At the trial tbe plaintiff was called as a witness in ber own behalf to show that ber signature to tbe instrument was procured by Earl A. Holdridge by misrepresentations, and also that she received no consideration therefor. Tbe testimony was excluded under a decision of the trial court that no evidence of conversation between tbe plaintiff and Holdridge-was proper until it was shown that be was tbe agent of tbe plaintiff’s husband.

Tbe plaintiff’s counsel finally stated to tbe court that if proof' was admitted respecting the manner in which tbe execution of tbe paper was procured, they should claim that those facts will show in connection with tbe fact that tbe husband subsequently accepted tbe paper, that as matter of law tbe defendant is chargeable with tbe acts of tbe brother as bis agent. That was overruled by tbe court — tbe plaintiff excepted. Tbe case of tbe plaintiff was dismissed by the court. Tbe plaintiff has appealed from tbe judgment.

Our conclusion is that the exclusion of the testimony was erroneous. If admitted, it would have shown that no consideration was paid for the agreement, that it was obtained by fraudulent representation, and that it had been accepted by the husband. Those facts entitle the plaintiff to relief on the principle that fraud vitiates all transactions into which it enters. It is not a question of agency, but a question of fraud. If the instrument in question was obtained from the plaintiff by misrepresentation and fraud it cannot be held against her. It is quite immaterial who perpetrated the fraud, the defendant cannot enjoy its results and retain its benefits by a claim that it was unauthorized by him. He has accepted an instrument tainted with fraud for which he has paid no consideration. He ■cannot retain the instrument for use against the plaintiff on the .ground that the fraud was unauthorized by him and committed without his knowledge or procurement. The instrument was not executed in the interest of the plaintiff. It was not procured for her and is not held by her, but it was procured for her husband and was delivered to him, and when he accepted it he received it with all the infirmities to which it was subject, and they were sufficient for its destruction.

The judgment should be reversed and a new trial granted, with ■costs to abide the event.

PRATT, J.:

Defendants claim that fraud of a person not a contracting party, nor an agent of such party, cannot invalidate an instrument thereby procured.

The question arose in Bridgeman v. Green (Wilmot, 58-64), and Lord HardwicK held that interests so gained could not be held by an innocent. party, and observed that were the rule otherwise it would be almost impossible to reach a case of fraud.

Lord WiLMOT, on a subsequent hearing of the case, said: “ There is no pretense that * * * -was a party to an imposition. Does it follow from thence that he must keep the money? No; whoever receives it must take it tainted and infected with the * * * imposition of the person procuring it. Let the hand that receives it be never so chaste, if it comes through a polluted channel the obligation of restitution will follow it.”

In Huguenin v. Baseley (14 Vesey, 289) the question arose, and Lord Eldon quotes Bridgman v. Green with approbation, and says i “ I should regret that any doubt could be entertained whether it is-not competent to a Court of Equity to take away from third persons the benefits which they have derived from the fraud, imposition or undue influence of others.” He quotes Lord Thuelow that it is against conscience that one person should hold a benefit which he derived from the fraud of another. The rule is familiar in the courts of this State.

In Whelan v. Whelan (3 Cowen, 587) a contract was set aside against a party who had no knowledge of the fraud. So in Bergen v. Udall (31 Barb. 9), the deed being to an innocent purchaser did not affect the operation of the rule. It follows that the evidence offered by the plaintiff should have been received.

A new trial should be granted, with costs to abide the event.

Present — DykMan and Pratt, JJ.; BarnaRd, P. J., not sitting.

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


author: Pp.att, J.:

text:
    In the Matter of the Application of the STATEN ISLAND RAPID TRANSIT RAILROAD COMPANY to Acquire Title to certain Real Estate of which JOHN H. STARIN and Others are the Owners or Persons Interested.

      Subscription to the stock of a railroad— when a payment by a certified check will be treated as a payment “in cash” — 1850, chap. 140, sec. 2.
    April 13, 1880, a subscriber for tbe stock of a railroad company, which, it was proposed to incorporate under chapter 140 of 1850, gave to one of the directors who was acting as treasurer a check drawn upon and certified by a national bank, which then held funds belonging to the subscriber sufficient in amount to pay the check. The check was deposited by the treasurer on the fourteenth and paid on the fifteenth of April.

