author: Bookstaver, J. Giegrich, J.

text:
    Mary Oakes, App’lt, v. James M. High et al., Resp't.

      (New York Common Pleas, General Term,

      Filed February 4, 1895.)

    1. Costs—Fcbma pauperis.
    Where a person obtains leave to sue as a poor person in the district court, but neglects, upon the removal of the action to the common pleas, to call the attention of the court to the order, and fails to assert his exemption from costs on the taxation, his motion to set aside the taxation is properly denied on the ground of loches.
    3. Same.
    One, who has procured leave to sue as a poor person in the district court must, upon the removal of the action to the common pleas, obtain a new order, if he desires to prosecute in forma pauperis in the latter court.
    Appeal from an order denying a motion to correct the judgment.

      H. G. Harris, for app’lt; Abraham Gruber, for resp’t
   Bookstaver, J.

This action was commenced in the district court, where it is claimed an order was made allowing the plaintiff to prosecute as a poor person, and the original summons, it is claimed, was marked “ Free.” But it appears by the affidavit of defendants’ attorney that, up to the service of the notice of motion to set aside or correct the judgment, neither he nor the defendants had any knowledge that any order was entered allowing plaintiff to sue or carry on the action as a poor person. It also appears by the copy summons served on defendants that it was an ordinary district court summons, and is not marked “Free.” On the return day of the summons the defendants gave an undertaking as required by law, whereupon the action was transferred to this court, the order for removal being dated August 9, 1892, although the issues were not finally joined until the 19th October of that year. The case came on for trial on the 24th January, 1898, and resulted in a verdict for defendants. Thereupon the clerk gave the usual trial minutes, showing that the defendants were entitled to costs. The attention of the trial judge was not at any time called to the fact that the action had been commenced by the plaintiff as a poor person, nor did he discover it on the trial, as the original papers were at no time before him. After the trial, and on or about the 24th day of February, 1893, a bill of costs and notice of taxation for the 27th of that month was duly served on plaintiff’s attorney, and due service was admitted, as appears by the bill of costs filed with the judgment roll. On the 27th, plaintiff’s attorney not appearing, the costs were taxed at the sum of $112.55, and judgment including said costs was entered on that day; and thereafter, and on the same day, a copy of the judgment and notice of entry was served on plaintiff’s attorney, who admitted service thereof. The motion on which the order appealed, from was entered, was not made until the 13th June, 1893.

Under such circumstances, we think the defendants were entitled to enter the judgment for costs, no notice of the order of the district court having ever been given, either to the judge who tried the cause, the defendants, or their attorneys. Notice of the defendants’ intention to tax such costs was given to the plaintiff’s attorney three days before the taxation. He failed to appear on, the taxation, or claim the exemption of the plaintiff from costs by' reason of the order made in the district court. In Neugrosche v. Manhattan Railroad Co., 1 St. Rep. 302, the plaintiff sued as a poor person, but made default when the case was called for trial. Afterwards he procured an order to show cause why the judgment entered on the default should not be vacated and set aside, which was denied by the court, it saying:

“The order in forma pauperis, not having been served, should have been presented to the clerk in opposition to the taxation. Not having been called to the attention of the defendant’s attorneys in any form, their practice in entering judgment was not irregular.”

In Johnson v. Green, 3 Abb. Pr. (N. S.) 342, Judge Van Vorst says:

“ It is the duty of the attorney obtaining an order in an action to serve a copy of it on the opposite attorney in all cases where the rights of the other party may be affected or prejudiced by any proceeding taken under the order. Until the order has been served, no active proceeding can be taken under it. An attorney conducting a causé has the right to manage it according to the general rules and practice of the court, without reference to any order which maybe obtained interfering with his client or the ordinary conduct of the cause, until a party obtaining an order against him serves a copy of it so as to give him an opportunity to prepare to meet the exigencies of the order.”

From the facts as above stated, it is clear the plaintiff or her attorney ~was guilty of negligence in not calling the attention either of the court or the defendants’ attorney to the order made in the district court, and was clearly guilty of loches in not moving to amend the judgment for nearly four months after its entry, al-

• though he had -notice of the intention to tax the costs, and to enter judgment on the costs as taxed, and of the entry of the judgment, for all that time.

The order made at the trial term of this court was neither invalid nor irregular, in the absence of any notice of the leave to sue in forma pauperis given in the district court. It was within the jurisdiction of the trial judge to make the order he did. It was made upon the facts then before him, and, if there were other facts which would have led to a different result, it was the duty of the party aggrieved to immediately call his attention to those facts. Instead of doing this, he waited four months, and then applied to another judge at special term, who certainly had no right to review or vacate the order as made.

So far upon the theory that the order made in the district court was binding upon this court. But we do not think this is the Case. When a district court action is removed to the court of common pleas, that court has exclusive jurisdiction thereof, and all the proceedings thereunder, which follow the usual course of actions in that court. If the plaintiff desires to proceed in it as a poor person, a new order to prosecute in forma pauperis should have been obtained. The order appealed from must therefore be affirmed, with costs.

Daly, C. J., concurs.

Giegrich, J.

(concurring in result). It has become the settled rule by adjudications in ¡the court of appeals, and in this court, that, on the removal of a cause from a district court to this court, it continues to be in effect an action in a;district court, the trial of which is to be had in this court. Smith v. White, 23 N. Y. 572; Salter v. Parkhurst, 2 Daly, 240; Latteman v. Fere, 11 Civ, Proc. R. 217; Walker v Scott, 3 Misc. Rep. 329 ; 53 St. Rep. 632; Myers v Rosenback, 7 Misc Rep. 560 ; 58 St. Rep. 513; affirmed 9 Misc. Rep. 89; 59 St. Rep. 669. As it continues to be, in effect, an action in a district court, it would seem to follow as a corollary that the removal is without prejudice to the proceedings already had in the district court, and that they stand until altered or revoked by this court. I fail, therefore, to perceive why the removal of the cause to this court should operate to abrogate the order of the district court permitting the plaintiff to sue as a poor person. If that result were to follow, then surely every other proceeding, including the pleadings in such action, would be swept away thereby. Such never was the intention of the lawmaking power, for the statute expressly provides that upon the granting of the order of removal “the clerk of the district court must forthwith deliver to the clerk of the court of common pleas all process, pleadings, and other papers in the action, and certified copies of all minutes, entries, and orders relating thereto, which must be filed, entered, or recorded as the case requires, in the latter’s office.” Code Civ. Proc. § 3216; Consolidation Act (Laws 1882, c. 410) § 1287. For these reasons I am constrained to dissent from the conclusion reached by my associates that the plaintiff should have obtained a new order to prosecute in forma pauperis if she desired to proceed in the action as a poor person; but under the circumstances of the case, which have been so clearly detailed by Judge Bookstaver, and in the light of the authorities cited by him, I am of the opinion that the plaintiffdost all right under the said order permitting her to sue as a poor person by reason of her inexcusable loches ; see Harris v. Van Wagenen, 14 Wkly. Dig. 212, and therefore I think that upon this ground the order appealed from should be affirmed, with costs.


source: Caselaw Access Project

author: Bookstaver, J.

license: Public Domain

text:
    David Felter, as Receiver, etc., App’lt, v. Jeanie E. Maddock App’lt, et al., Resp’ts.

      (New York Common Pleas, General Term,

      Filed February 4, 1895.)

    1. Receiver—Pendente lite.
    A receiver pendente lite of a firm acquires no title to the co-partnership property, but only the right of possession as an officer of the court.
    2. Same.
    Such receiver may institute actions which can be sustained by proof of possession only, without proof of title, legal or equitable.

      3. Same.
    But he cannot recover money withdrawn by a partner from the firm assets and paid to an individual creditor. ' ■
    4. Judgment—Co-defendants.
    Though all the parties are before the court, a claim which may be established in favor of one and against another, cannot be made the subject of trial and judgment, irrespective of the pleadings and the theory of the action.
    Appeal from a judgment, dismissing the complaint.

      John A. Straley, for appl’t Felter; Frederick W. Hinrichs, for app’lt Maddock; George C. Blanke and William H. Maginnis (Andrew Wesley Kent, of counsel), for resp’ts.
   Bookstaver, J.

