author: Follett, Ch. J.

text:
    Samuel Schuyler et al., App’lts, v. The Phoenix Insurance Co., Resp’t.

      (Court of Appeals, Second Division,

      Filed October 1, 1892.)

    1. Insurance (Marine)—Waiver oe exception in policy.
    Defendant by an open policy insured plaintiffs’ boatload of corn against the adventures and perils of the canal, and all other perils, losses or misfortunes that should happen to the damage of the cargo on the voyage, “ excepting perils, losses and misfortunes arising from or caused by ice.” It. also provided that the acts of insurers in recovering, saving and disposing of the property insured should not be considered a waiver, or acceptance of an abandonment, or as affirming or denying liability, but should be considered as done for the benefit of all concerned without prejudice. The boat passed through ice which cut its sides, and made a hole through wmch water leaked, and wet a part of the corn, which swelled and burst, the hull of the boat, causing a leak which wet almost all the cargo. The-insurer took possession, delivered the undamaged corn to plaintiff, soldi the damaged portion, and paid him the net proceeds. Held, that defend-r l-W * mg possession and selling the cargo, did not acknowledge its; liability for the loss, and was not estopped from contesting it.
    2. Same—Conversion.
    The boat was first taken possession of by a deputy superintendent of public works, and when defendant’s agent arrived one of the plaintiffs had reached the wreck, and made no objection to what was done with the cargo. Held, that defendant was not liable for conversion.
    (Vann and Parker, JJ., dissent.)

      Appeal from a judgment of the general term of the third department, which affirmed a judgment dismissing the complaint on the merits, entered on a report of a referee.

      Matthew Hale, for app’lts; George Clinton, for resp’t.

       Affirming 31 St. Rep., 659.

   Follett, Ch. J.

November 19, 1887, the plaintiffs owned 8,000 .bushels of corn, which they shipped on the canal boat “ H. D. Taft,” to be carried-on the Erie canal from Buffalo to Albany. On that day the defendant, by an open policy in writing, insured the plaintiffs in the sum of $4,200 against the adventures and perils of the canal, and all other perils, losses or misfortunes that .-should happen to the damage of the cargo on the voyage, “ excepting perils, losses and misfortunes arising from or caused by ice."

The policy contained the following provision: “ In case of loss or misfortune, it shall be the duty of the captain and crew, ■or those having command, to use the utmost diligence and attention to save the property until- some agent of this company shall arrive, and upon his arrival, to assist him in the care .and saving of the property, and neglect to do so will render this policy void, and it is understood there can be no abandonment of the subject insured; nor shall the acts of the insurers or their agents in recovering, saving or disposing of the •property hereby insured be considered a waiver or an acceptance of an abandonment, nor as affirming or denying any liability under this policy; but such acts shall be considered as done for the benefit of all concerned, without prejudice to the rights of either party. The boat proceeded on its voyage, reaching Hoffman’s Ferry, which is about ten miles west of Schenectady, at noon, December 1. Before this time ice about two inches thick had formed on the canal, which, during that afternoon, had been broken between Hoffman’s Ferry and Schenectady by an ice breaker operated under the direction of the superintendent of public works. The effect of breaking the ice was to form a channel about twenty feet wide, more or. less, filled with small pieces of floating ice, and leaving on each side solid ice with ragged edges. The referee found that the ice through which the boat passed cutaway portions of the planking, making an opening in the boat near the water line through which water leaked. That the boat began to leak shortly after three o’clock in the afternoon of December 1, and continued until about eleven o’clock in the evening of that day, at which time there w^as about sixteen inches of water in the hold,-which wet a portion of the corn. Shortly after the hour last mentioned the level where the boat lay was (drawn under the authority .of the superintendent of public works, and the boat rested on the bottom of the canal until the morning of December 2, when the injury to it was repaired and the water was then let into the level and the boat floated. But the corn had become so wet that it expanded with ■such force as to separate the planking of the sides and below of the boat, creating new leaks, through which water again entered to the injury of the cargo. ■ The result was that 6,761 bushels of the cargo were wet, 1,239 bushels remaining dry. On that day the defendant, by its agent, took possession of the boat and removed therefrom the dry corn, which was delivered to and accepted by the plaintiffs without prejudice to the rights of the parties as they then existed. Late in the afternoon of December 3, the defendants sold the damaged corn for $2,197.75, which? sum, after deducting the expenses, was paid over to the plaintiffs without prejudice to the rights of either of the parties as they then existed.

The referee found that the defendant in taking possession and! selling the cargo acted in good faith, that the plaintiffs were present and knew what was being done to preserve the property andi that they made no objection to the means adopted or to the sale which was made. Afterwards the plaintiffs served proofs of loss and brought this action to recover the damages sustained. That the injury to the boat and the resulting damage to the- cargo was caused by ice, which was one of the perils not insured against, is found as a fact, and no case having been made and the record containing nothing but the judgment-roll, the facts found cannot be challenged.

The plaintiffs seek to avoid the defense upon the theory that the defendant by taking possession of the cargo acknowledged its liability for the loss and is now estopped from contesting it The cases in which insurers have, by their conduct, been estopped from interposing technical defenses are numerous, but no case has been cited wherein an original liability has been created by such conduct Under this policy the defendant was not liable for a loss caused by ice, which was a risk expressly excepted by the-terms of the policy. Ño liability existing under the policy,, none could be created by any subsequent acts of waiver or conduct on the part of the defendant unless its acts amounted to a conversion for which it would be liable. The court found that what was done by the defendant in saving the cargo was pursuant to the provisions of the policy and for the benefit of all concerned. The learned counsel for the appellants refers to many cases in which it has been held that insurers become liable as for a total loss by taking possession of the subject insured. This rule is a well settled one, but in the cases cited the contract was quite different from the policy issued by this defendant, which contains, this provision:

“Nor shall the acts of the insurers or their agents in recovering, saving or disposing of the property thereby insured be considered a waiver or acceptance of an abandonment, nor as affirming or denying any liability under this policy, but such acts shall be considered without prejudice to the rights of either party.’" This takes the case out of the rule ordinarily applicable to marine contracts of insurance.'

There are no facts • found by the referee upon which a recovery can be predicated upon the theory that the defendant converted' to its own use any part of the cargo. The boat was first taken possession of by a deputy superintendent of public works, probably to diminish the dangers of interrupted navigation, and when the agent of the defendant arrived the next day one of the-plaintiffs had reached the wreck, and made no objection to what was afterwards done with the cargo.

The judgment should be affirmed, with costs.

All concur, except Vann and Parker, JJ., dissenting, and Land on, J., not sitting.


source: Caselaw Access Project

author: Bradley, J. Follett, Ch. J.

license: Public Domain

text:
    Lawrence Drake, App’lt, v. Mary Hopeton Drake et al., Resp'ts.

      (Court of Appeals, Second Division,

      Filed October 1, 1892.)

