text:
    Asbury Lester, App’lt, v. Mayor, Aldermen and Commonalty of the City of New York, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed June, 1894.)

    Damages—Adjoining property.
    The legitimate temporary use of property affords no ground for damages to an abutting owner, who sustains consequential damages by temporary annoyances, not negligently caused and not amounting to trespasses.
    Appeal from a judgment dismissing the complaint entered on a non-suit.
    Pursuant to chapter 490, L. of 1883—the Aqueduct act—the City of New York, by the Aqueduct Commissioners, on the 3d of February, 1886, entered into a written contract with John Brunton & Co., by which the latter agreed to construct section No. 14 of the new aqueduct, extending from One Hundred and Thirty-fifth street, at Convent avenue, to One Hundred and Sixty-second street, at Tenth avenue. The only provisions of the contract which are germane to this litigation are the third and fifth, which are as follows:
    “3. Sufficient ground is to be furnished by the city, at or near the shafts, for the establishment of the working plant, but no material from the shafts or from the tunnel shall be dumped thereon. All excavated material is to be removed by the contractor, who must furnished the necessary dumping grounds for the same. The cost of such removal and of procuring such dumping ground is to be included in the price herein stipulated for shaft and tunnel excavation. And the contractor, at nis own expense, must provide sufficient and proper drainage for all water discharged from the shafts and tunnel.”
    “5. The contractor, whenever so ordered, shall erect and maintain fences along the streets, roadways and around the grounds occupied by him. These fences must be of such a character as to be sufficient, in the opinion of the engineer, for the protection of the adjoining property.”
    At some time, the date not appearing, the city acquired, under chapter 490 of Laws of 1883, a lot, one hundred feet square, at the southeast corner of Tenth avenue and One Hundred and Fifty-seventh street, for the purpose of constructing the aqueduct. Since June 20th, 1884, the plaintiff has owned and occupied a lot, twenty-five feet wide and one hundred feet deep, on the south side of One Hundred and Fifty-seventh street, and adjoining on the east said lot owned by the city. In 1885, the plaintiff built on his lot a three story frame building, in which he has since resided. , In January, 1886, the contractors entered on the lot owned by the city for the purpose of executing the contract, and erected blacksmith forges, sheds, steam engines, drills and various kinds of machinery and structures for the purpose of sinking a shaft known as No. 29, to facilitate the construction of the aqueduct. During the years 1886, 1887 and part of 1888, this machinery was run day and night, Sundays included, causing loud and disagreeable noises, creating smoke, dust and disagreeable odors, which greatly annoyed the plaintiff and his family, and reducing the rental value of his property, as is asserted, more than $1,000 per year. The plaintiff presented his claim to the comptroller, who refused, to pay it, and July 12, 1892, this action was brought, which resulted in a nonsuit, on which a judgment was entered dismissing the complaint, with costs.

      James A. Deering, for app’lt; William H. Clark, for resp’ts.
   Follett, J.

—It is not alleged in the complaint, nor was it proved on the trial, that the site selected for the work was an improper one, that the work was negligently performed, or that any of the structures or machinery were unnecessary. In short, there is no allegation or evidence that the aqueduct commissioners, or any of the defendants' agents, or the contractors, or their servants, were negligent. FTor is there any allegation or evidence that trespasses were committed on the plaintiff’s premises. Before this action was begun, the work complained of had been completed, the structures removed, and the lot owned by the city had been sold, but to what uses it has since been put does not appear. The undisputed evidence shows that the structures and work complained of were temporary and necessary for the construction of the aqueduct authorized by chapter 490, Laws 1883. Temporary annoyances are almost invariably caused to the owners of lots adjoining one on which new buildings are being erected, or extensive improvements made, and in case no trespass is committed, and the work is prosecuted with care and diligence, the owners of adjoining lots suffering temporary inconveniences have no legal cause for complaint for consequential injuries caused by the prosecution of the work necessary to erect the buildings or to complete the improvements. Such temporary use of property is legitimate, and affords no ground for damages to an abutting ' owner who sustains consequential damages by temporary annoyances not negligently caused and not amounting to trespasses. Any other rule would render the improvement of property in cities unduly expensive and well nigh impossible. This case does not fall within the principle declared in Morton v. The Mayor, etc., 65 Hun, 32; 47 St. Rep. 64; aff’d, 140 N. Y. 207; 55 St. Rep. 413, but within the class of cases of which Radcliff v. The Mayor, 4 N. Y. 195 ; Bellinger v. The N. Y. Central R. R. Co., 23 id. 42, and Atwater v. Trustees, 124 id. 602; 37 St. Rep. 234, are types. See also 2 Dill. Mun. Cor. (4th ed.), § 987, et seq.

In Morton’s case a permanent structure was erected, which was held to be a nuisance, causing permanent injuries to the plaintiff's property. The rule damnum absque injuria is applicable to this case. Broom Leg. Max. 184; Sh. & R. Neg., 4th ed., Eos. 283 ami 209, and cases cited. Again, in an action arising under the aqueduct act, it was held that the aqueduct commissioners were not the agents of the city, and that it had no control over the manner of doing the work. O’Brien v. Mayor, 15 N. Y. Supp. 523; aff’d, 65 Hun, 112; 47 St. Rep. 258; 139 N. Y. 543; 55 St. Rep. 596.

The judgment should be affirmed, with costs.

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


source: Caselaw Access Project

author: Barrett, J. Follett, J.

license: Public Domain

text:
    Mary Foster Long et al., Resp’ts, v. Marian L. Rogers et al., Impleaded, etc., App’lts.

      (Supreme Court, General Term, First Department,

      Filed July, 1894.)

    Will—Probate—Actios.
    The next of kin of a testator cannot maintain an action in the supreme court, after the expiration of one year from probate of the will, to have the invalidity of such probate as to personal property determined.

      Booream, Hamilton, Beckett & Ransom (Henry M. Ward, of counsel), for app’lts; Ewing, Whitman & Ewing (H. H. Whitman, of counsel), for resp’ts.
   Barrett, J.

—The precise question here is whether, under § 2653a of the Code of Civil Procedure, enacted in 1892 (eh. 591), the next of kin of a testator can maintain an action in this court, after the expiration of one year from probate of the will, to have the invalidity of such probate determined. The injunction which was granted at special term, restrained Mr. Seymour, as executor of the deceased Long, from proceeding in the surrogate’s court with the judicial settlement of his accounts. These accounts had reference solely to the personalty. If, therefore, the probate of the will as a will of personal estate was conclusive upon the plain tiffs after the lapse of one year, the executor was properly accounting when the injunction was granted.

The question then is, did the Legislature, in adding this new section, 2653a, to "the article of the Code entitled “Bevocation of Probate,” intend to repeal the rest of the article, or at least to do away with all existing provisions as to the effect of the probate after the lapse of one year? If it did not, then, clearly, the probate here was conclusive. For “a person interested in the estate” must apply for revocation within one year after the recording of the decree admitting -the will to probate (Code C. P., § 2648). If such application is not made within one year, then as to the personal property the probate concludes “all mankind.” Hoyt v. Hoyt, 112 N. Y. 505; 21 St. Rep. 593.

As to the legislative intent we think there can be no doubt. It was to afford relief where relief was needed—namely, with regard to real estate; not to uproot a system of long standing and wholesome operation with regard to personalty. The object was to expedite, not to protract, the settlement of estates. The mischief aimed at was plainly the inability under existing law to quiet titles to real estate. There was no trouble about personalty. As to that, an estate could always be settled within a reasonable time after the expiration of the year. What was wanted was some way of making the probate conclusive as to realty within a reasonable time. And for this the new section provided.

In Anderson v. Anderson, 112 N. Y. 104; 20 St. Rep. 344, it was held that a devisee of the real estate, in possession of the property devised, could not maintain an action to establish the will against the heirs at law. The heirs could choose their own time to bring ejectment, and one by one, at varying epochs, could question the will. It was to remedy this evil, to enable persons interested in sustaining a will as to real estate to gather all possible contestants into one forum; and, in effect, to “conclude all mankind’’ that the section in question was added. That section, it will be observed, was not enacted as an independent law, but was engrafted upon the Code—following the sections regarding the “revocation of probate.” These sections were not repealed in express terms. On the contrary, though before the legislature, they were suffered to remain. This is apparent from the title of the act, which reads: “An act to amend article second, title three, of chapter eighteen of the Code of Civil Procedure by adding thereto a new section to be known as section twenty-six hundred and fifty-three a,” Laws of 1892, vol. 1, p. 1136, ch. 591.

It is clear, therefore, that the intention was, in adding this section, to embrace it within the existing system, not to substitute it therefor. And there is no inconsistency or irreconcilable repugnancy between the two systems, when the mischief aimed at is advisably considered. As to personalty, the function of the existing statutes continues, and the effect of probate after lapse of a year remains unaltered. This function does not conflict with the function of the new section, which operates upon real estate, and which affords a practical method of making that conclusive which otherwise would remain indefinitely presumptive.