At the opening of the trial, the defendants Steel and Kent moved to dismiss the complaint, on the ground that it exhibited no cause of action in favor of plaintiff. By the complaint it is alleged that the firm of Haddock & Steel, represented by plaintiff, as receiver, was dissolved under the articles of co-partnership, by limitation, on the 26th January, 1893 ; that after that time, and until the appointment of plaintiff as receiver, the property, assets, and effects of the firm were in the possession and under control of the defendant George Steel; that, after the dissolution of the copartnership, an action was brought by the defendant Jeanie E. Haddock in the supreme court against George Steel to wind up the affairs of Haddock & Steel, in which action, on February 27, 1893, plaintiff was appointed receiver of the property, assets, and effects of the firm of Haddock & Steel pendente lite, with the usual powers of such receivers in like cases, and that he duly qualified; that an order was entered about June 2, 1893, authorizing the plaintiff, as receiver, to commence and prosecute this action ; that, at the dissolution of the firm, the partnership was insolvent, and unable to pay its creditors, to the knowledge of defendants Steel and Kent; that on the 8th, 9th, and 10th days of February, 1893, defendant Steel withdrew from the copartnership assets of the firm of Haddock & Steel several sums of money, and paid the same to defendant Kent in part settlement of an individual indebtedness of Steel to Kent, and not otherwise ; that such sums were paid by Steel and received by Kent with full knowledge on the part of both that the same was in payment of an individual indebtedness of Steel to Kent, and not applied in payment of a co-partnership liability; that a demand was properly made on both of these defendants to return the moneys to plaintiff, which they refused; that Kent is an attorney and counselor at law, and has been the legal and confidential adviser of Steel, and had full knowledge of the relation of Steel to the firm of Haddock & Steel; and that defendant Haddock is a party defendant, for the reason that, osa co-partner of said firm, she may be entitled to an equity in. the assets of the firm, if any. The complaint then prays that the money paid by Steel to Kent may be adjudged assets of the firm of Haddock & Steel, and that they, or either of them, be directed to return the money to plaintiff, as receiver, with interest.

The only question, therefore, in the case, is whether plaintiff, as receiver, has capacity to sue. As alleged in the complaint, the plaintiff was appointed receiver pendente lite in the action brought by Haddock against Steel, with the usual powers of receiver in such cases, and as such he brings this action. The order of the court permitting him to sue as alleged in the complaint does not confer upon him any other powers than those already given him, and did not in any way attempt to clothe him with new powers, or to invest him with title to the property, and consequently did not enlarge his powers. We have repeatedly held that receivers so appointed were mere common law receivers, and, as such, acquired no title to the co-partnership property; their right was one of possession merely, as officers of the court; and that the title remained where it was when they were appointed; and that such appointment did not make them trustees of creditors. Devlin v. City of New York, 4 Misc. Rep. 106; 53 St. Rep. 455 ; Forker v. Brown, 10 Misc. Rep. 161; 62 St. Rep. 480 ; Buckley v. Harrison, 65 St. Rep. —. Such receivers have power to collect and receive the debts, demands, and other property of the corporation, to preserve the same, and, in proper case, to sell or dispose of the property as directed by the court, and to maintain any action or special proceeding necessary and proper for these purposes, but no other. It would follow, therefore, that such receivers may commence actions which can be sustained by proof of possession only, without proof of title, legal or equitable.

The question, then, arises whether the payment of the moneys to the defendant Kent, under the circumstances alleged in the complaint, transferred title to him, or whether such moneys remained assets of the co-partnership. This question has been much debated, and has received different answers. In the courts of Pennsylvania, Ohio, Wisconsin, and certain other states such moneys have been held to remain assets of the co-partnership. Purdy v. Powers, 6 Pa. St. 492; Thomas v. Pennrich, 28 Ohio St. 55; Viles v. Bangs, 36 Wis. 131. But a directly opposite conclusion has been arrived at by the courts of England, Massaschusetts, New Jersey, Illinois, and of this state. Jones v. Yates, 9 Barn. & C. 532 ; Wallace v. Kelsall, 7 Mees. & W. 264, 273 ; Homer v. Wood, 11 Cush. 62; Craig v. Hulschizer, 34 N. J. Law, 363; Church v. Bank, 87 Ill. 68 ; Calkinsv. Smith, 48 N. Y. 614. The learned counsel for the plaintiff, in an an able and ingenious brief showing much research, claims that the case last cited is distinguishable from the one under consideration, in that the decision was made in an action at law for the recovery of damages, and not in an action in equity. But in that case the court distinctly held that the cause of action was not a part of the assets of the firm, and that no interest therein was conveyed by the various assignments to the plaintiff in that action, including that of a receiver pendente lite ; and the reasoning in the prevailing opinion applies as well to an equitable action as to one at law. Judge Earl, in delivering the prevailing opinion, said :

“ I am inclined to think that the fraud was not a joint fraud for which the three partners could unite in a common law action ; but it was a fraud upon each partner separately, for which he could sue alone to recover the damages which he sustained. The damage sustained by each partner was not the same, but was in proportion to his interest in the partnership.” r

Again, plaintiff’s counsel “ claimed that plaintiff took their title to this demand through the assignment from the receiver. But it passes my comprehension how they could get title to the cause of action from that source, as Tift was appointed receiver only of the assets of the firm. This cause of action was no part of the assets of the firm, was never vested in Tift, and he could not, therefore, transfer any title thereto to the plaintiffs.” It is true that this decision was arrived at by a divided court. Nevertheless, we regard it binding upon us in this case; and it would therefore be bootless for us to review the various arguments by which diverse conclusions are arrived at in the different courts, for no matter what conclusion we arrive at, we would still feel bound to follow the decision of the highest court in this state. The ingenious suggestion that this action is brought to declare the funds co-partnership assets, and to reach them as such, and not an action to set aside a fraudulent title to property, cannot, therefore, prevail, and the complaint was properly dismissed as to the plaintiff.

But the defendant Haddock claims that, even though the complaint may have been properly dismissed as to the plaintiff, it ought to have'been continued in order to determine his rights as a member of the firm; and it is certainly true that, where all parties to a controversy are before the court, and one asserts or establishes a right against another, the court may determine the rights of the parties. But in such case the judgment must be secundum allégala el probata. In other words, judgment cannot be given in direct hostility to the theory of the action and the substantial allegations of the pleadings. Day v. Town of New Lots, 107 N. Y. 146; 11 S.t. Rep. 361; Hawes v. Dobbs, 44 Id. 890, and cases cited. As far as the defendant Haddock is concerned, the theory of this action is that the title to the claim is vested in the receiver of the co-partnership, and hence that he .can recover. The answer of defendant Haddock reasserts this position, and demands judgment accordingly. To hold that, because all the parties are before the court, any claini which might be established in favor of one and against another can be made the subject of trial and judgment, irrespective of the pleadings and the theory of the action, would be to ignore all principles of pleadings. The complaint was therefore properly dismissed as to the defendant Haddock, and the judgment should be affirmed, with costs.

All concur.


author: Giegerich, J.

text:
    David Boyd, as Administrator, etc., App’lt, v. Robert Boyd, Resp’t.

      (New York Common Pleas, General Term,

      Filed February, 4, 1895.)

    1. Appeal—Hew trial.
    "Where the reversal of an order of the city court, granting a new trial, is sought solely on the ground that the court below had no authority to make it, such order is reviewable in the Common Pleas.

      3. ISTbW TRIAD—NeWDY DISCOVERED EVIDENCE.
    Where a motion for a new trial is based upon, the ground of newly-discovered evidence, a case must be made, and the motion will not be heard upon affidavits only.
    Appeal from an order of the city court, affirming an order granting a motion for a new trial on the ground of newly-discovered evidence, made after direction of a verdict in favor of plaintiff.

      Edward W. S. Johnston, for app’lt; Henry Daily, Jr., for resp’t.
   Giegerich, J.