    Will—Lawful issue.
    James Drake died in 1871, leaving him surviving three sisters and their .children, and two grandchildren of a sister and one natural daughter. By ,his will he devised to said daughter eleven houses and lots with full power ■■to appoint by will said houses to her lawful issue as she might think proper, and in case she died without lawful issue, gave her power to devise ■and appoint said houses and lots “to all or any or either of his sisters,” •“ or to all or any or either of the lawful issue of my said sisters, *. * * .and in such shares and proportions as she may think proper,” after her death, and in default cf such appointment gave the houses and lots to his sisters after the death of such daughter, to be divided beiween them in equal shares, the issue of either sister dying during the lifetime of said daughter to take the share the parent would have been entitled to if living. The daughter took possession of the real estate, and dying left a will by "which .she appointed that four of the grandchildren whose parents were living should take seven of the lots. Seld, that the word “issue,” as ■used in the will of James Drake, was used in its unrestricted or broadest sense, and the execution of the power of appointment by the daughter by her will was valid, and, in her discretion, she could lawfully appoint the property to all the descendants of the sisters living at the time of her ■death, or to any or either of them, and in such shares as she saw fit.
    (Follett, Oh. J., Haight and Browm, JJ., dissent.)
    Appeal from a judgment of the general term of the supreme -court of the first judicial department, which affirmed a judgment dismissing the complaint upon the merits, with costs, entered on the decision of a special term.
    May 24,1871, James Drake died at the city of New York, seized in fee of eleven houses and lots in that city, which were a part of a large estate left by,him. He left him surviving three sisters, Susan A. Drake, Sarah A. Lawrence and Mary M. Keese, his only heirs. At the date of the will and at the time of his death, Susan A. Drake had seven children then living, and Sarah A. Lawrence three children then living. Mary M. Keese had no descendants then living. Charles H. Black, a grandson of Sarah A. Lawrence, born in March, 1867, and Edith L. Black, a granddaughter of Sarah A. Lawrence, born March 15, 1869, were then living. The seven children of Susan A. Drake, the three children of Sarah A. Lawrence, and the two grandchildren were the only living descendants of the sisters of James Drake at the date of his death. He also left Mary Hopeton Drake, a natural daughter, whom he had adopted, and who had resided with him for several years. The decedent left a will, executed January 22, 1868, and a codioil, executed August 9, 1869, which were admitted to probate J une 20, 1871. By the seventh clause of his will he devised the eleven houses and lots mentioned to Mary Hopeton Drake for life, and conferred upon her the power, in case, she died leaving lawful issue, to appoint, by her will, these houses to all or any or either of such issue, and in case of her death without an appointment, the lots were devised to her lawful issue. In case she had no lawful issue, the ninth clause of the will conferred upon her the power to appoint to other persons.
    The following is the ninth clause:
    “ Ninth. In the case of the death of the said Mary Hopeton Drake without leaving lawful issue surviving at the time of her decease, then, and in such case, I give and devise to her full power and authority to devise or appoint, by her last will and testament, or other instrument hereinafter mentioned, the said eleven dwelling houses and lots of land herein last above mentioned, and each and every of them, to all or any, or either of my sisters, Susan Ann Drake, Sarah Ann Lawrence and Mary M. Keese, or to all or any or either of the lawful issue of my said sisters, from and after the death of the said Mary Hopeton Drake, forever thereafter, and in such shares and proportions as she may think proper, and in such case I hereby give and devise the same in accordance with such devise or appointment, and in default of said last mentioned devise and appointment on the death of the said Mary Hopeton Drake without leaving lawful issue her surviving, I hereby give and devise the said last mentioned eleven dwelling houses and lots of land to my sisters above named, and to their heirs and assigns, from and after the death of the said Mary Hope-» ton Drake, forever, to be divided among my said sisters in equal» shares; and in case of the death of any or either of my said sis-" ters during the lifetime of the said Mary Hopeton Drake, leaving lawful issue, and then in such case last mentioned the said issue of each one so dying shall take the share or part thereof which the parent of such issue would have taken if she had survived.”
    Mary Hopeton Drake took possession of the realty devised to-her and continued in possession thereof until June 24,1884, when she died without issue. During her lifetime the three- sisters of James Drake died. Mary M. Keese left no issue. Susan A. Drake left seven children, Samuel Drake, Joseph T. Drake, John J. Drake, Charles Drake, Benjamin Drake, Lawrence Drake and. Mary M. Stagg, who were the only heirs of said Susan A. Drake. The aforesaid Benjamin Drake has one daughter, Mary Hopeton Drake, born in 1877.
    Sarah A. Lawrence left three daughters, Mary K Black, Emily T. Smith and Annie T. L. Atterbury, her only heirs.
    James Drake Black, born September 15, 1871, is a son of Mary K Black Hopeton Drake Atterbury is a daughter of Anna T. L. Atterbury. Mary Hopeton Smith is a daughter of Emily T. Smith. Mary Hopeton Drake, James Drake Black, Hopeton Drake Atterbury and Mary Hopeton Smith were born after the death of James Drake. Mary Hopeton-Drake left a will dated May 19, 1830, and a codicil dated June 21, 1881, which were admitted to probate September 1, 1884. In her will she attempted to execute a power of appointment in respect to the eleven houses and lots. She appointed that four of the grandchildren of Susan A. Drake and Sarah A Lawrence should take seven of the houses and lots, to wit:
    Mary Hopeton Smith and Hopeton Drake Atterbury, each one-half of 821 Broadway.
    Mary Hopeton Smith, all of 823 Broadway.
    Mary Hopeton Smith and Hopeton Drake Atterbury, each one-half of 51 Bast Twelfth street.
    James Drake Black and M'ary Hopeton Drake, each one-half of 1141 Broadway.
    Mary Hopeton Drake, all of 1143 Broadway.
    Hopeton Drake Atterbury, all of 1145 Broadway.
    James Drake Black, all of 1147 Broadway.
    The remainder of the houses and lots (four), were appointed to the children of Susan A. "Drake and Sarah A. Lawrence, the validity of which appointment is not questioned.
    As before stated, when Mary Hopeton Drake died, the parents of the-four infants to whom appointments were made were living.
    This action was begun in November, 1884, to set aside that part of the will of Mary Hopeton Drake which appointed seven of the lots to the grand-nephews and grand-nieces of James Drake, as above stated.
    The infants appeared by a guardian ad litem, and insisted that the appointment to them was valid. Benjamin Drake, Mary B. Drake, Emily L. L. Smith, Bthelbert M. Smith, Annie T. L. Atterbury. and Lewis B. Atterbury answered and asserted that the appointment to the infants was valid. Joseph T. Drake admitted the allegations in the complaint, and prayed for a judgment in accordance with the demand thereunder. The other defendants submitted their rights to the court.

      Joseph H. Choate, for app’lt; James C. Carter, George C Balkam and A. B. Crane, for resp’ts.

       Reversing 31 St. Rep., 921.

   Bradley, J.

The question is whether or not the power of appointment which Mary Hopeton Drake assumed, as she did by her will to execute, was within that created by the will of James Drake, and that depends upon the meaning to which the words “ lawful issue;” contained in the provision in that respect, in their relation and application to such power so given by him to her are ■entitled. By the seventh clause of his will, James Drake devised to her eleven houses and lots in the city of New York for and during "the term of her natural life. And by the eighth clause, in case she should have lawful issue surviving at the time of her decease, he granted to her power to devise, or appoint by her will the eleven houses and lots to all, or any or either of such issue, as she might in her discretion think proper, and in that case he devised accordingly, and in default of making such appointment, he devised the houses and lots to her lawful issue from and after the time of her death; and if such issue should consist of more than one person, and be of equal degree of consanguinity, the property should be divided among them unequal shares, and if of unequal degrees of consanguinity, then the issue-of any deceased parent should take the share the parent would have taken if he had been surviving. By the ninth clause, in case of her death without having lawful issue, the testator gave and devised to Mary Hopeton Drake “ full power and authority to devise or appoint by her last will and testament, or other instrument * ” * the said eleven houses and lots of land herein last mentioned, and each and every of them, to all, or any, or either of my sisters Susan Ann Drake, Sarah Ann Lawrence and Mary M. Keese, or to all or any, or either of the lawful issue of my said sisters, from and after the death of the said Mary Hopeton Drake, forever thereafter, and in such shares and proportions as she may think proper; and in such case I give and devise the same in accordance with such devise or appointment”

Mary Hopeton Drake died without issue and left her will by which, in execution of the power of appointment, she devised the houses and lots in specified shares to some of the children and grandchildren, named by her, o‘f Susan Ann Drake and Sarah Ann Lawrence, two of the sisters before mentioned of James Drake. The other sister, Mary M. Keese, died without issue before the will o£ Mary Hopeton Drake was executed. Susan Ann Drake had before then also died, and Sarah Ann Lawrence, then living, did not survive Mary Hopeton Drake, who was survived by the sisters’ children, who were the parents of the grandchildren in whose behalf the power of appointment was executed by her.

The main proposition urged in support of the action and for, the relief sought by it, is that the issue of the sisters could take as objects of the power only in a representative capacity and substitutionally, and therefore the appointment to the grandchildren was not permitted as their parents, the children of the sisters were living. The question may be considered in the light furnished so far as it may be by the context or by the other provisions of the will of James Drake, and such circumstances as may legitimately bear in that direction to determine the purpose of the power so far as it is dependent upon the import of the words “ lawful issue ” in the sense which they were there' used in relation to such power. In its general sense, unconfined by any indication of intention to the contrary, the word “issue” includes in its meaning all descendants. Leigh y. Norbury, 13 Ves., 340 ; Tier v. Pennell, 1 Edw. Ch., 354; 2 Wash. R. P., 318 ; Re Corrie, 32 Beav., 426; Re Kavanagh, 18 Ir. Ch., 120; Dodsworth y. Addy, 11 L. J., N. S., Ch., 382. It may, however, when such appears to have been the intent with which the word is used, have the restricted import of children. • It has been so construed where there was a certain collocation of the words parent ” and “issue ” in a bequest or devise, to the effect that the issue should take the share the parent would if living have taken. Sibley v. Perry, 7 Ves., 522. While that case has been so criticised or limited as not to be treated as establishing a general rule, the’ proposition is not questioned that in such case in bequests and; devises the issue take substitutionally. Ralph v. Carrick, L. R. 11 Ch. Div., 873; 32 Moak, 856 ; Pruen v. Osborne, 11 Sim., 132 ; Ross v. Ross, 20 Beav., 645: Robinson v. Sykes, 23 id., 40; King v. Savage, 121 Mass., 303 ; Jackson v. Jackson, 153 id., 374 ; Parkhurst v. Harrower, 142 Penn. St., 432.

The word “issue” may be a word either of purchase or limitation, and will be construed the one or the other as may be necessary to effectuate the intent with which it appears to have been used in the instrument where it is employed. Doe v. Collis, 4 Durn. & East, 294. And when used in a will making a devise on failure of issue, or to a person and his issue it is treated as a word of limitation and not of purchase, and unless there is something to show that it is entitled to a more restricted sense it imports descendants or an indefinite issue. This is the prima facie meaning in such case and practically it may have the same effect as the use of the term heirs of the body.” Slater v. Dangerfield, 15 M. &. W., 263, 272; Doe v. Rucastle, 8 C. B., 876; Reinoehl v. Shirk, 119 Penn. St., 108; Kingsland v. Rapelye, 3 Edw. Ch., 1.

