author: BARKER, J.:

text:
    REBECCA RACE, Plaintiff, v. ARTHUR GILBERT and Others, Defendants and Respondents. S. N. DADA, Referee, Appellant.

      Fees of a referee appointed to sell land in an aetion of pa/rtition — Oode of Cmf Procedure, sec. 3297.
    Where a referee sells real estate under a decree in partition which directs him to pay over the net proceeds of the sale to the parties entitled thereto, as provided in the decree, he is entitled to receive the same fees as a sheriff does upon the sale of real estate under an execution, viz.: Three per cent on a sum not exceeding $250, and two per cent on the residue.
    The payment of the proceeds of the sale to the parties entitled thereto, as provided in the decree, is not a “distribution” thereof, within the meaning óf the second sentence of section 3297 of the Code of Civil Procedure, providing that Y where a referee is required to take security upon a sale or to distribute, or to apply, or to ascertain and report upon the distribution or application of any of the proceeds of the sale, he is also entitled to one-half of the commissions upon the amount so secured, distributed or applied, allowed by law to an executor or administrator for receiving or paying out money.” This provision is only applicable to cases in which the referee is required to perform some duty relating to the money realized, after the sale has been made, other than the mere payment of the same directly to the parties to the action.
    The referee is also entitled to receive from the grantee a fee of two dollars for drawing the deed.
    Appeal by tbe referee, appointed to sell certain lands and pay over the proceeds of sale to the parties in the action, from an order made at a Special Term disallowing certain items of fees charged by him, and directing him to pay over the amount thereof to the parties entitled to receive the same.
    The premises were bid off by the plaintiff for the sum of $7,600. Out of the purchase-moneys the referee retained the gross sum of $295 as his fees and for disbursements, of which sum twenty-nine dollars was for fees ; commissions on $250, at three per cent; commissions on $7,350, at two per cent, together making $151.50 ; also the further sum of one-half of'five por cent on $1,000; and one-half of two and one-lialf per cent on $6,600, together making $107.50 ; and for posting notices of sale two dollars; and for drafting the deed two dollars. The entire sum realized on the sale was by the judgment ordered to be paid directly to parties and in amounts specified therein. On the motion of the defendants the Special Term struck out the item of two dollars for drafting the deed and the second item of commissions, amounting to $107.50, and directed the referee to pay over those sums to the parties entitled thereto as provided in the judgment.
    From this order the referee appealed.

      8. M. Dada, appellant in person.

      George B. Warren, attorney for the defendants, respondents.
   BARKER, J.:

The fees of the referee for making the sale and paying over the avails to the parties, as directed by the judgment, are the same as those allowed to a sheriff for making a sale in a like case. (Code of Civil Pro., § 3297.)

Where a sheriff is directed by a judgment of a court to make a sale of real estate, he is entitled to the same fees as for like services upon a sale of real property by virtue of an execution, except that In mortgage foreclosure cases, his entire compensation cannot exceed fifty dollars. (Code, sub. 11, § 3307.) His fees for selling real estate on execution are fixed by subdivision 7 of the same section, and are three per cent on the sum not exceeding $250, and two per cent on the residue arising from the sale. The claim made by. the referee to the fees rejected by the order of the Special Term is based upon the second paragraph in section 3297, which provides: “Where a referee is required to take security upon a sale, or to distribute, or apply, or ascertain and report upon the distribution or application of any of the proceeds of the sale, he is also entitled to one-half of the commissions upon the amount so secured, distributed or applied, allowed by law to an executor or administrator for receiving or paying out money.”

It is obvious that this provision is not applicable to this case, and the disallowance of the commission charged by the referee under this provision was correct and the order should be affirmed. The judgment is specific in terms and directed the referee to pay over the moneys realized on the sale, to the parties, after deducting the commissions allowed him by law. The referee was not required to invest the money and take security therefor, nor in any manner to distribute the same.

The suggestion made by the referee that a payment over to the parties themselves of the moneys realized on the sale and directed by the judgment, is a distribution of the proceeds, is altogether a misconception of the object and purpose of the statute.' The provisions are general and are applicable to all kinds of actions where the judgment provides for the sale of real estate, and is not limited to any particular class .of actions.

The distribution which the statute contemplates, and which if made would entitle the referee to one-half the commissions allowed to an executor or administrator for receiving and paying out money, is limited to cases where, by the decree, the referee appointed to make the sale is required to perform some duty subsequent to the sale, relating to the money realized, and the mere payment of the same directly to the parties without investment, or being charged with the care and custody of the same, does not entitle him to commissions. If such is not the purpose of the statute, then, for aught we can see, both classes of commissions are given to a referee who makes a sale of real estate in any action, except in a foreclosure action.

Ve hold without hesitation, that the judgment in this case did not provide for a distribution of any of the moneys realized on the sale, so as to entitle the referee to the commissions disallowed by the Special Term. Maher v. O’Conner (61 How., 103) is not in conflict with .these views. The terms of the decree in that case are not mentioned in the report, nor is the nature and character of the action stated, but a remark in the opinion of the court indicates that the views of the learned judge, are in accord with our own as to the meaning of the statute, for he says : “ He (the referee) is only entitled to these commissions upon such of the proceeds as he actually did distribute or apply. What he' paid over to the chamberlain was not, in my judgment, so distributed or applied within the meaning of the section.”

The referee was entitled to a fee of two dollars for drawing the deed. This fee is allowed a sheriff on deeding the land sold on execution “ to be paid by the grantee.” (Subd. 9, § 3307.) We think this fee is chargeable to and must be paid by the grantee, when the sale is made by a referee as well' as when made by a sheriff.

The order of the Special Term is affirmed, with ten dollars costs,, to be paid by the referee to the respondents. •

Smith, P. J., and HaediN, J., concurred.

So ordered.


source: Caselaw Access Project

author: ’•BARKER, J.:

license: Public Domain

text:
    ANNA M. ALLEN, Respondent, v. GEORGE E. SWAN, Appellant.

      Justices’ Court — entry of a judgment for too large an amount — power of the-successful party to remit apart of it — costs of an appeal to the County Court.

    In this action, brought in a J ustice’s Court, a verdict was rendered for the plaintiff for thirty-four dollars and fifty cents, upon which a judgment was entered by the justice for thirty-four dollars-and fifty cents damages and eighteen dollars, and eighty-seven cents costs. _ Two days thereafter the plaintiff left with the justice a written offer to remit the sum of fifteen dollars and twenty-nine cents, from the said judgment. On the following day the defendant appealed to the County Court where the plaintiff recovered a judgment for the amount to which he had offered to reduce the judgment.

      Held, that the defendant was entitled to the costs of the appeal.
    The provision of section 8016 of the Code of Civil Procedure, to the effect that “ where a verdict, or the decision of the justice upon a trial without a jury, is-rendered in favor of either party for a sum of money, the prevailing party may remit any portion thereof, and take judgment for the residue,” only authorizes a remission to be made before the judgment is entered; after the-entry of the judgment the justice has no power to alter or change the record.
    Appeal from an order of the Onondaga County Court, denying; a motion made by the appellant for a retaxation of costs herein and for an order directing the clerk td tax costs in favor of the appellant.
    The action originated in a Justice’s Court in the city of Syracuse;. was twice tried before a jury, and on the 29th day of November, 1882, the jury rendered a verdict in favor of the respondent for thirty-four dollars and fifty cents, and judgment was on that day entered for that amount, plus eighteen dollars and eighty-seven cents costs, in all fifty-two dollars and thirty-seven cents.
    Two days thereafter, to wit, on November 81, 1882, the respondent left with the justice a written offer to remit from the amount of the above entitled judgment the sum of fifteen dollars and twenty-nine cents, and to take judgment for the sum of nineteen dollars and twenty-one cents, which was the sum for which judgment was demanded in the complaint, with costs. On the 1st .day of December, 1882, the appellant duly appealed to the Onondaga County Court for a new trial on the merits. The respondent recovered in the County Court the sum of nineteen dollars and '.twenty-one cents.

      Hancock <& Monroe, for the respondent.

      Gray & Kline, for the appellant.
   ’•BARKER, J.:

Upon receipt of the verdict it is the duty of the justice forth-, with to render judgment and enter it in his docket-book. (Sec. 3015.) All agree, after the performance of this act, he is without jurisdiction or authority to alter or change the record in any respect.

In my opinion the offer of the plaintiff to reduce the judgment was wholly ineffective for that purpose, and that it remained as it was entered, a judgment for thirty-four dollars and fifty cents damages, and eighteen dollars and eighty-seven cents costs, notwithstanding the entry made by the justice. Section 3016 does not recognize any such proceedings. It is merely a statutory permission authorizing the party in whose favor the verdict is rendered, to remit any portion thereof and take judgment for the residue.' A record of judgment made up and entered according to the rules and practice of the court in which the action is pending, cannot be altered or amended l>y an ex parte motion of either party. This is a general rule applicable to all courts.