The reversal of the order appealed from is sought solely on the ground that the court below had no authority to make the same. Under these circumstances, we think the order should be reviewed in this court. Russell v. Randall, 123 N. Y. 436, 438; 34 St. Rep. 110. It is urged by the appellant that the court below had no power to entertain the motion, because it was not made upon a case proposed and settled. The rule must be regarded as well settled that, where a motion for a new trial is based upon the ground of newly-discovered evidence, a case must be made, and the motion will not be heard upon affidavits only. Code Civ. Proc. § 997; Anon., 7 Wend. 331; Sproul v. Resolute Fire Insurance Co., 1 Lans. 71; Leavy v. Roberts, 8 Abb. Pr. 315 ; Warner v. Western Transportation Co., 5 Rob. (N. Y.) 499 ; Russell v. Candall, 30 St. Rep. 452 ; Id., 123 N. Y. 436; 34 St. Rep. 110; Michel v. Colgrove, 46 Id. 899; Holmes v. Evans, 86 Id. 933; Thayer Mf'g Jewelry Co. v. Steinau, 58 How. Pr. 315; Bantleon v. Meier, 81 Hun, 162; 65 St. Rep.—; 2 Rumsey, Prac. 413; Baylies, New Trials, 524. Section 997 of the Code provides that, where a party intends to move for a new trial of an issue of fact, “ he must, except as otherwise prescribed by law, make a case, and procure the same to be settled and" signed, by by the judge or referee, by or before whom the action was tried, as prescribed in the general rules of practice.” We have not been referred to, nor are we aware of, any other provision of law, and we therefore conclude that the above are the only ones which apply to the question under consideration. These statutory provisions are declaratory of the practice as it existed before either Code went into effect; and it was held in Bantleon v, Meier, supra, that they are imperative, and that there was no provision of law which relieved a motion of this character from the operation of these provisions of the Code, unless, as was the case in Russell v. Randall, supra, the motion was heard without objection upon the pleadings in the action, and the affidavits of the parties relating to the history of the trial. In the case before us the appellant, at the very outset, took the same position as contended for by him upon this appeal, and maintained it throughout the entire proceeding in the court below ; and, when the motion came on for hearing, he filed an affidavit protesting against the hearing of the motion, on the ground, among others, that it was not made upon a case prepared and settled in conformity with the provisions of § 997 of the Code. It thus clearly appears that the appellant at all times insisted upon his legal rights, which he did not, in our opinion, waive for the reason assigned by the general term of the court below upon affirming the order, viz. that the appellant did not dispute, and the judge who tried the cause asserted, the correctness of the transcript of the entire evidence and proceedings-taken at the trial, which formed part of the motion papers, this being deemed, “ a sufficient settlement, under the peculiar circumstances of the case."

There is no suggestion here that a case was made, and was settled and signed by the trial judge, in conformity with the general rules of practice (in fact, there was no signature at all of the trial judge) ; nor that the appellant consented to a settlement of a case; nor that the appellant consented to have the motion heard upon the papers which were read in support of the motion. In the absence of either of these elements, we conclude, in the light of the-above-cited provisions of the Code, the general rules of practice (rules 32-34), and the decisions construing the same, that the court below had no authority to entertain the motion, and hence the-order was unauthorized. In arriving-at this conclusion, we deem it haeet and proper to state that we have not overlooked the dictum in Russell v. Randall, 123 N. Y. 438, 439 ; 34 St. Rep. 110, that the necessity for a history of the proceedings must appear to the court; but that we base our decision solely upon the requirements of § 997 of the Code, which, in our opinion, alone govern applications for a new trial upon newly-discovered evidence. There were other points urged by the appellant, but, in view of the opinion above expressed, we are dispensed from consideration of the same. For these reasons, the order appealed from should be reversed, with costs, but with leave to renew upon payment of. the costs of both appeals.

All concur.


author: Finch, J.

text:
    Hiram Hitchcock, as Executor, etc., Resp’t, v. Fanny M. Peaslee, et al., App’lts.

      (Court of Appeals,

      Filed April 9, 1895.)

    Judgment—Modification-.
    Upon, a motion to sot aside, alter or modify a judgment founded on matters in pais and dehors the record, the general rule is that the relief sought is discretionary.
    Appeal from order of the general term of the supreme court in the first judicial department, which-affirmed an order of special term confirming the report of a referee and denying a motion to require Fanny M. Peaslee to give security for a portion of a trust fund created by the will of Edmund E. Peaslee, deceased.

      Robert Hunter McGrath, Jr., for app’lts; C. M. Bovee, Jr., for resp’t.

      See 63 St. Rep. 871.

   Finch, J.

This appeal should be dismissed. The father of the defendant Fanny M. Peaslee by his will gave to her “twenty thousand dollars in trust, the same to revert at her death without, issue equally” to his wife and son. An action was brought by his executors, seeking to some extent a construction of the will, in which it was adjudged that the fund of twenty thousand dollars was payable to the daughter and should be put in her possession, but that she was not at liberty to spend or waste the principal and was bound to keep it securely invested for the benefit of those entitled to the contingent remainder. In pursuance of the decree the money was paid over to the daughter. The testator’s wife thereafter died and the executor of the mother made a motion at the foot of the decree for an order requiring the daughter, who continued to hold the fund as life tenant, to give security for its preservation and as a safeguard against loss or waste. The matter was sent to a referee to take proof of the facts, and it then appeared -that the whole fund had already been lost by unfortunate investments in stocks. Wall street had engulfed it bodily. After this severe loss, the daughter insured her own life to provide for the ultimate restitution of the fund and for a time managed to pay the premiums. The mother on ascertaining the facts protested against the hard remedy, begged the daughter not to continue the policy, nnd promised to forgive her the loss and never to call upon her for the fund. It became difficult for her to bear the annual drain of the premiums, and she then notified her brother of the situation and suggested that he should keep the policies in life until she should be able to do it herself. He refused, and she allowed ten thousand dollars of the insurance to lapse, but kept ten thousand dollars in force. By the will of her mother she has become entitled to about thirty thousand dollars absolutely and ten thousand dollars for her life. On this state of facts the court required her to give security for the one-half of the fund payable to Edward, and she has submitted to the order without an appeal, but the court refused the application as to the ten thousand dollars which was to revert to the mother, and Edward as executor of her will and his associate in that office appeal from the refusal after an affirmance by the general term.

I think it is obvious that the order of the special term rested in its reasonable discretion which was exercised in behalf of the moving parties quite as fully as was justifiable. There was no absolute legal right to have the security sought. The possession of the fund had been adjudged to belong to the- daughter. Whether she should give bonds for its preservation or ultimate payment over was a question dependent upon the after-occurring circumstances, and which the court might answer either way after giving them reasonable consideration. If the daughter, after having lost the fund, was insolvent, an order requiring her to give security would be in effect that she find somebody willing to pay the debt for her to her own brother. If, on the other hand, her mother’s legacy had made her worth three times the amount of the lost fund the court may have deemed the demand for security unreasonable, especially in view of the daughter’s claim that the mother had released the fund to her and discharged the liability. Such a question as that might very well be excluded from a determination upon a mere motion. Where one moves at the foot of a decree it is usually with permission given or reserved in the decree itself, and contemplates orders intended to carry out and effectuate the decree. Here the effort is to alter and modify it It gave the fund without conditions, and is sought to be changed by imposing conditions. Practically it is a motion to set aside the judgment, founded on matters in pais and dehors the record. The general rule in such cases is that the relief sought is discretionary. (Williams v. Montgomery, 60 N. Y. 648.)

The appeal should be dismissed, with costs.

All concur. •

Appeal- dismissed.


author: Andrews, Ch. J.

text:
    American Sugar Refining Company, App’lt, v. Charles H. Fancher, as Assignee, etc., Resp’t.

      (Court of Appeals,

      Filed April 9, 1895.)

    1. Equity—Following property or proceeds.
    A court of equity has jurisdiction to follow the proceeds of property taken from the true owner by felony, or misapplied by an agent or trustee, and converted into property of another description, and to permit the true owner to take the property in its altered state as his own, or to hold it as security for the value of the property wrongfully taken or misapplied, or, in case the original property or its proceeds have been mingled with that of the wrongdoers in the purchase of other property, to have a charge declared in favor of the person injured to the extent necessary for his indemnity, so long as the rights of lonafide purchasers do not intervene.

      2. Same—Assignee for creditors.
    In respect to such remedy, an assignee for creditors stands in no other or better position than his assignor.
    S, Same. •
    In pursuing such remedy, two limitations must be strictly observed, (1) that it must appear that the plaintiff has no adequate remedy at law, either in consequence of insolvency, the dispersion of the property or other cause, and (2) that nothing will be adjudged as proceeds except what can he specifically identified as such.
    - Appeal from order of the general term of the supreme court in the first judicial department, which reversed an interlocutory judgment in favor of plaintiff, eutered upon the report of a referee and the final judgment entered thereon, and ordered a new trial.
    • This action was brought by plaintiff against defendant, as assignee, for the benefit of creditors of the firm of C. Burkhalter & Go., to recover the proceeds of the re-sale of certain goods alleged to have been fraudulently purchased from plaintiff by said firm.
    The interlocutory judgment adjudged defendant a trustee of the goods mentioned in the complaint, and of the proceeds of such goods as had come into his hands as assignee, and that he account for, transfer and pay over to plaintiff all of said proceeds; a reference was ordered for the purpose of the accounting. A stipulation was afterwards entered into between the parties as to the amount of the proceeds received by defendant, and a final judgment in plaintiff’s favor in accordance therewith was rendered.