In Palmer v. Horn, 84 N. Y, 516, the meaning of the word “issue” was clearly restricted to children by the terms of the will, as both terms were there used synonymously. And Judge Earl there remarked that “ the word " issue ’ is an ambiguous term. Jt may mean descendants generally or merely children ; and whether in a will it shall be held to mean the one or the other, depends upon the intention of the testator as derived from the context or the entire will, or such extrinsic circumstances as can be considered.” And he added that it would be held to have the meaning, of children “ upon slight indication that such was the intention of the testator.”

In Hobgen v. Neale, L. R., 11 Eq., 48, the word “issue” not being restricted in its import was held to have been used in its largest sense.

The meaning of the term issue is not qualified by anything appearing in the provision by which the power of appointment is expressed, but it is suggested that it is by the further provision of the will of James Drake that in case of default in the execution of the power “I hereby give and devise the said last eleven •dwelling houses and lots of land to my sisters above ■ named and to their heirs and assigns from and after the death of the said Mary Hopeton Drake forever, to be divided among my said sisters in equal shares, and in case of the death of any or either of my •sisters during the lifetime of said Mary Hopeton Drake leaving lawful issue, and then in such case last mentioned the said issue of each one so dying shall take the , share or part thereof which the parent of such issue would have taken if she had survived.”

While it may be that the import of the term “ lawful issue,” as used in this conditional devise may practically have the same •effect as that of “ heirs of the body,” it is not in the view taken necessary to inquire whether it was used, in that or the restricted sense of children. For if it be assumed that it had the latter meaning as there employed, it does not follow that such term had that sense in its application to the power in the provision of which it was used, merely because it is contained in the same instrument. Dalzell v. Welch, 2 Sim., 319. In the one instance it •has application to a devise by the testator dependent upon default •of issue of Mary Hopeton Drake and her failure to execute the power. In the other it appears in the grant of power vesting a discretion in the donee in respect to the persons to whom appointment should be made, 'limited only by designation to the line of blood of the testator. He also made use of the term “ lawful issue ” in this unconfined sense in other portions of his will, and •especially in the fourth, fifth and sixth clauses, by which he made •devises to his sisters for the term of their lives, then over to their lawful issue, to be divided equally between them if of equal degree of consanguinity, but if of unequal degree of consanguinity, the issue to take the share to which the parent would have been •entitled if living; also in a like sense in the eighth clause. Thus, issue had the meaning of descendants who would take through their stirpes at any place in the line of descent where, at the time the limitation took effect, death of ancestry permitted them by representation to do so. And the practical effect is the same as if the term “ heirs of the body ” had been used. There is nothing in the context to restrict or qualify the sense in winch the words lawful issue were used in the provision creating the power. By a careful examination of the will, it seems evident that it was drawn with care, and the terms employed advisedly used; and the -fact that the testator has in some instances definitely expressed the effect to be given to the term “ lawful issue,” as used in those devises, furnishes no support to the suggestion that he intended its use in this grant of power otherwise than the apparent sense in which it was "there used. In some other portions of the will that term was applied by him in devises to denote the course of devolution of the property devised, and in those cases issue were to take substitutionally. There does not seem to have been any such purpose in the creation of this power of appointment. In it are no words of limitation of the estate dependent upon representation or substitution. The discretion given to the donee was within certain lines unqualified in respect to the objects of the power. And by fair construction it seems to have been intended that she should exercise the power as to her should seem proper in view of the situation when in her judgment the time should arrive for its execution.

It may here be observed that Mary Hopeton Drake, designated by the testator in the will as his adopted daughter, was treated by him as such, and it was understood in the family that she was his illegitimate daughter. He maintained and educated her, and from the time she left school at the age of twenty years until his death, she continued to reside with him. During that period he displayed great affection for her. “ She had not been treated by his_ sisters and their children with the cordiality and affection which they had shown towards each other.” He was sensitive in that respect, and was displeased at any ill-treatment or social slight of her by them, and declared that he would make a lady of her in spite of them. It may be assumed that the relation of donee of an important power of disposition of property arises out of confidence of the donor, in the person vested with it; and that the greater the discretion the more is the confidence evinced-Mary Hopeton Drake evidently enjoyed the special confidence well as the esteem of the testator; and in view of the circumstances before mentioned it is not strange or unnatural that he should desire, so far as practicable, to place her in such position in relation to the property in question as would have the tendency to give her the respect and esteem (to which he may have deemed her entitled) of those who might expect or hope, in the exercise of her discretion, to become appointees of the power with which she was vested. The view here taken is, that this discretionary power of the donee was not at any time after the decease of the testator confined to any one class coming within the range of the power, but embraced them concurrently; and that the term “lawful issue ” was there employed in an unrestricted sense. It is-, however, urged that the word “or,” as between the sisters and their lawful issue, was used in a disjunctive and substitutional sense in the provision, and therefore the children of living parents'1 were precluded from becoming beneficiaries. The cases cited with a view to the support of the proposition relate to bequests and devises, and do not seem necessarily to have any essential bearing upon the question here. It is true that in a devise to person or his children the word “or” would ordinarily imply an alternative gift. In the present case the question does not relate to a devise, but to the construction, of the power given to the donee to appoint the property to all or any or either of the three sisters “or to all or any or either of their lawful issue.” The word “ or ” following the names of the sisters in the provision was apparently used in a discretionary rather than a substitutional sense. When used in a devise the construction may be different. Then there is no opportunity for the exercise of discretion in execution, and the word “ or ” cannot be treated as of discretionary import in its relation to the provision in which it is used, but by implication words may be supplied to make it effectual as a word of substitution. This rule is not necessarily alike applicable to discretionary power of appointment created by will.

In Longmore v. Broom, 7 Ves., 124, the property was bequeathed to executors in trust to dispose of amongst the brothers and sisters of the testator or their children in such shares and proportions and at such times as they should in their discretion think proper. The master of the rolls there said: “ This is not a direct bequest to the objects, but a bequest to the executors with authority to dispose among them. * * * A bequest to A. or B. is void, but a bequest to A. or B. at the discretion of 0. is good, for he may divide it between them. That is the case of this will, I am not called upon to make any alteration in or addition to this will, which the court never does without necessity. A discretion is given to the executors.” And it was held that it. was within their discretion to give the fund to the parents or the-children. But as they had failed to dispose of it, the court having no discretion directed the division of the fund among the parents and children per capita. A like question came before the vice chancellor in Penny v. Turner, 15 Sim., 368, where by his will the testator gave to his mother a life interest in his property -with the provision that at her decease, “I will and devise that all the said estates and property shall be divided amongst my three sisters (naming them), or their children in such proportions as my said mother shall appoint by her last will or by deed in writing.” The vice-chancellor there said that the property being given amongst the testator’s sisters or their children as his mother should appoint, it is given to a class of persons who might have been appointees; therefore, the word “or” must of necessity mean “ and.” Held, that by the power of appointment the mother had the discretion to select the appointees among both the sisters and their children. On review of that case, 2 Phillips, 498, the chancellor after referring to the construction of the appellants that the .sisters alone were entitled to the property, said: “I am not called upon to make any alteration or addition to the will, which the court never does without necessity. The executor might say to whom the fund should be given, the parents or the children; but the court has not that discretion.” The conclusion of the vice-chancellor that the parents and children should share equally in the property was sustained. There brief reference was made to the distinction between that case and those in which direct bequests are made to legatees or their children. See also Re Vealés Trusts, 4 Oh. Div. 61; 19 Moalc, 669, affirmed 5 Oh. Div., 622, 22, id., 361. There the fund was bequeathed to a daughter of the testatrix for life, and after her death “ to and amongst my other children or their issue, in such parts, shares and proportions, manner and form as my said daughter shall by deed or will appoint.” The master of the rolls remarked that “ it was first argued that the words or issue ’ were substitutional, but that argument was soon given up.” It was held that the donee had the power, in her discretion, to divide the fund among the children and their parents. This seems to be the rule of construction applicable to powers of appointment, the execution of which rests in the discretion of the donee when not qualified by other words, or by something having relation to it appearing in the context, showing a different intent of the testator. Nothing is found either in the will or extrinsic circumstances to modify the import of the words constituting the provision creating the power and its scope. As has been remarked, the provisions of the will were drawn with care, and each one of them seemingly was prepared in reference to its purpose only. When the word “issue” was used in a representative or substitutional sense, it was not left to implication, but was made to so appear by express terms in the distinctive provisions where thus employed. Aud it is not reasonable to suppose that any words to that effect, or restrictive of the import of the words “lawful issue,” were inadvertently omitted in the provision in question. The substitutional sense in which the word “issue” was used in any of the provisions of direct devises furnishes no reason for a like import of it in its relation to the provision creating the power. And in view of the suggestion made to the effect that the meaning given to the word “ issue ” in reference to some of the devises has an essentially important or controlling bearing upon its meaning as used in its relation to the power, it may properly be said that the particularity of expression of purpose in that respect in all the direct devising provisions, renders the absence of any qualifying or restrictive words to that or any effect in that creating the power significant of the purpose of the testator that it should have the effect which was expressed by the words as there used to-create it; and that there was no.intent to qualify or restrict it. or the discretion of the donee in its execution. And this was. reasonably consistent with the relation, as treated by him, between the donor and donee of the power and the situation then and later,, as it may have appeared to and been anticipated by the testator. He was an intelligent man and had accumulated a large estate. He and his adopted daughter were, other than the servants, the-only members of his family. By other portions of the will he made provision for his sisters. The donee of the power was of the generation of their children, and was likely during her life to-see an increase of their descendants. At the time of the death of the testator in 1871 his three sisters, all their children and one grandchild was living. And at the time the testatrix made her will in 1880 and of her death in 1884, there were several of the-grandchildren of the sisters, as the testator may have anticipated. '

Whatever other causes may have led the testator to create the-power as he did, it is not unreasonable to assume that it was in view of the situation which • might be presented to the testatrix upon the increase during her life of the descendants of his sisters that the term “ lawful issue ” was there used as it appears to have been, in its unrestricted or broadest sense to embrace them within the scope of the power instead of confining its execution to their children. These views lead to the conclusion that within the range of the power of appointment of Mary Hopeton Drake were all the descendants of those sisters living at the time of her death, that in her discretion she could lawfully appoint the property to all or any or either of them, and in such shares as she saw fit; and that thé execution of the power by her will was; valid.