The offer of the plaintiff to reduce the judgment and the entry made by the justice in his docket is a proceeding unknown to the law. There is no power or authority vested in any court or officer to regulate the practice by which such a result may be reached: to admit the right of the plaintiff to make and file an offer with a view of altering the record would be mischievous, misleading, and often result in dispute and contentions between the parties. If the party in whose favor the judgment is entered may authorize the justice to modify the same by reducing the amount thereof, he may do it any moment before the notice of appeal is served. This might be done by the party claiming the right at such time and under such circumstances as to make it exceedingly difficult for the party feeling; aggrieved by the judgment, to determine whether his interest would be best served by 'acquiescing in the judgment as reduced by the-offer, or to seek further modification by appeal.

In this case it does not appear that the appellant had notice at the time he served notice of his appeal that the offer had been made and filed, and that the justice had made an entry in his docket of the fact. If the offer as made and filed with the justice had been brought to the appellant’s attention, he could not have determined by an inspection of the same whether or not the attorney who signed, it, in the name of the plaintiff was authorized to make the offer.. The instrument is not acknowledged by the plaintiff, nor is it accompanied with any evidence that the attorney who executed it was-authorized to perform the act. In my opinion the appellant was entitled to the costs of appeal in the County Court, and that it-should be so ordered.

The order- should be reversed and costs awarded to appellant.

Smith, P. J., and Hardin, J., concurred.

Order reversed and retaxation ordered,, with ten dollars costs and disbursements.


author: BARKER, J. :

text:
    JOHN H. WOODWARD and Others, Respondents, v. THE REPUBLIC FIRE INSURANCE COMPANY, Appellant.

      Policy of insurance against fire — effect of the failwe of the assured to ref&r to a real' estate mortgage upon the property — to a chattel! mortgage or a part thereof — when• the policy is severable — agreement that the mortgagee shall have the benefit cf the- . insurance money — the company cannot set up- his- claim thereto, and that the mortgagee should be a party to an action on the- policy -— principal — when he is-chargeable with the knowledge of his agent — Evidence—when a witness may be• impeached by pyroving contradictory statements made■ by him.

    .This action was brought upon a policy of insurance- against 'fire, issued by the-defendant to the plaintiff John Woodward,, upon his dwelling-house and the furniture therein, and his three barns and the produce therein, and upon his wagons, sulky and farming utensils, The dwelling-house, each barn, the-farm produce, household furniture, etc., were each separately valued, although the premium was charged as a gross sum.. The- policy provided, among other-things, that “ if the interest of the assured! in, the-property, whether as owner,. trustee, consignee, factor, agent, mortgagee, lessee or otherwise, is not truly stated in this policy, then, and in every such case, this policy shall be void'. If the interest of the assured in the property shall be any other than the entire unconditional and sole ownership of the property, for the use and benefit of the assured, or if the building insured stands on leased grounds, it must be so represented to the company and expressed in the written part of this policy, otherwise the policy shall be void. ”
    ■There, were two mortgages upon the real property at the time the policy was issued, one given to Margaret Evans and the other to one Vandewaker. A clause was written in the body of the policy making the loss, if any, payable to Margaret Evans, as her interest might appear, but no reference was made to the Vandewaker mortgage.

      Held, that the policy was not vitiated by the omission of all reference to the Vandewaker mortgage; that the assured held the legal title to the property, and was the sole owner thereof within the meaning of those terms as therein used.
    It appeared that the agents of the defendant, by whom the policy was issued, knew, of the existence of the Vandewaker mortgage before and at the time of the issuing of the policy, but it did not appear that it was referred to at that time.

      Held, that the defendant must be deemed to have known of the Vandewaker mortgage and to have waived the condition of the policy, so far as it covered that mortgage.
    If knowledge of a material fact be acquired by an agent previous to the transaction wherein he, acts for his principal, and the fact is in the mind of the agent at the time when he performs the act or transacts the business in question for his principal, then as to all the parties concerned it is, in legal effect, the same as if the information was communicated to the agent at that time.
    A part of the personal property was subject to a chattel mortgage given by the assured, which was outstanding and unpaid at the time when the policy was issued. •
    Held, that the legal title to the property covered Dy the chattel mortgage was in ' the mortgagee, and that as to such property the policy was avoided'by reason of the'foregoing condition.
    That the insurance was separable, and that the policy was valid as to all of the property other than such as was described in the said chattel mortgage.
    3By the Vandewaker real estate mortgage the mortgagor agreed to keep the buildings standing on the premises insured against loss by fire for a sum named for the benefit of the mortgagee, and that in case of his default so to do the mortgagee might procure such insurance at the cost of the mortgagor. The defendant claimed upon the appeal that the mortgagee was a necessary party to the action.

      Held, that the objection was untenable because: (1.) The defendant had not set it up in the answer; and (3.) The defendant could not raise the objection so long as it did not appear that the mortgagee had made any claim upon the moneys, or that he was not willing to forego all equitable claims thereon.

      It was conceded upon the trial that the buildings were set on fire, and evidence was given tending to show that this was 'done with the plaintiff’s knowledge and consent. A witness was called hy the defendant and allowed to testify as to admissions made to him by .the plaintiff before and after the fire, tending to show that he had procured some person to' start the fire. On his cross-examination he was asked if he did not say to a person named, at a given time and place, that the fire was an honest one, that the plaintiff was very unfortunate and that he ought to have his money.

      Held, that the plaintiff was properly allowed to call the person named and prove hy him that the witness had made the statement to which his attention had been so called.
    Appeal from a judgment, entered upon a verdict in tlie plaintiff’s favor, and from an order of the Oneida Special Term, denying the defendant’s motion for a new trial.
    This action was brought upon a policy of insurance issued by the ‘defendant on the lltli day of June, 1879, to the plaintiff J ohn Woodward, in the sum of $2,925, upon his dwelling-house and furniture therein, and upon his three barns and produce therein, and wagons, sulky and farming utensils. The premium paid was twenty-one dollars and ninety-four cents and was inserted in the policy as a gross sum. The dwelling-house and each of the barns was separately valued, and so was the farm produce, household furniture, wearing apparel, farming utensils, wagons and sleighs. On the fourteenth of July, following, the dwelling-house and barns were totally destroyed by fire, and the furniture, wearing apparel, stores, produce, farming utensils, wagons, sulky, sleighs and harness, were damaged and in part destroyed. At the time the policy was issued the plaintiff Margaret Evans held a mortgage on the premises upon which the buildings were located, to the amouut of $500, which remained unpaid at the time of the fire. In the body of the policy there was a clause that the loss, if any, should be payable to Margaret Evans as her interest may appear.
    The defendant’s answer did not deny any of the allegations set forth in the complaint, and the verdict was for the sum of $2,289.39 with interest. There was no dispute as to the value of the property or extent of the loss. The grounds upon which the defendant seeks to reverse the judgment, are separately set forth in a bill of exceptions.

      Edward G. Jonnes, for the appellant.

      S. Q. Huntington, for the respondents.'
   BARKER, J. :

We understand from the bill of exceptions tliattbe assured, John Woodward, was tbe owner in fee of the premises upon which the buildings were situated. It is not therein stated specifically that such is the fact, but it is manifest that the trial was conducted upon the assumption that such was his title. The policy states that $1,200 of the insurance was on his frame building, occupied as a dwelling.

The complaint alleges that the property covered by the policy was the plaintiff’s, and that he had an inteiest as owner therein. The third paragraph of the complaint avers, that at the time of making said insurance and from then until the fire, the plaintiff had an interest in the property so insured as follows: The plaintiff, John Woodward, as owner of said property, and the plaintiff, Margaret Evans, as mortgagee of the buildings so insured, and the lands and the premises upon which they were situated * * * amounting in all to more than and exceeding the sum of $2,289.93.”

None of these allegations are denied. We shall therefore dispose of all the questions presented for our consideration, upon the supposition that the assured, had a legal title in fee simple to the land upon which the buildings were located. The policy contains these clauses, viz.: IC If the interest of the assured in the property whether as owner, trustee, consignee, factor, agent, mortgagee, lessee or otherwise, is not truly stated in this policy, then, and in every such case, this policy shall be void.”

“ If the interest of the assured in the property shall be any other than the entire imconditional and sole ownership of the property, for the use and benefit of the assured, or if the building insured stands on leased .ground, it must be so represented to the company and so expressed in the written part of this policy, otherwise the policy shall be void.”

At the time the policy was issued the premises were subject to a mortgage executed by the assured, as mortgagor, to one Otis Yande-waker, for the sum of $1,361. This lien was not expressed in the written part of the policy, and the defendant insists that it was wholly ignorant of the existence of the same, and for that reason the policy was void by the terms of the condition last above quoted. The interest of the assured in the land being in fee, the condition was not broken by reason of the omission, on his part, to disclose the mortgage lien. He was the sole owner, his title was unconditional and he held the same for his sole úse and benefit. The word* “ ownership,” as used in this connection, is synonymous with the word title. The popular definition of the word owner, as given by lexicographers, is the right to own; exclusive right of possession; legal or just claim or title; proprietorship. The . interest of the assured in the real estate being entire did not call for any affirmative statement as to mortgage liens, to avoid a breach of the condition. It was only in case that his share or part in the thing assured was’ less than the whole, that he was called upon to state his interest. In common parlance the word interest is used to indicate the share, portion or part one has in a piece of property either real or personal. (Merrill v. Agricultural Ins. Co., 73 N. Y., 456.)