      Charles E. Hughes, for app’lt; James B. Dill, for resp’t.

       Reversing 62 St. Rep. 249.

   Andrews, Ch. J.

This case presents a question of considerable practical importance. It relates to the equitable jurisdiction ■of the court under special circumstances to follow proceeds of personal property in the hands of a fraudulent vendee or his general assignee for the benefit of creditors at the suit of a defrauded vendor, who.by false pretenses was induced to part with the property upon credit, the proceeds sought to be reached being the sums due from sub-vendees of the fraudulent purchaser arising on re-sales by him made before the discovery by the plaintiff of the fraud. The facts upon which the question' arises are substantially conceded and are free from complication. Between the 20th day of September, 1892, and the 20th day of October following, the plaintiff sold and delivered to the mercantile firm of C. Burkhalter & Co., doing business in the city of New York, sugars of vari■ous qualities on credit for the price in the aggregate of $19,121.41, no part of which has been paid, the last sale having been made October 19th, 1892. On the next day, the firm being insolvent and ■owing debts greatly in excess of its assets, made a general assignment to the defendant for the benefit of its creditors. Among the assigned assets were a portion of the sugars sold by the plaintiff to the firm, which he replevied from "the assignee, but the firm, prior to the assignment, had sold to numerous persons, customers of the firm, in the ordinary course of trade, portions of the sugars on ■credit and claims,held by the firm against the sub-vendees arising out of such sales, exceeding in the aggregate the sum of $10,000, were among the assets which passed by the assignment. These claims were collected by the assignee after the assignment, and •(excepting a small sum) after notice had been served by the plaintiff on the assignee that it rescinded theoriginal sale for fraud, which notice was accompanied by a demand for the sugars then in the possession of the assignee, and for an accounting and the delivery to the plaintiff of the outstanding claims against the customers of Burkhaltter & Co. in their hands for the sugars sold by the firm as above stated. The assignee declined to accede to the demand made. On the trial the parties by stipulation fixed the amount of the claims for sugars sold which had come to the hands of the assignee, and which had been collected by him.

The fraud of Burkhalter & Co. was not controverted. It was .shown that the sales were induced by a gross misrepresentation in writing made by one of the members of the firm to the plaintiff as to the solvency of the firm, made on or about September 20th, 1892, within thirty days before the assignment, and when the firm was owing several hundred thousand dollars more than the value of its whole assets.

The case presented is singularly free from any uncertainty in respect to the facts upon which the equitable jurisdiction to follow the proceeds of the sugars is claimed. They are definite and ascertained, but it is insisted that the court is impotent to give relief by way of subjecting the choses in action or their proceeds, representing the sugars, to a lien in favor of the defrauded vendor, or to adjudge that they shall be applied in partial recompense and restitution for the property so wrongfully obtained, because, as is claimed, such relief is not in any such case within the scope of the powers of courts of equity as heretofore defined and exercised, and for the further reason that new rights have intervened by reason of the assignment. The fraud of Burkhalter & Co. was, as we have said, admitted. They are hopelessly insolvent, and were so at the time they took the plaintiff’s goods. They disposed of a large part of the sugars before the plaintiff became cognizant of the fraud. The plaintiff was only apprised of it after the assignment was made. The remedy at law upon the contract against the fraudulent and insolvent purchaser is, under the circumstances, ineffectual. The pursuit of the property, except the small part of it. which was unsold and passed to the assignee, is impracticable. If it could yet be found unconsumed and capable of identification, the multiplicity of suits which would bé rendered necessary to reclaim it would make the remedy expensive, burdensome and inadequate. The identification of the proceeds sought to be reached is complete and unquestioned; It is not claimed that the credits- or the money into which they have been converted are not the very proceeds of sugars of which the plaintiff was defrauded.

The jurisdiction of a court of equity to follow the proceeds of property taken from the true owner by felony, or misapplied by an agent or trustee, and converted into property of another description, and to permit the true owner to take the property in its altered state as his own, or to hold it as security for the value of the properly wrongfully taken or misapplied, or, in case the original property or its proceeds have been mingled with that of the wrongdoers in the purchase of other property, to have a charge declared in favor of the person injured to the extént necessary for his indemnity, so long as the rights of bona fide purchasers do not intervene, has been frequently exerted and is a jurisdiction founded upon the plainest principles of reason and justice. The case of Newton v. Porter, 69 N. Y. 133, is an illustration of the application of this principle in a case of the larceny of negotiable bonds,, sold by the thieves, in which the court subjected securities in which they invested the money, and which they had transferred with notice to third persons as security for services to be rendered, to a charge in favor of the owner of the stolen bonds. The cases-upon this head are very numerous, where there has been a misapplication of trust funds by trustees, or persons standing in a fiduciary relation, and the money or property misapplied has been laid out in land or converted into other species of property. The court in such cases lays hold of the substituted property and follows the original fund, through all the changes it has undergone, until the power of identification is lost or the rights of bona fide purchasers stop the-pursuit, and hold it in its grasp to indemnify the innocent victim of the fraud. And even in case of money, which is said to have no earmark, its identity will not be deemed lost, though it is mingled with other money of the wrongdoer, if it can be shown that it forms a part of the general mass. Pennell v. Deffell, 4 DeG., M. & G. 372; In re Hallett, 13 Ch. Div. 696;. Holmes v. Gilman, 138 N. Y. 369 ; 52 St. Rep. 873. In the case of stolen property, or of misapplication by a trustee or agent of the funds of the principal or cestui que trust, the title of the real owner of the property has been in most cases lost, without his consent, and the court, by a species of equitable substitution, repairs, as far as practicable, the wrong, and prevents the wrongdoer from profiting by his fraud. And, indeed, courts of law, borrowing the equitable principle, in cases of misappropriation by agents, vest in the principal at his election the legal title to a chattel or security in the hands of the agent, purchased exclusively by the application of the embezzled or misappropriated fund. Taylor v. Plumer, 3 M. & S. 562.

It is at, this point that the controversy in the present case commences, and the divergence arises which has led to this litigation. It is claimed, on behalf of the defendant, that courts of equity in commercial cases, where the claim of the plaintiff originates in a fraud in the sale of personal property, does not undertake to follow party proceeds in the hands of the wrongdoer, but that the defrauded having consented to part with his title, is remitted exclusively to such legal remedies as are given for the redress of the wrong. The jurisdiction of courts of equity in cases of trust or agency, or cases of like character, it is insisted, is founded upon the ancient jurisdiction of these courts over trusts and fiduciary relations, and has not been and ought not to be extended beyond these cases. It is very true that trusts and trust relations aré peculiarly cognizable in equity, and have been so cognizable from the earliest period of equitable jurisprudence. But it is to be said that these are but branches of the larger jurisdiction over frauds, which equity abhors, and of which it has cognizance admittedly in many cases not connected with technical trusts or agency. It cannot be denied that the protection of cestui que trusts against frauds of the trustee is an object of peculiar solicitude in courts of equity. They, in many cases, are incapable, by reason of ago, inexperience or other incapacity, from looking out for themselves, and the court stands in the attitude of guardian of théir interests. But, as has been said, a court of equity does not restrict its remedial processes to the aid of the helpless or the ignorant. It embraces within its view the general claims included within what are called quasi trusts, and intervenes to prevent violations of equitable duty by whomsoever committed or whoever may suffer from the violation. It goes altogether outside of trust relations in many cases to prevent fraud, or to compel a restoration of property obtained by fraud. The exercise of the jurisdiction to set aside fraudulent transfers of real or personal property made in fraud of creditors is familiar. And the jurisdiction is most beneficially invoked in cases of private fraud to rescind transfers of real estate procured by fraudulent representations, and to restore to the defrauded vendor the title of which he has been defrauded. It often happens in cases of transfers of real estate procured by fraud that, before the action is brought or the plaintiff is apprised of the fraud, the fraudulent vendee has disposed of the land in whole or in part, or has created liens thereon in favor of the bona fide purchasers for value. In such cases the court will mould the relief to suit the circumstances, and will, at the election of the plaintiff, rescind the contract and compel a re-conveyance of the part of the land still remaining in the hands of the vendor, and compel the wrongdoer to account for the proceeds of the lands sold, or award compensation in damages. The court in many cases resorts to the fiction of a trust, and,- by construction, adjudges that the proceeds in the hands of the wrongdoer are held by him as trustee of the plaintiff. This was the exact nature of the relief granted in the case of Trevelyan v. White, 1 Beav. 589, as appears by the recital of the decree in the opinion of the master of the rolls, where part of the estate had been sold by the fraudulent vendee. In Cheney v. Gleason, 117 Mass. 557, a bill was filed by the defrauded vendor of real estate to reach a mortgage taken by the vendee on the land on a re-sale by him, and the court sustained the bill and granted the relief. In Hammond v. Pennock, 61 N. Y. 145, the court rescinded, at the instance of the plaintiff, a contract for the exchange of real and personal property, owned by the plaintiff, for a farm of the defendant in Michigan, which had been consummated on the plaintiff’s part by a conveyance and transfer, the contract and conveyance'having been obtained by the defendant by fraudulent representations; and the defendant having, after the conveyance to him, contracted to sell part of the land conveyed to him by the plaintiff, the court adapted the relief to the circumstances and rescinded the conveyance so far as practicable, and adjudged that the defendant account for the proceeds of the personal property included in the sale. [f the jurisdiction exercised by courts of equity in respect to undoing fraudulent conveyances of real estate and following the proceeds in the hands of the fraudulent grantee, appertains in like manner and degree to sales of personalty, it would seem that the plaintiff in the present case was entitled to relief.