The judgment should be affirmed.

Follett, Ch. J.

(dissenting).—-The sole question involved in this appeal is whether the term “ the lawful issue of my said sisters ” includes the sisters’ grandchildren whose parents were living at the death of Mary Hopeton Drake. If it does, this action must fail, but if it does not it is well brought. The word “ issue ” has not a precise meaning in the English language as spoken, or-as written. The word is nlore frequently used to denote children, but it is often intended to embrace all of the descendants of the-ancestor referred to. Neither has the word a precise legal meaning, for sometimes it has been held to embrace children only, and at. others all lineal descendants, near and remote.

In the earlier English cases it was held that the primary meaning of the word was “ all descendants,” and its secondary meaning “children." Lehigh v. Norbury, 13 Vesey, 340; Ross v. Ross, 20 Beav., 645; Cannon v. Rucastle, 8 C. B., 876; Ralph v. Carrick, 11 Ch. Div., 885 ; Morgan v. Thomas, L. .R, 9 Q. B. Div., 643— 646 ; Maddoch v. Legg, 25 Beav., 531; Re Jones Trusts, 23 id., 242; Hawkins on Wills, 87.

But this definition has not passed unchallenged. Kent says-4 Com., 278, “The term issue may be used either as a word of purchase or of limitation, but it is generally used by the testator as synonymous with child or children.” Judge Redfield, in his-learned work on Wills, says : “ It seems to us that the term issue ’ in its primary signification imports children, and that it is a secondary meaning by which it has been held to include the issue of issue, in an indefinite descending line. It is susceptible, more naturally than children, of including all descendants, but the primary sense certainly is that of direct issue, and it is only in a secondary sense that it also includes remoter descendants, as the issue of issue.” 2 Redfield on Wills, 3d ed., 37-38, note 5.

In Freeman v. Parsley, 3 Vesey, 421, the chancellor, in applying the rule that the word “ issue ” included grandchildren and allowed them to take in competition with their parents, said: “ In the common use of language as well as the application of the word' issue ’ in wills-- and settlements, it means all indefinitely. I very strongly suspect that in applying that to this will I am not acting according to the intention ; but I do not know what enables me to control it. If a medium could be found between a total exclusion of the grandchildren and the admission of them to share with the-parents, the nearest objects of the testator, that would be nearer the intention ; as by letting in those, whose parents were deceased,, to take the share the parents, - if living, would have taken; but that construction would, be setting up my own conjecture against, the obvious sense of the words. When you put the question, whether he meant all these grandchildren should take with their parents, I think he would say he did not; yet, if he was asked the other way, if it should go to the survivor while there was a descendant, I am equally clear he would not have given it to the-survivor. They are, therefore, all entitled.”

Judge Redfield, commenting on the case last cited, said: “ This-admission of so experienced an equity judge goes far to convict the English rule of having perverted the intention of testators in the majority of instances. There can be no question that in the-great majority of cases, say ninety-nine in a hundred, where testators have given estate to children, or to them and their issue, they do have in mind the precise distinctions adverted to above, and intend the issue to take only by way of substitution for, and, not in competition with, the ancestor. It might, therefore, seem more just, and surely more frank in the courts, to change the rule of construction by a sweeping overruling of the former cases, than'to-attempt to reach the same practical result by a multiplicity of exceptions, every one of which demonstrates the fallacy of the-rule. In saying this we only intend that if the courts could restore the term issue to its primary sense of children, and. treat its extension so as to include all descendants as a secondary-it might enable them to some of the refine-merits into which they .are driven at present, in consequence of "the early English cases having established the opposite construction.” 2 Red. Wills (3d Ed.), 39, note 9.

The only facts found by the trial court which are claimed by "the counsel for either party to throw any light upon the intention of the testator in respect to the persons whom he intended to include within the term “ lawful issue of his sisters ” are contained in the twenty-second finding.

Twenty-second. That the said testatrix, Mary Hopeton Drake, was treated by the said James Drake as his daughter, and it was understood in his family that she was his illegitimate daughter; that he maintained and educated her, and on her leaving school at the age of twenty years, in or about the year 1860, she went to live with him, and continued to reside with him until his death in the year 1871. That during all that period he displayed great •affection for her, and she had not been treated by his sisters and "their children with the cordiality and affection which they had shown toward each other.”

This finding seems to throw little or no light upon.the sense in which the testator intended to use the disputed term, and its meaning must be arrived at from the face of the will. If the ■words of the power be considered apart from the words of the •gift over in default of the execution of the power, the term “lawful issue” is not limited or qualified, and under the English cases it would include the remote descendants of the deceased sisters of the testator, even though such remote descendants had parents living.

But in determining the meaning of the term, it is our duty to -examine the sense in which it was used in other parts of the will. By the ninth clause, which contains the power, pursuant to which the appointment was made, there is a gift over in default of appointment in the following language: “I hereby give and devise the said last mentioned eleven dwelling houses and lots of land to my sisters above named, and to their heirs :and assigns, from and after the death of the said Mary Hope-ton Drake, forever, to be divided among my said sisters in -equal shares, and in case of the death of any or either of my said sisters during the lifetime of the said Mary Hopeton Drake, leaving laioful issue, and then in such case last mentioned "the said issue of each one so dying shall take the share or part thereof which the parent of such issue would have taken if she had survived.”

By the language of the devise over, it is apparent that the testator did not contemplate that his bounty in default of issue of Mary Hopeton Drake, and of an appointment by her, was to extend beyond: (1) His sisters. (2) Their children; and that the term “ lawful issue ” embraced only the children of his sisters. The words provide that the issue in case of the parent’s death should take the parent’s share, and the word parent plainly refers to the three sisters. The parents of such issue are referred to as •of the feminine gender, evidently meaning his three sisters. In this instance at least, the testator did not intend that descendants of his sisters more remote than their children should become the objects of his bounty.

In determining the meaning of the words “ lawful issue,” as-used in the power, we may inquire if a definite meaning has been given to them in other parts of the will. When a different .meaning has been given in independent clauses relating to distinct devises, and to different persons, such meaning is not necessarily-controlling. Carter v. Bentall, 2 Beav., 551; Hedges v. Harpur, 9 id., 479; Waldron v. Boulter, 22 id., 284. But when the term, has been given a meaning in a devise of the same subject, and with reference to the same devisees, it is, in the absence of other' circumstances, controlling.

In Palmer v. Horn, 84 N. Y., 516, the will under construction contained the following bequest: “ To divide the sum of $20,000 into as many shares as there shall be lawful issue of my deceased nephew, Matthew Horn, living at my death, and to invest the same and apply the interest and income from each of said shares to the use of each of the said children, respectively, and as-, they respectively depart this life to pay over the principal of said-share to their lawful issue share and share alike.”

When the will was executed, and when the testatrix died, three-children of the aforesaid deceased -nephew were living. But, before the execution of the will, a daughter of said nephew had died, leaving two children who survived the testatrix. The children of the deceased daughter asserted that they were included in the term “ lawful issue,” and were entitled to a share.” But it, was held that the words “each of the said children respectively limited the word “ issue ” to the children of the deceased nephew, and that the grandchildren were not embraced within the term, “lawful issue.”

In discussing the question the learned judge, who spoke for a, unanimous court, said:

“ The word ' issue ’ is an ambiguous term. It may mean descendants generally or merely children; and whether in a will it. shall be held to mean the one or the other depends upon the intention of the testator as derived from the context of the entire will, or such extrinsic circumstances as can be considered. Doe ex dem. Cannon v. Rucastle, 8 C. B., 876 ; Ralph v. Carrick, L. B., 11 Ch. Div., 873; Earl of Orford v. Churchill, 3 Ves. & B., 59, 67-In England, at an early day, it was held, in its primary sense,, when not restrained by the context, to be co-extensive and synonymous with descendants, comprehending objects of every degree. But it came to be apparent to judges there that such a sense given to the term would, in most cases, defeat the intention of the testator, and hence in the later cases there is a strong tendency, unless restrained by the .context, to hold that it has the; meaning of children. It will at least be held to have such meaning upon a slight indication in other parts of the will that suck was the intention of the testator. 2 Jarm. Wills (R. & T. ed.),. 635 ; 2 Bedf. on Wills (2d ed.), 34, 37 and note. And substantially the same rule of construction prevails in this country. In 4 Kent’s Commentaries, 278, in a note, the learned chancellor said t “ The term ‘issue’ may be used either as a word of purchase or of limitation, but it is generally used by the testator as synonymous with child or children.’’ Palmer v. Horn, 84 N. Y., 516 ; Palmer v. Dunham, 125 id., 68 ; 34 St Rep., 408.