      Held, that it was a payment “in cash” within the meaning of those words, as used in section 2 of chapter 140 of 1850, requiring ten per cent of the amount of the subscriptions to be paid “in cash” before the articles of association can be filed in the office of the secretary of State.
    Appeal from the report and appraisal of commissioners appointed to ascertain and appraise the compensation to be made to landowners for certain pieces of land proposed to be taken for tbe purposes of a railroad.

      James McNamee, for John H. and Laura M. Starin, appellants.

      W. W. MacFcvrlcmd, for the petitioner, respondent.
   Pp.att, J.:

This is an appeal from an order appointing commissioners to appraise lands of the appellants. Assuming, under the authority of the ease reported in 72 New York, 249 (Matter of Brooklyn, W. and N. Railway Co.), that the appellants are right in their certiorari “ that the landowner in this proceeding has the right to deny and disprove the corporate existence of the railroad company,” only one question is presented for determination, to wit, whether or not the conclusion of law in the following words: “I find as a conclusion that prior t'o the filing and recording of such articles of association, and the annexed affidavit in the office of the secretary of State, at least one thousand dollars of stock for every mile of railroad proposed to be made had been subscribed thereto, and ten per cent paid thereon in good faith and in cash to the directors named in said articles of association,” was properly found by the judge below 2

We need not notice the points made in the very elaborate briefs of the parties, as in our view briefly stated, the case must turn upon the question whether, under section 2, chapter 140 of Laws of 1850, a certified check can be regarded as cash if paid and received as such. Said section reads as follows: “ Section 2. Such articles of association shall not be filed and recorded in the office of the secretary of State until at least one thousand dollars of stock for every mile of railroad proposed to be made is subscribed thereto, and ten per cent paid thereon in good faith and in cash to the directors named in said articles of association.”

It appears that the subscriptions to the proper amount were made on the 13th day of April, 1880, and that the affidavit u that such subscriptions had been made ” and the required “ amount paid ” thereon was also made on the same day, and the articles of association were filed in the office of the secretary of State on the following day.

Mr. Erastus Wiman subscribed for 100 shares. It is conceded that if the payment made, by Mr. Wiman was not a valid payment, under the statute quoted above, there was not, at the time of filing the articles, the required amount paid in. The only payment made by Wiman was by a certified check, and under the following circumstances : On the 13th of April, 1S80, Wiman made his check on the Central National Bank, where he had sufficient funds, and the check was certified by the bank, and afterwards was on the same day, and before the making of the affidavit, paid over to Mr. Emmons, who was a director, and who was acting treasurer of the board. The check was deposited by Emmons on the fourteenth and paid on the fifteenth of that month. There can be no question but that Wiman intended to pay his subscription by this check, and it is equally clear, I think, tjiat Emmons and the directors intended to receive it as a payment in cash under the statute. The effect of the transaction was this, $900 had been set apart for the payment of that check by the Central National Bank, or in other words, that sum had been charged to the account of Wiman and it was represented in the check. By the check to Emmons the $900 was delivered to him, and if he elected to receive the cash in that form and credit the corporation with that amount, it was in effect a payment in cash. Wiman had parted with that amount of cash which he had in bank and Emmons had that amount of cash in the Central National Bank ready to be paid over as soon as he presented the check.

The appellants cite the case of Durant v. Abnendroth (69 N. Y., 148) as opposed to this view. In that case no check even was given prior to making the affidavit. In the opinion, however, Judge Rapallo says: “ If the special partner had paid the money to the bank to the credit of the general partners, or deposited it with any third party for the express purpose of being paid to the firm, etc., and had appropriated it to that purpose in such manner as to part with all control over it himself, there would be much force in the argument that this was a payment of his contribution of capital.” In view of these statements in the opinion we cannot regard this case as an authority against the respondents. We think the judge below decided correctly.

Order affirmed, with costs.

Present — BaRNAbd, P. J., DtkmaN and Pbatt, JJ.

Order appointing commissioners affirmed, with costs and disbursements.


author: Pratt, J.:

text:
    JOHN RYAN, Respondent, v. WILLIAM BUCHANAN and DAVID C. LYALL, Appellants.

      Employment of children in a dangerous business —1876, chapter 123, was repealed by section 292 of Penal Code.

    ■Chapter 122 of 1876, prohibiting the use or employment of any child in any business or vocation injurious to the health or dangerous to the life or limb of such child, was repealed by implication by the passage of section 292 of the Penal Code.
    This section of the Penal Code does not prohibit the employment of children in a dangerous “business or vocation,” but only their employment in a dangerous “practice or exhibition.”
    Appeal from a judgment in favor of the plaintiff, entered upon the verdict of a jury, and from an order denying a motion for a new trial made upon the minutes of the justice before whom the , ■action was tried.

