author: O’Brien, J. Parker, J. Van Brunt, P. J.

text:
    Joshua A. Baily et al., Resp’ts, v. Lewis M. Hornthal, etc., App’lt.

      (Supreme Court, General Term, First Department,

      Filed October 18, 1895.)

    1. Trial—Relief.
    R is the duty of the trial court, in the absence of objections to the sufficiency of the complaint, to give to the plaintiff the benefit of any cause of action established by the evidence.

      2. Fraudulent conveyances-Presumption.
    R is only where it is conceded or proved that the transfer was voluntary that the presumption will be indulged in that the person making it was insolvent, thus casting upon him the burden of showing that it was not made while he was not in such an insolvent condition.

      2. Same—Fictitious claim.
    Where partners, as between themselves, make an agreement by which in good faith and without injury to the then creditors, the special partner is to receive what is agreed upon to be paid him at a future date, such claim is not fictitious nor one that cannot be enforced; and such claim, valid as between themselves, is not changed into a fictitious one as against subsequent assailing creditors.

      4. Same.
    Where a limited partnership is insolvent at its limitation, a general partnership, which succeeds to its assets and liabilities, cannot devote any portion of such assets in payment of the amount originally contributed by the special partner, as against creditors of either the limited or the general partnership.
    Appeal from a judgment in favor of plaintiffs.

      William H. Cohen, for app'lt; Charles JE. Hughes, for resp’t.
   O’Brien, J.

This is an action by judgment creditors with unsatisfied executions to compel the defendant Hornthal to account for moneys received from the judgment debtors. These judgments aggregating $8,189.49, were recovered on December 20, 1892, against Albert Weis and Robert Weis for goods sold and delivered to the firm of Weis Bros. From May 1, 1886, until April 30, 1891, Weis Bros, were a limited partnership (organized under Texas Law), doing a dry goods business at Galveston. The judment debtors Weis were the general partners, and the defendant Hornthal was the special partner. The limited partnership was renewed yearly until April 30, 1891, when it was permitted to expire. The judgment debtors Weis retained the assets, and continued the business under the same name without change or interruption. On November 5,1891, Weis Bros, failed, announcing their insolvency by the execution of a deed of trust to one Gus Lewi for the benefit of creditors, whoso claims aggregated $225,-806.16. This trust covered all the firm merchandise and real estate. Certain property of the firm had been pledged previously, and the individual property of Albert Weis was conveyed in trnst for certain creditors, but no surplus was realized from either. The claims of the other creditors (unsecured), including plaintiffs, amounted to $314,894.56, and the available assets, outside of the trust estate, were open accounts then estimated to be worth $166,-404.23. The contracts for the sales by plaintiffs to Weis Bros., with one exception, were made prior to the termination of the limited partnership. The deliveries took place in May, June, and July, 1891, except two under Baily’s first contract, which were made on April 20 and 30, 1891, respectively, and amounted in value to $711.29.

At the formation of the limited partnership in April, 1886, Hornthal contributed $50,000 to its capital. On each renewal, he withdrew and at once returned $50,000, so that there was no other or different contribution than such as was originally made. In November, 1888, Weis Bros, loaned to the firm of Hornthal, Whitehead, Weissman & Co., of New York, their accommodation paper to the amount of $25,000, which was the first entered in the ledger to the latter firm to the credit of L. M. Hornthal, but this was subsequently corrected and cancelled by charging the item back to Hornthal and crediting Weis Bros, with the amount, so that it then appeared as a loan from Weis Bros, to the New York firm of which the defendant Hornthal was a member. After the dissolution, Hornthal was charged with $25,000 in his special capital account with Weis Bros., and his New York firm were credited with the same amount in their account, the payment to Hornthal being effected by a cancellation of the loan to Hornthal, Whitehead, Weissman & Co. The balance to Hornthal’s credit in the special capital account ($26,433.34) was then transferred to the account between Weis Bros, and Hornthal’s New York firm, and for this balance Hornthal was preferred in the Lewi trust deed, which balance was subsequently paid to Hornthal by the trustee.

Upon the trial, these facts, and others that will be'adverted to, were presented without objection and the only exceptions appearing in the record relate to the findings of the court upon which the decision was based. There being no objections, therefore, to evidence or to the sufficiency of the complaint, what was said in Knapp v. Simon, 96 N. Y. 292, is opposite:

“It was the duty of the court below, in the absence of objections to the sufficiency of the complaint, to give the plaintiff the benefit of any cause of action established by the evidence.”

Turning, then, to the record as made, and leaving out of consideration the theory that the defendant was to be charged with the common-law liability of a general partner, which was abandoned upon the trial, and not considered by the judge, the case upon the evidence has two aspects : First, the plaintiffs may be regarded as creditors of Albert Weis and Robert Weis, whose rights have been violated by the preference of a fictitious claim; or, second, the plaintiffs may be treated as creditors of the special partnership of Weis Bros. The first was the position taken by the trial court, and in this aspect it was immaterial whether plaintiffs were creditors of the special partnership. Upon the latter theory, if sustainable, $1,323.11 included in the Baily judgment will have to be eliminated, because the claim therefor arose subsequent to the dissolution of the special partnership.

Upon evidence which we regard as far from satisfactory, the trial judge found that the special partnership of Weis Bros, was insolvent at the time of its dissolution, and that its liabilities were in excess of the amount of special capital contributed by Hornthal. As in this view there was no indebtedness-from the firm toHornthal, his claim being treated as fictitious, it was held that the creditors of the firm succeeding the special partnership could recover the amount paid to Hornthal by the trustee. The ground for this conclusion was that the rights of the creditors of Albert Weis and Robert Weis were violated by the preference of a fictitious claim. As said in the opinion below:

“No money was due to Hornthal, either from the special partnership or the new firm, and the general partners had no right to convey to him the property of this insolvent firm, which belonged to its creditors.”

Necessarily, the entire foundation for the finding and conclusion of the trial judge was that the special partnership, at the time of its dissolution, was insolvent. The evidence on the part of the plaintiffs in support of this finding started with the showing that, at the time of the failure of the general partnership in November, 1891, there was a deficiency of assets amounting to at least $150,-000 ; and it was urged that this raised a'presumption that the condition thus appearing dated back to the dissolution of the special partnership in the April preceding, and to support such presumption authorities were relied on which held that, where a voluntary conveyance has been made, and the grantor is subsequently shown ■ to be insolvent, insolvency will be presumed at the time of the transfer. Without finding fault with this proposition of law, it may be said that the payment to the defendant Hornthal was not a-voluntary conveyance of property of the firm, unless we presume that the firm was then insolvent. In other words, to obtain the benefit of the rule two presumptions should be established : First, a voluntary conveyance or gift; and, secondly, insolvency when it was made. If the special partnership, at its dissolution, was not insolvent, then, clearly, Hornthal having the right to a repayment of his capital contributed, such .repayment could not be regarded as a voluntary one, and it would be going further than any of the cases relied upon by plaintiffs to hold that the court will presume that the gift was voluntary, and upon that build another assumption that the firm was insolvent when the payment was made. As we understand it, it is only where it is either conceded or proved that the transfer was voluntary that the presumption will be indulged in that the person making it was insolvent, thus thrusting upon him the burden of showing that it was not made while he was in such an insolvent condition. Undoubtedly, if a firm is shown to be overwhelmingly insolvent to-day, the inferencee is justified that it was so yesterday, and for some period back; but liow far back will necessarily depend upon the degree of insolvency, and the remoteness of the period to which the inference relates. This is a logical inference, and is to be distinguished from that in the class of cases to which we have have referred, in which it has been held that where a voluntary gift is shown insolvency will be presumed. The plaintiffs are entitled to the full benefit of the logical inference that arises, and the weight of this is to be determined by the condition of the general partnership when it failed in November, 1891.

It is admitted by Hornthal that the deficit at that time amounted to $150,000. In addition, the plaintiffs’ experts presented a report showing the course of business from April 1, 1891, to the date of the failure, which gives the total losses during that period as $32.415. ■ Besides this, we have the drawings of the partners from April until November, amounting to between $20,000 and $30,000, to which must be added depreciation of unsold merchandise and losses in outstanding accounts. These represent quite a considerable amount, and are as. much or more than the deficit of $150,000 admitted by Hornthal. It is not our purpose to go over the accounts, which have been ably summarized by the respective counsel, the plaintiffs showing a deficit of at least $200,-000, while the defendant makes an apparent showing of assets amounting to $546,596.21, and of total liabilities, secured and unsecured, amounting to $540,700.72. This wide divergence in the value of the assets is reconciled to some extent by remembering that plaintiffs have taken the valuation of an insolvent firm that has stopped business, while the defendant regards them as assets belonging to a live and going business, and not to a defunct firm. This will account for the financial condition of the firm after it had failed, as shown by plaintiffs, as contrasted with the defendant’s showing when it was a live and going concern. It may be that the plaintiffs are right, and upon conflicting evidence we should not differ with the finding made by the learned trial judge, that at the dissolution of the special partnership it was insolvent ; but we have referred to the respective contentions for the purpose of showing that, while after the failure of the general partnership there was a large deficit, resulting from the sale of property and its distribution among creditors, there was no overwhelming proof to sustain the conclusion that the special partnership at its dissolution was insolvent.