In, Edwards v. Edwards, 12 Beav., 97, the testator had three unmarried daughters, Mary, Marianne and Ann ; to Mary he gave the use for life of 1.000 pounds in case she married. To Marianne the use for life of 700 pounds in case she married. To Ann the use for life of the residue of the estate in case she married. The remainder over in each case “to be divided among her lawful issue.” Ann and Mary died unmarried; Marianne married -and had seven children, three of whom died before their mother. ■One of the four surviving children had four children who claimed to participate in the fund upon the ground that they were included within the word “issue.”

In a subsequent part of the will the testator provided that in -default of issue of all of his daughters that the sums bequeathed to them for life should be equally divided among all the children of T. R. and J. A., and in default of “lawful issue” of either of them the whole to be divided equally among the “ children of the ■other,” share and share alike. It was held that though the word “ issue ” was used equivocally in the first part of the will, that in the subsequent part it was used as meaning children, and it was held that it must be assumed that it was used in the same sensin all parts of the instrument. The same rule was stated and applied in Rhodes v. Rhodes, 27 Beav., 413. In Robinson v. Sykes, 23 Beav., 40, it was held “ that though the word issue is nomen generalissimum and includes all the remotest descendants, nevertheless, ,-held, that where issue are pointed out as persons to take, with reference to the share of the parent, a gift which, so far as regards the parent, fails, they take on the principle which may be ■called a quasi representative principle, that is, that the children of each parent whose share fails take that parent’s share, but not -admitting the grandchildren to take in competition with the children, to participate in the share of that deceased parent" The .same rule was held in Ross v. Ross, 20 Beav., 645.

As before shown, when the testator was providing for a disposition of these eleven lots, in default of issue and of an apportionment, the term “ lawful issue ” was so limited that it only in•cluded the children of the sisters, and it provides that such chil■dren should take, representatively, the children of each parent her share. Unless there is something in other parts of the will which lead to the conclusion that the testator intended by those .•same words to authorize the appointee of the pow.er to execute it in favor of all of the descendants of the sisters, near or remote, it must be held, that she was limited in her chpice to the sisters and their children, and in case any of the children were dead, to their •children.

In the fourth, fifth and sixth clauses of the will the testator devised to each of his sisters a house and lot for life, with remainder over in each case in the following language :

“ From and immediately after the death of the said (sister), to her lawful issue forever, to be divided equally between them in ■case they should be of equal degrees of consanguinity, and in case they should be of unequal degrees of consanguinity, then the issue of each deceased parent to take the share which the parent of such issue would have been entitled to if he or she had been then surviving.”

By these clauses the testator gave (1) a life estate to each sister, .and after her death to her lawful issue. It is plain that the word •‘‘issue” was not here used in the sense of children only, for it provides that if they (issue) should be of unequal degrees of consanguinity, that the issue of each deceased parent should take the .share of such parent. Clearly the term “ issue ” in the fourth, fifth and sixth clauses was used representatively, the testator not intending that children should take to the exclusion of or concurrently with their parents.'

By the eighth clause of the will the testator empowered Mary Hopeton Drake to appoint any or all of the eleven houses and lots devised to her for life in the seventh clause to any or all of her lawful issue, but in case she failed to so appoint, and left lawful issue her surviving, the remainder over was disposed of as follows:

“ To the said Mary Hopeton Drake, during her natural life, to her said lawful issue from and immediately after her>.death, forever, and if such issue shall consist of more than one person, and shall be of equal degrees of consanguinity, then the said estate hereby given and devised to them is to be divided among them ■in equal shares, and if such issue shall consist of persons of unequal degrees of consanguinity, than the issue of any deceased parent shall take the share which the said parent of such issue would have taken if he or she had been then surviving.”

In this clause the testator plainly intended that if Mary Hope-ton Drake left lawful issue, and failed to appoint as between them, that the houses should pass to her descendants, near and remote, upon the principle of representation, the children of each deceased parent taking the parent’s share. In the fourth, fifth and sixth clauses, the testator provided for the same persons, his sisters and their descendants, that he provided for contingently by the ninth clause, and no sufficient reason appears upon the face of the will ■or upon the facts found to lead us to the conclusion that he intended by the word “ lawful issue,” as used in the power, to embrace all. descendants, and in all other parts of the will that he •used the term in a different and more restricted sense. It follows that the attempted execution of the power by Mary Hopeton Drake, as to seven of the eleven houses and lots, was invalid, and they pass under the devise over, one-half to the children of Susan A. Drake and one-half to the children of Sarah A. Lawrence. 'The counsel for the appellant, in his brief, does not ask for a judgment absolute, but for a reversal and a new trial, which should be granted, with costs to abide the event

Judgment affirmed, with one bill, of costs in favor of infant defendants.

All concur, except Follett, Ch. J., Haight and Brown, JJ., dissenting.


text:
    Austin B. Hathaway, Resp’t, v. The Orient Insurance Co., App'lt.

      (Court of Appeals, Second Division,

      Filed October 1, 1892.)

    Insurance (Fire)—Rights oe mortgagee.
    Where a mortgage contains an insurance clause, which fact is known to the owner of the property and the insurer, a policy taken out by the owner enures to the benefit of the mortgagee, and the insurance company has no authority to agree with the owner as to the amount of the damages, and determine as between him and the mortgagee what sum was payable-to each, and the accord and satisfaction entered into between the insurer and the owner is not a bar to a recovery by the mortgagee of his damages.
    Appeal from judgment of the supreme court, general term, fifth department, affirming judgment for plaintiff entered upon the report of a referee.

      Richard Crowley, for app’lt; S. R. Filkins, for resp’t.

       Affirming, 33 St. Rep., 678.

   Follett, Ch. J.

The mortgage held by the plaintiff contained a covenant that the buildings should be kept insured against damage by fire for the benefit of its holder. Pursuant to this covenant Breckon, the owner of the fee, procured the policy .on which the action was brought, by the terms of which the defendant, “ does insure T. W. Breckon, * * * Loss if any payable to A. B. Hathaway, as his mortgage interest may appear.” The owner-of the fee and the mortgagee each had an insurable interest in the property which could have been protected by separate policies, or by a single one as they and the insurer might agree. The policy describes Breckon as the owner, and Hathaway as mortgagee, and provides that in case of loss the damages shall be “ payable to Hathaway as his mortgage interest may appear.”

It is said that Hathaway is the appointee of Breckon. He is, but he is not a mere appointee of Breckon, and without a vested interest in the policy. He acquired his right to recover the damages, not solely by the appointment of Breckon, but by the policy, a contract entered into between the insurer, the owner of the fee and the mortgagee. Had this policy provided that in case of loss-the damage should be paid to a person having no interest in the insured property, such person would have been a naked appointee, the same as though the damages had been directed to be paid to a bank or to any collecting agent, and the owner could have settled the loss and released the insurer on his own terms.

It may be that the same rule would have been applicable, as between the insurer and the appointee, had the loss been payable- “ to A. B. Hathaway,” having an insurable interest, which was. neither known to nor described by the insurer in its policy. The-rights of an appointee, an agent, or the trustee of an express trust, who has no interest in a contract which he may enforce, are quite different from those of a person having a vested legal interest in a contract created' by the concurrent action of all the parties to it.

The questions decided in Traders’ Ins. Co. v. Roberts, 9 Wend., 404; Tillou v. Kingston Mutual Ins. Co., 5 N. Y., 405; Grosvenor v. Atlantic Fire Ins. Co., 17 id., 391, and the Buffalo Steam Engine Works v. Sun Mutual Ins. Co., id., 401, are not involved-in the case at bar, arid it is unnecessary to attempt to harmonize those and kindred decisions. In the cases cited, the owners of property insured it in their own names, the loss if any payable to mortgagees, or the insurance was assigned, with the assent of the insurer,. to the mortgagees for their security, and before a loss occurred, and while the contract of insurance was in part executory, the owner increased the risk or did a prohibited act, or omitted to perform some act required by the- policy. The question in these cases was whether the violation of the contract by the owner was a defense to an action by or for the benefit of the mortgagee. Ho such question is involved in the case at bar. The liability of the insurer is admitted, and the question here is whether the owner cf the property and the insurer may, without the concurrence of the mortgagee, effect an accord and satisfaction without the assent of the latter. It is a general rule that where a demand is owned by several by such a unity of interest that all must be joined as parties in a strictly personal action for its recovery, that a release of the claim by one of its owners is as effectual as the release of all. Austin v. Hall, 13 Johns., 286; Decker v. Livingston, 15 id., 478; Osborn v. Martha's Vineyard, etc., 140 Mass., 549. But this rule has its exceptions. Gock v. Keneda, 29 Barb., 120; Upjohn v. Ewing, 2 Ohio State, 13; 1 A. & E. Ency., 106.

Breckon, the owner, was not a necessary party plaintiff to an action for the recovery of 'the amount due from the defendant, for the whole amount was recoverable by an action brought by the mortgagee individually, Dakin v. Liverpool, London & Globe Ins. Co., 77 N. Y., 600, though a joint action by the owner and the mortgagee •could have been maintained. Winne v. Niagara Fire Ins. Co., 91 N. Y., 18_.