      William G. De Witt, for the appellants.

      Carpenter da Roderick, for the respondent.
   Pratt, J.:

The plaintiff sues to recover damages for the loss of his son’s ¡services occasioned by an injury to his fingers. The son was under thirteen years of age at the time of the injury. It is assumed by •defendants’ counsel that he was in their employ attending a machine known as a cap-press. The boy had attended on the machine for •some weeks and knew its movements. It would seem that the caps were pressed by a plunger which first struck and gave them form ■and then drove them through a tube somewhat after the manner of •a piston working in a vertical cylinder, the caps falling out of the •opening at the bottom of the tube.

It was the boy’s business to remove the caps as they fell from the ■tube- and then to arrange and dispose of them in boxes. He put his hand up through the tube from the bottom while the machine was in motion and received the injury. The evidence scarcely •comes up to the point of showing that the machine was out of repair or defective in its construction, but the apparatus was exhibited to the jury, and the jury found that it was dangerous in its normal operation. There was, however, no evidence tending to-show that the boy was not fully instructed in its use. It appears-that the plaintiff deemed this proof unnecessary under the circumstances stated, and, in the absence of a statute, the master would not be liable because the lad was injured by putting his fingers into the tube ; that was no part of his duty. The act plainly contributed to, and was the main cause of, his injury. (2 Thompson on Negligence, 977.) The plaintiff, therefore, sought to bring his action within the statute by showing that the defendants had “ procured or encouraged a child to engage in a business or vocation dangerous-to the life or limb of the child” within chapter 122, Laws of 1876. The complaint was framed with this view, and the case was submitted to the jury on that theory. The defendant contended that this statute had been repealed or abrogated by the corresponding provision of the Penal Code (§ 292). If this was true the action was not maintainable, because the new statute does not cover a dangerous business or vocation. It is limited to “ any practice * * * dangerous or injurious to the life, limb, health or morals of the child.” The distinction between “ a practice ” and a “vocation” or “business” was clearly indicated by the act of 1876, hence the correctness of the decision of the case by the trial judge depends upon the alleged repeal of the act of 1876 in this respect. IE said act is repealed it is by implication. The general scope of the Code covers the subject-matter of the act of 1876 upon the point in question. The general matter of the two provisions is the same that is, the protection of the lives, limbs and morals of young children, and prescribing the engagements which are prohibited by reason of the liability to danger in that respect. Regarded-in this general way the two provisions upon the same subject-matter are plainly inconsistent. The latter is a different provision upon the same general subject. This is one of the tests by which we determine legislative intent. Who, for example, would suppose that an offender, under the act of 1876, might be punished again as for a separate offense under provisions of the Code which are in common? But a stronger, and to my mind conclusive, consideration lies in the fact- that the new statute is just what it professes to be, a code or body of law established by the legislative to which it relates. (Bouvier’s Law Dictionary.) It is a revision, authority of the State designed to regulate completely the subject a reiteration of the pre-existing penal laws, which the legislature intended to preserve, a reduction thereof to a complete system. It is well settled that whenever this general proposition appears from the legislative act the former provision upon the same subject is deemed repealed by implication, and it is quite immaterial that the new provisions are not repugnant in (all details to the old. (Columbian Mfg. Co. v. Vanderpoel, 4 Cow., 456; Excelsior Petroleum Co. v. Lacey, 63 N. Y., 422.) I think the plain purpose of the Code was to substitute the new provisions for the old one. It follows that the plaintiff’s testimony made no case against the defendant.

The judgment must, therefore, be reversed and a new trial ordered, costs to abide event.

Present — .BabkaRd, P. J., DyemaN and Pratt, JJ.

Judgment and order denying new trial reversed and new trial granted, costs to abide event.


author: PRATT, J.:

text:
    NATHANIEL DOBBS VALENTINE and Others, Appellants, v. SAMUEL BOWNE DURYEA and RICHARD HALL, Respondents.

      Incapacity of an executor to purchase property of the estate — the rule does not apply to one named, as an executor who has not taken out letter's.