The fact that before the action was brought, Burkhalter & Go. had made a general assignment for the benefit of creditors to the defendant is no obstacle to the 'relief, if, except for the assignment, the court would have interposed, on the prayer of the plaintiff, its preventive and other remedies, to have enabled the plaintiff to reach the unpaid claims against the sub-vendees. As assignee for creditors he is not a purchaser for value, and stands in no other or better position than his assignor as respects a remedy to reach the proccds of the sales. Goodwin v. Wertheimer, 99 N. Y. 149; Barnard v. Campbell. 58 id. 76; Bullcliffe v. Langton, 18 Md. 383; Bussing v. Rice, 2 Cush. 48; It is claimed that the general creditors of the firm will be prejudiced if the plaintiff is allowed to prevail, and that he will thereby acquire a preference over the other creditors of the insolvent firm. But general creditors have no equity or right to have appropriated to the payment of their debts the property of the plaintiff, or property to which it is equitably entitled as between it and Burkhalter*&Oo. They, so far as appears, advanced nothing and gave no credit on the faith of the firm’s possession of the sugars, assuming that that element would have had any bearing on the case. If the sugars had existed in specie in the hands of the assignee it cannot be doubted that the plaintiff on rescinding the sale would have been entitled to retake them, and the general creditors aie in no worse position, if the plaintiff is awarded the proceeds, than they would have been if the .sugars had remained unsold.

Much was said on the argument upon the difference between a trespasser taking and disposing of the property of another and the case of a sale of personal property to a vendee induced by fraud. It is the law of this state, as in England, that title passes on such a sale to the fraudulent vendee, notwithstanding that the crime of false pretenses is included in the statute definition of a felony, but which was not such at common law. Barnard v. Campbell, supra ; Wise v. Grant, 140 N. Y. 593; 56 St. Rep. 496 ; Benj. on Sales [6th ed.] § 433; Fassett v. Smith, 23 N. Y. 252; Benedict v. Williams, 48 Hun, 124; 15 St. Rep. 677. But a purchase procured by fraud is in no sense, as between the vendor and vendee, rightful. It was wrongful, and while a transfer so induced vests a right of property in the vendee until the sale is rescinded, the means and act by which it was procured was a violation of an elemental principle of justice. But the rule is that a sale of personal property induced by fraud is not void, but is only voidable on the part of the party defrauded. “This does not mean that the contract is void until ratified; it means that the contract is valid until rescinded.” When a contract of sale infected by fraud of the vendee is consummated and the property delivered, the vendor on discovering the fraud may pursue one of several courses. He may affirm the contract, and an omission to disaffirm within a reasonable time after notice of the fraud will be deemed a ratification. He may elect to rescind it, and -thereby his title to the property is reinstated as against the purchaser and all persons deriving title from him not being bona fide purchasers for value; and a purchaser is not such who takes the property for an antecedent debt or who purchased the property on credit and has not paid the purchase-money or been placed in a position where payment to a transferee of the claim cannot be resisted. Barnard v. Campbell, supra; Dows v. Kidder, 84 N. Y. 121; Matson v. Melchoir, 42 Mich. 477; 1 Benj. on Sales, p. 570, note. Upon rescission the vendor may follow and re-take the property wherever he can find it, except in the case mentioned, or he may sue for conversion.

When these legal remedies are available and adequate, clearly there is no ground for going to a court of equity. The legal remedies in such case are and ought to be held exclusive. But in a case like the present, where there is no adequate legal remedy, either on the contract of sale or for the recovery of the property in specie, or by an action of tort, is the power of a court of equity so fettered that where it is shown that the property has been converted by the vendee and the proceeds, in the form of notes or credits, are identified beyond question in his hands, or in possession of his voluntary assignee, it cannot impound such proceeds for the benefit of the defrauded vendor? The only reason urged in denial of this power, which to our minds has any force, is based on the assumption that it would be contrary to public policy to admit such an equitable principle into commercial transactions. but with the two limitations adverted to, and which ought strictly to be observed, (1) that it must appear that the plaintiff has no adequate remedy at law, either in consequence of insolvency, the dispersion of the property or other cause, and (2) that nothing will be adjudged as proceeds except what can be specifically identified as such, business interests will have adequate protection. Indeed, the disturbance would be much less than is now permitted in following the property from hand to hand until a bona fide purchaser is found.

The case of Small v. Atwood, Younge, 507, is a very instructive case, which involved a large amount, was argued by eminent counsel and received great consideration. It supports, we think, the equitable jurisdiction invoked in the present case. It was an action by the purchaser to rescind a contract for the sale of mines and mining property induced, by fraudulent representations, and to recover the purchase money paid to the amount of about £200,000. The court found the fraud and rescinded the contract, apd made a decree for an accounting. On a supplemental bill being filed, showing that the purchase money paid had been invested by the seller in public securities in his name, which he afterwards caused to be put in the name of his mother, and that the purchaser had no other means adequate to repay tne purchase money, the chancellor, on an application for an injunction restraining the transfer of the securities, held that the money paid could be followed into the stock purchased, and granted the injunction. The ease In re Cavin v. Gleason, 105 N. Y. 256; 7 St. Rep. 18, was an attempt to fasten upon the estate of an insolvent a preferential lien for money put into his hands by the plaintiff for the purchase of a mortgage for her, and which he applied, without authority, to the payment of his debts before the assignment, with the exception of a small sum ($30.00) which went into the hands of the assignee. The court held that the money, which the insolvent had used to pay debts prior to the assignment, was not a preferred debt, but .sustained her right to be paid the small sum which the assignee received belonging to the trust. This case points the distinction. The character of the debt gave it no priority. The fund had been dissipated and could not be traced among the assigned assets There was no equitable ground of preference except for the small sum mentioned.

Upon the whole case, we are of the opinion that the judgment on the report of the referee was correct, and the order granting a new trial should, therefore, bereversed and the judgment on the report of the referee affirmed, with costs.

All cqneuri

Judgment accordingly.


author: Peckham, J.

text:
    Dina Sulz, as Administratrix, etc., Resp’t, v. Mutual Reserve Fund Life Association, App’lt.

      (Court of Appeals,

      Filed April 16, 1895.)

    •1. Jurisdiction—Dbcetent’s estate.
    Where a different administrator has been duly appointed in this and another state where decedent died, and the foreign administrator first com- , menees an action, by the service of process upon an agent of the company, to recover on an insurance policy which is found in that state at the death of the assured therein, a second action in the courts of this state upon the same policy by the administrator appointed here will not be permitted.
    2. Executors—Legal representatives.
    The words “legal representatives” mean ordinarily executors or administrators, and such meaning will be attributed to them in any instance, unless there are facts existing which show that the words were not used in their ordinary sense, but to denote some other and different idea.
    3. Same.
    Where the object of an insurance company is stated in its by-laws to be “to promote the well-being of all its members and to furnish substantial aid to their families and assigns” in the event of a member’s death, the widow of a deceased member is not entitled to maintain an action upon the policy in her own right irrespective of her character as administratrix.
    Appeal from judgment of the general term of the supreme court in the second judicial department, entered upon an order which affirmed a judgment in favor of plaintiff entered upon a verdict, and also affirmed an order denying a motion for a new trial.

      Raphael J. Moses and F. A. Burnham, for app’lt; Charles J Patterson, for resp’t.

       Reversing 64 St. Rep.

   Peckham, J.