Assuming then a difference of opinion upon this question, depending upon how we look at the proof, and taking the view adopted by the trial judge, that the special partnership was in fact insolvent, the question remains, whether the adjustment at that time made between the partners can be successfully assailed by those who subsequently became creditors of the general partnership, with which the defendant Hornthal had no connection. At' first blush it would seem that, upon the dissolution of the special partnership, the only ones interested in the adjustment made would be the partners themselves and their then creditors ; and there is no good reason apparent why the partners could not, as between themselves, settle their differences as they saw fit, provided this was done without injury to or violation of the rights of their creditors. If, therefore, their creditors are fully protected, the partners were at liberty, if acting in good faith and without any intent to defraud, to reach a basis of settlement which should include the right of the defendant Hornthal to be paid his special capital. ' And, assuming that no creditor was wronged, and, as was here done, the special partner permitted the general partners to take over all the assets, and continue the business, upon an agreement to pay him what he contributed by way of special capital, could not Hornthal, as against the general partners, sue and recover upon such an agreement to pay him? Could they, in such an action, set up as a defense that they were relieved from liability because, at the time they made the agreement, the firm, without their knowledge, was insolvent, and that the claim they had agreed to pay was therefore fictitious? In this connection it must be remembered that the general partners had complete control of the business and the books, and were in such a position when they made the agreement that they knew or will be presumed to have known the actual condition of the firm; and if, instead of accounting and determining the exact status, they preferred to make the agreement to pay the special partner his capital, we fail to see why they should not keep such agreement.

Of course, this discussion has proceeded upon the theory that such an arrangement was in good faith, and without any intent to defraud. If there was anything to show that the special partnership was so overwhelmingly insolvent that all the partners knew, or should be presumed- to have known, its condition, justifying the inference that, by a collusive arrangement, entered into between the parties, it was agreed that the special partner was to get out his money at the expense of those who subsequently might deal with the general partnership, then, undoubtedly, because a fraud upon them, they could recover the amount which under such circumstances was paid. Here, however, there was no evidence of bad faith or fraud, or that what was done was with intent to cheat subsequent creditors. One of the Weises, examined for plaintiff, testified:

“ On the 30th of April, 1891, and prior thereto, the firm of Weis Bros, enjoyed good credit, and assets exceeded liabilities on the 30th of April, 1891."

It may be that the evidence shows that, in this statement, the witness was in error; but it is important, as rebutting the presumption that the firm was in such a condition of insolvency that the parties knew or should have known that it was insolvent. If, in the honest belief that it was solvent,—and nothing to the contrary appears in this record,—the partners, as between themselves, made an agreement by which, in good faith and without injury to the then creditors, the special partner was to receive what was agreed to be paid him at a future date, we fail to see how this can be regarded as a fictitious claim or one that could not be enforced.

Our conclusion upon this branch of the case, therefore, is that, had there been evidence of an agreement to pay Hornthal, the plaintiffs’ proofs did not go far enough, and while there may have been sufficient to justify the conclusion that the special partnership was insolvent at the date of its dissolution, there is nothing to show any fraudulent arrangement or agreement in bad faith by which the claim that the defendant Hornthal had against the partnership was changed from a valid claim, as between themselves, into a fictitious" one, as against subsequent assailing creditors, [t will thus be seen that we do not agree with the plaintiffs in the view that, if there had been an agreement at the time of the dissolution of the limited partnership, to pay Hornthal his capital balance, it and the payments thereunder would have been fraudulent and void as against so much of plaintiffs’ claim as arose after such dissolution. We have been led into this discussion because it is alleged in the complaint, and stated by the trial judge in his opinion, that notes were given to Hornthal for the balance due him. This, as evidencing an adjustment and agreement to pay, would have given defendant Hornthal a valid, enforceable claim, and the intimation to the contrary in the opinion below was erroneous.

Notwithstanding the language of the complaint and the opinion, plaintiffs insist that there was no agreement between Weis Bros, and Hornthal for the return of the capital balance, and in this we think the plaintiffs are right. That portion of the complaint which alleges that notes were given is denied by the answer, and there was no evidence produced upon the trial to substantiate it. Moreover, Hornthal testified that he had no agreement except that under which the special partnership was organized. Accordingly, the firm simply expired on the 30th of April, 1891. The agreement under which it had existed contains no provision for the return of the capital. The parties were left to the ordinary legal consequences attending the capital contribution. Hornthal had a capital account with Weis Bros, and when the firm expired there was a book balance of something over $50,000. On May 23,1891, without any agreement whatever, but simply in part payment of the balance shown by the books, $25,000 was charged to Hornthal in his account with Weis Bros, and the same amount was credited to Weis Bros, in their account with Hornthal, Whitehead, Weissman & Co. The debt from Hornthal, Whitehead, Weiss-man & Co. squared this much of the capital balance, and left in Hornthal’s special capital account a balance of something over $26,000. There was, therefore, no agreement that made the capital balance effective as a claim which the judgment debtors could lawfully prefer. The partners, in May, 1891, simply took $25,-000, and in the November following $26,433.34, of their property and gave it to Hornthal; and when this preference was given in November, the claims of these plaintiffs had been incurred, and they were then existing creditors. In this situation, the finding that the special partnership was insolvent is all important, because, in the absence of any agreement to pay, Hornthal was simply entitled to get the capital contributed after the payment of creditors. And it appearing that the firm was insolvent, and no proof being offered to show that there was sufficient to pay all the creditors, therefore, the existence of any claim in favor of Hornthal being negatived, the general partners could not take their assets and apply them to a claim which was not shown to have had a valid foundation.

Upon the other branch of the case, as to so much of plaintiffs’ claims as were debts of the special partnership, nothing need be added to what was said in the opinion of the court below, because, so far as plaintiffs can be considered as creditors of the special partnership of Weis Bros., they were entitled to be paid before the withdrawal by the defendant Hornthal of any portion of his special capital, and to the extent of their claims, as against the amount so withdrawn, the plaintiffs, as creditors of the limited partnership, were entitled to j udgment as against Hornthal—First, because of the insolvency of the limited partnership, and the preferential payments to such special partner; and, second, because of the withdrawal of special capital during the continuance of the limited partnership.

Our conclusion, therefore, is that the judgment below was right, and should be affirmed, with costs.

Parker, J.

(concurring).—Confirming, as we do, the finding of the special term that the limited partnership was insolvent at its expiration, April 30, 1891, the conclusion necessarily follows that the-general partnership which succeeded to its assets and liabilities could not devote any part of such assets in payment of the amount originally contributed by the special partner, as against either creditors of the limited or the general partnership. And this is so because the general partnership was not indebted to the special partner of the limited partnership, but was indebted to both prior and subsequent creditors, and such creditors could not be deprived of any portion of the assets at the instance and for the benefit of a third party not a creditor. While the plaintiffs, as creditors of the general partnership, could not have effectually complained of an honest effort by its members to pay the creditors of the limited partnership in preference to him, they did, and do, have the right to insist that no part of the assets of the firm of which they are creditors shall be turned over to one who has not an enforceable claim against the general partnership.

I concur with Mr. Justice O’Brien for an affirmance of the judgment.

Van Brunt, P. J.

While I concur with Mr. Justice O’Brien in the affirmative of the judgment, so far as it relates to liabilities incurred before the dissolution of the special partnership, there seems to me no ground for a recovery based upon indebtedness which was contracted subsequent to such dissolution. The creditors of the new firm certainly bad no reason to complain because of the payment back by such new firm of the special partner. The only persons who could claim that such special capital should be held for the purpose of the payment of their debts were the creditors of the special partnership ; and although the plaintiffs may have been both creditors of the special partnership and of the new firm, that gave them no greater rights, as to the indebtedness of the new firm to them, than if such indebtedness had been the only amount which was due to them.

I am of the opinion, therefore, that the judgment should be modified by striking from the recovery the amount of the indebtedness incurred subsequent to the dissolution of the limited partnership, and, as modified, affirmed, without costs to either party.


source: Caselaw Access Project

author: Van Brunt, J.

license: Public Domain

text:
    John Grey et al., Resp’ts, v. Central Railroad Company of New Jersey, App’lt.

      (Supreme Court, General Term, First Department,

      Filed October 18, 1895.)