The owner of the equity of the redemption in real estate may be described as owner. (Washington Ins. Co. v. Kelly, 32 Md., 421.) The mortgagee is not an owner, he has a lien on thé title and that is all. The mortgagor may sell or convey the property and give the purchaser a title. (Manhattan Fire Ins. Co. v. Wiell & Ullman, 28 Grattan [Va.], 389.) In the preceding clauses of the policy, the assured had declared, in substance and effect, that he was the sole owner of the house and buildings, and this latter clause was inserted for the manifest purpose of declaring the contract void,' if the fact concerning such ownership was less or different than represented in’ the previous statement. The fact that the Yandewaker 'mortgage was not represented to the company and expressed in the written’ part of the policy did not work a forfeiture. A mortgage on real estate is not, in a legal sense, an alienation of the property. It is only a lien on the lands as a security for a debt. The mortgagor remained the sole and unconditional owner of the land. The mortgagee was the sole owner and proprietor of the debt secured by a lien thereon. (Conover v. The Mutual Ins. Co. of Albany, 3 Denio, 254; S. C., 1 Comst., 290; Jackson v. Mass. Mutual Ins. Co., 23 Pick., 418; Savage v. Howard Ins. Co., 52 N. Y., 502.) The’ cases cited on this point by the learned counsel for the defendant do not support- this argument.

In Savage v. Howard (supra) the condition was: “ If the property be sold or transferred, or any change takes place in the title or possession * * * without the consent of the company indorsed tbereon, the policy shall be void.” The policyholder. conveyed his title to the property in suit, and it was held tliac it worked a forfeiture of the policy under the clause therein which has been quoted. One of the other cases cited is Lasher v. The St. Joseph Fire and Marine Insurance Company (86 N. Y., 424). In this case the assured procured a policy on her household furniture contained in a hotel.” She had no title to the property, it being in her possession under an executory contract for the purchase of the same, containing a stipulation that the title should remain in the seller' until the price was paid. The policy contained a provision that it should be void if the interest of the assured in the property, whether as owner, trustee, consignee, factor, agent, mortgagee, lessee or otherwise, was not truly stated in the policy, and it was held by the court that as she was not the owner, she had not stated her interest in the property truly, and the contract was void for that reason. The court also held that a condition contained in a policy, such as the one then under consideration, without any representation as to title or any statement of specific interest, of the assured, amounts to a declaration on the part of the assured that his interest is an absolute one.

We have endeavored to show that the assured in this case had a legal title to the property, and was the sole owner of the same and that the mortgage lien thereon did not diminish his interest in the real estate. If the terms of the condition had been embraced in the form of a question to the applicant, as to the interest which he had in the property to be insured, and his answer had been that he was the sole, entire and unconditional owner, his ownership of the fee would have verified the truth of his answer.

If this is not the proper construction to be placed on the condition and a breach of warranty is made out, then we think the bill of exceptions states other facts which in law constitute a waiver of the condition so far as the Yandewaker mortgage is concerned. It is stated in the bill of exceptions “ that the plaintiff gave evidence tending to prove that Howell and IJpton, the defendants’ insurance agents, had been informed of and knew of the existence of the said Yandewaker mortgage before and at the time of issuing the policy in suit; but no evidence was given tending to show that the existence of said mortgage was mentioned at or about the time of the issuing of the said policy.” In short, this means that when the policy was issued the agents knew the fact that this mortgage incumbrance existed, and they had the same in mind when they delivered the contract and received- the premium, but Woodward, the assured, did not at that time mention the circumstance. Having knowledge of the lien- derived before the policy was issued, and having it actually in mind when it was delivered, it is as binding on the company as if Woodward had communicated the information, pending the negotiations. . .

The general doctrine that the knowledge of the agent is the knowledge of the principal is not and cannot be doubted. This proposition has been applied .in many cases and' under various circumstances. ■ ,

In Holden v. New York and Erie Bank (72 N. Y., 286) the rule was directly undeR consideration, and the court, in speaking of the knowledge of a'factf.on|the'^>arj|<i>f the agent, said: “Hence, as a matter of law, whatever notice of/ facts lie ha| in any capacity, which were material in the performance by him-on the part of the bank in any transaction becameNotice to the bank, his principal, as it was his duty to give it notice*thereof in that matter. It is the É,/ a K the knowledge of the agent is the knowledge of his pri-n- . notice to the agent of the existence of material facts is noape thereof to the principal, who is taken to know everything aboufei transaction which his agent in it knows.”

If knowledge of a material fact be acquired by the agent previous to .the transaction wherein he acts for his principal, and the fact is in the mind of the agent when he performs the act or transacts the business in question, then as to all parties concerned it is, in legal effect, the same, as if the information was communicated to the agent at the time. The learned counsel for the defendant contends that the rule is that the notice must come to the agent while he is engaged for the principal, atsd, in the course of the very transaction in question. The rule has b'-ien laid down in some of the cases as contended, but the more recent decisions do not limit the rule so much as the argument claims, but support the one which we have already stated. .'In .speaking of the rule and its application the court, in Hoover v. Wise (91 U. S., 308), remarked: “It must, however, be knowledge acquired in the transaction of the business of his principal, or knowledge acquired in a prior transaction then present to his mind, and which could properly be communicated to his principal.”

In The Distilled Spirits (11 Wall., 356) the rule was stated, namely, “ that notice to the agent is notice to the principal applies not only to knowledge acquired by the agent in the particular transaction, but to knowledge acquired by him in a prior transaction and present to his mind at the time he is acting as such agent, provided it be of such a character as he may communicate- to his principal without breach of professional confidence.”

The rule as stated in these cases was applied in the case of Holden v. New York and Erie Bank (supra). The agents of the defendant had knowledge of, and it was in their mind when this contract was concluded that the lien- existed on the lands, there is no sense or reason in saying that because they did not have the fact repeated to them while writing out the policy their principal is not bound by the information. (Dresser v. Norwood, 17 Common Bench [N. S.], 466.) By reason of the fact that the company knew when the policy was issued that the mortgage lien existed, it is to be inferred that the company waived the condition as far as that particular incumbrance was concerned. (Van Schoick v. Niagara Fire Ins. Co., 68 N. Y., 434; Richmond v. Niagara Ins. Co., 79 id., 230.)

It appears that a part of the personal property was subject to a chattel mortgage given by the assured to the same Giles Vandewaker as mortgagee, which was outstanding at the time the poljcy was issued, and there was unpaid thereon the sum of $160, the existence of this mortgage was not made known to the defendant or any of its agents. The terms and condition of this mortgage are not stated in the bill of exceptions,- but in the written part of policy the property is mentioned as “liis” (the assured) property. In this State the effect of a chattel mortgage is to convey'the title of the'property to the mortgagee, and thejH^'er the mortgagor’s interest is that of an equity of redemption ánd nothing more. (Parshall v. Eggert, 54 N. Y., 23; Bragelman v. Daue, 69 id., 69.) Therefore the interest of the assured iii- the personal property was not that of a sole, entire and unconditional ownership, and so much of the contract as related to that class of property was void by the very terms of the condition. The omission to disclose the true interest of tbe assured in the personal property constitutes a breach of the warranty so far as it relates to the property Incumbered by the chattel mortgage.

It is urged by the appellant that á breach of the terms of warranty in this particular works a complete forfeiture of the entire contract, and for that reason the plaintiffs are not entitled to recover anything on the policy. The solution of this proposition depends upon the question whether the contract is entire or several. It is now well settled that contracts of insurance ai-e severable in their character when a separate valuation has been placed'on the different articles, pieces or classes of property, although a gross sum has been fixed as the premium to be paid for the entire property. (Merrill v. Agricultural Ins. Co., 73 N. Y., 452.)

The contract of warranty as to so much of the personal property as was mortgaged was broken for the reason that the assured had not the legal right thereto, and he failed to disclose his true interest therein ; the plaintiff cannot recover for the loss sustained thereon.

As to the articles embraced in the policy and not mortgaged, and upon ■which a separate valuation was placed therein, the contract is separate in its character; the plaintiffs were entitled to recover for so much of it as was destroyed. All the personal property insured was not embraced in the chattel mortgage, but it is impossible from the evidence and statements contained in the bill of exceptions to designate with certainty the articles mortgaged.

Assuming that all the goods mentioned in the policy, which are of the same kind or class as those mentioned in the mortgage, and regarding them as embraced therein, and adopting the valuation placed thereon in the policy, the total value of such articles is $400. If all the goods mortgaged were destroyed by fire then there may have been included in the verdict the sum of $400 for loss on goods, for which the plaintiff is not entitled to recover for the reason stated.