This is an appeal by the defendant from a judgment in favor of the plaintiff for the amount of a certain policy of insurance for $3,000 issued by the defendant, an insurance company organized under chapter 175 of the Laws of 1883. The policy of insurance or certificate of membership, as it is sometimes called, was issued by the defendant association January 20, 1891, to Charles H. Sulz, payable to his “legal representatives,” at the home office of the company, in the city of New York, within ninety days, after satisfactory evidence of the death of the insured party. The application for membership aud for a policy of insurance in the corporation defendant was made by the insured, Charles H. Sulz, in December, 1890. In such application, in answer to the requirement to state the name of the beneficiary in full, he answered “ my estate.” Mr. Sulz, at the time of the issuing of the policy to him (Jan. 20, 1891), was at San Francisco in California, and, upon its receipt, he sent it to his wife at their residence in the city of Brooklyn, to which city he soon returned, and it remained in the possession of the wife for about six months, when, on the removal of the family (the husband and wife) from one house to another iu the city of Brooklyn, the wife packed it in a trunk, which was taken by the deceased when he started on his journey to Tacoma in the state of Washington. When the deceased went to Tacoma in 1891 he left his wife at his old home in the city of Brooklyn. In August, 1891, he wrote from the city of Tacoma to the home office of the defendant in the city of Hew York notifying them that he had made Tacoma, Washington, his home for the future, having gone into the manufacture of soaps and chemicals there, and he asked them to forward assessments to him at Tacoma, or to notify him who their agent was there, to whom he might make further payments, In January, 1892, Mr. Sulz died at Tacoma, 'having at the time this policy or certificate in his possession. A.t the time of his death his wife was still residing in Brooklyn. Letters of administration were applied for by his widow to the surrogate of Kings county and were granted, and she duly qualified and entered upon the discharge of her duties as administratrix. A few days after the granting of such letters she signed a written renunciation of her right to take out letters as administratrix in Tacoma and forwarded it to the former attorneys of her husband at that place, and thereupon one E. P. Thomas was appointed administrator of the estate of her husband by the proper court in the state of Washington. Mr. Thomas at once commenced an action in that state to recover upon the policy of insurance which he had taken possession of as part of the effects of the deceased, and such suit was commenced by the service of process upon an agent of the defendant residing in the state of Washington and duly authorized under the laws of that state, and by the designation of the defendant corporation to receive such service on its behalf. Within a few days subsequent to the commencement of that action the plaintiff herein commenced this action as administratrix of the estate of her deceased husband in the supreme court of this state to recover the amount due under such policy of insurance. The defendant set up a defense to this action based upon an alleged breach of warranty by the insured in making false answers to certain questions contained in the application for insurance signed by him. It also set up the above facts in relation to the insurance policy and the pendency of the action against it in the superior court of the state of Washington, and claimed that the plaintiff herein had no right to maintain this action because of these facts. The case was tried at circuit, and the facts relating to the alleged breach of warranty submitted to a jury, and upon the whole case the jury found a verdict for the plaintiff, and the question is whether the judgment entered upon that verdict shall stand.

We will assume that the letters of administration granted to the plaintiff by the surrogate of Kings county are conclusive in regard to the status of the plaintiff as being the administratrix duly appointed upon the estate of her deceased husband, and the only question remaining is whether as such administratrix and upon the facts in this case she can maintain this action. We are of the opinion that the courts of this st.ate ought not to take jurisdiction of this action. The defendant issued what it terms in the blank application provided by it a “ certificate of membership or policy of insurance,” by which certificate or policy it insured the life of Mr. Sulz for $3,000 for the benefit of his “ legal representatives,” those words being used in the instrument instead of the words “ my estate,” as used by the insured himself in his application for the insurance. The constitution and by-laws of the company and the certificate or insurance policy itself must all be looked at for the purpose of discovering what was the contract entered into by the parties. In re Equitable Reserve, etc., Assn., 131 N. Y. 354-368; 43 St. Rep. 204. In some companies, possibly in this, a person might become a member thereof, and his family or any other named beneficiary be entitled to receive the benefit of such membership upon his death, as provided for in the constitution or by-laws, even where no certificates of membership or policy of insurance had been issued; but where such'a paper has been issued by the company and delivered to and accepted by the insured person, it must be read in connection with such constitution and by-laws for the purpose of determining what the contract was which existed between the parties at the time of the death of the insured. The policy in this case was in the possession of the deceased at the time of his death in the state of Washington, and I do not think that it differs materially from any other policy of insurance so far as this question is concerned." Having been issued it has become a material part of the contract between the parties to it.

The case of Holyoke v. Union Mutual Life Ins. Co., 22 Hun, 75, is cited by defendant and is somewhat in point. In that case the plaintiff, as executrix of George E. Holyoke, brought an action in this state against the insurance company (a Hew York corporation) for the purpose of recovering the amount of a paid-up policy issued upon the life of one Alfred S. Perkins, a resident of the state of Maine, and by him assigned to Holyoke. The plaintiff’s testator died in Brooklyn, N. Y., May 7, 1875, where he had continuously resided for sixteen years prior to his death and he left a will by which he bequeathed and devised his whole property to his wife, the plaintiff, which will was duly admitted to probate in Kings county, and on June 8, 1875, letters of administration were issued to the plaintiff. After the death of Mr. Holyoke the assignment was found among his effects at his office in the city of Hew York and was delivered to the plaintiff, and had been in her possession up to the commencement of the action. On October 8, 1378, Alfred S. Perkins, the insured person, died and the plaintiff immediately gave proper proofs of his death and otherwise duly performed all the conditions required of her by the policy and demanded its payment. The defense interposed was that the assignment in question was a collateral assignment only to secure Perkins’ indebtedness to Holyoke and that the amount due the latter had been paid and that letters of administration with the will annexed upon the estate of Holyoke had been issued to one Percival Bonney by the probate court of Cumberland county, Maine, and that the policy of insurance was in the state of Maine at the time of Holyoke’s death, and had been by Bonney assigned to and was then held and owned by another person residing in the state of Maine. The court held that at the time of the death of George Holyoke the legal title to the policy in controversy was vested in him; that he held a written assignment of the policy, and that in contemplation of law it was in his possession. The policy was, however, as matter of fact in the state of Maine when the testator died and was taken possession of by the administrator of his goods, etc., with the will annexed, who had been appointed by the probate court in the latter state. The court said it was immaterial whether the assignment to Holyoke by Perkins was as collateral security for the debt due from the latter to Holyoke or whether it was an absolute one. If collateral, the debt was due from Perkins himself, and he being a resident of Maine, no one could enforce payment of the debt in the courts of Maine, or release or control the same save an administrator appointed in that state, and that if the assignment were absolute the policy of insurance is the thing which formed a part of the property of the testator; that the assignment was only a muniment of title to that property and must follow the thing assigned. It was stated that if the testator had left a chattel in Maine which remained in that state until after his death, it was clear that the chattel would belong to the administrator in Maine as against the administrator in Hew York, although the bill of sale transferring the chattel to the testator was found among his papers in Hew York,' because administration of the property of the deceased person can be had only in the jurisdiction where the property is found after the death of such person and the fact that the property in controversy is a chose in action makes -no difference in the rule of law on this subject. Upon appeal to this court the decision of the general term was affirmed upon the opinion delivered by the court below, 84 N. Y. 648. There are some expressions in the opinion delivered in the supreme court in this Holyoke case which we might doubt the correctness of. While the decision itself upon the facts appearing in the report Was proper, we do not think that the mere fact that a policy of insurance is found on the person of an individual dying in another state, but who was a resident of this state at the time of his death, would preclude the maintenance of an action by an administrator appointed here upon the policy in the courts of this state against a company residing here, although the polic}7 remained in tho other state. A simple contract debt (and such is a policy of insurance) is assets where the debtor resides, even though evidenced by a written instrument. Wyman v. Halstead, 109 U. S. 654; Insurance Co. v. Woodworth, 111 id. 138 ; Chapman v. Fish, 6 Hill, 554.

The case of Morrison, Public Administrator, v. Mutual Life Ins. Co., 57 Hun, 97; 32 St. Rep. 846, is something like the Holyoke case, and it was held by the general term, first department, that the administrator in Hew York could not enforce the payment of a policy of insurance issued by a company incorporated in this state to a resident of the state of Maine, where the policy had never thereafter been within the state of Hew York, even though the principal office of the company was in the city of Hew York. It was stated that the policy in question not having been in the state could not under the principle of the Holyoke case form any part of the assets of the deceased to which the plaintiff, an administrator appointed in the city of New York, acquired title. That case does not seem to have been brought to this court.