    Interest—Unliquidated claim.
    Where the damages are unliquidated, and the party in default has no means of ascertaining the amount of damages to which the other party is entitled, so that he may tender the same, interest upon the amount of damages is not allowable.
    Appeal from a judgment entered on a verdict in favor of plaintiffs, and from an order denying a motion for a new trial.

      Robert Thorne, for app’lt; Jacob F. Miller, for resp’ts.
   Van Brunt, J.

It does not seem necessary to discuss the question involving the right of the plaintiff to the benefit of the verdict rendered. There are no exceptions to the admission or exclusion of evidence which require special mention. The learned court, however, seems to have erred in charging the jury that, if they found for the plaintiff, they should allow interest. It seems to be the rule in this state that, where the damages are an-liquidated, and the party in default has no means of ascertaining the amount of damages to which the other party is entitled, so that he may tender the same, interest upon the amount of damages is not allowable. Mansfield v. N. Y. C. & H. R. Railroad Co., 114 N. Y. 331; 23 St. Rep. 739; McMaster v. State, 108 N. Y. 542; 13 St. Rep. 674; White v. Miller, 78 N. Y. 396. In the latter case, the question is examined at length, and the foregoing seems to be the conclusion arrived at. In Mansfield v. N. Y. C. & H. R. Railroad Co., supra, the court lays down the rule that, in an action to recover damages for breach of contract, unless the means are accessible to the party to be charged of ascertaining, by computation or otherwise, the amount to which the plaintiff is entitled, he may not be allowed interest on the amount of the-damages found, and the submission of the question as to such allowance to the jury is error.

The judgment should be modified by reducing the judgment to-the sum of $2,500, the amount of the verdict, with interest thereon from the date of its rendition to the entry of the judgment, and, as modified, the judgment should be affirmed, without costs to either party.

All concur.


author: McAdam, J.

text:
    Barnett Harris et al., Pl’ffs, v. Leopold R. Treu et al., Def’ts.

      (New York Superior Court, Special Term,

      Filed October, 1895.)

    Equity—Jurisdiction—Summary proceedings.
    The fact that a district court justice cannot open a default taken in summary proceedings, does not imply that a court of equity has jurisdiction to annul a warrant in such proceedings in the district court and open a judgment rendered therein by default.
    Motion for injunctive relief.

      A. Cohen, for motion ; Kurzman & Franlcenheimer, opposed.
   McAdam, J.

On the return of the precept in summary proceedings instituted in the district court for nonpayment of rent, the tenants appeared, and obtained a short delay to file their answer, which they subsequently submitted, but were told that it Was too late, as judgment by default had been entered, and a warrant to disposess issued. The plaintiffs (the tenants), by their bill filed herein, seek to annul the warrant, open the judgment, and reinstate the tenancy, so as to permit them to pay the rent and costs, and discharge the proceedings. The right to such relief is, strange to say, based upon their own default, not on the ground of fraud, want of jurisdiction, or the like, and is urged on the supposed lack of any other adequate remedy. The fact that the district court justice cannot open a default taken in summary proceedings does not imply that a court of equity must, for that reason, supply the absence of the jurisdiction by the assertion of its authority. The proceedings had in the lower court are regulated by statutory enactments, which clearly define the rights, duties and remedies of parties thereto ; and if the remedy for review with the stay which follows (Code § 2262), is insufficient for present purposes, it is because the legislature, in its wisdom, did not intend to further enlarge the rights of tenants summarily proceeded against under said enactments. Indeed, the legislature, to make itself clearly understood, declared in section 2265 of the act that an injunction shall not be issued after judgment in such proceedings, except in a case where the final judgment in an action of ejectment would be stayed thereby; and this is not such a case. The tenants had their day in court, and, if they failed to avail themselves of any of their legal rights, it is because of their own neglect. If, on the other hand, they have been unjustly deprived of legal rights by the action of the court below, the appeal provided for furnishes a complete remedy for the wrong. The rule is that, where a party is sued in a court of law having exclusive jurisdiction of the subject-matter, he must make his defense there, and cannot resort to equity, unless he is hindered or prevented from making such defense. Equity will not relieve from a judgment at law except for fraud, accident, surprise, or manifest injustice, unmixed with fault or negligence on the complainant’s part (Hill. New Trials [2d ed.] 590); and on this principle an injunction will not be granted if the person seeking it could, by proper diligence, have protected himself from injury by the ordinary means at law. Cases collated in 2 Daniell, Oh. Prac. (4th ed.) 1621. There is nothing which calls for equitable interference with the proceedings of the lower court, or the execution of its process. See cases collated in 2 Abb. N. Y. Dig. 770. The application for injunctive relief must therefore be denied.


author: Giegerich, J.

text:
    German Exchange Bank, Pl’ff, v. John Kroder, Def't. (Two cases.)

      (New York Common Pleas, Special Term,

      Filed October 22, 1895.)

    Former adjudication—Motion.
    Where a motion by defendant to consolidate two actions brought against him by the same plaintiff, and a motion by plaintiff for judgment on the answer as frivolous, were decided at the same time, by denying the former, and granting the latter, motion, the denial of the motion for consolidation is not a decision on the merits, so as to preclude a renewal of such motion on a different state of facts.
    Two actions by the German Exchange Bank against John Kroder. Defendant moves for consolidation of the actions.

      John Fennel, for pl’ff; Henry Schmitt, for deft.
   Giegerich, J.

The motion is made by the defendant to consolidate two actions brought against him by the plaintiff. A similar motion was made at an earlier stage of the proceedings in these actions, at which time the plaintiff made a counter motion for judgment upon the answers, as frivolous. Both motions were considered at the same time, and disposed of in the same decision ; the one for judgment being granted, while the one for consolidation was denied. Upon appeal the order allowing judgment was reversed, but the one refusing consolidation was not appealed from, and still stands, and, so the plaintiff contends, is a bar to this motion. It has been said that the decision of a motion is never regarded as res adjudicata, Snyder v. White, 6 How. Prac. 321; Smith v. Spalding, 30 id. 339; Belmont v. Railroad Co., 52 Barb. 637; at any rate, not strictly as such, Veeder v. Baker, 83 N. Y. 156; Reggs v. Purcell, 74 id. 370; First Nat. Bank v. Clark, 42 Hun, 90; Thalheimer v. Hays, 42 id. 93; 8 St. Rep. 441. As a matter of orderly practice, however, leave to renew a motion should be obtained from the court. Snyder v. White, supra ; Smith v. Spalding, supra. But, where a different state of facts has arisen since the first motion, a new motion, based upon these facts, may be made, as a matter of right. Veeder v. Baker, supra; Belmont v. Railroad Co., supra; People v. Mercein, 3 Hill 399; Railway Co., v. Ramsey, 57 Barb. 449; Smith v. Zalinski, 94 N. Y. 519; Goddard v. Stiles, 99 id. 640; Noonan v. N. Y., L. E. & W. Railroad Co., 68 Hun, 387; 52 St. Rep. 203. That the facts have changed is clear. Amended answers have been served upon payment of considerable costs to the plaintiff. The order allowing judgment has been reversed. In making that order in the first instance, the court naturally refused consolidation, because the order for judgment terminated the actions, and left nothing for an order for consolidation to operate upon. Under the circumstances it cannot be said with certainty that the former denial was based upon a consideration of the merits of the application. The fact that the consolidation was granted as to the other defendants, whose answers were nearly as faulty as those of this defendant, may properly be regarded as an indication that, had the answer in its present amended form been at that time before the court, the motion would have been granted. For these reasons the motion is granted, but, under the circumstances, no motion costs are awarded. The order to be entered hereon should also provide for payment to plaintiff, if ultimately successful, of the costs to date of the discontinued action.' See Hiscox v. New Yorker Staats Zeitung, 3 Misc. Rep. 110; 52 St. Rep. 212.


text:
    Patrick J. Condon, Pl’ff, v. Church of St. Augustine et al., Def'ts.

      (New York Common Pleas, General Term,

      Filed October 22, 1895.)

    Pleadings—Answer—Extension of time.
    An extension of time to serve an amended answer may be granted ex peurte, though one extension lias already been allowed, where the motion is made before the period of the first extension has expired.
    Action by Patrick J. Condon against the Church of St. Augustine and others. Plaintiff moves to vacate an order extending the time of defendant the Church of St. Augustine to serve an amended answer.

      Miller & Miller, for pl’ff; Bernard J. Tinney, for def’t Church of St. Augustine.
   Giegerich, J.