In the Yandewaker real estate mortgage there is an insurance clause by the terms of which the mortgagor agreed to keep the buildings standing on the premises insured against loss or damage by fire for a sum not exceeding $1,300 for the benefit of the mortgagee, with a provision that in default thereof it should be lawful for the mortgagee to effect such insurance in his own behalf at the expense of the mortgagor. The defendant made the point on the trial and now insists that Yandewaker was a necessary party to the suit, and for that reason the verdict cannot be upheld. There are two good and sufficient answers to this projiosition and one is, that it was not set up in the answer that the mortgagee was a necessaryparty, and the objection is therefore waived. (Code of Civil Proc., §§ 488, 498, 499 ; De Puy v. Strong, 37 N. Y., 372.)

The agreement relating to the insurance for the benefit of the mortgagee is wholly executory, and as it does not appear that the assured has transferred the policy to Yandewaker, the latter has no legal title to the moneys due thereon. And further it does not appear that the mortgagee has made any claim whatever that the moneys due upon the policy should be paid to him, and for this reason the case is not within the rule laid down in Cromwell v. Brooklyn Fire Insurance Company (44 N. Y., 42), or either of the other cases cited by the defendant,on this point. It may well be that the mortgagee is willing to forego all such equitable claims as he may have, as between himself and the mortgagor, to the moneys due on the policy rather than be made a party to this litigation. Until he gives notice to the insurance company that he lays claims to the moneys, it can legally discharge all its obligations on the policy by payment to the plaintiffs in this action.

The other questions presented by the bill of exceptions relate to the reception and rejection of evidence. It was admitted that the fire was of incendiary origin. Upon the question of the complicity of the plaintiff Woodward, in setting the same, the testimony was conflicting. To prove the plaintiff’s' complicity the defendant called as a witness Lorenzo D. Harding, who testified, in substance, that some ten days before the fire, Woodward called upon him at his house, and stated to him that he had got to burn his buildings, and there was no other way out of his financial troubles, and asked'the witness to do it on the evening of the day on which the conversation was had, that he had made arrangement for firing the buildings and instructed the witness where and how to apply the match, giving the details of what he had done in preparing combustible material for that purpose, and describing to the witness how he could 'make an escape from 'the premises and not be detected. Harding declined and Woodward then told him that if he ever disclosed the request which had been made of him he would kill him. The defendant offered to prove by the same witness that on an occason prior to the time when Woodward asked him to burn the buildings, Woodward’s wife told the witness, that her husband was going to burn the buildings, and that he had requested her to do it, and that she declined. This was objected to by the plaintiff as incompetent and the objection was sustained. This we regard as mere hearsay evidence and it was properly excluded. With a view of making the evidence competent, the defendant proved that after Mrs. Woodward made the statement to the witness, he had a conversation with Woodward about Woodward’s wife separating from him and leaving his home at that time; the witness told Woodward that if his wife did leave him it would injure his case with Cummings, and added the further remark: “ This other thing that you have gone into.” The witness also testified that at the time Woodward asked him to burn the buildings he remarked that he should not have come to him for that purpose, but “ I know my wife has fold you.”

The defendant admits that this evidence was not competent as proof of the truth of the facts stated by Mrs. Woodward to the witness, but as proof of what Woodward’s wife had told the witness, and which Woodward knew, and for that reason he was induced to approach Harding with a solicitation to burn the building. "W e think it would be a mere conjecture to say that the remarks made by Woodward that he was conscious that his wife had had a conversation with the witness of the nature and character of that offered to be proved, and for that reason he was induced to persuade the witness to burn his buildings. It fails to support, in any legitimate way, the witness in his evidence that Woodward applied to him to do the incendiary act.

The defendant gave evidence tending to prove that the fire was in fact set by one Charles Coates, an employee of Woodward, and with his knowledge and by his procurement. The witness Harding testified that he was at Woodward’s house the morning of the fire and had a conversation with Woodward concerning the same, that Woodward said to him, “how is it.” The witness replied: “Well they mistrust you, you might know they would by these.circumstances and this man Coates around here.” Woodward then replied: “They do not unless you have said something.” . The witness then said : “that be bad not said anything and Woodward appeared excited.” The witness started to leave when Woodward followed him and they had a further conversation, in the road near by, where the buildings had stood. The witness testified that Woodward then said : “ I know what ails you, you are mad because I got Coates to do it,” and added,“ if you ever lisp a word I will fix you.”

On his cross-examination Harding was asked, if he did not say to J ohn Lobd.ell, at a certain time and place, which were mentioned, “that Woodward’s fire was an honest one and that he was very unfortunate and ought to have his money,” and he answered, “ he had no recollection of saying any such thing.”

The plaintiff then called John Lobdell and he was asked the question: “ Did Harding say to you, on the occasion referred to, in substance, that Woodward’s fire was an honest one and that he was very unfortunate, and that he ought to have the insurance money, or that in substance.” The defendant objected to the evidence as immaterial and incompetent, the same was overruled and the wit-, ness replied : “ I think he used the words.”

If the evidence which Harding gave is true, it amounted to an admission by Woodward, that the fire was set by his procurement and that Coates did it. The statement made to the impeaching, witness by Harding is wholly inconsistent and irreconcilable with the evidence which he gives in court. If we are correct in the view which we take of the object and purpose of the defendant in introducing the statements of Woodward, made after and on the morning of the fire, then the impeaching evidence was properly received and no rule of evidence violated.

In Schell v. Plumb (55 N. Y., 592) the action was on an alleged oral contract by the defendant to support the plaintiff. The witness called by the defendant testified to admissions made by the plaintiff in substance and effect that no contract for the support of the plaintiff had ever been made by the defendant.

On his cross-examination he denied, that he had ever said the plaintiff ought to have $1,000 from the defendant. The proper foundation being laid the plaintiff was permitted to prove by way of contradiction and impeachment of the witness that he had So said. The same point was made there, which the defendant makes here, that the statements of the witness Harding, out of court, was the mere expression of an opinion on the merits of the controversy, and for that reason should have been excluded. It was held, however, in the case cited, that the evidence Was equivalent to a declaration that a contract had been made. We think, in this case, the evidence received was competent, as being a statement by Harding, made out of court, that Woodward never made the admission as to which he testified on the trial.

On the plaintiff’s stipulating that the judgment may be modified by deducting therefrom the sum of $400 with interest thereon, from the 30th day of July, 1879, the same is affirmed as modified, without costs to either party.

If such consent is not given, the judgment is reversed and new trial granted, with costs to abide the event.

Smith, P. J., and Hardin, J., concurred.

So ordered.


text:
    HIRAM F. INGLEHART and Others, Respondents, v. THE THOUSAND ISLAND HOTEL COMPANY, HELEN M. STAPLES and Others, Appellants.

      Trustee of a company — right of, to purchase judgments against it — they may be enforced for their full a/mount although purchased at a discount.