There is nothing in the phraseology of the new section which militates against this construction.' It is true that we find these words therein: “It shall be tried by a jury, and the verdict thereon shall be conclusive as to real or personal property,” &o. But this does not say that “a person interested in the estate of the decedent” shall not be otherwise concluded. Nor does it limit the effect of his failure to apply for revocation, under §§ 2647 and 2648, within the year. It may entitle “a person interested in the will ”—which is the phrase used in the new section to indicate the person who may proceed thereunder—as distinguished from “a person interested in the estate " (which is the phrase used in § 2647) to bring the action to validate the will, even during the running of the year. But it certainly does not authorize a person who has omitted to apply for revocation within the year, and as against whom the probate has become conclusive, to inaugurate a fresh contest thereafter.

We think the executor here was properly proceeding with his judicial accounting under the statute when this suit was instituted, and that he should not have been interfered with.

The order appealed from should, therefore, be reversed, with $10 costs and disbursements ; and the injunction dissolved, with $10 costs.

Van Brunt, P. J., concurs.

Follett, J.

—Under § 2653a I think an action can be maintained to set aside or establish the probate of a will. Otherwise, I concur.


author: Barrett, J.

text:
    Leila R. Martin, Individually and as Executrix, etc., App’lt, v. John B. Pine, as Trustee, etc. et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed June, 1894.)

    1. Will—Construction—Power or appointment.
    Power of appointment, dependent upon and governed by a contemplated contemporaneous instrument not executed, is not valid or operative.
    2. Same—Trust—Validity.
    A valid trust is indestructible and absolutely inalienable, until the whole design and object of the trust scheme has been practically accomplished.

      W. H. Hamilton, for app’lts; Aymar Embury, for resp’t.
   Barrett, J.

—This is an action for the construction of the will of William G. Martin, who died on the 4th day of May, 1891, in the city of Hew York, leaving the plaintiff as his sole heir and next of kin. The questions discussed are raised by the eleventh clause of Mr. Martin’s will. By the seventh, eighth, ninth and tenth clauses, four specific trusts for small amounts were created in favor of Stella Martin, Margaret Ford, Fannie Ford, and Mary Ford. They are not disputed or attacked. The eleventh clause then provides as follows:

“ Eleventh. All the rest, residue and remainder of my 'estate, both real and personal, I give,' devise and bequeath to my executor hereinafter named, in trust, nevertheless, to invest the same or keep the same invested and to collect the rents, income and profits thereof, and apply them to the use of my daughter Lelia B. Martin, during her natural life, and on her decease, if it occur within five years after the date of this will, to pay over and transfer to himself, as trustee for Stella Martin, a sum equal to that held by him in trust for her, if she shall be alive, and on the same trust; also, to pay over and transfer to himself, as trustee for Margaret Ford, a sum equal to that held by him in trust for her, if she shall be alive, and on the same trust; also, to pay over and transfer to himself, as trustee for Fannie Ford, a sum equal to that held by him in trust for her, if she shall be alive, and on the same trust; also, to pay over and transfer to himself, as trustee for Mary Ford, a sum equal to that held by. him in taust for her, if she shall be alive, and On the same trust; and to pay over and transfer the whole or any part of the said residuary estate which may then be left, or which may be left at any lime, to such person or persons, or such body corporate, as my said daughter may appoint by will, if such appointment is not contrary to the provisions which I shall leave in a certain paper made contemporaneous with this will, and sealed "up and addressed to the executor; and if said appointment shall be contrary to said provisions, then I give, devise and bequeath my said residuary estate, after the death of my said daughter, to the person or persons, or body corporate, named in said paper addressed to said executor in the proportion therein named.”

The will was dated the 10th day of September, 1887, and Lelia E. Martin lived for five years thereafter. In fact, she is the present plaintiff, and is still alive. Mo such paper as that referred to in the latter part of the eleventh clause has ever been found. Upon that head the learned justice at special term, upon the re quest of both sides, found as a fact: “That neither at the time of the execution of the said will, nor at the time of the execution of the said codicil, nor at any time subsequent thereto, was there in existence any provision or paper made contemporaneous with said will or at any time corresponding to the paper mentioned and described in the eleventh clause of said will.”

Upon this state of facts the defendant trustee claims that the power of appointment conferred upon Lelia R. Martin by the eleventh clause of the will is a valid power, by virtue of which she is entitled to dispose of the testator’s entire residuary estate. The plaintiff, upon the other hand, claims that the power is wholly void and inoperative; that the eleventh clause is incapable of execution ; that the corpus of the residuary estate is vested in the plaintiff as sole heir at -law and next of kin; that the attempted trust for her benefit became inoperative or merged in her absolute ownership of the corpus of the estate; that the main purpose for which any trust was sought to be created has completely failed, and that the whole residuary estate should be adj udged to belong to the plaintiff, freed of any trust.

Mo question is raised with respect to the annuities payable to Stella Martin and the Fords under the seventh, eighth, ninth and tenth clauses of the will. It is claimed, however, that the disposition of the principal fund, out of which these annuities are payable, should be governed by the adjudication upon the eleventh clause.

Two points are made against the power of appointment. First, that it was dependent upon the death of the plaintiff herein within five years after the date of the will, which death has not happened.” Second, that it was made “ dependent upon, and governed by, the terms of an extraneous paper which may or may not exist, but it cannot, in any event, give any dispositive force or effect under well settled principles of law. ”

The learned judge at special term discussed the first point but not the second. He holds, and we think correctly, that the power of appointment sought to be conferred was not limited to five years after the date of the will. The grammatical construction of the clause must give way to the clear intent and meaning of the testator. He meant to dispose of the residue and to give his daughter a power of appointment. If his daughter died within five years after the date of the will, the several annuities to Stella Martin and the Fords were to be doubled. If she lived beyond the five years, these annuities were not to be doubled. That was the real significance of this five years’ limitation.

As to the power of appointment, if it were exercised and the daughter should die within the five years, it was to operate upon “the whole or any part of the said residuary estate which may then he left” That included the principal fund out of which the double annuities were to be paid. If, however, it were exercised, and the daughter should live beyond the five years, it was also to operate upon the residue, including the principle fund out of which the single annuities were to be paid. This is clearly covered by the words “which may be left at any time,” and by the devise “after the death of” his daughter—in case the power of appointment is not exercised according to his wishes. “The death of my said daughter” here referred to was clearly not her death within the five years,"but her death at any time.

We think, however, that the second point made against this power of appointment is well taken. It is impossible to say that this is an unlimited power of appointment merely because the limitation upon its exercise is void. The power is interwoven with the limitation, and cannot be severed therefrom without nullifying the testator’s intention. It is conceded that the limitation is void. Even if the paper referred to were in existence, it could not be taken as part of the will. Langdon v. Astor's ex’rs, 16 N. Y. 26 ; Williams v. Freeman, 83 N. Y. 569 ; In the Matter of O'Neil, 91 N. Y. 516; Booth v. Baptist Church, 126 N. Y. 215 ; 37 St. Rep. 79. The defendants’ contention'is that the limitation, being void, should be disregarded and the power held to be unlimited. This, however, would be contrary to the expressed wishes of the testator. How can we say that the power was unlimited? The daughter was really to exercise no discretion, but simply to follow the testator’s direction as contained in the supposed contemporaneous paper. Although the provision with regard to this paper is inoperative as a testamentary disposition, yet the court will look at it to ascertain the testator’s intention. Kiah v. Grenier, 56 N. Y. 220; Gross v. Moore, 68 Hun, 412; 52 St. Rep. 657 ; Thayer v. Wellington, 9 Allen, 283.

In the case last cited the will contained the following clause : “I give to the said Edmund T. Hastings and to Wm. W. Wellington, and the survivor of them $15,000 in trust, to appropriate the same in such manner as I may, by any instrument in writing under my hand, direct and appoint.”

The testator, by a separate instrument, not attested as a will, made a certain disposition of this money to the City of Cambridge. It was held (citing with approval Langdon v. Astor, surpa) that it did not create a valid bequest to the City of Cambridge, even with the assent of Hastings and Wellington to the payment. The suggestion was made in behalf of the city that effect might be given to the supposed object of the charity by holding the bequest to be an absolute one to Hastings and Wellington personally, in confidence that they would appropriate the money as the testator should request But the court declined’to accede to this suggestion, giving as a reason that “the words of the clause” did not “authorize such a construction to be given to it," and that the bequest had, “on its face, language directly contradictory to it.” '

In Gross v. Moore, supra, the residuary clause read as follows: “I give, devise and bequeath unto my executor, hereinafter named, all the rest, remainder and residue of my personal estate, to be distributed by him according to instructions given to him by me.” It was contended that even though the trust were invalid, there was an absolute gift. But the court said: “We think that the language directing that the residuum be distributed by him according to the instructions given him by the testatrix negatives the view that the executor was to keep the property as his own. It equally negatives the idea that he was vested with a discretion, which, had it been conferred, might have induced the court to construe this into a power of appointment."

We think, therefore, that there was here no valid or operative power of appointment. But this view of the case does not aid the plaintiff in her desire to terminate the trust created for her benefit and to receive the entire residuary estate free from it The trust itself is perfectly valid, and remains wholly unaffected by the invalid power of appointment. The residue of the estate, after providing for the four small annuities, is given to the executor in trust to “invest the same and keep the same invested, and to collect the rents, income and profits thereof and apply them to the use of Leila R. Martin during her natural life.”