_In case a claim arises in favor of A. and B. against 0., out of a -contract entered into by the three, to which claim by the contract A. has the prior, and B. the subsequent right, C. and B. cannot, without the consent of A., effect an accord and satisfaction which will cut off the right of A. Ennis v. The Harmony Fire Ins. Co., 8 Bosw., 516; Cromwell v. Brooklyn Fire Ins Co., 44 H. Y., 42; Reid v. McGrum, 91 id., 412; Baltis v. Dobin, 67 Barb., 507.

In Cromwell's case a house and lot had been sold under an executory contract by which the vendee' covenanted to insure the house for the vendor’s benefit. The vendee went into possession and insured the house under a policy payable to the vendor in case of loss. On the expiration of this policy the vendee took out a new one payable to himself, and during its life -the house was burned. The vendor had assigned his interest in the contract, and the assignee, Cromwell, the plaintiff in the action, notified the insurer of his rights under the contract, demanded payment of the loss, and forbade its payment to the vendee. The insurer disregarded the demand and notice, paid the amount due under the policy to the vendee. In an action Brought by Cromwell, the assignee of the vendor, it was held that he was entitled to recover, notwithstanding the accord and ’satisfaction between the insurer and the vendee.' The principle upon which this decision rests is that the vendee and insurer could not effect an accord and satisfaction which would bar an action by one having a prior equitable right to the money due under the contract. Reid v. McCrum, supra, is, in its facts, a stronger authority in support of the judgment in the case at. bar. In that case the owner of realty mortgaged it, covenanting to keep the buildings insured and the policy assigned to the mortgagee. Afterwards Hugh McCrum acquired the title to the property subject to the mortgage, and obtained policies of insurance on the buildings, which were endorsed by the insurers; “Loss, if any, payable to John Eeid, Mortgagee.” Subsequently McCrum procured the insurers to .cancel the endorsement, and to write on the policies: “ The mortgagee’s interest having ceased, the loss, if any, is now payable to Hugh McCrum, as-owner.”

The mortgagee’s interest had not terminated and he had no-' knowledge of the change. After this the buildings were destroyed by fire and the mortgagee began an action to foreclose his-security, malting McCrum and the insurers parties defendant, asking that McCrum be compelled to assign the insurance and the insurers required to pay the loss to the plaintiff. It was held that, the policies could not be legally changed without the assent of the mortgagee, and that he was entitled to recover the loss from the insurers.

Upon principle and authority it seems to be clear that the defendant in this case had no authority to agree with the owner as-to the amount of the damages, and determine as between him and the mortgagee what sum was payable to each, and the accord and satisfaction entered into between the insurer and the owner is not a bar to a recovery by the mortgagee of his damages.

The judgment should be affirmed, with costs.

All concur.


author: Vann, J.

text:
    George W. McLean, Rec’r of Taxes, App’lt, v. Sarah L. Myers, Resp’t.

      (Court of Appeals, Second Division,

      Filed October 1, 1892.)

    1. Taxes—Action bt receiver—Consolidation act, § 863.
    Under the provisions of § 863 of the New York city consolidation act of 1882. an action in personam may be maintained by the receiver of taxes in said city for the recovery of taxes imposed upon a stockholder of a national bank located in said city, in a case where such stockholder was not a resident of the city and county of New York when the taxes were imposed.
    2. Same.
    It need not appear as a condition precedent to the right of the receiver of taxes to maintain an action of this kind, that a warrant for distress and sale has been issued by the receiver, as provided by § 863 of the consolidation act and returned unsatisfied.
    (Beown and Landon, JJ., dissent.)

      Appeal from a judgment of the general term of the superior court of the city of New York, setting aside a verdict directed at circuit in favor of the plaintiff and dismissing the complaint, with costs.
    This action was brought' by the receiver of taxes in the city of New York to recover from the defendant the amount of certain taxes assessed against her upon stock in the Broadway National Bank standing in her name.
    From the statement of facts prepared for the purpose of this appeal, pursuant to § 1339 of the Code of Civil Procedure, it appears that the plaintiff is the receiver of taxes in the city and county of New York; that the defendant has not been a resident of said city and county since prior to 1882, but during said period has resided in the county of Westchester; that “in and for each of the years 1882 and 1883 the defendant was assessed for taxation and taxed by the proper authorities of the city and county of New York as a stockholder of the National Broadway Bank of the city of New York,” as follows: For 1882, assessment $1,125, tax $25.31; for 1883, assessment $3,055, tax $69.95 ; that in due time each year an assessment roll, showing the several assessments and the amount of each tax, was delivered by the board of aldermen to the tax receiver, with a warrant annexed in due form and duly signed, requiring him to collect the respective sums assessed as taxes, but the taxes in question have not been collected or paid; that it did not appear that any warrant had been issued by the receiver of taxes to the sheriff or any marshal in the city and county of New York commanding him to levy and collect said taxes by distress and sale, as provided by § 853 of the Consolidation Act, or that any such warrant had been returned unsatisfied. It was conceded “ that the taxes aforesaid were valid.”
    The questions of law arising from these facts, as stated under the direction of the court below, are as follows:

      “First. Whether, under the provisions of § 863 of the New York city Consolidation Act of 1882, an action in personam may be maintained by the receiver of taxes in said city for the recovery of taxes imposed upon a stockholder of a national bank located in said city in a case where such stockholder was not a resident of the city and county of New York when the taxes were imposed.

      Second. Whether, as a condition precedent to the right of the receiver of taxes to maintain an action of this kind under the provisions of § 863 of the New York city consolidation act of 1882, it must appear that a warrant for distress and sale has been issued by the said receiver as provided by § 853 of the said consolidation act, and returned unsatisfied.

      Third. Whether the complaint in this action should be dismissed, or judgment should be directed in accordance with the verdict.
    These questions of law were determined by the general term as follows: The first, in the negative; the second in the affirmative and the third in favor of the defendant. The case comes to this* court by leave of the general term, granted in due form.

      George S. Coleman, for app’lt; E. P. Johnson, for resp’t.

       Reversing 33 St. Rep., 802.

   Vann, J.

The questions presented by this appeal require us to construe certain provisions of the banking act, and of the consolidation act, both of which passed July 1, 1882, the former to. take effect immediately, and the latter on the first day of March, 1883; although for the purpose of determining its effect upon other acts, and of other acts upon it, the Penal Code excepted, it. is to be deemed to have been enacted on the first day of January, 1882. Laws 1882, ch. 409, p. 581; id., ch. 410, § 2143.

The part of the banking act requiring examination is chapter-twelve, which relates to the subject of taxation, and provides for the assessment of the stockholders in every bank, whether organized under state or national authority, “on the value of their shares of stock therein,” such assessment to be made where the bank is located, “and not elsewhere, whether the said stockholders reside in said place, city, town or ward or not.” Laws 1882, ch. 409, p. 701, § 312. By a subsequent section provision is made for the collection of a tax from, stockholders who do not reside in the place where the bank is. located by conferring upon the collector and co.unty treasurer “ the same powers * * * as they have by law when the-person assessed has removed from the town, ward or county im which the assessment was made,” and authorizing “the county treasurer, receiver of taxes or other officer authorized to receive-such tax from the collector ” to proceed by action to collect the-tax “ from the avails of the sale ” of the shares of stock. Id.,. §314. “ For the'purpose of collecting such taxes * * * and in addition to any other law of this state” it is made the duty of every bank to retain so much of any dividend belonging to the stockholder as shall be necessary to pay the tax, which is declared a lien on the shares.- Id., §§ 314, 315. These are the-only provisions of the banking act in relation to the collection of taxes.

Chapter 16 of the consolidation act contains the provisions relating to “ taxes and assessments,” but as, by the concession of the parties upon the trial, “ no question whatever is raised as to-the formal regularity of the assessment or tax ” under consideration, it will be necessary to examine only such provisions as regulate the collection of taxes after the lawful assessment thereof. When the assessment is made, corrected and “ finally completed,” the roll is delivered to the receiver of taxes with a warrant annexed requiring him to collect the several sums assessed as taxes, named therein. § 833. The receiver thereupon gives notice by advertisement that the taxes are due and payable and that in case-of payment on or before November 1st, interest at the rate of six per cent per annum will be deducted for the period “ between the day of such payment and the 1st day of December then next succeeding.” §§ 841 and 842. One per centum is added to any tax remaining unpaid on the day last named, and after January 1st following, interest at the rate of seven per cent per annum is -charged upon all unpaid taxes “ to be calculated from the day on which said assessment rolls and warrants shall have been delivered to said receiver of taxes to the date of payment” § 843.