    Where a trustee of a corporation purchases with his own funds a judgment, which has been recovered against it, for less than the amount due thereon, and ■ thereafter assigns the same to a third person, the assignee may enforce the judgment against the company for the full amount due upon it, he is not limited to the collection of the amount paid therefor by his assignor.
    Appeal from a judgment, entered on the decision of the J efferson county Special Term.
    The appeal was taken by the defendants, the Hotel Company, Charles E. Staples and Ellen M. Staples.
    On the 27th day of January, 1874, the plaintiffs commenced an action against the defendant, Thousand Island Hotel Company, a corporation engaged in carrying on the hotel business at Alexandria Bay, Jefferson county; for $1,370.11, and on the 9th day of April, 1875, recovered a judgment therein against said defendant for $1,370.11. The plaintiffs thereupon issued an execution upon said judgment, which was afterwards returned unsatisfied.
    On the 1st day of May, 1873, the said hotel company had become the owner of the hotel called the Thousand Island House, and the land on which the same is situated. On the 7th day of August, 1873, the defendant Alfred Tilly, duly filed a mechanics’ lien against the said hotel company, and upon said hotel and the land on which the same stands. On the. 19th day of March, 1874, the said Tilly commenced an action in this court to foreclose the said lien, and on the 11th day of August, 1875, judgment was rendered in the said action, declaring the said lien to the extent of $3,936.74 damages, and $199.83 costs, and directing a sale of the said property for the purpose of satisfying the same. From the said judgment the said Thousand Island Hotel Company appealed to the General Term. The said appeal was submitted to the General Term in October, 1876, and on the 29th day of December, 1876, a decision was made by the General Term reversing the said judgment, and ordering a new trial, but the order of reversal was never entered in Jefferson county. Pending the said appeal, and on the 27th day of November, 1876, the defendant Tilly sold and assigned the said lien and judgment to the defendants Kennedy, Spaulding & Co. On the 28th day of December, 1876, an agreement was made between said Crin G. Staples, a trustee of the company, representing one Charles F. Staples and the said Kennedy, Spaulding & Co., the owners of the Tilly judgment, whereby it was stipulated that a judgment of affirmance upon the said appeal should be entered; that Kennedy, Spaulding & Co., would assign the said judgment to Charles F. Staples for $2,400, and that they would advertise and sell the said hotel property and bid on such sale the amount of their judgment, and if they purchased the same they would convey it to Charles F. Staples on payment of the said sum of $2,400. Judgment of affirmance upon the said stipulation was accordingly entered in Jefferson county' clerk’s office, December 30, 1876. The said property was accordingly advertise^ for sale, and was bid off by Kennedy, Spaulding & Co., for the amount of their judgment, the plaintiffs in this action attending and announcing to those present that the judgment had been reversed and a sale thereunder would be invalid. The report of sale was afterwards duly confirmed by the court, and a conveyance of the aforesaid property was executed to Kennedy, Spaulding & Co. At the time the agreement was made with Kennedy, Spaulding & Co., for the affirmance of said judgment, they were paid $1,000 by the certified check of Charles F. Staples. Payments were subsequently made to them by Crin G. Staples, until on the 6th day of January, 1880, the balance unpaid then was $849.30. The interest in the Kennedy, Spaulding & Co., contract was on the 26th day of October, 1877, assigned by Charles F. Staples to defendant Helen M. Staples, wife of Orin G. Staples.
    This action was brought to set aside the Tilly judgment of affirmance and the sale thereunder, and to restore the lien of plaintiffs’ judgment, or that plaintiffs be permitted to redeem the hotel property on such sale.
    The court below held that the agreement for the withdrawal of the appeal and the affirmance of the judgment were valid, notwithstanding the reversal of the same at General Term; that the sale and conveyance under said judgment to Kennedy, Spaulding & Co. was valid, and that the plaintiffs had no right of redemption under the same. He further held that Helen 1VI. Staples must be deemed to' be in possession of assets of the Thousand Island Hotel Company, to the extent that the sum bid by Kennedy, Spaulding & Co. exceeded what they were paid by Charles F. Staples, and directed an amendment of the complaint and a sale of the hotel property for the purpose of paying the plaintiff’s judgment.

      O’Brien <& Emerson, for the appellants.

      Bradley Winslow, for the respondents.
   BARKER, J.:

The trial court, in passing upon the rights of the parties, sustained the validity of the Tilly lien, and the regularity of the sale in the foreclosure proceedings. In disposing of the questions of law we deem it necessary to examine on this appeal, we shall proceed upon the correctness of these conclusions, for the reason that, upon the facts as found, they are logicaband correct.

In view of the specific findings of fact as set forth in the decision, we shall not, in 'this case, for the purpose of upholding the legal propositions deduced therefrom, assume that the trial court found •other facts than those therein mentioned. The records and contracts given in evidence having an important bearing on the issues, .are not fully set forth in the case, and it would be highly improper for this court, in a case thus made up, to indulge in presumptions as to the existence of facts not reported in the decision or admitted by the pleadings. The defendants Kennedy, Spaulding & Co., by their purchase, acquired a perfect title to the Tilly judgment, based on a good consideration. They had a right, so long as it remained in force and unreversed, to collect the same in the mode and manner provided by the statute creating the lien. As assignees and owners they could transfer the same to any person willing to become the purchaser. At the time of the sale of the premises the title to the judgment was in them, as the contract with Charles F. Staples was wholly executory and remained unperformed at the time of the trial, and there was then found to be due and unpaid thereon the sum of $849.30. It was made a term of the contract of sale that the judgment was not to be assigned until full performance by the purchaser, and it was specifically provided, that he should have*no right under it if he failed to make the payments, and also, that a breach of any of the conditions should work a complete forfeiture of the contract.

The facts as found, do not, in my opinion, sustain the legal conclusion reached by the trial court, “that the amount unpaid on the Tilly judgment in the hands of Charles F. Staples and his assignees is the sum of $2,400, and nó more,” and cannot be enforced for a greater amount. This part of the decree is sought to be sustained, on the theory that the hotel company, the 'owner of the premises subject to the lien, by consenting to an affirmance of the judgment, secured a compromise with the holder of the same as to the amount due thereon, which in equity reduced it to the sum mentioned. It is not pretended that the company then paid anything whatever upon the judgment; it parted with nothing. At this time the judgment was in full force and effect and has never been reversed or modified. The announcement by the General Term of its decision, that the judgment was erroneous and directing that the same be set aside and a new trial granted was not in a legal sense a reversal. It needed a judgment or order, entered in the due course of procedure, to secure that result. The stipulation that a judgment of affirmance might be entered was in effect an abandonment of the appeal and nothing more, and we fully concur in the views of the trial court in this particular.

The motives and considerations which induced the officers of the company to consent to an affirmance of the judgment were not passed upon by the trial court. The circumstances attending the negotiations were such as to constitute some evidence, in support of the position which has been advanced by the respondents, that the officers of the company were in collusion with the owners of the judgment, to keep on foot an invalid and fraudulent lien upon the property of the company, to the injury of the plaintiffs as subsequent judgment creditors. But there is no finding of fact that such was the purpose of the parties in entei'inglnto the stipulation,, for an affirmance of the judgment, but on the contrary the trial court held the judgment to be legal and valid ; and .that the judgment of affirmance was agreed upon without any fraudulent intent or purpose.

It was found as a fact that the transfer of the judgment by Kennedy & Co. to Charles F. Staples was made- in the interest of and for the benefit of Orrin G. Staples, who was at that time president and one of the trustees of the company. It is claimed by the plaintiffs that as Staples was at this time trustee, in equity, as against, him, the company is entitled to all the benefits and advantages derived by the contract for the purchase and transfer of the Tilly judgment. None of the money paid to Kennedy & Co. by O. G-. Staples belonged to the hotel company, although he may have acted for himself, doing the business and taking the assignment in the name of C. F. Staples. This also must have been the conclusion of the trial court, as the decree provides that out of the moneys which majr be realized from the sale which has been ordered there shall be paid to the defendant Ella M. Staples,, the- present assignee of the contract of sale, a sum equal to that which, has been paid to Kennedy & Co. before any of the money realized on the sale is tó be paid over to the plaintiffs on their judgment. The evidence tends to prove that the sums paid to Kennedy & Co. were supplied by Charles F. Staples out of his own money, and there is no finding to the contrary.

The finding as to the part taken by Q. G.. Staples in negotiating for the purchase, and his actual interest therein,, at the most nothing more tban that be, with bis own money and for bis own personal benefit, purchased tbe Tilly judgment for a sum less tban the amount due thereon and caused tbe same to be transferred to Charles E. Staples, reserving to himself tbe power and authority of controlling and directing tbe mode and manner of its collection. Conceding such to be tbe facts tbe first question presented is, could Staples while bolding tbe office of trustee, make a valid purchase of this judgment and enforce its collection for the full amount due thereon out of the assets of the company. I am not aware of any rule of law which limits or restrains bis actions in this respect by reason of his being a trustee of tbe debtor corporation. That a trustee of a corporation organized under the general laws of this State acts in a fiduciary character, is not a subject of doubt, as he is intrusted with power and authority to be exercised in tbe interest of the stockholders and creditors of tbe company. In dealing with its property and in the management of its affairs, he is subject to the obligations and disabilities incident to that relation, and he must so act as not to permit himself or his own private interests to interfere or compete with his duty to the company. (Hoyle v. Plattsburgh and Montreal R. R. Co., 54 N. Y., 314; Cumberland Coal Co. v. Sherman, 30 Barb., 553; Twin Lick Oil Co. v. Marbury, 91 U. S., 588.)

It is not, however, deemed to be inconsistent with tbe duties which a trustee owes a company, to loan and advance to it moneys to be used in transacting its legitimate business, and to meet its financial wants and receive security therefor by mortgage or pledge of the assets of the company. By fair dealing and in the legitimate business of the company he may become one of its creditors. Transactions of this character between an officer of the company and the company itself, is of frequent occurrence and has received the approval and sanction of the courts as appropriate and not inconsistent with the duty which a trustee owes to the stockholders and creditors of the company. (Duncomb v. N. Y., H. and N. R. R. Co., 84 N. Y., 190; Twin Lick Oil Co. v. Marbury, supra.) So also a trustee or director may, with his own money, purchase for himself of a third person, a valid and subsisting outstanding debt owing by the company, and secure a perfect title thereto." Such a transaction is not even the ground for entertaining the suspicion that it is in violation of any duty wbicli be owes the corporation, and there is no presumption of law, against its fairness. If the obligation is valid the owner «may sell and transfer it to any one who is willing to become a purchaser, and he thereby secures an unquestioned title. (See the ea|es last cited; also Clark v. Flint and Pere Marquette R. Co., 5 Hun, 556.)