The facts in the case of New England Life Insurance Company v. Woodworth,- cited supra, are as follows : The husband of the insured commenced an action against the insurance company in the state of Illinois, although the party insured (his wife) died in the state of New York, and the insurance company was organized under the laws of the state of Massachusetts, and it was only after the death of the wife that the husband came into Illinois having the insurance policy in his possession. The United States supreme court held that a company may be regarded as present in and an inhabitant of the state where it has an agent upon whom, pursuant to the laws of that state, process may be served, and that an administrator is duly appointed in such state when the policy is brought within the state prior to such appointment, although the person insured died outside the limits of the state and not a citizen thereof. As the company is to be regarded as an inhabitant of the state where its agent is thus served with process, the court held that the principle that a simple contract debt followed the person of the debtor was not invaded, because the debtor was present in the state of Illinois when the suit was commenced by the husband as his wife’s administrator, being at the same time the beneficiary under the policy. Under such facts the policy was assets in the state where it was when the administrator was appointed.

In this case the fact is the same; that is, the state of Washington had enacted a law providingfor the designation of an agent by a foreign company, upon whom process could be served for it, and the company had duly appointed such an agent, and process was properly served upon him in the. action by the Washington administrator upon the insurance policy in question.

Within the above case in the federal court the person of the debtor in this case was within the state of Washington, and the debt could be collected there as well as here. It is a case, therefore, of a concurrent jurisdiction, so far as the general facts go, and in such case the situs of the policy, the death of the insured in Washington and the issuing of letters of administration in that state and the prior commencement of the Washington action are material facts. In this case we do not assert that the courts of this state might not have had jurisdiction to entertain this action, even though the policy were in the state of Washington, provided the courts of that state had not appointed an administrator, and the administrator thus appointed had not commenced an action on the policy prior to tire action in this state. On the contrary, we are inclined to the opinion that jurisdiction of this action would in such event be entertained by the courts here. But in the case of administrators duly appointed in each state, when the foreign administrator first duly commences an action by the service of process upon an agent of the company to recover on the policy, and the policy is found in the foreign state at the death of the assured in that state, we think the courts of the foreign state have obtained jurisdiction, and, therefore, could give a full and complete discharge to the company if it paid upon a judgment obtained in such action, and we ought not to permit a second action in the courts of this state upon the same policy. In such a case as this we think that the principle of comity between the states calls for the refusal on the part of the courts of this state to entertain jurisdiction.

It a: claimed, however, that the plaintiff might recover in this action under another aspect and in her own right, irrespective of her character of administratrix. It is said that the policy is by its terms payable to the legal representatives of the insured. Attention is then called to the by-laws of the defendant, which state its object to be “to promote the well-being of ail its members and to furnish substantial aid to their families or assigns in the event of a member’s death.” This, it is said, means the immediate families, or, in other words, the dependents of the members, and not remote relatives and immediate relatives and dependents indiscriminately, and that this provision, coupled with the proof of the dependence of the plaintiff upon her husband and that they had no children, makes the true construction of the policy to be that the amount due upon it belongs not to the general estate of the deceased, but to his widow. Griswold v. Sawyer, 125 N. Y. 411; 35 St. Rep. 396; Bishop v. Grand Lodge, 112 N. Y. ; 627, 636 ;21 St. Rep. 811. We do not think that this argument should prevail. Giving due consideration to the by-laws above quoted, the words “legal representatives” must still have their ordinary meaning. The by-law provides not only for the well-being of its members and for the furnishing of substantial aid to their families, but -it adds the words “or assigns,” showing that the company is not restricted in its objects to the immediate families of its members, but the members are themselves at liberty to designate another than a member of their family as the beneficiary. As the members are not in any way restricted in the naming of a beneficiary by any by-law of the company or by its constitution, if there is any beneficiary named in the certificate or policy itself, that person is the one to whom the money shall be distributed. In the case at bar the insured named his estate in his application for insurance as the beneficiary thereof, and in the policy itself the words used are “legal representatives.” We see nothing in the mere fact that the insured was married and had no children to vary the ordinary significance of the words “legal representatives” when used in a policy of insurance. As was said in Griswold v. Sawyer (supra), the words “legal representatives” mean ordinarily executors or administrators, and that meaning will be attributed to them in any instance unless there be facts existing which show that the words were not used in their ordinary sense, but to denote some other and different idea. The facts in this case are not sufficient to change the ordinary meaning of this language, and wre, therefore, must attribute to the insured an intention in conformity to the ordinary meaning given to those words. We chink that such.meaning is strengthened if resort be had to the written application herein, because there the insured designates the beneficiary as his estate. That expression, it seems to us, refers to all the property which a man leaves behind him at the time of his death. A testator frequently uses in a will the expression, “all my estate I give, devise and bequeath,” or “all my estate, real and personal,” or “all mv estate of every name and nature,” meaning by the expression all the property which belonged to him and which could be devised or bequeathed. So here, by the use of those words, the testator meant to include the money arising from this insurance policy or certificate in the general amount of his property or that which would be left behind him to be distributed to his next of kin as in case of intestacy. In such case the administrator represents this estate which is to be added to by the payment of this money and such administrator takes the estate together with the -addition thus made to it as a trustee, to be distributed to those who by law are entitled to it. We do not think that under the circumstances arising in this case the creditors of the insured would take any interest in or right to any portion of the money arising from this policy. The statute under which the defendant is organized provides that the money arising from such insurance shall be exempt from execution and shall not be liable to be seized, taken or appropriated by any legal or equitable process to pay any debt or liability of the member. Reading the statute in connection with the language used by the deceased and it would seem to be plain that he intended this money should go to his legal representatives to be appropriated by them free .'from his own debts, and for the benefit of those who would take his estate under the Statute of Distributions. The administrator of this estate, therefore, represents the claims of those who may be eventually entitled to the money arising from the payment of this policy, and neither the widow nor next of kin could maintain an action in their own right for the recovery of any portion of this money.

In Bishop v. Grand Lodge, 112 N. Y. 627 at 636 ; 21 St. Rep. 816, we simply held that in the absence of any certificate designating the beneficiary where no policy or certificate had been issued, that there was enough in the constitution and by-laws of that company defendant to enable the court to say that the parties entitled to the moneys arising from the insurance were those to whom the estate of the deceased would pass as in case of intestacy and that the administratrix had sufficient interest in the fund to sustain the action in her capacity as such and that the money while subject to distribution as in case of intestacy, yet still would be a special fund subject to the exemption provided for m the act of incorporation and would not be liable for the payment of the debts of the decedent or to be taken on any process in'the payment of such debts. We did not hold in that case that where an administratrix had been appointed, those who were the next of kin could themselves maintain an action for the recovery of the money due under the policy or certificate of membership, nor did we hold that the administratrix could herself maintain the action in any other character. We cannot, therefore, see any way by which, the plaintiff ought to bo permitted to maintain her action either as administratrix or as the widow and alleged sqle beneficiary covered by the policy. We confess that we do not see how the money arising from tbe payment under this policy or certificate can be made liable for any of the debts of the deceased any more in the state of Washington than in case the action was brought here. The statute under which the company is organized makes provision upon that subject; but as the courts of Washington have jurisdiction of that question it will be matter for them to decide, which they will do in a manner consistent with their views of the law.

The judgment in this action ought not to stand, and it must, therefore, be reversed, and, as' the plaintiff cannot in any event succeed upon a new trial, her complaint should be dismissed, with costs oat of the estate.

All concur, except O’Brien, J., not sitting.

Judgment accordingly.


author: O’Brien, J.

text:
    Frederick H. Cyrenius, as Administrator, etc., App’lt, v. The Mutual Life Insurance Company of New York, Resp't.

      (Court of Appeals,

      Filed April 16, 1895.)

    Insurance—Life—Beneficiary.
    Where he policy of insurance states the consideration therefor to be the payment of a specified sum by the son of the person on whose life the policy is issued, and that the amount insured was, on the death of the latter to be paid to the “assured,” and, in the written application which was signed by both parties, the son is described as the applicant and the person for whose benefit the insurance was intended, the administrator of the father cannot maintain an action upon the policy to recover the amount of insurance.
    Appeal from judgment of the general term of the supreme court in the fourth judicial department, entered upon an order which reversed a judgment in favor of plaintiff entered upon a verdict and ordered a new trial.

      William Tiffany, for app'lt; Edward Lyman Short and William H. Shepard, for resp't.

       Affirming 55 St. Rep. 897.

   O’Brien, J.

This was an action upon a life insurance policy of $3,000, dated Juno 18, 1873, whereby the defendant insured the life of one Alvin Cyrenius, who died on the 6th of June, 1877. This action was commenced by his widow, as administratrix, who died during its pendency, and the present plaintiff, her successor in office, was substituted in her place and continued the action.