Section 853 provides that “ it shall be lawful for the said receiver, if any tax for personal property shall remain unpaid on the fifteenth day of the month of January succeeding the receipt by him of the rolls, to issue his warrant, under his hand and seal, directed to the sheriff or any marshal of the city and county of New York,” commanding him to collect such tax by levy, distress and sale of the goods and chattels of the person against whom such warrant is issued. “ In case of the refusal or neglect of any person to pay any tax imposed on him for personal property, if there be no goods or chattels in his possession upon which the same may be levied by distress and sale, according to law and if the property assessed shall exceed the sum of $1,000, the said receiver, if he has reason to believe that the person taxed has debts, credits, chóses in action or other personal property, not taxed elsewhere in this state, and upon which levy cannot be made according to law, may thereupon in his discretion make application within one year ” to certain courts to enforce the tax by imposing a fine for misconduct in refusing or neglecting to pay the same. Section 857. It is made “ the duty of the receiver of taxes to send or cause to be sent to the attorney for the collection of arrears of personal taxes, monthly, all cases of personal taxes embraced in the assessment rolls, when the assessment is one thousand dollars or more, and upon which a warrant to any of the marshals of said city and county has been issued and unsatisfied for a period of sixty days, or returned unsatisfied in whole or in part, and of all other cases of personal taxes, except in those cases where the comptroller may extend the warrant, when application to any court may be made for the collection of the tax and the said attorney is authorized to make requisition upon the said receiver for all such cases.” Section 859. Said attorney is “ charged with the prosecution of all suits or proceedings, in any court having jurisdiction, for the collection of all cases of personal taxes sent to him by the receiver of taxes, or where by any law of this state any suit or proceeding may be instituted by such receiver * * * for the collection of any tax for personal property.” Section 860.

“Any tax duly imposed for personal property upon any person ■or corporation in the city and county of New York and which shall remain unpaid and in arrears on the fifteenth day of January succeeding the year in which it shall have been imposed, may be recovered, with interest and costs, by the receiver of taxes of said city in an action in any court of record in this state.” Sec. S63.

These are all the provisions contained in said act for the compulsory collection of taxes upon personal property.

This action is founded upon § 863, but the defendant contends that it confers upon the receiver no right of action against a nonresident of the city and county of New York. We think, however, that the phrase “ any tax duly imposed,” refers to the place where the tax was laid rather than to the residence of the person upon whom it was laid, and that the section should be construed as if it read “ any tax duly imposed in the city and county of New York upon any person or corporation.” It is natural that the remedy thus provided should be limited to the taxes imposed in the particular locality affected by the statute and the language used is appropriate to that object, but not to a limitation depending upon the residence of the person taxed, because nothing is-said upon that subject. No word is used that suggests residence and we are not at liberty to insert one. The use of the general terms “ any tax ” and “ any person ” indicates an intention to include every one taxable upon personal property in the city of New York under any statute.

Even if the banking act was not in force when the consolidation act was passed, previous legislation had provided, in, language identical with that used in the banking act, for the assessment of stockholders in banks at the place where the bank is located, without reference to the residence of the person so taxed. Laws 1881, chap. 477, § 4.

In enacting the Consolidation Act, therefore, the legislature is-presumed to have had in mind the change it had lately made in the rule governing the assessment of personal property when it-was in the form of bank stock. Sedgwick Stat. & Con. Law, 229— 247. There is nothing in § 863 indicating an intention to expressly exclude such assessments from the remedy therein provided, a<nd we do not think that they should be excluded by implication, as there is no apparent reason for it. There is greater need of the remedy in the case of non-residents, because absence from the city makes the enforcement of the tax more difficult. We think that the language used confers a general right of action in personam to collect taxes imposed for personal property, and that if the legislature had intended to except a single class from the operation of the section, it would have done so in express^ terms. Powers v. Shepard, 48 N. Y., 540; Smith v. The People, 47 id., 330-

It is contended, however, that such an action cannot be commenced unless a warrant for the collection of fhe tax has, in the-language of § 859, been “issued and unsatisfied for a period of sixty days,-or returned unsatisfied in whole or in part.” That-section simply requires the receiver to send certain cases to the attorney for the collection of arrears of personal taxes. It first-provides for that class of assessments, which, according to § 857, may be made the basis of a proceeding to punish for contempt, and then adds: “All other cases of personal taxes,” with an exception not now material, “ when application to any court may be-made for the collection of the tax.” Whether an action may be regarded as an application within the meaning of that section or not, it is unnecessary to decide, as § 860 charges said attorney “ with the prosecution of all suits and'proceeclings * * * for the collection of all cases of personal taxes,” including not only those sent to him by the receiver, but also such as may be made-the basis of an action by that officer to collect “ any tax for personal property.” There is no provision which makes the issue or return of a warrant a condition precedent to the commencement of an action. That condition is required only in case of a proceeding to punish for contempt. Section 857.

It is also claimed that it is a condition precedent to the transmission of a case by the receiver to the attorney for prosecution,, and thus becomes a condition precedent to an action, but we find no satisfactory foundation for this position in the statute, because “ all other cases of personal taxes ” are to be sent in the same way, and authority is expressly conferred upon the attorney to prosecute any suit authorized by any law of the state for the collection of any tax for personal property. Moreover, the statute authorizes an action in personam to be commenced on the very day that the distress warrant may first be issued. On the fifteenth of January the receiver is authorized to issue his warrant, § 853, or commence an action, § 863. The legislature could not have intended that the former should necessarily precede the latter, because it provided that the warrant should be returnable within thirty days after the date thereof. It could not well be issued and returned unsatisfied, “in whole or in part,” on the same day, as that would give no time for effective action under it, and it is not. reasonable to suppose that such was the intention. A much longer period for the execution of the warrant was clearly in contemplation, as sixty days is mentioned in § 859 as the time that it. might be in the, hands of the marshal.

The defendant invokes the principle that where a statute confers a right, and prescribes adequate means of protecting it, the proprietor of the right is confined to the statutory remedy, and. claims that it should be applied to this case. Dudley v. Mayhem,. 3 Com., 1,15.

We do not think, however, that the banking act created a new right within the meaning of the principle thus relied upon, because bank stock was assessable before that act was passed, sometimes on one basis and sometimes on another. Laws 1823, chap. 262, § 4; 1 R. S., 414; Laws 1853, chap. 654, § 1; Laws 1866, chap. 761, § 1; People v. Dolan, 36 N. Y., 59, 63.

Neither that act nor its immediate predecessor made anything assessable which was not so before, but they changed the place where the assessment was to be made so as to promote convenience and certainty. They did not prescribe the method of assessment, but left that to existing statutes, except that due provision was made for the allowance of “ all the deductions and exceptions allowed by law in assessing the value of other taxable personal property.” Laws 1881, chap. 477, § 4; Laws 1882, chap. 409, § 312.

They provided no system for collecting the tax by encouraging voluntary payments, or by any other means, except by a proceeding in rem against the stock itself, or by a warrant to be issued against non-residents by the collector or county treasurer. Even those remedies are not applicable to the city of New York, because it has neither county treasurer nor collector who could issue the warrant. The action to foreclose the lien of the tax upon the stock is to be brought by “ the county treasurer, receiver of taxes -or other officer authorized to receive such tax from the collector.” Id., §§ 6, 314. There is no “collector” in that city,-as there is -elsewhere in the state, and even if that word refers to the functions rather than to the title of the officer, still the “ receiver of taxes ” as the only collector in that sense, and he cannot receive the taxes from himself.

The banking act, standing by itself, is clearly inadequate to the assessment or collection of the taxes authorized thereby, because it does not direct how the assessment is to be made, nor how the the tax is to be collected, except as mentioned above, which can-mot be regarded as an adequate remedy. We think that the legislature intended to furnish an additional safeguard in assessing bank stock by directing that it should be assessed at the place «where the bank is located, and additional, but not exclusive, remedies to aid in collecting the tax. This is clearly indicated by § 315. In all other respects the general statutes relating to the subject of taxation were relied upon to furnish the method of procedure both in assessing and collecting.

The judgment entered upon the decision of the general term should be reversed, and judgment directed on the verdict in favor of the plaintiff, but without costs, as the parties have so stipulated.

All concur, except Brown and Landon, JJ., dissenting.


author: Maynard, J.

text:
    In the Matter of the Application of John E. Corwin.

      (Court of Appeals,

      Filed October 4, 1892.)

    1. Taxes—Certiorari to review assessment—Inequality.
    The general term reversed an order of special term denying a motion to quash and dismiss a writ of ceriiorcm obtained by relator under the act of 1880, chap. 269, to review the action of the assessors of Middletown in making up their assessment roll for 1891, and granted the same on the ground that relator did not personally appear before the assessors upon the ■day for hearing grievances, but appeared by attorney, although no objection was made by the assessors, they receiving and filing his affidavit, interrogating him, receiving an admission from him which rendered examination of relator unnecessary, and gave him notice of their final.action. Held, error; that the assessors waived any objection to the appearance by attorney, even if it would have had any force had it been promptly made, and the appearance was sufficient.
    9. Same—Appeal—Code, § 8815.
    Chapter 269, Laws of 1880, was designed to afford a remedy where none before existed or where the previous remedy was, at the best, inadequate, and if the taxpayer brings his case within the statute, the granting of a writ of certiorari is not discretionary, but he is entitled to it as a matter of right, and the reversal of such an order by the general term is appeal-able to this court.
    S. Same—Limitation.
    Nothing which the assessors or the common council might do, or omit to do, would be available to abridge. the time within which the relator might under the statute apply for judicial redress. The assessment roll must remain in suspenso for fifteen days for the purpose of review, after its completion and delivery.