The other question to be considered in this connection is, will the trustee or director be permitted to enforce a collection of the debt thus acquired for its entire amount, or shall he be limited to the sum which he actually paid for the debt or obligation. I am unable to discover any good reason why he should not be permitted to enforce payment for the full-amount, nor can I find any decision limiting the trustee to the sum actually paid. In these times a large proportion of the mercantile, commercial and manufacturing business of the country is carried on by corporations, and many of them issue, in large amounts, securities in the form of negotiable instruments, payable in the future, which are purchased and held as investments by capitalists and others, and it has never been questioned but that a director in a corporation of this character might purchase the same of a third person at a discount, and collect from the company the entire sum secured thereby.

If these views are correct, then the decree is erroneous so far as it directs that the present owner of the judgment is not entitled to receive thereon any greater sum than was paid to Kennedy and Company on the sale and transfer thereof.

The trial court did not adjudge the sale which took place as invalid, and the decree is based upon the supposition that it was entirely regular. It is undoubtedly incumbent upon a director of a corporation, when seeking to enforce a collection of a judgment, owned by himself individually, by a sale of the property or assets of the company, to act with the greatest 'fairness and publicity, and to do every thing reasonably within his power to secure the highest price for the property sold, and if he is guilty of any improper action by which he secures to himself the property of the company for less than its fair market value, the sale may be set aside on the application of interested parties. JBut, as I understand the theory of the decree, the prior sale is not set aside, but another sale is ordered as a means of securing to the plaintiff, to be applied on tfyeir judgment, the value of the property over and above the sum agreed to be paid to Kennedy and Company on the transfer of the judgment to Charles F. Staples. *•

The respondents were not made parties in the foreclosure proceedings, and in disposing of the questions now presented we have not intended to express any opinion on the subject, whether the same have been properly conducted, so as to cut off the plaintiffs’ lien on the property.

As it is impossible to conform the decree to the rights of the parties, upon the facts as they now appear the judgment is reversed and a new trial ordered, with costs to abide the event.

Smith, P. J., and IIaRDIN, J., concurred.

So ordered.


author: Barker, J.:

text:
    GEORGE W. CARTER, Respondent, v. JOSEPH W. WALLACE, Appellant.

      Sale of personal properly — the risk of loss follows the legal title,

    .The plaintiff and defendant entered into ail agreement whereby the plaintiff was to sell, and the defendant to take and use a mare belonging to the plaintiff, and if she drove to suit him, he was to pay the sum of $130 for her; if she did not suit him he was to return her. The mare was delivered to the defendant, and while in his possession was taken sick and died. In an action to recover the agreed price:

      Reid, that the plaintiff was entitled to recover; that after the delivery, and until the defendant had exercised the election conferred upon him by the contract, the title, and with it the risk of loss, was in him.
    Appeal from a judgment in favor of tlic plaintiff, entered upon tlie report of a'referee.

      Eli Soule, for the appellant.

      Burrell c& JRolmson, for the respondent.
   Barker, J.:

The action was brought to recover the purchase-price of a horse alleged to have been sold and delivered to the defendant.

The plaintiff was the owner of the horse, and it is admitted that be delivered it into the possession of the defendant. While in the possession of the defendant the horse was taken sick, and died'within one day thereafter. Thq parties had negotiations concerning the sale of the horse, which resulted in the delivery of the horse as stated'. The plaintiff claims that the negotiations resulted in a complete and absolute sale of the property at the price óf $130, and that the same was delivered in pursuance of the bargain, with the privilege on the part of the defendant to return the same if, on trial, she did not drive to suit him. If such was the agreement then the title to the property passed to the vendee, and until an election is made to return the property it is at the risk of the purchaser, and in case of any loss or injury, to the property, it will fall on the purchaser;

Any form of words importing a bargain whereby the owner of chattels signifies his willingness and consent to sell the same, and another shall signify his willingness and consent to buy in prcesmli for'a specific price, if followed by a delivery of the article or a pay: ment of the whole or part of. the purchase-money, constitutes a perfect sale and transfer of the title to the purchaser.

I think the plaintiff’s evidence fairly supports the finding of the réferee, ’which is, in sirbstance, that the plaintiff and defendant differed'into an-agreement whereby the defendant was to take and use the mare, and if she drove to suit him he was to keep her and' pay the plaintiff therefor the sum of $130, and in pursuance of such agreement the plaintiff delivered the animal to the defendant. After stating other facts as found by him he finds as'a conclusion of law that the plaintiff is entitled to recover of the defendant the sum of $141.76.

The only serious question which arises in this case is whether the title to the property passed to the defendant in pursuance of the arrangement under ■ which the delivery was made to him. It is a general rule of the common law that a mere contract for the sale of goods where nothing remains to be done by the seller to make good a delivery transfers the property, although the price has not been paid nor the goods sold delivered to the purchaser. (Bradley v. Wheeler, 44 N. Y., 502.)

Chancellor Kent, in his Commentaries, says the common law very reasonably fixes the risk where the title resides, and where the bargain is made and rendered binding by giving earnest, or by part payment, or by part delivery, or by a compliance with the requisites of the statute of frauds, the property, and with it the risk, attached to the purchaser. (Vol. 2, 449; Groat v. Gile, 51 N. Y., 431; Taylor v. Tillotson, 16 Wend., 494.)

As to the terms of the contract, and that the bargain was complete, the .plaintiff relies upon his own evidence. In material respects the same was flatly contradicted by the defendant. The referee having an opportunity to observe the candor and appearance of the parties, it was for him to say which of them was entitled to the most credit. Our inspection of the evidence satisfies us that the plaintiff’s testimony, if the same is to be believed and followed, fully justifies the finding of fact set out in the report. The horse was taken severely sick, and before she died was returned to the custody of the plaintiff, and the plaintiff’s evidence tended to show that the defendant placed the animal in his possession to be doctored, and before recovery she died. The defendant’s evidence tended to show that he delivered her to the plaintiff, in pursuance of the option he had to do so, if she did not suit him after trial and rescind the contract.

We see no reason for interfering with the referee’s conclusions on this question, as the evidence is highly conflicting and was given chiefly by the parties themselves.

Judgment affirmed, with costs.

Smith, P. J., and Hardin, J., concerned.

Judgment affirmed.


author: Baeker, J.:

text:
    GEORGE BLOUNT, Respondent, v. AMY JANE WETHERELL, Appellant.

      Sale <tf diluted milk to a cheese factory — who may sue for the penalties —1878, chap. 237.
    In the season of 1880 the plaintiff and a number of other persons, more than seven, formed an informal association for the purpose of manufacturing cheese, from milk to be furnished by them, and elected a secretary, treasurer and salesman. The cheese was to be manufactured by the plaintiff, in a building and with machinery belonging to him, at a specified price per hundred pounds. The defendant, who had refused to join the association, sold her milk to the plaintiff, at a fixed price, knowing that fie purcfiased it ior tfie purpose of manufacturing cfieese tfierefrom. Tfie plaintiff delivered tfie milk so purcfiased, at the factory, as his own, and made cfieese therefrom for the association. In this action, brought by tfie plaintiff against tfie defendant to recover the penalties prescribed by chapter 237 of 1878, for diluting milk sold to be used in making butter or cfieese, tfie complaint alleged, among other things, that tfie association, of which tfie plaintiff was a member, consisted of more than seven members.

      Held, that if tfie other associates should have been joined as parties to tfie action, the defect was waived by the failure of the defendant to demur.
    That tfie plaintiff was entitled to recover.
    Appeal from a judgment of the Oswego County Court in favor of the plaintiff, entered upon the verdict of a jury.
    The action was brought to recover penalties for a violation of chapter 237 of the Laws of 1878. So much of the same as is necessary in disposing of the question presented is as follows: “ Whoever shall with intent to defraud sell, supply, or bring to be manufactured, to any butter or cheese manufactory in this State, any milk diluted with water * * * shall for each and every offense forfeit and pay a sum not less than twenty-five dollars, nor more than one hundred dollars, with costs of suit, to be sued for in any court of competent jurisdiction for the benefit of the person or persons, firm, or association or corporation, or their assigns, upon whom such fraud shall be committed.”
    The verdict was for $275. The defendant admitted that she sold and delivered to the plaintiff the milk from her dairy of cows for the season mentioned, and that upon four separate occasions and on different days she diluted the milk so delivered with water.

      J. J. Lamoree, for the appellant.

      Pardee <& Piper, for the respondent.
   Baeker, J.:

The only question presented on this appeal that merits attention is, was the plaintiff entitled in his own right to the penalties incurred. The statute gives the penalty to any manufacturer of butter or cheese, whether the same be carried on by an individual, a partnership, or an association of individuals or a corporation. If a fraud is perpetrated on a dealer in milk by an adulteration of the article by the seller, and the same is intended to be used otherwise than in making butter.and cheese, the statute does not impose upon the wrong-doer a penalty.