All that follows in the eleventh clause relates to the disposition of the residue after the death of the beneficiary. That is not an essential part of the trust. If the power of appointment was valid, the appointee, upon the death of the trust beneficiary, would take the residue by virtue of the statute. 1 R. S. 727, § 47; Welch v. Allen, 21 Wend. 147; Nicoll v. Walworth, 4 Denio, 391. If invalid, the testator’s heir would take. In neither case would a conveyance by the trustee be essential. The duty to pay over and transfer the residuary estate upon the death of the trust beneficiary is not an active trust duty. It is merely nominal. There is .but one active trust here, and that is perfectly valid under the Revised Statutes. It has not failed, and it is entirely possible of performance.

As to the remainder, it is undoubtedly vested in Leila R. Martin. She cannot exercise a power of appointment with regard to it under her father’s will, but she can devise it under her own. The idea that the trust for her life can be destroyed because she is thus vested with the remainder is fallacious. There is here no merger of estates. She has no estate in that which is vested in the trustee for her life. The entire estate, legal and equitable, is vested in the trustee for the trust purposes. As beneficiary of the trust, she has no estate. The remainder is vested, but it commences in enjoyment only upon the termination of the estate now-vested absolutely in the trustee. The case of Asche v. Asche, 113 N. Y. 232; 22 St. Rep. 799, is directly in point upon this branch of the case. We cannot nullify a testator’s will to suit the convenience of his beneficiaries. There is a class of cases, where, as was said in Cuthbert v. Chauvet, 136 N. Y. 329; 49 St. Rep. 671, the court would decree dissolution of the trust upon the application of all the interested parties, but this ivas strictly limited to cases where the whole design and object of the trust scheme had been practically accomplished, and all the interests created h)' it had become vested.

Here the whole design and object of the trust scheme has not

been accomplished, and cannot be while the plaintiff lives to enjoj7the income applicable to her use. “ Trusts are usually created,” said the court in Cuthbert v. Chauvet, “ for the purpose of withholding from the beneficiaries or other interested parties the control and disposition of the principal of the trust fund, for reasons which appear sufficient to the settlor, and they are not, as a general rule, regarded with satisfaction by the persons who are thus deprived of the possession of the trust estate.”

In Douglas v. Cruger, 80 N. Y. 19, it was held that the supreme court had not the power to destroy a valid trust. “ The purpose of the statute,” said Earl, J., “ was to make those trust estates and trust interests indestructible and absolutely inalienable during the existence of the trust, and if they could be rendered alienable by order of the court, the whole scheme of the statute would be greatly impaired and its purpose thwarted.”

The same doctrine was maintained in Lent v. Howard, 89 N. Y. 169.

In Asche v. Asche, supra, it was claimed, independent of the question of merger, that, as upon the death of the children the widow took an estate in the remainder, she would thus become entitled, as heir to her children and the sole beneficiary in the trust, to the immediate possession and control of the trust fund. The court held otherwise, Ruger, C. J., observing: “We do not think so. The object of the creation of the trust estate would not then have been accomplished. The intention of the testator to put the corpus of the fund beyond the hazard of impairment and waste during the life of his wife cannot be defeated or affected by the acquisition by her of the estates in remainder created by the will. The necessity for the maintenance of the trust would remain in full force, notwithstanding the widow’s succession to the rights of her children. By such acquisition she would acquire a future estate, dependent upon the precedent estate of the trustees, but which she cannot enjoy in possession. She might devise it, but cannot possess an estate conditioned upon her own death.”

This is conclusive of the plaintiff’s contention. It follows that all the trusts created by the will in question are valid and indestructible.

The judgment appealed from should, therefore, be modified by striking out so much thereof as adjudges that under the eleventh clause of the will in question the plaintiff, Leila R. Martin, has a valid power of appointment. So far as it upholds the validity of the trusts, it should be affirmed, with costs to the Vustee only, payable out of the estate.


author: Van Brunt. P. J.

text:
    Joseph M. Mullins et al., by Guardian, etc., App’lts, v. Thomas M. Mullins, Impleaded, etc., Resp’t.

      (Supreme Court, General Term, First Department,

      Filed June, 1894.)

    Wn.ii—Construction.
    The legal estate, in case of an express trust to collect the rents during the minority of infants and apply the same to their use, is in the trustee, and he is entitled to the possession of the premises.

      Appeal from judgment entered after dismissal of complaint at a circuit court.

      W. H. Hamilton, for app’lt; Emmet & Robinson, for resp’t.
   Van Brunt. P. J.

—This action was brought to recover possession of house and lot No. 326 East Fifty-seventh street, in the city of New York. It appeared upon the trial that one Ellen Hoey died seized of the premises on the 26th of January, 1890, leaving a last will and testament, which was duly admitted to probate, and letters testamentary issued thereon to the defendant, who was the executor therein mentioned.

By said will the said Ellen Hoey devised the premises in question as follows :

“Second. I give, devise and bequeath the house and lot known and described as number 326 East Fifty-seventh street, in the city of New York, unto my brother, Thomas Francis Mullins, in trust, nevertheless, to have and to hold the same during the minority of the six children of my brother, John Mullins, for the benefit of said children. * * * On said children attaining majority I give, devise and bequeath the house and lot devised in this paragraph to the said six children and the issue of any deceased child, and the survivor or survivors of them, share and share alike, issue to take per capita and not per stirpes, to have and to hold the same to their own use and behoof forever.

Upon the death of the testatrix and the probate of the will, the defendant went into possession of this house and lot, and has collected the rents thereof. All the six children .of John Mullins mentioned in the will were, at the time of the commencement of this action, infants under the age of twenty-one years ; and this action is brought by their guardian ad litem, claiming possession of the premises in question, upon the ground that there being no valid express trust to collect the rents-of the premises during the minority of the infants, there was a present devise of the same to the said infants, and they are entitled to the possession thereof.

The court below disposed of the case upon the ground that the provisions of the will of Ellen Hoey contravened the statute against perpetuities, in that the absolute power of alienation was suspended during the minority of the whole of the six children— necessarily, therefore, for more than two lives in being. This question, however, it does not seem to be necessary to consider in the disposition of this appeal; because it seems to us, upon an examination of the will, and being guided in the construction by the rule that the intention of the testatrix is to govern, if the statute against perpetuities was not contravened, there was an express trust to collect the rents during the minority of these infants and to apply the same to their use, in which case the legal estate would be in the trustee, and he would be entitled to the possession of the premises.

It is undoubtedly true that the draughtsman of the will has expressed the intention of the testatrix in perhaps inartificial language; but the intent seems to be perfectly manifest By a previous clause in the will the testatrix had given to her brother, the defendant, the house adjoining the one in question; and it was her intention that the children of her brother John Mullins should have the other house upon their attaining their majority; and it was furthermore her undoubted intention that the children of her brother John, during their minority, should have applied for their benefit the rents which might be derived from the premises in question. In order to effectuate, this object, she devised the premises in question to her brother Thos. F. Mullins, in trust to hold the same during the minority of the six children of her brother John for the benefit of said children; and then provided that upon the children attaining their majority, such children were to have absolutely the premises in question. Here is a plain intimation upon the part of the testatrix that the defendant is .to hold these premises for the benefit of these infants until they shall attain their majority, when they are to enter into full enjoyment of the bequest. It is clear that the holding of the premises for the use of the children implied the right upon the part of the trustee to enter into possession, to collect the rents, and to apply them to the use of the infants. This is a trust expressly recognized by the statute; and, as has already been stated, authorized the trustee to take possession of the premises, to collect the rents and apply them to the use of the said infants. Simply because a testatrix has used inapt language in order to carry out this plan, or design, is no reason why it should be, defeated. Words have been transposed, words have been supplied, and interpretations given to phrases not accustomed to be applied to them in order that expression may be given to the designs of a testator. Therefore, in a case such as the one at bar it is the duty of the court to place such interpretation upon the language used as effectuates the manifest1 intention of the testatrix.

We are of opinion, therefore, without determining the question as to whether there is a suspension of the power of alienation beyond that which is permitted by the statute, that the defendant, as trustee, has at least the right to the possession of the premises for the purpose of collecting the rents and applying the same to the use of the children of the testatrix’s brother John until such children shall attain their majority.

This view is sufficient to dispose of the question involved in this action, and, therefore, we think that the judgment appealed from should be affirmed, without our expressing any opinion upon the question as to the effect of the statute in respect to the suspension of the power of alienation.

The judgment should be affirmed, with costs.

Follett and Barrett, JJ., concur.


author: Van Brunt, P. J.

text:
    Miles M. O’Brien et al., as Receivers, etc., Resp’ts, v. Frederic A. Kursheedt, Impleaded, etc., App’lts.

      (Supreme Court, General Term, First Department,

      Filed July, 1894.)

      1. Tkial—Mode—Equity.
    The question as to whether an action is one at law or in equity, is not governed by the prayer for relief alone, but also by the allegations contained therein.

      3. Pleadings—Demurrer—Misjoinder.
    In an equitable action by a bank against its directors for violation of duty, all the directors are properly joined in one suit, and the causes of action properly united.
    3. Same—Domestic general statute.
    Where a cause of action is based upon a domestic general statute, it is not necessary to plead the statute.
    Appeal from interlocutory judgment overruling the demurrer of the defendant to the complaint.