—The timeof the defendant the Church of St. Augustiiie to serve an amended answer was extended by stipulation of the parties until September 30, 1895. On that day the said defendant, ex parte, obtained from the court an order extending its time until and including ten days after the entry and service of an order on another motion then pending. The plaintiff seeks to have this order vacated upon the ground that no notice of the application was given, and that a judge had no power, ex parte, to make the order, and in any event should have limited the extension to twenty days. A party may amend a pleading once within twenty days after its service. Code Civ. Proc. § 542. Where the time within which a proceeding in an action, after its commencement, must be taken has begun to run, and has not expired, it may be enlarged, upon an affidavit showing grounds therefor, by the court or by a judge authorized to make an order in the action. Id. § 781. Notice to the adverse party is not necessary where the application is made before the time has expired. Travis v. Travis, 48 Hun. 343, 346; 15 St. Rep. 874. As I understand the facts of this case from the affidavits submitted, the said defendants’ time had been extended by stipulation to September 30th, and the application for the order extending the time further was made upon that day, before the time had expired. The judge, therefore, had power to grant the application, and I think his discretion was properly exercised, a motion to consolidate this action with another being then pending. This order was made pursuant to the sections of the Code, heretofore quoted, and not under section 723. The cases cited by the plaintiff relate to an application to amend a pleading, and not to one for an extension of time, which has begun to run, but has not expired. Section 775 of the-Code, directing that an order to stay proceedings shall not be made for a longer time than twenty days, does not apply to an order extending the time to answer (Wilcoch v. Curtis, 1 Code R. 96; Bis-son v. Lawrence, 25 How. Prac. 435; 1 Rum. Prac. p. 228), and for the same reason does not apply to an order extending the time to amend an answer.

The order was a proper exercise of judicial discretion, and this motion is therefore denied, with $10 costs to the said defendant to abide events.


author: Pryor, J.

text:
    Alfred McCarville, Pl’ff, v. Theresa Lynch, Def't.

      (New York Common Pleas, Equity Term,

      Filed October, 1895.)

    1. Negotiable instrument—Forged endorsement.
    No right can be acquired by a forged indorsement.
    2. Same—Certificate of deposit—Transfer.
    Delivery by the payee of a certificate of deposit to his order, without indorsement, confers no apparent ownership or power of disposition on the holder.
    3. Same—Delivery without indorsement.
    Delivery by the payee of a certificate of deposit as security for his good conduct in an employment, imparts no title which, in the hands of a bona fide purchaser, will prevail against the title of the payee.

      4. Same—Bona fide purchaser.
    Receiving the certificate in the belief that he who passes it is the payee, and in reliance on his indorsement as the indorsement of the payee, is not taking it upon the faith of apparent ownership in the former conferred by the latter.
    5. Same—Transfer of title.
    In the absence of either an indorsement or assignment of the certificate by the payee, another, to whom possession of the certificate is intrusted, cannot, by his assignment, convey title even to a bona fide holder for value.
    Action by Alfred McOarville against Theresa Lynch to recover possession of a certificate of deposit.

      Abner ‘C. Thomas, for pl’ff; Abram Kling, for def’t.
   Pryor, J.

One Lawrence, fraudulent pretending that he had secured an employment for plaintiff, represented to him -that the fictitious employer required security for his faithful conduct. Thereupon plaintiff procured a certificate of deposit as follows:

“Fifth National Bank. $150.
“New York, December 15th, 1894.
“This certifies that Alfred McOarville has deposited in this bank one hundred and fifty dollars, to the order of himself.
“W. S. Beckley, Teller “S. Kelly, Vice President.”

Feigning to be Alfred McOarville, Lawrence indorsed that name on the certificate, and delivered it to the defendant for $90 in jewelry and $60 in money. Discovering the cheat practiced upon him by Lawrence, McOarville demanded the certificate of defendant, and on her refusal to return it, he brings this action to compel its surrender. Conceding the defendant’s contention, that, in legal effect, the paper is the negotiable note of the bank, and that she holds it in good faith and for value, still she may not retain it from the plaintiff. Of course, the defendants, no matter what her caution, acquired no right by virtue of the forged indorsement. Graves v. Bank, 17 N. Y. 205; Colson v Arnot, 57 id. 253. Neither does she get title by operation of the statutory provision that a promissory note, payable to the order of the maker, is, when negotiated by him, in legal effect, payable to bearer; for here the certificate is not to the order of the maker, but of the payee (Plets v. Johnson, 3 Hill, 112, 116), and the payee, instead of negotiating it, merely deposited it as security. Baring v. Lyman, 1 Story, 416, Fed. Cas. No. 983.

Another position of the defendant is that the plaintiff communicated a title to Lawrence which, though voidable for fraud, became indefeasible in fayer of a bona fide transferee for value. Simpson v. Del Hoyo, 94 N. Y. 189, 194. Plaintiff, however, intended to impart no title to Lawrence, but merely delivered the certificate in bailment. The principle invoked is applicable only when a vendor purposes to pass the property to the fraudulent vendee; and is ineffectual for the protection of a purchaser from a "bailee. Paddon v. Taylor, 44 N. Y. 371.

It is argued, again, that the plaintiff invested Lawrence with an apparent power of disposition, and so enabled him to convey title to the defendant. McNeil v. Bank, 46 N. Y. 325. But mere possession of the certificate was not the equivalent of apparent ownership, and imported no power of disposition (Moore v. Bank, 55 N. Y. 41, 48; McNeil v. Bank, 46 id. 329-330); especially since the paper was not indorsed by the person to whose order it is payable. Goshen Nat. Bank v. Bingham, 118 N. Y. 349, 358; 28 St. Rep. 702. The absence of such indorsement was, in itself, notice of a defect of title in Lawrence. Nor did defendant take the certificate upon the faith of an apparent title in Lawrence, communicated by the plaintiff (Moore v. Bank, 46 N. Y. 41), but in the belief, after investigation, that Lawrence was the plaintiff, and in reliance upon the indorsement of Lawrence as the'indorsement of plaintiff. Colson v. Arnot, 57 N. Y. 253.

It is contended, finally, that, although defendant took nothing as indorsee, yet she got title as assignee. By assignment from whom ? Not from plaintiff, for he made no assignment either to defendant or Lawrence. Not from Lawrence, for be had nothing to assign. In Risley v. Bank, 83 N. Y. 318, there was an actual and effectual assignment of the deposit independently of the check. Lynch v. First Nat. Bank, 107 N. Y. 179, 185; 11 St.Rep. 389. So in Freund v. Bank, 76 N. Y. 352, 358, there was an assignment of the check by the payee, and to one who could enforce it against the maker. Assuming, however, defendant tobe assignee of Lawrence, she takes subject to plaintiff’s title. Simpson v. Del Hoyo, 94 N. Y. 189, 192; Greene v. Warnick, 64 id. 220; Westfall v. Jones, 28 Barb. 9.

Judgment must be awarded to plaintiff. Since it was defendant’s refusal to surrender the certificate on demand, and her persistence in retaining it after knowledge of the facts, that forced plaintiff into court, it is equitable that he be indemnified the expense of the litigation by an allowance of taxable costs.


text:
    The People ex rel. Charles A. Simons, Pl’ff, v. Joseph Murray et al., as Commissioners, etc., Def’ts.

      (New York Common Pleas, Special Term,

      Filed October 23, 1895.)

    1. Ceriorari—Excise commissioners.

      Certiorari to review the decision of the excise commissioners, in refusing to grant a liquor license, is to be heard on the affidavit on which the writ was issued, the writ and the return of the commissioners thereto, but not on additional affidavits.
    3. Excise—License—Church.
    The refusal of the excise commissioners to grant a license on the ground that the place, for which the license was sought, was within two hundred feet of a church is not sustained in the absence of proof that the said building was occupied exclusively as a church.

      Certiorari to review the decision of the board of excise commisioners of the city of New York, in refusing to grant relator a license to sell liquor on certain premises in said city.

      Amasa Thornton, for relator; Julius M. Mayer, for board of excise.
   Giegerich, J.

The first question to be determined is, what papers may be considered upon this hearing? At common law only the return to the writ was before the court upon review. In re Eightieth Street, 16 Abb. Prac. 169; People v. Board of Fire Com'rs, 73 N. Y. 457; People ex rel. Peck v. Commissioners Dept. Fire and Buildings, 106 id. 64; 8 St. Rep. 634. Code Civ. Proc. § 2138, has, however, changed the former practice by requiring that the hearing must be upon the “writ and return, and the papers upon which the writ was granted.” Now, therefore, the writ and the papers upon which it was granted must also be looked to (People v. Commissioners Dept. Fire and Buildings, supra; People v. Board of Sup’rs, 2 N. Y. Supp. 555; People v. French, 25 Hun, 111; 10 Abb. N. C. 418), and for the purpose of show- - ing facts “essential to the jurisdiction of the body or officer to make the.determination to be reviewed,” “affidavits or other written proof” may be received (Code Civ. Proc. § 2139; People ex rel. Wright v. Court of Sessions of Ontario Co., 45 Hun, 54; 9 St. Rep. 607; Buckley v. Drake, 9 Civ. Proc. R. 336. Consistently with the practice just enunicated, I am confined, upon this proceeding, to a consideration of the writ and the affidavit upon which it was issued, and to the return of the writ. Various additional affidavits which have been submitted cannot be regarded.