    Since the passage of the Revised Statutes a'person named in a will as one of the executors thereof, to whom letters testamentary have not been iss. led, is not incapacitated from purchasing property from the executors who have qualified.
    Appeal from a judgment, entered after a hearing at the Special Term, dismissing the complaint.
    The action was brought to have a deed of certain lands in West-chester county set aside and vacated, and decreed to be null and void, upon the ground that the same was void by reason of the relation of the parties thereto to each other, and that it was executed with the intent of defrauding the plaintiffs of certain alleged interests in the property.

      Tbe property covered by the deed in question consists of a farm of about ninety-two acres situated in the town of Pelham, which was owned by one Thomas Valentine at the time of his death, in the year 1839. Thomas Valentine left a last will which was duly admitted to probate on the 30th day of March, 1840, on which day letters testamentary were issued to Nathaniel Valentine, one of the executors named in said will. The lands in question were, by the provisions of this will, converted into personalty, and the balance of the proceeds of the sale thereof, after paying certain legacies therefrom, was bequeathed, with the residue of the testator’s estate, to his son Charles Valentine “ to'use during his life, and if he bears lawful issue * * * to said issue.” Nathaniel Valentine, Burling Valentine, Sampson D. Valentine and Charles Valentine, the son and legatee aforesaid, were named in the will as executors, but Nathaniel Valentine alone qualified. On the 23d day of March, 1843, Nathaniel Valentine, the sole qualified executor, after a public sale thereof, conveyed the farm, the title to which is now in question, by deed to Charles Valentine f>>r the sum of $7,000. After this sale and conveyance, Nathaniel Valentine brought the proceeds into the Surrogate’s Court upon his accounting as executor, and on the 27th day of April, 1843, a decree settling his accounts was made by the surrogate* which found that there remained in his hands to be appropriated, as directed by the testator in his will, the sum of $2,972.25. The will provided for the payment to the testator’s sister, Elizabeth Valentine, of a legacy of $2,000 m case Charles Valentine had lawful issue. At the time of the accounting Charles Valentine had no lawful issue, he having married in June, 1843, but his first child was born in August, 1844, when the legacy to Elizabeth became payable out of the balance found by the decree to be in the executor’s hands.
    In .March, 1844, Charles Valentine conveyed the farm, with other property, to one John R. Hayward, in trust, to sell and dispose of the proceeds in payment of his debts. In January, 1845, John R. Hayward and wife, by a deed in which Charles Valentine and wife joined, conveyed the property in question for $9,000, to Samuel Bowne, tinder whom the defendant Duryea now holds.
    This action was commenced on the 17th day of February, 1882, to have the. deed from Nathaniel Valentine, as, executor to Charles Valentine, dated March 23, 1843, declared to be null and void. The plaintiffs are the children of Charles Valentine*, now deceased, who were born on the following dates respectively: Nathaniel Dobbs Valentine, August 28, 1844; Johanna Beardsley, February 7, 1846; Ada Briggs Valentine, January 2, 1855; Emily Ann Valentine, November 5, 1856 ; Charles Valentine, April 23, 1859, and claim that an interest in the real estate vested in them under the will; that the sale to Charles Valentine was contrived to defraud them thereof, and that the deed to him was wholly void and of no-effect by reason of the fact that he had been named in the will as an executor, and had become thereby so far a trustee, that he could not purchase the property of the testator and take a valid title thereto.

      Oummings <& Mwrray, for the appellants.

      A. W. JEvarts, for the respondents.
   PRATT, J.:

The findings of fact made by the Special Term are fully supported by the evidence. The only testimony in any respect tending to sustain the allegation of fraud in fact was that of one witness, who placed the value of the property at a sum considerably exceeding the $7,000 for which it was sold by the executor. But witnesses far more competent than he clearly showed that the property sold for its full value. It is also shown that the purchase-price was paid to the executor of the plaintiffs’ testator, and was necessarily expended in payment of his debts.

The only ground upon which any argument can be made for plaintiffs is that the sale to Charles Valentine was void in law, in consequence of his having been named in the will as executor. We think the contention is fully answered by the provisions of the Be vised Statutes, and that not having been appointed executor by the letters testamentary he was thereby superseded. Having no power or authority as executor, we do not see that he was incapacitated from becoming a purchaser. Since the Bevised Statutes, the authority of an executor is wholly derived from the probate <jourt, and only through its appointment can he be invested with the office or be subject to its disabilities.

It follows that the judgment should be affirmed, with costs.