      Jos. Fettretch, for app’lt; Samuel Untermyer, for resp’t.
   Van Brunt, P. J.

—This action was brought by the plaintiffs, as receivers of the Madison Square Bank, to recover damages alleged to have been sustained by the said bank through the failure and neglect of the defendants, who were directors of said bank, to perform the duties which devolved upon them by reason of their office. The defendant demurred to said complaint upon the grounds, first, that causes of action had been improperly united, and, secondly, that the complaint did not state facts sufficient to constitute a cause of action.

It is urged by the defendant demurring that no cause of action is stated against him in the complaint at all; because no legislative enactment is referred to which makes it the duty of the defendant to do the things which the plaintiff alleged it was his duty to do upon becoming a director of the Madison Square Bank. This ground, however, does not seem to be well taken, because it is a familiar rule of pleading that it is not necessary to plead a domestic general statute; and that an allegation of default upon the part of a defendant in performing a certain duty may be established by showing that the law governing the position which he occupied required this duty, without any reference in the complaint to the specific general statutes relating to the subject. ' And, furthermore, it may be questionable as to whether the neglects referred to in the complaint require the support of any statutory enactment in order that they may become the basis of a recovery by those who have been injured.

Outside of this criticism of the complaint, the defendant demurring admits that a good cause of action is alleged; but claims that it is a cause of action at law and not in equity, and that, therefore, causes of action against his co-directors and himself could not be joined.

It is conceded upon all sides that if this action is to be treated as an action at law, then causes of action against these various directors cannot be joined; But it is claimed on the part of the plaintiff that the action is one in equity, and that an action of this nature may be maintained. This principle was held in the case of Brinkerhoff v. Bostwick, 88 N. Y. 52, and also in the case of Bauer v. Platt, 72 Hun, 327; 55 St. Rep. 196, where the grounds upon which courts of equity take cognizance of action of this description arec distinctly stated. The complaint in this action was framed upon that which was sustained by the court of appeals in the case of Brinkerhoff v. Bostwick, above cited; the only variatian (and which is claimed upon the part of the appellant to be fatal to the complaint in the case at bar) being in the prayer for judgment. As far as the plaintiff was concerned, in the action of Brinkerhoff v. Bostwick, the declaration as to damage was as specific as that which is contained in the complaint at bar; but in regard to the damages sustained by others who might come in and participate in the action, the prayer for the relief was indefinite, and, therefore, it is claimed that there is a broad distinction between the case at bar and the case cited, inasmuch as in the case at bar the allegation of damage is specific and the prayer for judgment is not conclusive upon the nature of the action. It is true that in the case of Glenn v. Lancaster, 21 Abb. N. C. 270; 15 St. Rep. 196, the court held that the character of the action, whether it was one in equity or at law, was determined by its prayer for judgment

But this view does not seem to have been adhered to in the case of Murtha v. Curly, 90 N. Y. 372. and Bell v. Merrifield, 109 id. 202; 14 St. Rep. 796; in both of which cases it was held that the court might give such judgment as was embraced within the issues, and which the evidence required. It is true that in those cases answers had been interposed, and formed a part of the record in the action in which the relief was granted. But an answer had also been interposed in the case of Glenn v. Lancaster, in which a different rule seems to have obtained.

Taking the latter expression of opinion in regard to the effect of the prayer contained in the complaint, it would seem that it does not definitely determine the character of the action; but that that must be determined, having in view not only the prayer of the complaint, but also the allegations therein contained. In the case at bar, it appears distinctly that this action was brought for the purpose of the ascertainment and recovery of the damages which had been caused by the various directors named as defendants by their neglect of duty; and that, for the purpose of avoiding multiplicity of suits, as well as for other reasons, such an action must necessarily be an equitable action in order that the rights of all parties may be protected. With this character stamped upon all the allegations of the complaint, the mere prayer for judgment should not be allowed to throw the plaintiffs out of court when they would be entitled to equitable relief, although, perhaps, they might not be entitled to maintain the action as one strictly at law.

We are of the opinion, therefore, that the interlocutory judgment should be affirmed, with leave to the defendant to answer upon payment of the costs of the appeal and in the court below.

Follett and Parker, JJ., concur.


text:
    Miles M. O’Brien et al., Receivers, etc., Resp’ts, v. Lawrence J. Fitzgerald, Impleaded, etc., App’lts.

      (Supreme Court, General Term, First Department,

      Filed July, 1894.)

    Appeal from an interlocutory judgment overruling the demurrer of the defendant to the complaint.

      Jos. Fettretch, for app’lts; Samuel Untermyer, for resp’ts.
   Van Brunt, P. J.

—For the reasons stated in the opinion handed down in the case of O'Brien v. Kursheedt, 61 St. Rep. 470, the interlocutory judgment appealed from should be affirmed, with leave to the defendant to answer upon payment of the cost of the appeal and in the court below.

Follett and Parker, JJ., concur.


text:
    Marie T. Upington, Resp’t, v. Michael A. Corrigan et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed June, 1894.)

    Winn—Devise.
    Grantor’s right of re-entry for breach of condition subsequent is not devisable, but vests in his heirs at law.

      F. R. Coudert, for app’lts; James M. Hunt, for resp’t; George Bliss, for def’t Pooler.
   Barrett, J.

—All but two of the questions now presented were decided adversely to the defendant upoú the previous appeal. 69 Hun, 320; 53 St. Rep. 310.

The defendants’ main contention upon the present appeal is that the right of action for breach of the condition subsequent, passed under the will of Mary McDonough Davey to her devisees, and, consequently, that the plaintiff claiming as heir at law must fail.

It is conceded that this position would not be tenable at common law, but the. appellants insist that our statute of wills is broad enough to cover such a devise. There can be no doubt that, under this statute, every interest in real property is devisable. 2 R. S., 57, § 2. Such was the expressed intention of the revisers (see note, 5 ed. Statutes at Large, p. 365). Commenting upgn this statute, Chancellor Kent says (Commentaries, vol. 4, p. 512): “ The Hew York Revised Statutes have altered the language of the law and put all debatable questions to rest * * * by declaring that every estate and interest descendible to heirs may be devised.”

The question, then, is whether Mrs. Davey’s right, upon the breach of the condition subsequent, was devisable. If that right was an interest in land, it was devisable. Otherwise, it passed to the grantor’s heirs. It is well settled that this right is inalienable, Nicoll v. N. Y. & Erie R. R. Co., 12 N. Y. 121, and it is difficult to see how that which is inalienable, because the grantor has neither interest nor estate to alien, can be devisable. We agree that, under the broad provisions of the statute of will, expectant and future estates, contingent as well as vested, are devisable. So are interests in lands of every kind. So is a right of entry, without seizin, Jackson v. Varick, 7 Cowen, 238, even though, at the time of the devise and of the devisor’s death, the land be in the adverse possession of another (same case). The right of entry here spoken of is, however, a vested right descendible to the heirs at law. Even a possibility coupled with an interest is devisable it the person in whom the interest is to vest can be ascertained, Pond v. Bergh, 10 Paige, 153, though a mere naked possibility is not. Deas v. Harris, 2 Hill, Ch. S. C. 248; Nicoll v. N. Y. & Erie R. R. Co., supra, p. 139. So, where the grantor has an interest, indepemhint of the possibility of reverter, as where he has a reversion of what remains after the expiration of a particular estate, he may assign and doubtless devise such reversion, and with it his right of entry for non-performance of a condition subsequent Nicoll v. The N. Y. & Erie R. R. Co., supra.

Where, however, there is a grant of an unqualified fee, the rule is invariable that a condition subsequent reverses to the grantor no estate or interest in the land. Every estate and interest of the grantor passes, absolutely, to the grantee. A blear understanding of the nature and legal effect of a condition subsequent is all that is essential to a correct solution of the present question. It is well settled that upon breach of the condition the estate does not ipso facto revest in the grantor. The grantor may not avail himself of the breach, and no one else can take advantage of it. In Schulenberg v. Harriman, 88 U. S. R. 63, Mr. Justice Field, speaking’ for the supreme court of the United States, said: “And it is settled law that no one can take advantage of the non-performance of a condition subsequent annexed to an estate in fee but the grantor or his heirs, or the successors of the grantor if the grant proceed from an artificial person; and if they do not see fit to assert their right to enforce a forfeiture on that ground, the title remains unimpaired in the grantee." This case was cited with approval and followed in Towle v. Remsen, 70 N. Y. 312.

The grantor has a right of entry, which he must assert before the estate is restored. This right of entry was defined in De Peyster v. Michael, 6 N. Y. 506, in this wise: “It is not a reversion, npr is it the possibility of reversion, nor is it any estate in the land. It is a mere right or chose in action, and if enforced, the grantor would be in by the forfeiture of a condition, and not by a reverter."

And Ruggles, O. J., illustrated this further, as follows : “It is a totally different interest from the possibility of reverter spoken of by Goke, and in the ‘Touchstone.’ It is no more than the possibility of a forfeiture. When property is held on condition, all the attributes and incidents of absolute property belong to it until the condition be broke'n.”