The license was refused ; as appears from the written decision of the commissioners, which is included in th'e return, “for the reason that the place for which a license is sought is on the same street with, and having its nearest entrance within 200 feet of' the nearest entrance to, a building occupied exclusively as a church, and that said premises were not licensed prior to the enactment of chapter 401 of the Laws of 1892, or chapter 480 of the Laws of 1893.” If there is no competent proof of a fact necessary to be proved; the proceedings must upon certiorari be reversed. People ex rel Wright v. Court of Sessions of Ontario Co., supra. The only evidence I can find, in the papers I am permitted to consider as before me, of the fact that the building in question was occupied exclusively as a church, is in the report made to the excise board, and signed by D. Hoyle, general inspector, that “the building was a residence, but the two first floors have been -thrown together, and changed into a church. Over the church is the residence of the pastor and of the janitor, all in the same building.” Here is no statement that the portion of the building which has been changed into a church yms used exclusively as such, nor that the portions occupied by the pastor and janitor are used exclusively for purposes of residence, nor that there are not other portions of the building devoted to still other uses. Neither the writ nor the petition upon which it was issued supplies these defects. It may be unnecessary to remark, after what precedes, that I think a church edifice may, within the intent of the statute above referred to, be deemed “a building occupied exclusively as a church, although a pastor, or a janitor, or other necessary or customary officer, resides therein. The determination under review must therefore be annulled; but I deem it best to remit the matter to the board of excise for its further consideration and action, as was dpne by this court in People v. Dalton, 9 Misc. Rep. 249; 60 St. Rep. 648.

The relator may have $50 costs and his disbursements.


author: Follett, J.

text:
    Emanuel Lyon, as Administrator, etc., Resp’ts, v. Second Avenue Railroad Company, App’lt.

      (Supreme Court, General Term, First Department,

      Filed October 18, 1895.)

    1. Damages—Excessive.
    A verdict of $5,000 for negligence in causing the death of a woman, sixty-three years of age, will not be disturbed as excessive, where she, at the time of the accident, was living with her husband and daughter and doing all the household work.
    2. Negligence—Question eor jury.
    The question whether the disease, of which the intestate died, was caused by an accident resulting from the defendant’s negligence was held, • under the evidence of this case, to be one for the jury.
    Appeal from a judgment, entered on a verdict in favor of plaintiff, and from an order denying a motion for a new trial, made on the minutes.

      Payson Merrill, for app’lt; Sumner B. Stiles, for resp’t.
   Follett, J.

This action was begun July 28, 1894, to recover damages resulting from the decedent’s death,—caused, it is alleged, by the negligence of the defendant and of its employe. The defendant, on this appeal, does not challenge the finding of the jury that the decedent was injured September 8, 1892, by the negligence of the defendant and of its servant, and that she did not, by any act or omission, contribute to the accident. There was no conflict in the evidence in.respect to the accident, its cause, or the decedent’s conduct on the occasion. None of the exceptions taken to the charge or to the rulings upon the admission or exclusion of evidence are questioned, and we are asked to reverse the judgment solely on the grounds: (1) that the accident was not the cause of death; (2) that the damages awarded ($5,000) were excessive.

September 8, 1892, the decedent, while walking on the sidewalk of Bast Twenty-Eighth street, was knocked down and injured by a team which escaped from the defendant’s driver. Her right leg was considerably injured,—to such an extent that she never fully recovered from its effects,—and she sustained so severe a shock that she remained in a semi-conscious condition for two or three days. At this time the decedent was sixty-three years of age, and had, before the accident, been possessed of good health, but from the time of the accident to May 2, 1893, when she died, she was in feeble health. The immediate cause of her death was Bright’s disease,—induced, it is asserted, by the shock. The physician who attended the decedent during her last illness, and had been the family physician for a year or more preceding the accident, testifies that the disease of which she died was traceable to, and caused by, the injury. Another physician,—an instructor for seven years at the College of Physicians and Surgeons at Columbia College,— testified that in his opinion the accident caused the disease of which she died. A physician who had been employed by the defendant, in its accident cases, for two years, testified that he saw the decedent four days after her injury ; that he found three confused and lacerated wounds on her right leg, below the knee. He testified that he saw no evidence that the patient was suffering from shock, but noticed that her legs were swollen, but that the swelling could not, in his opinion, have been produced by the injury. He said that in his opinion the decedent then bad chronic Bright’s disease, and died from its effects, and that the disease was not caused by the injury. A physician who has been a professor •of clinical medicine and therapeutics for several years was called by the defendant, and testified, as an expert, that in his opinion, founded upon the evidence, the.injury was not the cause of the disease of which the woman died. This witness had never seen patient. Bach side swore the same number of medical witnesses, but those sworn in behalf of the plaintiff had the best means of knowing the facts and forming an opinion, and their opinions were supported by the evidence of the plaintiff in respect to the jn-evipus good health of his wife. We think, under the evidence, that the question whether the injury was the cause of death was a fair question for the jury, and that its verdict cannot be disturbed.

Nor do we think the verdict should be set aside because the damages were excessive. The decedent was sixty-three years of age, in good health, and performed all of the labors in plaintiff’s household. She left her husband and one unmarried daughter, of full age, her only next of kin; the three before her death, living together as one family. The daughter, before her mother’s illness, had employment elsewhere. The estimate of the damages sustained in such cases is necessarily based upon probabilities, and can never be ascertained with accuracy, or to the satisfaction of both parties. Under the decisions of this court, we cannot reverse the judgment and set aside the verdict upon the ground that the damages awarded were excessive. The judgment_and order should be affirmed, with costs. All concur.


text:
    Stillman R. Walker et al., App’lts, v. Phoenix Insurance Company of Hartford, Connecticut, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed October 18, 1895.)

    1. Appeal—Direction of verdict.
    Where, at the close of the evidence, a verdict is directed in favor of the defendant upon his motion, an exception thereto is sufficient, without any request that any issue of fact he submitted to the jury or that a verdict be directed in plaintiff’s favor, to raise the question whether any issue of fact should have been submitted to the jury.
    2. Insurance—Policy—Mortgagee.
    In case a mortgagee’s interest is to be protected under a standard policy, his interest must be specified in it, or in a written or printed provision attached to ifr.

      3. Same—Conditions—Waives.
    The failure to disclose to the company the fact that the insured was not the unconditional and sole owner of the insured property and the absence of a condition protecting the interest of the mortgagee are not waived by the company having entered into an appraisal and thereby fixing the amount of damages, where it is expressly provided in the policy that the prosecution of an examination in respect to the fire, or entering into an appraisal to ascertain the damages, shall not waive any provision of the policy or any forfeiture thereof.

      4. Same—Reissue of policy.
    The act of the application clerk, upon request to correct a clerical error in the name of the insured and to attach to the policy a provision making the loss payable to the mortgagee, in correcting the name is not a reissue of the policy, where he refused to attach a provision making the loss payable to the mortgagee.
    Appeal from a judgment, entered on a verdict directed for defendant.
    ' George W. Stephens, for app’lts ; John S. Wise, for resp’t.
   Follett, J.

This action was begun February 24, 1891, to recover damages alleged to be due under a policy of fire insurance issued by the defendant. The plaintiffs are partners under the firm name of Walker & Bresnan. In November, 1889, William 5. Saunderson and Charles Gr. Adams, were partners under the firm name of William S. Saunderson & Co., engaged in business on Water strdet, at the city of New York. November 23, 1889, William S. Saunderson & Co. mortgaged to Walker & Bresnan a quantity of printing materials and machinery to secure the payment of $676.92, and January 27,1890, they also mortgaged to Walker & Bresnan printing materials and machinery to secure the payment of §654.98. Both mortgages contained a covenant by the mortgagors to keep the property insured in an amount to be approved by the mortgagees, and the policy assigned to them. On the 11th of November, 1890, Charles Gr. Adams sold his interest in the firm of William S. Saunderson & Co. to James A. Starkweather, and thereupon the firm became Saunderson & Starkweather. November 11, 1890, the defendant, by its policy of insurance,—a New York standard policy,—insured Saunderson & Starkweather for one year from November 11, 1890, at noon, to November 11, 1891, at noon, against loss or damage by fire “ to an amount not exceeding one thousand dollars.” The policy contained the following provisions :

(1) “This entire policy, unless otherwise provided by agreement indorsed hereon, or added hereto, shall be void * * * if the interest of the insured be other than unconditional and sole ownership, * * * or if the subject of insurance be' personal property, and be or become incurñbered by a chattel mortgage. * * #”

(2) “ If, with the consent of this company, an interest under this policy shall exist in favor of a mortgagee, or of any person or corporation having an interest in the subject of insurance other than the interest of the insured as described herein, the conditions hereinbefore contained shall apply in the manner expressed in such provisions and conditions of insurance relating to such interest as shall be written upon, attached, or appended hereto.