Barnard, R. J., concurred; Dyxman, J., not sitting.

Judgment affirmed, with costs.


author: jBaRNAed, P. J.: Pratt, J.:

text:
    In the Matter of the Judicial Settlement of the Accounts of JOHN J. JONES and G. ALEXANDER THAYER, Executors of the Last Will and Testament of DAVID JONES, Deceased.

      Will — authority to executors to awry on business — when no allowance should he made to the estate for rent of real estate used in carrrying it on — bad debts and ordinary expenses should be charged to income.

    A testator devised Ms entire estate, in five equal parts, to his executors and trustees and'directed them to pay over the net proceeds, after deducting expenses, etc., of one of such shares to each of his four sisters and a brother during their respective lives, and after the death of each to pay her or his share of the principal to her or his descendants.
    The will further provided: “I hereby authorize and empower my said executors, the survivors and survivor of them, to continue the business of brewing and malting which I am now conducting upon the same premises I now occupy in the city of New York, and with the fixtures and personal property connected therewith, for such time after my decease as they shall think most advantageous to my estate; and in continuing said business I direct that my brother John J. Jones shall take the general charge and management thereof, if he shall desire to do so, and in such case that he receive such portion of the profits made or realized therefrom for his services, care and attention in the management thereof as may be agreed upon between Mm and the other executors of this my will; and the residue of said profits shall be received by my said executors as part of my estate for,division and investment as hereinbefore provided.”
    Upon an accounting by the executors who had continued the business as authorized by the will:

      Held, that the executors were not chargeable with the rental value, if any, of the real estate belonging to the estate which was used in carrying on the business,' or with any rent therefor.
    That bad debts and losses incurred in carrying on the business should be charged to income and not to principal.
    That the cost of replacing and restoring personal property worn out and used up in the ordinary course of the business should be charged to the income and not to the principal.

      Appeat. from a decree of tbe surrogate of "Westchester county made on the settlement of the accounts of the above named executors.
    David Jones died in January, 1881, leaving a last will and testa, rnent in and by which he appointed his brother, John J. Jones, and his brother-in-law, George Alexander Thayer, executors of his estate. His only surviving heirs-at-law and next of kin were his four sisters and his brother. In the will which was proved in the surrogate’s office of Westchester county, he devised his entire estate to his executors, in five equal parts, in trust, and directed them to pay one-fifth of the residue or net proceeds, after paying taxes, expenses, etc., to each of his sisters and his brother during their lives, respectively, and upon the death of any one of them to pay over one-fifth part of the principal of his (the testator’s) estate to the descendants of the brother or sister so dying.
    At the time of the testator’s death he was largely engaged in the brewing and malting business, and was operating five breweries, viz.: The New Rochelle Brewery, Boulevard Garden Brewery, Hudson County Brewery, Rivinus Brewery, and Forty-fourth 'Street Brewery. The eighth clause of his will authorizes his -executors to continue this business. The language of the will is as follows:
    “ Eighth,. And further, I hereby authorize and empower my said executors, the sufvivors and survivor of them, to continue the business of brewing and malting, which I am now conducting upon the same premises I now occupy in the city of New York, and with the fixtures and personal property connected therewith for such time after my decease as they shall think most advantageous to my estate, and in continuing said business I direct that my brother, John J. Jones, shall take the general charge and management thereof, if he shall desire to do so, and in such case that he receive such portion of the profits made or realized therefrom for his services, care and attention in the management thereof as may be agreed upon between him and the other executors of this my will, and the residue of said profits shall be received by my said executors as part of my estate for division and investment as hereinbefore provided.” „
    There was a large amount of capital invested in stock, chattels and book accounts in each, of the breweries at the time of David dones’ death. The executors considered it for the best interest of the estate to continue the business, in order that they might be. able to sell the different breweries in full working order. No question is raised as to the executors’ power to carry on the business as they have done. It is, however, objected by Margaret A.. Jones, one of the life tenants, that'in so carrying on the business the executors deducted the losses made by bad debts from the profits,, paying only the net profits to the life beneficiaries, whereas such losses should have been charged against the body of the estate, and the gross profits paid over to those entitled to the income. It is also objected that the charges made by the executors against the income for the purchase of horses, harness and wagons to replace those contained in the inventory, and which had been worn out in the business, should have been charged against the principal of the estate, and not against the income as was done by the executors. It was also objected that the executors were not charged with the rental value or rent of any of the real estate used in the business. The surrogate overruled the objections and entered the decree appealed from.