The authorities are unvarying in their assertion of this doctrine. Thus, in Nicoll v. N. Y. & E. R. R. Co., supra, it was held that a failure to perform a condition subsequent does not divest the title, and that the right of entry which results from the breach is not a reversion or an estate in land. “The grantor or his heirs," said Parker, J., “may not choose to take advantage of the breach, and until they do so by entry, or by what is now made by statute its equivalent, there is no forfeiture of the estate. This was the common law, and it has not been altered by statute so as to give a right of entry to an assignee in any instance not' coupled with a reversionary interest, as in the cases of estates for years and for life, except in cases of leases, or rather of grants in fee, reserving rent. To that extent the law was changed in England by 82 Henry VIII (ch. 34); and similar enactments have been made in several of the states. In this state these provisions will be found at 1 R S. 748 (§§ 23, 24 and 25), and are limited to grants or leases in fee reserving rents, and to leases for lives and for years. As to other grants upon condition the common law is unchanged.” See, also, observations of Gardner, J., on papers 139 and 140.

The rule stated in this case was reaffirmed in Towle v. Remsen, surpa, and Duryee v. Mayor, 96 N. Y. 497, and again in Vail v. Long Island R. R. Co., 106 N. Y. 283 ; 8 St. Rep. 700, where Andrews, J., observed that “the possibility of reverter merely is not an estate in land, and until the contingency happens the whole title is in the grantee.” It was also clearly asserted by the Supreme Court of the United States in Ruch v. Rock Island, 97 U. S. [7 Otto.], 496, Mr. Justice Swayne using this language: “If the conditions subsequent were broken, that did not ipso facto produce a reverter of the title. The estate continued in full force until the proper step was taken to consummate the forfeiture. This could be done only by the grantor during his lifetime, and after his death by those in privity of blood with him. In the meantime only a right of action subsisted, and that could not be conveyed so as to vest the right to sue in a stranger.”

The rule laid down by all these authorities is decisive of the present question. As was said in the case last cited, no one could claim the forfeiture save the grantor during his lifetime, and after his death those in privity of blood with him ; no one, in fact, save the grantor and his heirs (see Schulenberg v. Harriman, supra).

This rule runs unvaryingly through all the cases. The option is personal to the grantor ana his privies in blood. The grantor cannot confer the option to claim or not to claim the forfeiture, upon another, either by assignment or devise. Nor can the devisee of the grantor take advantage of the condition. Southard v. Central R. Co., 26 N. J. L. 121. A different rule seems to have been laid down in Massachusetts (21 Peck. 215), possibly as stated in note 1, p. 904, vol. 6, of American and English Encyclopedia of Law, because of the construction of a clause in the public statutes of Massachusetts (chap. 173, sec. 3).

It is conceded that there was no breach at the time of Mrs. Davev’s death. But even if there had been such breach, the then unclaimed right to take advantage of such breach did not go to her devisee, but vested in her heirs at law.

This disposes of the main question. It was also claimed that the question as to what was a reasonable time to fulfill the condition was not correctly decided. We think, however, that the evidence amply supported the finding of fact on this head, as well as the conclusion of law, that the condition subsequent had been broken.

The action was properly brought. The title is in Archbishop Corrigan, not as the spiritual successor of Archbishop Hughes, but as the devisee of Cardinal McCloskey, who took as devisee of Archbishop Hughes. Archbishop Corrigan is made defendant upon the same principle as though he were the grantee of Bishop Hughes. He is in possession claiming the fee. As were said in Jackson v. Topping, 1 Wend. 394: “The grantee having conveyed to the defendant, the suit is necessarily against him. If enough has been shown to entitle the lessor to recover, had the first grantee continued in possession, it is sufficient against the defendant. He succeeds to the right of his grantor and no more. He represents him, and, for the purpose of this suit, stands in his place. In law there is a privity of estate between them ; and if there has been a forfeiture it cannot be defeated by a transmission of the title from the one to the other. This was an estate upon condition.”

Our conclusion is that there was a breach of the condition subsequent prior to the commencement of this action; that a right of re-entry thereupon vested in Mrs. Davey’s heirs at law, and that this right was duly asserted by the present proceedings.

It follows that the judgment appealed from was right, and should be affirmed, with costs.

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


author: Parker, J.

text:
    Ferdinand A. Fischer et al., Pl’ffs, v. Issac H. Burns et al. Def’ts.

      (Supreme Court, New York Special Term,

      Filed July, 1894.)

    1. Parties—When not necessary. ' 0
    In an action to set aside a contract or stipulation, a person who has no interest in it nor has acquired any right by it which he can enforce, is not a necessary party thereto.
    2. Money paid—Recovered back.
    Payments made in settlement of a disputed claim can be recovered back, when the facts show a positive and fraudulent statement of a material fact which is believed and is the inducement for the settlement. •
    3. Same—Costs.
    In such case, payment of costs by the defrauded party directly to the opposing attorney, solely by reason of a fraud perpetrated by his client, may be recovered back.

      Charles W. Dayton, for pl’ffs; Benno Lewinson and Bostwick, Morrell & Bates, for def’ts.
   Parker, J.

—The action is to set aside a contract, which is claimed to have been induced by the fraudulent representations of the defendant Burns, and to recover back moneys paid thereunder.

The only question before me is whether the plaintiffs can recover on the case, as they have set it forth in their complaint. If I conclude that they can, the issues of fact raised by the answer are, by the mutual stipulations of parties in open court, to be sent to a jury for trial.

It is averred in the complaint substantially as follows: Fischer, Schroter and Pause were copartners. In August, 1892, it was agreed between them that Pause should retire from the firm, and transfer all his interest therein to the others, in consideration of a certain amount of cash and a note, with approved indorser, delivered to him, and that the others should continue the business under the old firm name of Fischer, Schroter & Co. On August 16, 1892, they, Fischer and Schroter, under such firm name, made a note for $1,500, payable to the order of Pause, due in four months, procured it to be indorsed by the plaintiffs, George, Frank and Louis Hertz and delivered it to Pause, under the agreement that he would, on August 29, 1892, consummate the agreement by a writing dissolving the firm, and transferring all his interest therein to Fischer and Schroter. Pause kept the note, but, instead of executing the writing and transferring all his interest to the other’s, he and Schroter on the 29th commenced an action whereby the firm was dissolved, and all its property passed into the hands of a receiver.

Criticism is made by the defendants as to the meaning of the averments on this subject, but I think there can be no doubt but that the above facts are substantially set forth in the complaint.

Manifestly, if such averments are true, neither Pause nor any one, except a bona fide holder for value, could recover against the markers or indorsers upon such note. The condition upon which it was delivered to Pause was never performed, and its consideration utterly failed.

It is further averred in such complaint that, upon the maturity of such note, Isaac H. Burns, who is the defendant in this action, commenced an action in this court against the makers and indorsers of such note (including therein Pause as the immediate indorser to himself) for the collection of such note. Pause and Schroter made default in that action, but the other defendants, who are the plaintiffs in this action, answered, setting up substantially the defense above stated, and averring, on information and belief, that Burns was not a bona fide holder of the note for value, but took it subject to such defense.

The complaint then goes on to aver that, after such issue joined, the defendant Burns represented to these plaintiffs that he had purchased the note before maturity from Pause for a valuable consideration, and without knowledge of the circumstances under which it was made and delivered. That he was, in fact, a bona fide purchaser and holder for value before maturity, and that they, believing and relying upon such representations, were thereby induced to withdraw their defense and to enter into a written stipulation in such action which is fully set forth in this complaint.

The stipulation is dated April 5, 1893, and is to the effect that $500 of principal and some interest and $52 costs had been that day paid by Joseph F. Stier, trustee, to Burns and his attorney, and that Fischer and the Hertzes (the plaintiffs in this action) agreed with Burns that the answer in such action should be deemed withdrawn, and that the action should be discontinued, without costs to either party, and upon the payment to Burns or his attorney of $500 and interest on May 5, 1893, and $500 and , interest on the 5th of June, 1893, upon which last payment the note should be surrendered to Fischer and the Mertzes. And that, upon default being made in either payment, judgment might be entered in the action without further notice against Fischer and the Mertzes. The complaint further avers that these plaintiffs paid such sum of $500, interest and costs that were paid April 5, 1893, and also paid the further sum of $500 and interest that became due under the stipulation May 5, 1893.

It would appear from the stipulation and receipt indorsed thei'eon that the payments were made by Joseph F. Stier, and the point is made by defendants’ attorney that he is, therefore,' a necessary party to this action. Just why a trustee is necessary in such a settlement is not very apparent, but it is clear (assuming the averment that plaintiff paid the money to be true) that he had no personal interest in the transaction, but acted solely for the plaintiffs. They alone had defended that action, and this stipulation was necessary and effectual only as against them. Their rights alone are affectéd by it, and, therefore, I can see no reason why Stier should be made a party in an action to set it aside.

The complaint further avers that the above representations made by Burns were utterly false and fraudulent, and that they were made in pursuance of a collusive arrangement between him and Pause, by which he should falsely assume the character of a Iona fide holder for value, and thus be able to prevail against the defense which, in fact, they knew to exist against such note. That, in truth, he paid nothing for the note, but held it merely to the use of Pause, and that plaintiffs have only recently learned of the falsity of such representations. It also avers that Burns is utterly insolvent.