The business of making cheese was carried on at the town of Volney during the season of 1880. The plaintiff was the owner of the building and the manufacturing apparatus. The milk from which the cheese was made was supplied by the plaintiff and by other farmers living in the neighborhood. These persons who designated themselves as patrons of the factory, entered into an informal association and elected managers of the business, who were designated as secretary, treasurer and salesman. The associates consisted of more than seven persons, but the number is not stated. The plaintiff contracted with the association to receive milk at the factory and to make it into cheese at a fixed price per hundred pounds. The defendant was not one of the associates and declined to join the association or to deal with it. The milk from her own cows she sold to the plaintiff, individually, at a fixed price per pound, and she agreed to deliver the same to the plaintiff at the factory as a part of the contract of sale. The same was there received by the plaintiff, and he immediately delivered the same to the factory as his own and as one of the partners or associates, and the same was with the other milk made into cheese, which was sold and the net proceeds divided among the patrons of the factory. It was understood by the defendant that the milk which she sold and delivered to the plaintiff was to be used by him in making cheese at the factory, and that he purchased it for that purpose and none other. That the plaintiff was in fact a manufacturer of cheese, admits of no doubt, and that the defendant sold and delivered to him 'milk to be made into cheese, is equally clear and certain. She had no dealings whatever with the association as such. That she violated the statute is admitted and the penalty should go to the plaintiff.

It is set forth in the complaint that he was a member of an association consisting of seven persons and upwards, who were associated together for the purpose of manufacturing cheese, and that the action was brought for the benefit of himself and for all the members of the association. The pleader doubtless made these aver-ments with a view of meeting the objection, if the one now presented was made. So much of the complaint as refers to the other members of the association may be treated as surplusage, for tbe complaint states all the facts and, specifically, the contract relating to the sale of the milk to him by the defendant. The averment was that the same was sold for the purpose of being made by the plaintiff into cheese at the factory.' If the penalty incurred belonged to the plaintiff and his associates, then the non-joinder of these persons ■ has been waived by an omission to demur. . The rule is, if the non-joinder appears on the face of the complaint and the defendant omits to demur for that reason, he waives the defect of parties and cannot raise the objection by answer or on the trial. (De Puy v. Strong, 37 N. Y., 372; Code of Civil Pro., §§ 488, 498, 499.)

The exceptions taken on the trial mostly relate to, and were intended to bring up the question which we have considered, and do not need separate or further consideration. Some of the rulings of the learned county judge, made on the trial in excluding evidence offered by the defendant, were erroneous, but the evidence rejected, as it turns out, related to issues which were not, in the end, in dispute.

Judgment affirmed, with costs.

HaRdin, J., concurred; Smith, P. J., not sitting.

Judgment affirmed.


text:
    GILBERT FORBES, Respondent, v. GEORGE GARFIELD, Appellant.

      Partnership — payments made by a surviving partner on a firm note — when they prevent the statute of limitations running in favor of the other partner.

    Where payments are made by one of several partners, after tbe dissolution of a firm, upon a note given by tbe firm for goods sold to it, and sucb payments are received by tbe payee in ignorance of tbe fact that tbe firm bas been dissolved, sucb payments are to be treated as if made by tbe firm, and prevent tbe running of tbe statute of limitations in favor of tbe other members of tbe .old firm, although they were made without their consent or directien.
    Appeal from a judgment in favor of the plaintiff, entered upon the report of a referee.

      William E. Hobby, for the appellant.

      J. <& Q. Van Voorhees, for the respondent.
   BARKER, J. :

The action is upon a negotiable promissory note made by Newton, Garfield & Co., dated December 7, 1867, for the sum of $400, made payable to the plaintiff or bearer one year after date. The makers were H. G. Newton, George Garfield and E. M. Harwood, who were doing business as produce merchants under the firm name of Newton, Garfield & Co. The consideration was for grain sold and delivered to them by the payee. The referee held as a conclusion of law that the plaintiff was entitled to judgment against all the makers after deducting all payments. The only defendant who appeared and answered was the appellant, who pleaded in bar of a recovery the statute of limitations. Whether the facts as found by the referee sustain this defense, is the only question of importance presented for our consideration. After the date of the note and on .the 29th day of April, 1871, the said partnership was dissolved, and by an instrument in writing the assets were transferred to Newton and Harwood, and they agreed to pay its debts and discharge all its obligations. At the time of the dissolution there had been paid upon the note, on the 16th day of April, 1869, thirty-eight dollars and two cents. Business of the same character was continued at the same place by the instaying members, Newton and Harwood, under the name and style of H. G. Newton & Co., for one year, when they dissolved and the business was thereafter continued by Newton, in his individual name, until the 13th of February, 1879, when he failed and made a general assignment for the benefit of his creditors. There was paid by Newton on the note, December 16, 1872, the sum of $102, and on the 11th day of March, 1876, ninety-one dollars and eighteen cents, and on the same day a further sum of fifty dollars, all of which were indorsed upon the note. Thi's action was commenced on the 5th day of March, 1879. The referee found that at the time the several payments were made by the defendant Newton, as already stated, the plaintiff had no knowledge of the dissolution of the firm of Newton, Garfield & Co., the makers o| the note, and that he received such payments in the belief that the firm at that time continued to exist and do business, and that they made such payments.

Payment upon a debt or obligation is, in legal effect, a new promise to pay the same and renews the debt or obligation, and when the statute is pleaded as a defense, the time of making the promise is to be computed as from the time of such payment. As the payee of the note had no knowledge of the dissolution of the firm at the time one of the partners made the payments to him, such payment has the same force and effect as if it had in fact been made with the the consent and by the direction of all the members. To exempt co-partners from liability on a contract made by one of the firm in the name of the firín after dissolution, with a previous dealer with the firm, it must be made to appear that the person with whom the new debt was contracted, or new promise made to pay an existing debt had notice of the dissolution. Bindley says, at page 337 : “ Those who have dealt with the firm before the change took place are entitled to assume, until they have notice to the contrary, that no change has occurred.” The same rule is laid down by Collier on Partnerships (§ 533), and also by Story (§ 161). This rule has been frequently applied in cases in all essential particulars like the one before ns.

In National Shoe and Leather Bank of the City of New York v. Martin, Herz (89 N. Y., 629), the action was upon several indorse-ments made in the name of Martin Herz and Company, the members of which firm were all made defendants. It appears that prior to its dissolution it did its banking business with the plaintiff, and in the course of it obtained discounts, made deposits and drew checks, as is usual where the relation of banker and depositor exists. After the dissolution, the business was continued at the same place by one of the firm, and he, with the consent of the outgoing members retained the name of the old firm. After the dissolution, the bank continued to discount notes endorsed by the new firm in the name of the old firm, the bank supposing and believing that it was done in the business of the old firm, they having no knowledge of its dissolution; and it was held that the discount was made under such circumstances as brought the case within the principle, which permits one partner to bind his copartner in dealing under the firm name with one who had no knowledge of the dissolution, and a recovery in favor of the bank against all the members of the .old firm was upheld.

The case of Sage v. Ensign (2 Allen, 245), is directly in point, the note in suit was executed by the makers in their firm name, and after dissolution one of the partners made a payment thereon. The defense interposed was the statute of limitations, and without giving-effect to this payment as constituting a renewal, that defense would have prevailed. The holders of the note insisted that they had no notice of the dissolution at the time the payment was made, and it was held that the payment by one of the firm after dissolution, and before notice, and while the payee was ignorant of it, had the same effect as if it had been made during the continuance of the firm. That as the holder had no notice of the dissolution he had a right to receive the payment as a payment by the firm, and to rely upon it as a partnership act, with all the incidents and legal consequences of such a payment. (See, also, Austin v. Holland, 69 N. Y., 571; Tappan v. Kimball, 10 Foster [30 N. H.], 136; Graves v. Merry, 6 Cow., 701; Nat. Bank v. Norton, 1 Hill, 572; Van Epps v. Dillaye, 6 Barb., 244; Robbins v. Fuller, 24 N. Y., 572.)

The failure of the defendants to give notice to the plaintiff, who had previous dealings with them as partners, that the partnership was dissolved, distinguishes this case from those in which a promise of payment made by one partner after the dissolution of the partnership has been held not to take a case out of the statute of limitations so as to affect his copartnership liability. In principle the case is the same as where a previous dealer with a fix-m sells and delivers goods to one of the partners after dissolution, without having .knowledge of the fact that the firm has gone out of existence, and believing that the ti-ansaction was with the same firm.

After a pei-usal of the evidence pertinent to the question of whether the plaintiff had knowledge of the dissolution of the firm at the time these payments were made, we find no reason for differing with the conclusions reached by the referee. On the trial the defendant offered in evidence the agreement of copartnership entered into between Newton and Harwood, and the same was rejected and the defendant excepted. It was competent to prove that these parties did continue the business at the old place, and the film name which they assumed, but the terms of the same were wholly immaterial. The plaintiff made no objection to proof of the fact that a new firm was created, and limited his objection to proof of the contents of the agreement.

Each of the other exceptions taken by the appellant on the trial have been examined, and none of them appear to be well taken.

The judgment should be affirmed, with costs.

Smith, P. J., and Hardin, J. concurred.

Judgment affirmed.