      Luther É. Marsh, for Margaret A. Jones, appellant.

      Ma/rtm J. Keogh, for the executors, respondents.
   jBaRNAed, P. J.:

The executors were empowered by the eighth clause of the will to continue the business of brewing which the testator had carried on in his lifetime “ upon the same premises.” The same section provides that a certain portion of the profits may be agreed upon between the executors and John J. Jones for management of the business, and “the residue of said profits” were made part of the estate for division and investment as provided by the will. By the other provisions of the will the estate was divided in five parts. The executors were to keep the property safe, and after paying taxes and expenses, insurance and repairs, and all other legal and necessary charges, they were to pay over the residue or net proceeds on one of the fifths to Margaret Jones for life, with remainder over after her death to her children, if she had children, and disposing of the same otherwise if she had* not. The executors determined to continue tbe business, and did so. Margaret Jones claims that she is entitled to one-fifth of the fair rent of the real estate. The claim cannot be supported. When the testator permitted the continuance of the business on the same premises and provided for a division of the profits the right to use the real estate in the business was absolute, and by reason of the non-payment of rent the profits were increased. The appellant has, therefore, been paid rent in the larger profit. The claim of Margaret Jones that the bad debts should be deducted from the capital is equally untenable. The question of due diligence in carrying on the business in respect to credit given is not made As matter of law, assuming a legitimate loss, such loss should come out of the profits. There is no profit on the capital employed until the balance is struck which deducts losses and keeps the capital intact. • Such losses are incident to business, and when the testator gave a power to continue the business he intended to do a benefit to the life estate by giving a larger income yearly than if the estate was invested in the usual form. Repairs on the property are provided for by the will. The power to continue the business involved with it the power to use up the property used in it. TJnder the power of those two clauses the personal property used up and restored new was properly charged against the profits and not against the capital. Presumably, when a new article was substituted for the old the income as well as the capital was increased. The point taken by appellant that building á well and fencing and building a man-hole are not on the face of it repairs, is not, as matter of law, a certain conclusion to be drawn from the charges. In the absence of proof showing what the charges are for, no error is apparent which calls for a reversal of the decree on account of these items.

The judgment should be affirmed, with costs.

DyKMAN, J., concurred.

Pratt, J.:

Several objections were made to the accounts of the executors which were overruled by the surrogate. They are nearly all of the same character and may be disposed of together. They are as follows: First. That losses incurred in carrying on the testator’s business bj the executors after his death from bad debts and inability to collect accounts for sales made should be charged in part to the principal of the estate. Second. That expenditures made for horses, wagons and harness, and other personal property which were purchased to take the place of other property worn out in the business, should have been charged to the principal of the estate. Third. That the executors have not been charged with the rent of the real estate occupied for the business carried on.

By the eighth clause of the will the executors were authorized to continue the testator’s business for such time as they should think most advantageous to his estate, and the profits were to be received by the executors as part of the estate for division and investment as provided by the will. The testator devised all his estate to his executors in trust, to take possession of and manage the same. The rent of the real estate after payment of taxes, repairs and insurance, and the dividends, interest and income of the personal estate, after payment of all necessary and legal charges and expenses, was to be paid over to his brother and sisters during their lives, and upon their death was devised to the children of said brother and sisters. There is no specific bequest of the profits of the business further than that contained in the direction to pay over to the brother and sisters the income of the personal estate.

It needs no argument to show that if the appellants’ theory of the case should prevail that it would be merely a question of time when the principal would be exhausted, and with the destruction of the principal the income would cease. "Whenever there was a bad debt, or an account lost, or a worn-out piece of personal property to be replaced, so much of the principal would have to be taken to make good the loss, and we should have the remarkable exhibit of a business, where the capital was surely and certainly being exhausted, yet yielding a clear income all the time. By profits of his business the testator intended net profits. The principal of the fund was to remain intact. All losses from bad sales and all expenditures to replace worn-out personal property were properly chargeable to the income. As to the rent of the real estate there is no charge on either side of the account. If it is charged against the executors, it would have to be paid out of and charged to the income, the result would be the same. The items charged for improvements to tbe real estate were proper, they fall under tbe bead of repairs.

We find no error in tbe settlement of tbe account and tbe decree ■of tbe surrogate should be affirmed, with costs.

Part of decree of surrogate appealed from affirmed, with costs.