On these facts the plaintiffs ask that the money paid under it be restored to them, and that all parties be restored to the same position in which they were before such settlement was made.

A motion in the action on such note was made by Fischer and the Mertzes, after they discovered such fraud, for relief against such stipulations, but that motion was denied without prejudice to this action. References have been made to those affidavits in the complaint in this action. I have not considered such affidavits as a part of this complaint, nor do I consider any of the facts therein stated as being now before me, except so far as they are particularly restated in this complaint. Manifestly, such a reference to those affidavits is not a proper pleading of the facts therein contained.

The defendant Burns contends that the plaintiffs are not entitled to recover, upon the facts set forth in such complaint, for the following reasons:

First. That the necessary parties are not before the' court. The contract, or stipulation, sought, to be set aside was between the plaintiff and Burns only. Neither Schroter nor Pause had any interest in it, nor acquired any rights by it that they could enforce against the plaintiffs. Though Schroter was a member of the firm, that made the note, I fail to see how he could be heard to deny Fischer’s claim for this relief, as against Burns. He has no claim to insist that Fischer's money should pay the firm debt, and nothing in the complaint indicates that he had any interest in the money that was used by Fischer. Therefore, he does not seem to be a necessary party to settle the question whether it was procured from Fischer by the fraud of Burns. As to Pause, he never was a member of the firm that issued the note, and has no claim whatever to insist that the settlement must stand. Under the averments the money must be deemed to have been paid by these plaintiffs, and the settlement is evidently with them, and hence no other parties are necessary to a complete determination of the questions presented.

Second. That the payments made, as avered in the complaint, must be deemed voluntary payments, and the settlement a voluntary one. But the basis of the action is fraud, and if the plaintiffs were fraudulently induced to make the stipulation and payments, they cannot be deemed to be voluntary. And the argument that plaintiffs were not, in fact, induced to make such settlement by the fraudulent statements; that they did not believe them : that they knew they were false, but settled because they could not prove them so, cannot be considered by me in the face of the positive averment in the complaint that they believed the statements of Burns, relied upon them, and were thereby induced to make the stipulations they now seek to avoid. The cases cited by defendants’ counsel, to the effect that payments made in settlement of a disputed claim cannot be recovered back, are all lacking in the element of fraud, and none of them are authority, when the facts show a positive and fraudulent statement of a material fact which is believed, and which is the inducement for the settlement. I cannot agree with the defendants’ counsel that it appears from the complaint that plaintiffs knew, at the time they made the settlement, or even believed that Burns was not a bona fide holder. They suspected he was not, but his positive statements overcame their suspicion and induced them to settle. Such, is the fair meaning of the statements set forth in the complaint. Baker v. Spencer, 47 N. Y. 562.

Third. The defendant claims that the complaint does not show that the note in question ever had a valid inception, or that the consideration thereof had failed, and that hence no case for equitable relief is made. It seems very clear to me that the note, if given under the circumstances averred in the complaint, could not be collected by Pause, or any one except a “bona fide holder for value.” And, therefore, Burns, unless he was such a holder as he claimed to be, has obtained by the settlement money and rights to which he was not entitled. The fact that he is insolvent is sufficient to give a court of equity cognizance of the matter, and I conclude that the facts set forth in the complaint warrant the relief asked, as against the defendant Burns.

As to the defendants Coleman and Donohue no charge is made that they were at all privy to the fraud of Burns, but it is charged that $52 of the amount which plaintiffs so paid, because of the fraud of Burns, was paid direct to them as and for their costs in that action, and the relief asked as against them is that they refund that amount to the plaintiffs. If the $52 had been paid to Burns, and he had subsequently used it to pay his attorneys, there would not, I think, be any ground for seeking to reach that amount in the attorneys’ hands; but inasmuch as the money was paid directly to the attorneys by the plaintiffs, and the inducement to make such payment was the fraud of Burns, I do not think that the attorneys can retain the money - so procured from the plaintiffs.

They cannot, any more than Burns, retain money which was delivered to them by the plaintiffs, solely by reason of a fraud perpetrated upon the plaintiffs, even though the fraud was perpetrated by another party.

I conclude that the complaint states facts sufficient to constitute a cause of action against all the defendants, and that there is no defect of parties. An order must be entered denying the motion for judgment on the complaint, and sending the issues of fact to a jury for trial. The parties may incorporate in the order entered herein a settlement of the issues so to be tried, or, if they cannot agree, either party must be at liberty to move the court for a settlement of such issues in the usual way.


author: Gaynor, J.

text:
    The People ex rel. Brooklyn Traction Company, Pl’ff, v. The Board of Assessors, Def’t.

      (Supreme Court, Kings Special Term,

      Filed July, 1894.)

    Tax—Corporations.
    A corporation is not taxable upon stock held by it in another corporation, whose capital is taxable.
   Gaynor, J.

—All lands and personal property, whether owned by corporations or individuals, are alike liable to taxation. 2 E. 5., part 1, chap. 18, title 1, § 1. The property of a corporation is called its capital. The capital of a corporation is the same as the capital of an individual; and each is subject to the same taxation. It is not the paper certificates of shares of capital in a corporation that are taxed. They merely represent and evidence the distributive portions of the capital, or' substance, of the company which would go to the different shareowners upon the dissolution of the company; and it is this capital, or substance, which is taxed. The actual property, not the paper certificates representing it, is what is taxed. To tax the property, and then the paper certificates representing it, would be taxing the same property twice. It would be the same as taxing so many acres of land, and then taxing the title deeds of it. But our tax laws allow no such thing; nor is there anything in them to suggest or make credible that assessors might ever attempt to do the like. Indeed, as if to preclude the possibility of it, the legislature expressly made the “owner or holder” of stock in any corporation, which is liable to taxation ón its capital, not liable to be taxed for such stock, 2 E. 5., part 1, chap. 13, title 1, § 7; obviously meaning the paper certificates of the shareholder, and not the proportion of the property, real and personal, of the corporation represented by them, for the title to that is, not in a shareholder at all, and it is, therefore, not taxable against him; but, on tne contrary, the title to it is in the corporation, and it is, therefore, taxable against the corporation. 1 R. S., part 1, chap. 13, title 1, § 1. The relator, the Brooklyn Traction Company, is the owner of shares of stock in, the Atlantic Avenue Railroad Company. It may no more be taxed upon said shares than may any other owner of shares in the said company be taxed upon his shares. This is obvious; but, nevertheless, the legislature, in a spirit which, except for the occurrence of this ease, would have to be deemed needless caution, has commanded assessors in the marshalling of the assets of corporations for taxation to exclude or deduct all shares of stock owned by them in corporations whose capital is taxable. Laws 1857, chap. 456, § 3.

Judgment for the relator, with costs and disbursements.


author: Bookstaver, J.

text:
    Neuchatel Asphalt Company, Limited, Pl’ff, v. The Mayor, Aldermen and Commonalty of the City of New York et al., Def’ts.

      (New York Common Pleas, Special Term,

      Filed July, 1894.)

    1. Corporations—Foreign—Doing business.
    A contract made in violation of § 15, chap. 687 of 1892, cannot be enforced.
    2. Same—Subsequent certificate.
    The procuring a certificate subsequently will not validate such contract.
    3. Mechanic’s lien—Action.
    A sub-contractor, who is a defendant in an action duly commenced, will be permitted to recover on his answer therein, though, in an independent action attempted to he commenced by him the principal contractor had never been served.
    4. Same—Sub-contractor.
    A non-answering defendant sub-contractor will be refused participation in a judgment, though he apparently received an order signed by the principal contractor, where he has made no attempt to authenticate such order.

      Foley & Powell, for pl’ff ; Knevals & Perry, for def’ts.
   Bookstaver, J.

—On the 12th of April, 1893, the defendant, Mathias Theriault, made a contract with the defendant, The Mayor, &c,, to do certain work and furnish certain materials for the latter in the alteration of a building near the foot of Bast Sixteenth street. Theriault made various subcontracts for doing portions of the work, and the contractors, not being paid on the completion of their work, filed liens againts the property. Thereafter, the plaintiff and several other contractors commenced separate actions to foreclose these liens, and they were all consolidated in the above entitled action.

On the trial, the defendants other than The Mayor, &c., contended the plaintiff could not maintain its action, on the ground it was a foreign stock corporation and had not filed the requisite certificate at the time of making the contract and doing the work, and also on the ground that the action was not commenced against the principal contractor within the time limited by law.