(3) “This company shall not be held to have waived any provision or condition of this policy, or any forfeiture thereof, by any requirement, act, or proceeding on its part relating or to any examination herein provided for. * to the appraisal % # ”

(4) “ This policy is made and accepted subject to the foregoing stipulations and conditions, together with such other provisions, agreements, or conditions as may be indorsed hereon or added hereto; and no officer, agent, or other representative of this company shall have power to waive any provision or condition of this policy, except such as by the terms of this policy may be the subject of agreement indorsed hereon or added hereto, and as to such provisions and conditions no officer, agent or representative shall have such power, or be deemed or held to have waived such provisions or conditions, unless such waiver, if any, shall be written upon or attached hereto; nor shall any privilege or permission affecting the insurance under this policy exist or be claimed by the insured unless so written or attached. * * *»

The witnesses all agree that when the contract of insurance was entered into the defendant did not know of the existence of the chattel mortgages, nor did it know that any persons other than the insured, were interested in the property covered by the policy. November 12, 1890, the property was destroyed by fire, and on the next day, after the defendant had learned of the fire, One of the brokers who procured the policy took it to defendant’s office, and asked its application clerk to correct a clerical error in spelling the name of Starkweather, and also to attach to the policy a provision making the loss payable to the mortgagees.

The application clerk corrected the error in the name, but declined to add the provision making the loss payable to the mortgagees. Thus far these witnesses agree. The broker testified that the clerk said : “ He (the clerk) said it (the absence of the mortgagees’ provision) would make no difference as the loss would be settled with Saunderson & Starkweather, and a cheek paid to their order.” The application clerk denied saying that a check would be given for the loss. The broker testified that the interview was in the morning of the 13th, but the clerk testified that it occurred in the evening of that day. This is substantialty all the conflict there is in the-evidence. On November 13th defendant’s adjuster visited the scene of the fire, saw one of the firm of Saunderson & Starkweather, and directed him to make out an itemized statement of their loss, which they did, and on November 18th delivered the statement to defendant’s adjuster. Two or three days thereafter the amount of the loss was submitted to the arbitrament of two appraisers, one selected by the insured and the other by the insurer. The amount of the loss was fixed at $1, 505.17, and the portion, payable by the defendant, if liable, at $950. During the appraisal the existence of the chattel mortgages became known to the defendant’s adjuster, who reported the fact to the general manager of the defendant’s office in New York. The general manager testified that he did not know of the mortgages until after the appraisal. December 8, 1890, the premium due on the policy was tendered by the broker who procured it to the defendant, but it was refused. December 2, 1890, Saunderson & Starkweather assigned all.their interest in and right of action on the policy, to the mortgagees the plaintiffs. It was agreed on the trial that, if the plaintiffs were entitled to recover, their damages were $950, with interest from January 28, 1891.

At the close of the evidence the defendant moved that a verdict be directed in its favor, which was granted, and an exception taken. The plaintiffs did not request that any issue of fact be submitted to the jury, or that a verdict be directed in their favor, but their exception is sufficient to raise the question whether any issue of fact should have been submitted to the jury. Train v. Insurance Co., 62 N. Y. 598; Clemence v. City of Auburn, 66 id. 334; Trustees of East Hampton v. Kirk, 68 id. 459. There was no conflict in the evidence except in respect to the hour when the conversation occurred between the broker and the application clerk, and whether the latter said that the absence of the mortgagees’ provision would make no difference, and that the loss would be paid to the insured by check. The hour when the conversation took place is not material, and the application clerk had no power to waive, orally, after the loss, any one of the provisions of the policy. This is expressly provided for in the provisions lastly above quoted from the policy There was no issue of fact for the jury; and the sole remaining question is, should a verdict have been directed for the plaintiffs? Under the provision first above quoted from the policy it is clear that the policy never took effect, and by the provision secondly quoted it is made plain that in case a mortgagee’s interest is to be protected under a standard policy, his interest must be specified in it, or in a printed or written provision attached to it. There is no such provision, and it is conceded that the defendant had no knowledge of the existence of the mortgagees’ interest until after the fire. It is urged in behalf of the plaintiffs that the failure to disclose to the defendant the fact that the insured were not unconditional and sole owners of the property and the absence of a condition protecting the interests of the mortgagees were waived by the defendant having entered upon an appraisal, and thereby fixed the amount of damages. The answers to this is that by the provision thirdly above quoted from the policy it is expressly provided that the prosecution of an examination in respect to the fire, or entering into an appraisal to ascertain the damages, shall not waive any provision or condition of the policy, or any forfeiture thereof. Kiernan v. Dutchess Co. Mt. Insurance Co., 80 Hun, 602; 61 St. Rep. 720, is cited as an authority for the plaintiffs’ contention that the defense that the policy was void because of the undisclosed existence of the two chattel mortgages was waived by the defendant’s inquiry into the circumstances of the fire, and thereafter uniting in an appraisal to determine the amount of damages. The case cited is meagerly reported. It does not appear whether the chattel mortgage was given before or after the insurance was affected, nor does it appear whether the policy was a New York standard policy, containing a condition that an appraisal of the damages should not be deemed a waiver of any provision or condition of the policy. This case cannot be accepted as of sufficient authority to authorize this court to disregard the plain conditions of this policy.

It is urged that the correction, after the fire, of the spelling in the policy of the name of Starkweather by the application clerk, he being at the time apprised of the existence of the mortgages, was in effect a reissue of the policy, and a waiver of the provision first above quoted. This contention cannot be sustained. The interview between the broker and the application clerk must be considered as an entirety. The clerk expressly refused to waive the condition by declining to attach a provision in favor of the mortgagees, and besides, as before stated, he was without power to waive orally, after the fire, any of the conditions of the policy.

The judgment should be affirmed, with costs.

All concur.


text:
    The People ex rel. Michael Linehan, App’lt, v. James J. Martin et al., as Police Commissioners, etc., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed October 18, 1895.)

    Municipal cobfobation—Police—Removal.
    The refusal by the police commissioners to adjourn the hearing of charges against a policeman to enable him to procure witnessess is not an abuse of discretion, where he does not state the name of any witness whom he desired to call, and, though he had five days’ notice of the hearing, made no effort to have his witnesses subpoenaed.

      Certiorari to review the action of the police commissioners of the city of New York in dismissing relatior from the police force.

      Louis J. Grant, for relator; Terence Farley, for resp’ts.
   Follett, J.

The relator, a patrolman, was dismissed from the police service for intoxication. A written notice of the charge made against him, and that it would be investigated November 15, 1893, was personally served on the relator November 10, 1893. He appeared before the board with counsel, and asked for an adjournment to procure witnesses, but he did not state the name of any person whom he desired to call. The charge was proved by two witnesses, the captain of the precient and a police surgeon. The relator was not sworn in his own behalf, and made no defense. Five days after the hearing,, he made and filed an affidavit with the commissioners, in which he stated the names of three persons by whom he testified that he could disprove the charge made against him. Why the names of the witnesses were not given on the hearing, or not earlier furnished, is not disclosed. It is not asserted that erroneous rulings were made on the hearing and the only ground upon which we are asked to reverse the proceedings is because an adjournment was refused. We think the board did not abuse its discretion. He had five days’ notice of the hearing, and so far as the case shows, made no effort to have his witnesses subpoenaed. When confronted with the charge, he declined to be sworn, and gave no evidence that he had any defense on the merits.

The writ should be dismissed, with costs.

All concur.


author: Per Curiam.

text:
    James Shanks, Resp’t, v. Magnolia Metal Company App’lt.

      (Supreme Court, General Term, First Department,

      Filed October 18, 1895.)