      4. Same—Petition.
    Relator’s petition alleged that all the other assessments upon the roll were made at a lower proportionate valuation than the assessment of relator’s property, and that his assessment was wholly out of proportion to-the basis of valuation adopted by the assessors in making the other assess- < ments, etc., and asked that it be corrected so as to be in accordance with, law and to conform to the other valuations. Held, sufficient.
    Appeal from judgment of the supreme court, general term,, second department, reversing order denying motion to quash a writ of certiorari to review an assessment of personal property and from order referring the matters in issúe.

      Wm. Vanamee, for app’lt; Henry W. Wiggins, for resp’t.

       Reversing 46 St. Rep., 148.

   Maynard, J.

The relator obtained ex parte a writ of certiorari at special term, under the act of 1880, to review' the action of the assessors of the city of Middletown in making up their assessment roll for the year 1891.

The principal ground of error complained of, and the only one now insisted upon, was the inequality of his assessment of personal property, compared with the property assessments of other taxpayers of the city. Upon the return to the writ the respondents made a motion to quash, which was denied, and an order of reference granted to take proofs upon the matters in issue. The-general term reversed the order of the special term, denying the-motion to quash and dismiss the writ, and granted the motion, with costs; and the case is now here upon an appeal from that order.

The order is silent as to the grounds upon which it was made, but it appears from ‘the opinion of the court that the writ was quashed because the relator did not personally appear before the assessors upon the day for hearing grievances, but appeared by attorney, which was considered insufficient to entitle him to a review under the act of 1880.

The respondents contend that the order of the general term is; not appealable, for the reason that it was discretionary, and therefore, not reviewable by this court, and cite the provisions of the Code, §§ 190, 1337, 2127, and The People, etc., v. Board of Tax Com’rs, 85 N. Y., 655, and People, etc., v. McCarthy, 102 id., 630; 2 St. Rep., 546. These were cases of the allowance of a common law writ of certiorari; the granting or refusal of which by the supreme court has always been held to be so far discretionary that an order of that court quashing the writ is not reviewable here unless it affirmatively appears that the discretion of the court was not exercised in granting it. Section 2127 of the Code merely embodies the pre-existing practice of the courts upon the subject. But this is a statutory proceeding under an act passed after the-provisions of the Code are to be deemed to have been enacted, § 3355; and it was held by this court in the People, etc., v. The Assessors of Greenburgh, 106 N. Y., 671; 8 St. Rep., 709, that this act regulates the review of assessments in towns, cities and villages by certiorari, and renders inapplicable to such cases the-general provisions of the Code relating to such proceedings. It-was designed to afford a remedy where none before existed, or where the previous remedy was, at the best, inadequate; and if the taxpayer brings his case within the statute, the granting of the writ is not discretionary, but he is entitled to it as a matter of right.

The objection is also urged, that the application for the writ was not made in time. The charter of the city of Middletown required the assessors to make up the assessment roll; give notice •of the meeting for the hearing of grievances; correct the roll, and ■deliver it to the city clerk, on or before the third Tuesday of July. The record shows that bn June 18th they gave notice that they had completed the roll for the year 1891, and left a copy with the ■city clerk, where it might be seen and examined by any person interested until July 10th, on which day they would meet to review their assessments, on the application of any person aggrieved. On July 10th they met and heard the complaints of parties deeming themselves aggrieved, and on July 16th made oath to the roll and filed it with the city clerk, and on the same day the common council adopted a resolution confirming it.

Section 9 of the act of 1880 provides that when the assessors shall have finally completed and verified their roll, they shall deliver it to the city clerk ; and that it shall remain with such clerk for a period of fifteen days for public inspection; and that the assessors shall forthwith give public notice of the final completion ■of the roll, the officer to whom it has been delivered and the place where it will be open to the public inspection; but it does not appear that these requirements of the law were observed in the present case. It is further provided that application for the writ must be made within fifteen days after the°completion and delivery of the roll and the giving of such notice, but that such time shall not begin to run until such notice is given. Nothing which the assessors-or the common council might do, or omit to do, would be available to abridge the time within which the relator might, under the statute, apply for judicial redress. If the notice was not given, it has been held that such time was unlimited. The People, etc., v. Haupt, 104 N. Y., 877 ; 5 St. Rep., 770.

The authorities cited by respondent’s counsel are cases which arose before the enactment of the law of 1880. Under the practice then prevailing, the writ must have been sued out and served upon the assessors before they had parted with the roll; which was generally impossible, as the roll would be completed and delivered on the same day, as it was in this case. The taxpayer could not anticipate the action of the assessors, and service of the writ upon them before they had entered the judgment sought to be reviewed would be premature. This was one of the evils undertaken to be remedied by the legislation of 1880, which requires the assessment roll to remain in suspenso, for the purposes of review, for the period of fifteen days after notice is given of its completion and delivery.

In The People, etc., v. Assessors of Niagara, 40 Hun, 228, it seems to have been held that it was too late to apply for the writ .after the assessors had delivered the roll to the supervisor of the. town, and after its delivery by him to the board of supervisors. The opinion of the court does not refer to the act of 1880, and its provisions do not appear to have been considered, and there is nothing to indicate whether the fifteen days limitation had not actually expired. The cases referred to in the opinion either arose before the passage of the act, or are cases of special assessments, and so far as the decision may be construed to hold that the writ cannot issue in any case after the assessors have parted with the roll, it is in. conflict with the plain provisions of the statute and cannot be approved.

The relator was not concluded by the action of the common council in confirming the assessment roll. That body has no power under the city charter to correct the roll, except such as is possessed by boards of supervisors with respect to town assessment rolls, and, hence, it could not afford the relator the relief to which he claims to be entitled.

The general term quashed the writ in this case for the reason that the relator appeared before the assessors upon "the day appointed for the hearing of grievances by attorney and not in person. No such objection was made by the assessors at the hearing. They recognized the appearance of- the attorney; received and filed his affidavit; interrogated him upon the subject of his client’s grievance; took an admission from him, which rendered an examination of the relator unnecessary; made a reduction in the real property assessment, and gave the attorney notice of their final action and it might properly be held that they had waived any objection of that character, even if it would have had any force had it been promptly made. People v. Hicks, 40 Hun, 598; 2 St. Rep., 294.

Whatever effect might be given to the failure of the taxpayer to appear before the assessors at their last meeting and there seek a correction of his assessment, the point is not involved upon this appeal. Under chap. 176 of the Laws of 1851, as amended by chap. 536 of the Laws of 1857, it may be that in a proper case the assessors might insist upon the personal appearance and examination of the taxpayer, if necessary. If he is seeking to escape taxation because he does not possess taxable property of the value fixed by them, or because of non-residence, or for some other reason which is peculiarly within his personal knowledge, there might be great propriety in requiring him to appear in his own person in order that the assessors might probe his conscience by an examination under oath as to the extent of his possessions, or as to any other material fact of which he alone may be able to give the most reliable information. They cannot be compelled to act upon hearsay testimony, but have the right to demand the best evidence obtainable. But even in such cases, if a personal appearance is impracticable, on account of unavoidable absence, or sickness, or other sufficient cause, the taxpayer cannot be denied the opportunity to present his grievance bv attorney, with the proofs to support it. Here there was a sufficient appearance by attorney. He admitted the existence of all the facts which it was material for them to know with respect to the relator’s property; and they did not ask or require a personal appearance or examination, for the obvious-reason that it would be the performance of an idle ceremony. He therefore omitted nothing which, under any reasonable construction of the tax law, he was bound to do in order to invoke the remedy provided in the act of 1880. '

Objection is made to the sufficiency of the petition upon which the order for the writ was granted, which we think is based upon a misconception of the office of a petition in such a proceeding. It is in the nature of a pleading and only conclusions of fact need be stated, and not the evidence necessary to support them. The statute says that the writ may be allowed on the duly verified petition of the taxpayer when' the petition shall set forth that his ^assessment is unequal, in that it has been made at a higher proportionate valuation than other property on the same roll and that he will be injured by such unequal assessment. It may well be questioned whether an averment in the petition in the words of the statute would not be sufficient to confer jurisdiction, Rochester R. R. Co. v. Robinson, 183 N. Y., 242; 44 St. Rep., 872, but this petition goes farther and alleges that all the other assessments upon the roll are made at a lower proportionate valuation than the assessment of relator’s property, and that his assessment of personal property is wholly out of proportion to the basis of valuation adopted by the assessors in making the other assessments on. the roll and bears no relation to their general method and system in arriving at their assessments of personal property, and does not conform to the valuations and assessments applied by them to other personal property. ■ His demand for relief is that his assessments be declared Unequal, and be corrected in such manner as shall be °in accordance with law, and so as to make them conform to the valuations of other property on the roll, and so as to secure equality of assessment. He is not seeking to obtain a reduction of his assessment by showing that in a single instance, or that even in occasional instances, other property has been- assessed proportionately lower, which this court held in the People, etc., v. Carter, 109 N. Y., 576; 16 St. Rep., 367, would not entitle him to the remedy providéd in the act of 1880; but he proposes to bring himself within the rule laid down by Judge Andrews in that case; which requires him “ to show a state of facts from which a presumption justly arises that the inequality of which he complains will subject him to the payment of more than his just proportion of the aggregate tax.”

The order of the general term should be reversed, and the order of the special term affirmed.

All concur.