The first of these is the most important. It is based upon § 15, Gen. Corp. Laws, chap. 687, 1892, which provides “that no foreign stock corporation, other than a monied corporation, shall do business in this state without first having procured from the secretary of state a certificate that it has complied with all the requirements of law to authorize it to do business in this state, and that the-business of the corporation to be carried on in this state is such as may be lawfully' carried on by a corporation, incorporated under the laws of this state for such or similar business, or if more that one kind of business, by two or more corporations so incorporated, for such kinds of business respectively. The secretary of state shall deliver such certificate to such corporation so complying with the requirements of law.” And further providing, that no such corporation now doing business in such state shall do business .therein after December 31st, 1882, without having procured such certificate from the secretary of state, but any lawful contract previously made by the corporation may be performed and enforced within the state subsequent to such date. And further provided, that no foreign stock corporation, doing business in this state without such certificate, shall maintain any action in this state upon any contract made by it in this state until it shall have procured such certificate. The complaint alleges that the plaintiff is a foreign corporation, and was employed by the principal contractor as laborer and merchant to furnish certain materials and to do certain work on the building in question, and on the trial .it was proved that the plaintiff was a foreign stock corporation organized under, the-laws of Great Britain, and had been doing busÍ7iess within this state for fourteen or fifteen years, but that the certificate required by' the section above quoted was not obtained until the 4th of December, 1893, after making the contract, doing the work and filing the lien. These facts, I think, bring the plaintiff squarely within the prohibition of the law. That the legislature has the power to make such a provision is clearly declared in Demarest v. Flack, 128 N. Y. 217; 40 St. Rep. 383, where it is said : “The power rests with the legislature to say whether any, and if so, what terms shall be imposed upon such corporations as a condition of granting them permission to do business here.”

In this case, the prohibition being absolute, no contract made in violation of it can bo enforced. In Hall v. Bishop, 3 Daly, 109, this court held: “That where the object of requiring a license is to limit the pursuit of certain callings, a penalty implies a prohibition against engaging in that pursuit unless a license is procured." In the case under consideration this prohibition is not implied but expressly declared. In the case last cited it was also said: “It was not in plaintiffs power without a license to carry on the business of giving legal advice in relation to any matter whatever.” In accordance with this decision we have recently held that a plumber doing work as such without first having obtained the license required by law cannot maintain an action to recover for work so done. Bloom v. Saberski, 59 St. Rep. 277 ; see, also, Lowey v. Granite State Provident Ass'n, 59 Id. 246 ; 28 N. Y. Supp. 560. But this court is not alone in this view of the law. In Best v. Bander, 29 How. 489, it was held that a contract of sale made by a peddler without having the license required by the act-of Congress, approved July 1, 1862, was invalid. In De Witt v. Brisbane, 16 N. Y. 508, where the parties were engaged in business in violation of the banking laws, the court of appeals said : “Ho court will lend its aid to a man who founds his action upon an illegal contract It says to him that, even though he suffer injustice at the hands of the defendant, he has no right to invoke the assistance of the court, for he himself has transgressed the law.” In Griffiths v. Wells, 3 Den. 226, plaintiff sought to recover for liquor sold at retail, he having no license for that purpose. The court said: “The principle of law is well established in this state, where the law prohibits the doing of a thing, or provides a penalty for doing that thing, contracts made in contradiction thereof are wholly illegal.” So, too, under the act of 1833, prohibiting persons from transacting business under fictitious names and making the violation thereof an offense punishable by fine, the superior court held, in Swords v. Owens, 34 N. Y. Supr. 277, that contracts made by those doing business under a firm name, when there were no actual parties to represent the “& Co.,” were void.

Plaintiff seeks to avoid the force of this contention by claiming that only a single piece of work, to wit, the one in question, was proved to have been done by it in contravention of the law, and that one act does not fall within the prohibition. II this were well founded, I would he loath to hold against that view, especially as I regard plaintiff’s claim a just one. But the complaint is so framed as to imply that the work done.by it in this case was its ordinary business, and, besides, it avers that it did this work both as laborer and merchant, and the latter word of itself imports “doing business” within the meaning of the statute. Besides, the prohibition is as board as language can make it. While the evidence shows that the plaintiff lias been “doing business” in this state for many years, and express provision was made for such cases in the act extending the time to procure the certificate until the 31st of December, 1892.

Plaintiff also contends that, even if the contract made by it falls within the prohibition, the only penalty provided by the act and incurred by it was that it could not maintain an action on such contract until it had procured the certificate, and as it had done this before the action was commenced, it ought now to be allowed to prosecute it. The first difficulty with this contention is that the act itself forbids foreign stock corporations doing business without first procuring the certificate, thus making the contract illegal and not enforceable in the courts of this state, as is clear from, the provision regarding foreign corporations doing business within the state at the time of the passage of the act; for it says that no such corporation shall do business therein after December 31st, 1892, until the certificate is procured, and expressly provides that contracts made before that date “may be performed and enforced” after that date. Thus clearly cotiplying the enforcement with the doing of the business, and bringing both,,within the same rule. To hold otherwise would practically nullify the statute, for foreign corporations might, as this one has done, do business in this state for years and never comply with the law •until some dispute arose, and then, and not till then, procure the certificate in order to maintain an action against one .of our own citizens. In the meanwhile our citizens having claims against such companies, if an officer of the corporation could not be served with process and it had no property within the jurisdiction of our courts, would be left remediless.

Having arrived at this conclusion as to the first question presented, it would be unnecessary to examine whether or not the action could be maintained, because it was not commenced within the time limited by law, were it not for the fact that this question is also raised as against the defendant Thompson. - He filed a lis pendens in his own action January 27th, 1894, but did not be.gin an action until long after that time, and has never served Mathias Therisault, the principal contractor. It has been repeatedly held by this court that actions to foreclose mechanics’ liens are not to be deemed commenced until the principal contractor has been served or the process lodged with the sheriff in good faith for service. Henry v. Lynch. 1 N. Y. Supp. 780; Smith v. Gault„ 5 Monthly Bull., May, 1883 ; Kelsey v. Combe, 50 How. 358. But Thompson was made a party defendant in several of the actions which have been consolidated with this, and has duly answered in this action, so I think he is entitled to recover on his answer. § 17, Mechanic’s Lien Law, 1883, as amended in 1885 ; McAllister v. Case, 24 St. Rep. 52 ; 5 N. Y. Supp. 918 ; Danzinger v. Simonson, 116 N. Y. 335 ; 26 St. Rep. 708; Moran v. Murray Hill Bank, 32 St. Rep. 102; 9 N. Y. Supp. 715.

As Jatneson was allowed to appear and serve his answer without objection by the defendants, I think he also should recover. Various objections were made by .plaintiff to the sufficiency of the notices of liens of the several defendants, but as it is now out of the case, and the insufficiency of the notices of liens is not urged by the defendants as against each other, I do not deem it necessary to examine them or to say anything on that point further than that it would not be very safe for any of them to do so.

The defendant Wines not having answered, although he apparently received an order signed by the principal contractor and on file with the comptroller, cannot participate in any judgment to be rendered in this action, as he has made no attempt to authenticate his order.

It was agreed on the trial that the various claims, if allowed, should be without interest or costs. My findings handed down herewith sufficiently express my views on the other questions in the case.


author: Martin, J.

text:
    Montraville W. Atwood et al., Resp’ts, v. Martin Barney, App’lt.

      (Supreme Court, General Term, Fourth Department,

      Filed July, 1894.)

    1. Evidence—Books of account.
    Proof that parties had dealt with plaintiff, settled from his books and found them correct, is sufficient to establish that he kept fair and honest accounts, and to authorize their admission in evidence.
    2. Same—Clerks.
    Such books will not be excluded on the ground that the plaintiff kept a clerk during the time of the dealings in question, where it appears that he had no regular, but only temporary, clerks, and that the entries were made under his general supervision, within his knowledge, usually in his presence and at his suggestion, and that those made by such clerks were correct.
    Appeal from a judgment in favor of plaintiffs.

      George E. Morse, for app’lt; Wayland F. Ford, for resp’ts.
   Martin, J.

—Practically, the only question which arises upon this appeal is whether the plaintiffs’ books of accounts were properly admitted in evidence. The plaintiffs were hardware merchants doing business at Clayton, Jefferson county, N. Y. The books admitted in evidence were the books of account kept by them in the regular course of their business. The appellants contend that the referee erred in admitting these books — First, because the plaintiffs kept a clerk during the time of the dealing between the parties; and, second, because there was no proper proof that the plaintiffs kept fair and honest accounts. Several witnesses were called, who testified that they had dealt with the plaintiffs, settled from their books, and that they found them to be correct. We think this was sufficient evidence that the books were fairly and honestly kept. The plaintiffs’ testimony was to the effect that during the time this account was running they had no regular clerk, but that they sometimes employed persons to help them about the store for a few days or months, also employed persons to assist them temporarily in posting their books, and that the entries made on their books by others were made under their supervision, in their presence, and at their suggestion. On cross-examination the plaintiffs testified that they could not swear they were always present when the charges on the books were made, or that they saw or gave directions as to every charge. The witnesses Marshall and Sumner both testified that the work they did was correctly done, and that when goods were sold or charged by them the sales were correctly reported to the plaintiffs, or correctly entered upon the plaintiffs’ books. A fair construction of this evidence leads to the conclusion that the entries were made under the general supervision of the plaintiffs, with their knowledge, usually in their presence, at their suggestion, and that those made by Marshall and Sumner were correct Under these circumstances, can it beheld that the plaintiffs’ books vrere'inadmissible? In Sickles v. Mather, 20 Wend. 72, where the plaintiff had in his employ a foreman, who delivered the goods sold by the plaintiff to the defendant, and who kept a slate at the factory, on which he made a memorandum of the goods delivered, from which the plaintiff made his entries on a daybook, it was held that he was not in any sense a clerk, for the purpose of verifying the books, and hence not within the doctrine of the case of Vosburgh v. Thayer, 12 Johns. 462, which is the leading case in this slate on the question of the admission of books of account in evidence, and which holds that where there are regular dealings between the parties, and it is proved that the plaintiff keeps honest and fair books of account, that some of the articles charged to the defendant have been delivered to him, and that he keeps no clerk, his books of account are admissible in evidence. In McGoldrick v. Traphagen, 88 N. Y. 334, 338, it was said: “We think that the clerk intended was one who had something to do with, and had knowledge generally of, the business of his employer, in reference to goods sold or work done, so that he could testify on that subject. It evidently means an employe whose duty it is to attend to the duties of business, and thus is able to prove an account, and not one who, from his isolated position as a bookkeeper, can have but little means of knowledge personally as to the transaction done, or information relating thereto, except what is mainly derived from others. The latter position was that occupied by the bookkeepers of the respondent, and they were in no sense clerks, within the meaning of the law as to evidence of this character.