    Attachment—Foreign corporation.
    An allegation in the alternative as to incorporation is not sufficient to satisfy the requirements section 636 of the Code, which authorizes the issuing of an attachment, in certain cases, where the defendant is a foreign corporation.
    Appeal from an order denying a motion to vacate an attachment.
    The attachment was granted on the complaint and affidavits made by plaintiff and one Henry L. Miller, of which the following are copies, respectively:
    “The plaintiff, for his complaint, alleges, upon his information and belief: First. For a first cause of action: That, at all the time herein stated, defendant was an association or combination of persons, and held and holds itself to be a foreign corporation, created under the laws of West Virginia. Second. That in consideration of certain services which one Henry L. Miller promised, undertook, and agreed to render to said defendant, said defendant agreed to accept and receive such services, and to pay him therefor one hundred ($100) dollars per week, during all of the year 1895; that defendant wrongfully broke said agreement, and terminated the same, and refused to allow said Miller to render such services, or to pay him therefor, from and after May 20, 1895; that said Miller was ready and willing and offered to perform such services, but defendant hindered and refused to permit him to do so; that thereafter said Miller diligently sought opportunity to render other services elsewhere, to reduce the damages sustained by him by reason of defendant’s breach of contract, but was unable to do so, and he sustained damages by reason of the premises, in the sum of three thousand dollars. That thereafter, and before the commencement of this action, said Miller, for value, assigned to plaintiff his claim and cause of action arising by reason of the premises, to plaintiff, and plaintiff is the holder thereof. Second. For a second cause of action: That the facts stated in the first clause or paragraph of the complaint is true; that the defendant undertook, promised, and agreed to pay to Henry L. Miller, for sales of merchandise which he should effect at the request of defendant, or its managers or agents, ten per cent, of the amount thereof; that, in consideration of promise and agreement, said Henry L. Miller made sales of such merchandise for or at the request of defendant, or its managers or agents, between October 1, 1891, and January, 1893, to the amount of $46,000, or upwards, over and above all sums upon which or for winch defendant made payment to said Miller pursuant to said agreement, upon which said sales there became due and owing from defendant to said Henry L. Miller forty-six hundred dollars, and the same, with interest thereon from January, 1,1893, is still justly due and owing from defendant; that thereafter, and before the commencement of this action, said Henry L. Miller, for value, assigned his claims, demand, and cause of action by reason of the premises to plaintiff, and plaintiff is the holder thereof. Wherefore plaintiff demands judgment against the defendant for seven thousand six hundred dollars, with interest on $4,600, parcel thereof from January 1, 1893, and on the balance thereof from May 20, 1895, together with the costs, etc., in this action.”
    ' “James Shanks being duly sworn, deposes and says: I am the plaintiff. I have a cause of action against the above-named defendant, which is, or holds itself out to be, a foreign corporation, which claim arises out of contract other than a contract to marry, and the amount of which said claim is $7,600. 00-100 over and above all counterclaim, and all offsets known to me. The claim arises out of the facts set forth in the complaint herein, and of the affidavit of Henry L. Millet hereto annexed, to each of which I ask leave to refer.
    “ Henry L. Miller, being duly sworn, deposes and says: I have read the complaint herein. I am the person therein referred to, named Henry L. Miller, and the facts set forth in the complaint are true. For several years prior to January 1, 1895, I had rendered, and was then rendering, services for defendant, at its request. For certin services, defendant agreed that I should receive and draw $5,200 per annum, from the beginning of each year, in equal weekly payments of one hundred dollars each, and I received and drew the same accordingly until after January 1, 1895; and said arrangement and agreement was continued in force for the year 1895, without modification. On or about May 20, 1895, defendant violated said agreement, refused to make further payments, or to allow said employment to be continued, without cause, although I was ready and willing and offered to continue therein, and have since sought to obtain other employment, but failed to do so. Prior to 1893, for certain services which I rendered for defendant at its request, defendant agreed that I should receive ten per cent, on the sales which I procured at the request of defendant, its managers or agents. Between October 1, 1891, and January 1, 1893, when said arrangement and agreement ceased, I procured and caused sales of merchandise for or at the request of defendant and of its authorized managers, or agents or members, of the amount of at least $46,000 over and above all sums upon which commissions or the ten per cent, allowance above referred to has been paid, and ten per cent, upon said amount of $4,600, with interest, is justly due from defendant by reason of the premises. As against said several demands herein and in said complaint set forth, there are no counterclaims nor offsets, and the same are justly due and owing from defendant, over and above all counterclaims and all offsets known to me.”

      A. S. Bacon, for app’lt; L. A. Gould, for resp’t.
   Per Curiam.

We are of opinion that there was no sufficient allegation of the fact that the defendant was a corporation. The allegation in the alternative is not sufficient to satisfy the requirements of the Code, (§ 686), which authorizes the issuing of an attachment, in certain cases, where the defendant is a foreign corporation. If the plaintiff is not willing to make his allegation in a definite form when he proceeds against a foreign corporation, he cannot procure the benefits of the statute given him, as against foreign corporations. The order should be reversed, with $10 costs and disbursements, and the motion granted, with $10 costs.


text:
    Simon Sterne, Resp’t, v. Elisha H. Talbott et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed October 18, 1895.)

    1. Appeal bond—Action on.
    A surety, who has unconditionally promised to pay the debt of another, cannot defend on the ground that the debt can be collected of the principal debtor, or on the ground that the creditor has in his hands property of the principal debtor out of which the debt can be collected.
    2. Same—Counterclaim.
    In such case, securities in the hands of the creditor are not available to the sureties as a counterclaim, nor even as a set-off.
    3. Same—Notice of judgment,
    The provision of section 1309 of the Code, which requires notice of the entry of judgment to be served on the appellant’s attorney before an action on an undertaking can be maintained, has no application to an undertaking given on appeal to the court of appeals.

      4. Same—Proof of non-payment of judgment.
    In an action upon an undertaking on appeal, & prima facie case is made out as to the non-payment of the judgment appealed from, where it, uncanceled, is put in evidence, in the absence of any allegation of payment in the answer, and of any evidence of payment given or offered by the defendants. '
    Appeal from a j udgment entered on a verdict directed by the court in favor of plaintiff, and from an order denying motion for a new trial, made on the minutes.

      A. A. Greenhoot, for app’lts.; B. Bllery Anderson, for resp't.
   Follett, J.

The plaintiff alleged in the- complaint: That November 2, 1892, he recovered a judgment against Charles F. Beach, Jr., in the supreme court-for $2,587.96, from which the defendant appealed to the general term, where the judgment was affirmed, and, February 27, 1893, a judgment of affirmance was duly entered in favor of the plaintiff and against Charles F. Beach, Jr., for $82.45 costs. That in March, 1893, Charles F. Beach, Jr., appealed to the court of appeals from the last-mentioned judgment, and on said appeal the defendants herein duly executed and filed a written Undertaking, pursuant to sections 1326 and 1327 of the Code of Civil Procedure, by which they did “ jointly and severally, pursuant to the statute in such case made and provided, undertake that the appellant will pay all costs and damages which may be awarded against the appellant on said appeal, not exceeding five hundred dollars, and do also undertake that, if the judgment so appealed from, or any part thereof, is affirmed, or the appeal is dismissed, the appellant will pay the sum directed to be paid by the judgment, or the part thereof as to which judgment shall be affirmed.” It'is also alleged that in June, 1894, the judgment appealed from was affirmed by the court of appeals, and, June 28, 1894, a judgment of affirmance was entered on the decision in favor of the plaintiff and against Charles F. Beach, Jr., for $129.95 costs, and that more than ten days prior to the commencement of this action notice of the entry thereof was duly served, and that no part of any of said judgments has been paid. The defendants answered separately, but their answers are identical: They denied knowledge or information sufficient to form a belief as to* the truth of the allegation (1) that a judgment entered upon a decision of the court of appeals for $129.95 had been recovered and entered ; (2) that due notice of the entry thereof had been served ; (3) that no part of said judgment had been paid. Hone of the other allegations in the complaint were put in issue. As a further defense it was alleged that the judgment for $2,587.96 was recovered on a loan of money made by the plaintiff to Charles F. Beach, Jr., who pledged as security therefor a bond for $1,000 and fifteen shares of stock of $100 each, all of the value of $2,500, which the plaintiff retained, and had failed to apply the avails thereof to the payment of the judgments. The defendants also set up the existence of the pledge as a counterclaim, but did not demand an affirmative judgment. A reply was not served. Upon these issues the case was tried. Before any evidence was given, the defendants moved, on a notice given pursuant to section 515 of the Code of Civil Procedure, for a judgment on the alleged counterclaim, which was denied, and an exception taken. The plaintiff then introduced the judgment records and the original undertaking, and called a witness, who testified, among other things:

“Iserved the judgment entered on the remittitur, and I served the judgment entered on the remittitur on Charles F. Beach, Jr. I served it personally. I know Mr. Beach. It was served on the 28th day of June, 1894, together with a notice of entry indorsed on the paper I served. I have made a computation of the amount due on the various judgments to to-day. * * The principal and interest amount in the aggregate to $3,160.63.”

The witness was not cross-examined, and the defendants offered no evidence. Thereupon the defendants moved to dismiss the complaint on the ground that the plaintiff had failed to make out a cause of action, and specified (1) that the service of the notice of judgment upon the party, but not upon his attorney, was insufficient ; (2) that the plaintiff had not shown that the judgments had not been paid. The motion was denied, and an exception taken» The court thereupon directed a verdict in favor of the plaintiff for $3,160.63.