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    JOHN H. MOORE, Appellant, v. CORNELIUS M. HORTON, Respondent.

      Bankniptey proceedings — a discharge has no extra-territorial effect — conditions of a composition in bankruptcy — waiver thereof, by a creditor.

    In September, 1875, the defendant, then a resident of Buffalo, filed a voluntary petition in bankruptcy and thereafter effected a compromise with his creditors, whieh was duly confirmed by the court. At this time the defendant was indebted to one Moore, a resident of Canada. Thereafter Moore brought an
    •. action against the defendant in the Canadian courts upon the said indebtedness and recovered a judgment therein. The defendant appeared in the action and gave evidence upon the trial, but did not plead his discharge in bankruptcy.
    In this action, brought in this State upon the Canadian judgment by an assignee thereof, the defendant pleaded the discharge in bankruptcy as a defense.

      Held, that the debt upon which the judgment was recovered was discharged by the bankruptcy proceedings, but that this defense would not in this case have been available to the defendant in the Canadian court, even if it had been pleaded, as the discharge had no extra-territorial effect.
    That it was a good defense to this action.
    The validity of the defendant’s discharge was impeached by the plaintiff upon the ground that he had neglected to deliver to him notes of the amount and tenor agreed upon at the meeeting of creditors when the composition was arranged.

      Held, that the objection could not be raised by the plaintiff as it appeared that he had refused to participate in the bankruptcy proceedings, and had notified the defendant that he would not accept the notes.
    Appeal from a judgment entered upon the report of a referee, dismissing tbe plaintiff’s complaint.

      Tbe action was founded upon a judgment recovered in the courts of the Dominion of Canada, the only defense interposed was a discharge in bankruptcy granted to the defendant prior to the commencement of the action, in which the judgment sued upon was rendered. The facts are stated in the opinion of the court.
    Wadsworth, HojoTcins do White, for the appellant.

      Milo A. Whitney, for the respondent.
   BARKER, J.:

The defendant in September, 1875, then a resident of the city of Buffalo, filed his voluntary petition in bankruptcy and was adjudged a bankrupt, and thereafter such proceedings were duly and regularly taken that a composition, proposed by the said defendant, of twenty-five cents on a dollar of his indebtedness was accepted by the requisite number and amount of his creditors, and the same was confirmed by the court. At the time of filing the petition the defendant was indebted to Hugh Moore, a resident of Canada, in the sum of $472, the balance due on a mercantile transaction between the parties had in the city of Buffalo.

After the defendant received his discharge and in 1877, Moore commenced an action against the defendant in the Courts of Common Pleas for the Province of Ontario, in the Dominion of Canada, based upon the said indebtedness. The defendant appeared in the action and was present on the trial, and gave evidence therein, and judgment was rendered in the plaintiff’s favor for the sum of $592. It does not appear from the bill of exceptions that the defendant pleaded his discharge in bankruptcy in bar of a recovery in that action.

The referee held as a matter of law that the debt upon which the judgment in suit was rendered, was discharged by the composition proceedings in bankruptcy before the said judgment was rendered, but that such defense wjis not available to the defendant in the Canadian court. The judgment has been assigned to the plaintiff in this action.

As Hugh Moore, the original creditor, was not a resident of this State nor of any of the United States at the time the defendant presented his petition in bankruptcy and received his discharge,-the same was no bar to a recovery in a suit in the courts of Canada, founded on the debt existing in Moore’s favor against tbe defendant. Moore did not prove his debt'before the register, nor in any manner appear in, or consent to or approve of the proceedings in bankruptcy.

The discharge of a debtor from his- just debts, without payment, according to the terms of the contract by which the debt is created, or by a voluntary release therefrom by the creditor, is wholly unknown to the common law. A discharge, under and in pursuance of the statutory laws of the country where the debtor resides, has no extra-territorial effect; therefore when the debtor goes beyond the limits of the State under whose laws he receives his discharge, it affords him no protection from his original liability on a debt owing to a creditor residing in a foreign country. So when the defendant visited Canada and became subject to the jurisdiction of its courts, the r’elation of debtor and creditor existed between himself and Moore as to the debt in suit, according to the terms of the original obligation. As the laws of that country take no notice of our insolvent or bankrupt laws, the defendant’s discharge would have been of no avail as a defense to the suit upon the original indebtedness if the same had been pleaded. These propositions have been so frequently adjudicated that an original discussion of the same is unnecessary. (Ogden v. Saunders, 12 Wheat., 213; Hoyt v. Thompson, 5 N. Y., 320; Johnson v. Hunt, 23 Wend., 87; Abraham v. Plestoro, 3 id., 538; Mosselman v. Caen, 4 T. & C., 171 [2 Kent’s Com.], 406; Smith v. Buchanan, 1 East, 6; Pedder v. McMaster, 8 Term, 609).

The case of Potter v. Brown (5 East, 124), cited by the plaintiff in support of his contention, that if the defendant had pleaded his discharge in the Canadian suit it would have prevailed, is not in point. In that ease the debtor and creditor both resided in the United States, where the debt was created and where the discharge was granted. Afterwards both parties became residents of England, and a suit was there commenced against the debtor on the original indebtedness. The discharge was held good and constituted a bar to a recovery, for the reason that both the creditor and the debtor migrated to England after the discharge, and their existing relations continued as between themselves; and a discharge from the debtor’s debts, rendered in pursuance of the statutory laws of another country, where both • then resided, did not clash, as the court remarked, with the rights of any English subject. Neither is Ohlemacher v. Broek (44 Upper Canada Rep., 366) in point. In that case also the creditor and debtor resided in one of the States when the discharge was obtained and where the debt was created. In a suit on the original debt in the Dominion of Canada the court held the discharge a bar.

If the defendant had pleaded his discharge in the Canadian suit it would have been unavailing to him as a defense. It serves as a complete defense in actions prosecuted in the courts of this State, as to all debts existing at the time he filed his petition, by force and operation of our own laws. In a legal sense the cause of action here is the same as that upon which the action was prosecuted in the Canadian courts. It is a suit upon the original contract, which was not merged in the foreign judgment. (Wood v. Gamble, 11 Cush., 8; Eastern Townships Bank v. Beebe, 53 Vt., 177.)

In the latter case it was held that a judgment in Canada, as a cause of action, is of no higher grade than the original debt on which the suit was founded, as the debt was not merged in the judgment, and that a distinction existed in this respect between the judgments of a foreign country and those rendered in the federal eourts or the State courts.

The only objection made by the plaintiff to the validity of the defendant’s discharge is that he neglected to deliver to the plaintiff notes of the amount and tenor agreed upon at the meeting of creditors when the composition was arranged. The evidence upon this subject is not set forth in the bill of exceptions, but the fact is stated that by the terms of the composition the same was to be evidenced by the defendant’s notes at four, eight and twelve months from the confirmation of such composition by the District Court in bankruptcy, and that the notes were not executed by the defendant nor tendered to the said Hugh Moore; that the defendants gave evidence tending to prove that, after such composition in bankruptcy, Moore notified the defendant that he would not receive- the said notes nor have anything to do with such bankruptcy proceedings. The bill further states that it was proven on the trial that no such notes were ever executed or tender made to said Hugh Moore, in compliance with the composition proceedings in bankruptcy as required by the bankrupt act, but that on the 2d of March, 1877, the defendant tendered to John H. Moore, then the assignee of the debt, $100.22 in cash, which he refused to accept.

The referee has found as a fact that Moore refused to take any part in the bankruptcy composition proceedings, and did not prove his claim and refused to take any part therein, and declined to accept said compromise or composition. As a conclusion of law the referee found that the tender of notes, provided for by the composition in bankruptcy, was rendered unnecessary by the refusal of Hugh Moore to accept the same, and his refusal to take any part in the bankruptcy proceedings.

As it does not appear by the bill of exceptions, when .Moore gave the defendant notice that he would not accept the compromise or composition notes, it is to be presumed, in support of the referee’s legal conclusion, that such notice was given to the defendant before the time any of the notes became due and payable. The refusal of this creditor to participate in the bankruptcy proceedings, and the notice which he gave the bankrupt that he would not accept the composition notes, was a waiver on his part of a delivery of the same, and he is estopped from making the objection to the validity of the discharge. (Lawrence v. Miller, 86 N. Y., 131; Chemical National Bank v. Kohner, 85 id., 189.)

It is not before us to review the conclusions of the referee, that the debt was not contracted in any fiduciary capacity, as the evidence upon this .issue is not set forth in the bill of exceptions. It is, however, therein stated that the defendant gave evidence tending to prove particular facts, which conclusively indicates that it was an ordinary transaction between merchants for the sale and delivery of goods, and at the time the account was closed a balance was found due the plaintiff’s assignor

The learned referee prepared a written opinion which accompanies his report, giving his reasons for the conclusions which he reached on the facts and the law of the case, in which .we fully concur.

The judgment should be affirmed, with costs

Hardin, J., concurred; Smith, P. J., concurred in result.

Judgment affirmed.