See also Cobb v. Wells, 124 N. Y. 77; 34 St. Rep. 968, and cases cited in opinion.

The obvious purpose of the rule limiting the admission in evidence of books of account to cases where the party has no clerk is to withhold this class of evidence where the party has some third person in his employ, whose business it is to notice the sales made or services rendered, and to make entries of them in the books as they occur, and by whom he can prove the sale or services for which he seeks to recover. While this may be a border case, still we are of the opinion that the plaintiffs had no such clerk as would-prevent the admission of their books under the rule established by the Vosburgh Case, and that, under the evidence, they were properly received.

The case, however, discloses that in the plaintiffs’ account there was included $4.41 for goods delivered to other persons, and as to which there was -no evidence of any authority from the defendant to deliver them to the persons receiving them. This amount should therefore be deducted from the plaintiffs’ recovery. Again, the plaintiffs’ books contained a charge of $15 for cash. This was not a proper subject of book account; and under the Vosburgh Case, and subsequent cases following it, the books were insufficient evidence to justify a recovery therefor. There was no other evidence that would authorize the allowance of that sum. The defendant denied having it, and the plaintiffs testified that they had iio recollection of paying or loaning him that amount. It follows therefore, that the judgment herein should be modified by deducting from the amount of the recovery, as of the date of the judgment., the sum of $19.41, with interest from February 13, 1889, to September 25, 1893, which amounts to the sum of $5.15.

Judgment modified by deducting therefrom, as of the time of its entry, the sum of $24.56, and, as so modified, affirmed, without costs of this appeal to either party. All concur.


author: Martin, J

text:
    James Radley, Resp’t, v. Richard Connell, App’lt.

      (Supreme Court, General Term, Fourth Department,

      Filed July, 1894.)

    Appeal—Amendment—Harmless.
    An amendment of the complaint on the trial does not prejudice the defendant, where the plaintiff might have introduced the same proof without, as with, the amendment.
    Appeal from a judgment in favor of the plaintiff.

      N. F. Breen, for app’lt; Rogers & Atwell, for resp’t.
   Martin, J

—This was an action for an accounting between the parties. There had been dealings between them prior to November 8, 1889. Upon that day they had a settlement, and the plaintiff gave the defendant his note for $1,280.32, the amount claimed by the defendant to be due him, and executed and delivered to him a chattel mortgage to secure the payment of such note. At the time the note and mortgage were given, the plaintiff was a tenant of the defendant, and they were given as security for the rent due from the plaintiff to the defendant at that date. From that time until November 15, 1892, the plaintiff continued to occupy under the defendant a farm or farms, working it or them on shares. ' Between November 8, 1889, and November 15, 1892, a mutual account arose between the parties. During that time the defendant advanced and paid various sums of money for, and delivered various articles or property to, theplaintiff. During the same time the plaintiff delivered to the defendant, or to others by his order, substantially all the produce raised upon such farm or farms, a large amount of hay, straw, grain, and other produce, which was his individual property, performed labor and services for the defendant, and made various payments to him in cash. On January 14, 1893, the defendant obtained from the plaintiff another chattel mortgage, in which it was stated that it was given as additional security for the payment of the debt secured by the note and mortgage given November 8, 1889. At the commencement of this action, the defendant was about to foreclose such mortgages and sell the property for the payment of the amount of such note and interest. The defendant claimed at that time that the whole amount of the note, with interest from its date, was still due and unpaid, while the plaintiff claimed that the amount due the defendant was much less. Upon the trial, the referee found that the note for $1,280.32 and the mortgage first mentioned were given ¡November 8, 1889, and that a mutual account subsequently existed between the parties. He then stated the account between them, and found that there was due from the plaintiff to the defendant only the sum of $748.83, including the amount secured by such note and chattel mortgages. He also found that the» second mortgage was procured by the fraud of the defendant, was without consideration, and void, and held that the plaintiff was entitled to a judgment adjudging: (1) That the amount of the plaintiff’s indebtedness to the defendant was only the sum of $748.83, with interest from December 31, 1892; (2) that the chattel mortgage of ¡November 8, 1889, should be enforced against the plaintiff for only that amount; (3) that the other chattel mortgage was procured by fraud, was without consideration, and void, and that the defendant acquired no lien upon the plaintiff’s property by reason thereof; and (4) that the plaintiff should recover costs against the defendant.

The question principally litigated on the trial was whether there was a settlement between the parties on December 31,1892. That the parties met on that day, and attempted to adjust their accounts, is undisputed. The defendant insist that a settlement was perfected. He claims that there was found due him the sum of about $60 over and above the amount secured by such note, and that there was an agreement between the parties that the defendant would not require the payment of the $60 thus due, if the plantiff would pay the amount secured by the note, which he agreed to do, and thus settle the accounts between them. The plaintiff, while admitting that the account existing between the parties was considered by them at that time, that the defendant on that occasion claimed to figure up the accounts between them, and said that the plaintiff owed him about $60 in addition to the amount of the note and interest, denied that he agreed to such settlement. He insists that, being unable to read writing or to figure, he could not determine the correctness of the statement made by 'the defendant, and that he did not agree to the correctness of the account- as figured or stated by him. Upon this question, the referee found that the plaintiff and defendant attempted to settle on that day; that after a statement of the account made by the defendant at that time, and set forth in the findings of the referee, the defendant informed the plaintiff that there was due and owing him more than $62 over and above the amount duo upon the note, which then amounted to $1,519.70; that the plaintiff demurred to this claim, expressed great surprise at the amount, and insisted that he.did not owe the defendant that sum ; that, at the time of such attempted settlement, the parties did not stand upon an equality, as the defendant was a man of large experience in business affairs, apparently well educated, and had been a party to many controversies and litigations, while the plaintiff was a man. of little business experience, unable to write, except his name, or read writing, possessed little or no education, and was unable to make a computation of the account; that all the figures and computations made on the occasion were made b} the defendant; that the statement of the account, in the defendant’s handwriting, made at that time, shows that the amount of the plaintiff’s indebtedness to the defendant was then only $977.38, and that the account, even as made up by the defendant, was incorrect; that there was actually owing by the plaintiff to the defendant only the sum of $748.83, and that the defendant knew that the plaintiff’s indebtedness to him did not exceed the sum of $977.38. The referee likewise found that, on the attempted settlement, the defendant prepared and caused to be signed by the plaintiff a memorandum as follows:

“December 31, 1892.
“ Settled with James Radley. Due me the amount of note dated Nov. 8, 1889, to balance ac.
“(Signed) James Radley.”

That the plaintiff was unable to read the memorandum signed by him, that the contents were not fully explained to him by the defendant, and that the plaintiff signed the memorandum believing it to be a receipt for the vouchers and evidences of debt delivered to him by the defendant. While there was a conflict in the evidence upon this question, still the plaintiff’s evidence was sufficient to sustain the findings of the referee. Upon the facts as. found, it is apparent that there was no binding settlement, and that there was no such statement of the accounts as would prevent the plaintiff from having the dealings between the parties properly and correctly settled. This has been done by the referee, and we think his findings and the judgment entered thereon should be upheld. We have examined the various exceptions, to which our attention has been called, to the rulings of the referee in the admission or rejection of evidence, but have found none that require a reversal of the judgment. After the close of the evidence, the plaintiff’s attorney moved to amend the complaint by setting up fraud on the part of the defendant, a mutual mistake in the attempted settlement, and by setting forth certain erroneous charges made by the defendant on such settlement. This amendment vyas objected to, the objection was overruled, and the defendant excepted. We discover nothing in this ruling which would require us to interfere with the judgment. If it be assumed that the amendment was not properly allowed, still it could in no way have injured the defendant. The plaintiff’s action was not on an account stated, but for an accounting, on the theory that there was an open and unadjusted account between the parties. The defense, so far as this question is involved, was that there had been a valid and binding settlement between them. The plaintiff, to avoid such settlement, was entitled to prove that no settlement was made, and that the pretended settlement was fraudulent, incorrect, and made under a mutual mistake by the parties, or any other fact that would show that it was invalid Hence, the evidence given was admissible under the pleadings as they stood originally, and the amendment, could not have harmed the defendant. A full and careful consideration of the evidence in the case has led us to the conclusion that the decision of the referee is fully sustained by the proof, that there are no exceptions requiring a reversal of the judgment, and that i,t should be affirmed.

Judgment affirmed, with costs.

All concur.