Upon the entry of the judgment of November 2,1892, the debt on which it was recovered was merged in the judgment for the payment of which the defendants became liable in case it was affirmed, and the necessary steps taken to charge them. The fact that the plaintiff might have enforced the judgment by the sale of property of the judgment debtor on which the judgment had become a lien would be no defense to an action on the undertaking. Wood v. Derrickson, 1 Hilt. 410; Heebner v. Townsend, 8 Abb. Prac. 234; Johnson v. Ackerson, 40 How. Prac. 222; affirmed, 3 Daly, 430; Sperling v. Levy, 1 Daly, 95; Boomer v. Laine, 10 Wend. 525. It is a general rule that a surety who has unconditionally promised to pay the debt of another cannot defend on the ground that the debt can be collected of the principal debtor, or on the ground that the creditor has in his hands property of the principal debtor out of which the debt can be collected. Insurance Co. v. Babcock, 57 Barb. 231; Bank v. Wood, 71 N. Y.° 405; Third National Bank v. Shields, 55 Hun, 274; 28 St. Rep. 505. This case is not within any of the exceptions to the rule, no special equities being alleged in the answer, not even that Charles 3?. Beach, Jr., was insolvent. Securities in the hands of the plaintiff, if there were any,—of which no evidence was given or offered,—were not available to these defendants as a counterclaim (Wright v. Austin, 56 Barb. 13-16); nor even as a set-off (La Farge v. Halsey, 1 Bosw. 171; Insurance Co. v. Homer, 9 Mete. [Mass.] 39; Wat. Set-off [2d ed.] 56 et seq). Whether a counterclaim can be pleaded in an action on a statutory undertaking is a question on which the cases are not agreed. Atwater v. Spader, 12 St. Rep. 506; Cornell v. Donovan, 14 Daly, 295; 14 St. Rep. 687; Furber v. McCarthy, 54 Hun, 435; 27 St. Rep. 294; Wickham v. Weil, 43 St. Rep. 155; Delaney v. Miller, 78 Hun, 18; 60 St. Rep. 481; same case on second appeal, 84 Hun, 244; 65 St. Rep. 834. The court did not err in refusing to order a judgment for the defendants on the alleged counterclaim, which had not been replied to by the plaintiff.

Section 1309 of the Code of Civil Procedure, requiring notice of the entry of judgment to be served on the appellant’s attorney before an action on an undertaking can be maintained, has no application to undertakings given on appeals to the court of appeals. This section relates only to appeals taken as prescribed in the third, fourth, and fifth titles of chapter 12, which do not embrace appeals to the court of appeals, which are provided for in the second title of chapter 12. Weil v. Kempf 12 Civ. Proc. R. 379; Johnstone v. Conner, 13 Civ. Proc. R. 19. Why a notice is not required before an action can be maintained on such an undertaking is not apparent.

Some evidence was given by the plaintiff of the nonpayment of the judgments. The uncancelled judgments were received in evidence, and a witness testified that $3,160.63 was due on them. The witness was not cross-examined, and we think, in the absence of any allegation of payment in the answers, and in the absence •of any evidence of payment given or offered by the defendants, that a prima fade case was made out. It is quite apparent that the defendants have no defense to this action on the merits.

The judgment and order should be affirmed, with costs.

All concur.


author: Parker, J.

text:
    Edward C. McKay, App’lt, v. Donald McKay et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed October 18, 1895.)

    Brokers—Deposit to secure account—Proof.
    The facts of the case, together with the presumption of payment, raised by the lapse of twenty years between the date of the first settlement and the return of the bonds, were held to justify the finding of the trial court that the defendants have not in their possession any bonds belonging to the plaintiff, nor the proceeds of any such bonds, for which they have not accounted to the plaintiff.
    Appeal from a judgment, dismissing the complaint on the merits.

      Wm. G. Ohoate and James A. Denison, for app’lt; S. P. Nash, for resp’ts.
   Parker, J.

An examination of the evidence presented by the record leads us to concur in the decision of the trial court that the defendants have not in their possession any bonds belonging to the plaintiff, nor the proceeds of any such bonds, for which they have not accounted to the plaintiff. The complaint alleges the deposit by the plaintiff with the defendants, in September, 1869, of certain bonds, of the face value of $45,000, and their sale by the defendants during the months of October and December following, for a sum exceeding $55,000. During the years 1869, 1870, and 1871, the defendants purchased and sold stock for the account of the plaintiff, and rendered to him an account of such transactions on the 27th of October, 1871, by which there appeared to be due to defendants the sum of $15,800.74, which sum the plaintiff paid by his check, at the same time receiving a transfer of the stocks then held by the defendants for his account. Afterwards, the plaintiff complained of certain charges in the account for interest and commissions, which led to a further settlement, by which the defendants agreed to, and did, pay to the plaintiff the sum of $1,617, for which he gave a receipt reading as follows:

Mew York, Sept. 12, 1872.
“Received of Vermilye & Co. their check to my order for sixteen hundred and seventeen dollars ($1,617), in full of all claim against said Yermilye & Co.
“Witness: E. D. 0. McKay.
Geo. 0. Lyman.
Donald McKay.”

From the time of the first settlement, in 1871, to the year 1891, no claim was made against the defendants on account of these bonds. In the meantime, the head of defendants firm died, and their books covering this period were destroyed. The facts to which we have referred, together with the presumption of payment raised by the lapse of twenty years between the date of the first settlement and the demand for a return of the bonds (Bean v. Tonnele, 94 N. Y. 381), justify the finding of the court.

The discussion of the facts at special term makes it unnecessary to further refer to them on this review.

The judgment should be affirmed, with costs.

All concur.

The opinion of Mr. Justice Ingraham at special term is as-follows:

The claim here presented is that the plaintiff deposited with the firm of Vermilye & Go., the defendants, $45,000 in United States bonds in the year 1869, as collateral security for any loss upon the purchase of stock by Vermilye & Go., for plaintiff. The account was closed in the year 1871 by the payment to Vermilye & Go. of the balance then due, and the transfer of the stock held by Vermilye & Go. for the plaintiff at that time; and from the year 1871 to the year 1891, no claim was made against Vermilye & Co. on account of these bonds. The claim is so inherently improbable that it would require something more than the mere testimony of the plaintiff, uncorroborated, to establish it. It is scarcely conceivable that a person would leave bonds of the amount stated with a firm of brokers for twenty years after his accounts with the brokers had been settled, especially where the account was withdrawn from the brokers at the latter’s request in consequence of a dispute between the brokers and their principal. In this case it appears that the account with the defendants was withdrawn at their request, and that, about one year afterwards, plaintiff made some objection to some charges in the account for interest, and that after some negotiations that claim was settled by the payment to plaintiff of $1,617, and a receipt taken by the defendants from plaintiff, whereby the receipt of this sum of $1,617 was stated to be “in full of all claim against said Vermilye & Go.” It is not pretended that, at that time, the plaintiff made any claim to these bonds or their proceeds. There is not the slightest evidence in the case that would justify a finding that these bonds were ever delivered to Vermilye & Go.,, except the statement of the plaintiff, nor is there any evidence to show that Vermilye & Go. ever received the proceeds of the bonds. It does appear that the firm of Vermilye & Go. guaranteed the signature of the plaintiff to a transfer of the bonds; but at that time Vermilye & Go. were prominent dealers in government bonds, were the brokers of the plaintiff, and thus in a position to identify him, and the mere fact that they did identify him as the person signing the transfer would not justify a finding that they received the proceeds of the bonds when sold.

The plaintiff offers no explanation as to why he did not receive these bonds at the time the other securities held by Vermilye & Go. for him were delivered, and it is clear that he had no thought then that he had any claim against Vermilye & Go. on account of these bonds. The only explanation offered by plaintiff’s counsel, in his brief, is “ that plaintiff had, by lapse of memory, or otherwise, lost track of these securities.” If his memory was so bad at the-time the transaction was fresh in his mind as to his right to such a large amount, I think his memory, after the lapse of twenty years, is entirely insufficient upon which to base a finding that he ever delivered these bonds to the defendants, or that, if they were delivered, they were not returned to plaintiff prior to the time that his account was settled. The defendants were at the time when it was claimed these bonds were delivered to them, a banking house of prominence in the city of New York, and of most ample responsibility, and have continued in business from that time to the present, always occupying a prominent position as bankers and brokers in New York. It is inconceivable, if such a claim ever had any existence, that plaintiff would have delayed making it for twenty years, until all of defendants’ books, from which information could be obtained as to bonds received by them at' the time, and as to what disposition had been made of such Ronds, should have been destroyed, and Mr. Yermilye the head of the firm, prevented by death from testifying.

Upon all the facts of the case, including the acts of the plaintiff at the time of the settlement of the account and his subsequently giving the receipt mentioned, I am' satisfied that, if these bonds ever were delivered to Yermilye & Co., they were returned by them to plaintiff, or their proceeds accounted for.

There should be judgment, therefore, dismissing the complaint with costs.