The action was commenced in 1877, and has since been before the courts in various forms and with varying results. On the first trial the plaintiff recovered, but the judgment was reversed by the general term. On the second trial there was a disagreement of the jury, and on the third trial the plaintiff again' had a verdict, but the judgment was again reversed at general term. From this judgment of reversal the plaintiff has appealed to this court.

We have given attentive consideration to the oral and written arguments oí the learned counsel for the plaintiff and, without attempting to express an opinion upon all the numerous and interesting questions discussed, we think it quite sufficient to say that the single point upon which the decision of the court below was placed cannot be successfully answered. That was that the plaintiff, as the administrator of Alvin Cyrenius, has no interest in the contract or the cause of action. The other defense, that the policy lapsed before the death for non-payment of the premium, is also serious, but as that possibly involved the consideration of questions of fact, it need not be further referred to. The other question is fully discussed in the opinion below, and, as we concur in its reasoning and result, it is scarcely necessary to follow the line of argument by means of which the learned counsel for the plaintiff has reached another conclusion. The action was one at law for the recovery of money due or payable to the plaintiff in his capacity as personal representative, and unless the policy was payable to his intestate, or came to the hands of the administrator as assets of the estate, he cannot recover. The defendant insists that the policy was payable to George A. Cyrenius, the son of the deceased, who before the death of the father, assigned it to the plaintiff individually, and, therefore, that the father, at his death, had no interest in it, and none passed to his personal representatives. That the son did assign the policy, and, prior to , the assignment, dealt with it as his property is undisputed. In behalf of the plaintiff, it is urged that the application, which is signed by both the father and the son, shows that Alvin intended to and- did insure his life for the benefit of his estate. This view, it is claimed, is re-inforced by other facts in proof, such as the payment of some part of the premium by the father. We think that nothing appears to change the effect of the plain words of the contract itself, the material part of which reads as follows:

“ The Mutual Life Insurance Company of New York, in consideration of the representations made to them in the application for this policy, and of the sum of one hundred and ninety-eight dollars and eighty-seven cents, to them duly paid by George A. Cyrenius, son of Alvin Cyrenius, and of the annual payment of a like amount on or before the 18th day of June in every year during the continuance of this policy, do insure the life of the said Alvin Cyrenius, of Scriba( in the county of Oswego, state of New York, in the amount of three thousand dollars for the term of his. natural life ; and the said company do hereby promise and agree to pay the amount of the said insurance at their office, in the city of New York, to the said assured, his executors, administrators or assigns, in sixty jdays after due notice and proof of the death of the said person whose life is hereby insured', the balance of the year's premium, if any, being first deducted therefrom.”

In the written application referred to and made a part- of the contract, George is described as the applicant for the policy and the person for whose benefit the insurance was intended. Reading all the papers together, no other construction is possible except that adopted by the court below, that the contract is one insuring the father's life for the benefit of the son. The father’s life, in which it is stated the son had an-interest, was the subject of the insurance, and naturally and properly enough he was required to ■answer the questions and sign the application. Rut the son is the beneficiary. He is the assured to whom the defendant’s promise to pay was made and to whom the insurance was payable in '.he event of death, and this promise or obligation was outstanding m the hands of his assignee when the action was commenced and"s ■still so held. No construction of the language used in the policy and the application can fairly be adopted to make the contractor promise one for the benefit of the father's estate. There was no legal or equitable assignment to the father or to his personal representatives, and the extraneous facts and circumstances shown are all consistent with the purpose and intention of all the parties as expressed by the language of the policy. Ferdon v. Canfield, 104 N. Y. 143; 5 St. Rep. 583 ; Luchs v. Conn. Mut. Life Ins. Co, 108 U. S. 498; Walsh v. Mut. Life Ins. Co., 133 N. Y. 418; 45 St. Rep. 123.

The learned counsel for the plaintiff contends that the contract may be regarded as one made with and payable to the father for the benefit of his son, the father being a trustee of an express trust for the benefit of the son which upon his death devolved upon his administrator. There are many difficulties in the way of this theory, both of form and substance, even if such a construction could Ido given to the contract. We think that such a view of the legal relations of the parties is not possible. It would be doing violence to the language of the contract to say that it was made by the defendant with the father and in his name for the benefit of the son. It is very plain, we think, that it was made with the son and in his name for his own benefit. The fact that the father signed the application with the son is not a circumstance of much significance as against the language of the policy itself. The defendant before entering into the contract needed to be informed in regard to the age, health and general history of the person whose life was the subject of the risk. No one could furnish that, but himself! This was the main purpose of the father’s signature to the application. But even in that paper when the question was asked by the defendant with respect to the person for whose benefit the insurance was applied for, the answer is made that the son is such person. Then the amount of the -insurance in the event of death is by the terms of the contract made payable to the assured and this term clearly refers to the son and not the father either as trustee or otherwise. The contract having been made with George in his own name for his own benefitire alone or bis assignee is entitled to sue upon or enforce the defendant’s promise.

The judgment should be affirmed and judgment absolute ordered for the defendant.

All concur.

Judgment affirmed.


text:
    Sarah Lazarus, et al., Resp’ts, v. The Metropolitan Elevated Railway Company, et al., App’lts.

      (Court of Appeals,

      Filed April 16, 1895.)

    1. Referee—Proposed findings of fact.
    The repeal of § 1023 of Hie Code, after the case was submitted to the referee for decision and after the appellant has submitted proposed findings of fact and law, operated to relieve the referee from the duty imposed by that section, to note his disposition of the several propositions presented by counsel on the statement submitted.
    2. Same.
    A law changing the procedure applies thereafter as well to actions pending and undetermined when the law was passed, as to actions subsequently commenced, unless the former are specially excepted.
    3. Same.
    Section 31 of the Statutory Construction Act of 1892 does not save the case from the operation of the Repealing Act.
    Appeal from order of the general term of the supreme court in the first judicial department, which affirmed an order of special term denying a motion by defendants for the order sending back the decision of the referee herein with instructions to rule upon certain proposed findings of fact and conclusions of law as requested by defendants, or to vacate said report.
    This action was brought to enjoin the defendant from operating its elevated railroad in Trinity place, in the city of Mew York, in front of plaintiff’s premises.

      Brainard Tolles, for app’lts; Nelson S. Spencer, for resp’ts.

       Affirming 66 St. Rep.

   Andrews, Ch. J.

This is an equity action and was referred to a referee for trial and decision by an order entered May 27, 1893. The evidence was taken and the case was submitted to the referee for decision March 22, 1894. On the same day the defendants submitted to the referee proposed findings of fact and conclusions of law. The referee’s tune in which to make his decision was, upon his request, extended by stipulation to October 27, 189-4. On the 22d day of October, 1894, he made and delivered his report m favor of the plaintiffs, stating generally the grounds of his decision. Intermediate the submission of the case to the referee and the making of his report, namely, on the 12th day of May, 1894, the legislature repealed section 1023 of the Code of Civil Procedure. That section authorized the attorney of either party to an action tried before a court or referee, before the cause is finally submitted for decision, or within such time afterwards and before the decision, as the court or referee may allow, to submit a written statement of the facts which he deemed established by the evidence and of rulings upon questions of law, which he desired the court or the referee to make. The section then declared : “ At or before the time when the decision or report is rendered, the court or referee must note in the margin of the statement the manner in which each proposition has been disposed of, and must either file or return to the attorney the statement thus noted.” The referee dicl not note on the statement submitted by the attorney for the defendants the disposition of the propositions contained therein, and thereupon the defendants moved for an order requiring him to do so. The court at special term denied the motion, and from the order there made the defendants appealed to the general term, where the order was affirmed, and from the order of affirmance they appeal to this court.

The only question is whether the repeal of section 1023 after the case was submitted to the referee for decision and after the defendants had submitted proposed findings of fact and law, operated to relieve the referee from the duty imposed by that sectian to note his disposition of the several propositions presented by counsel on the statement submitted. The learned counsel for the defendants rest upon the general rule that statutes arc to be construed' prospectively and not retrospectively, unless either by express words or necessary implication a different intention appears. The further ground is taken that the right of the defendants to have the referee pass upon the proposed findings accrued upon the submission of the statement, and that such right is saved from the operation of the repealing act by section 31 of the Statutory Construction Law of 1892, which declares that the repeal of a statute “ shall not affect or impair any act done or right accruing, accrued or acquired, or liability, penalty, forfeiture or punishment incurred prior to the time such repeal takes effect, but the same may be asserted, enforced, prosecuted or inflicted, as fully and to the same extent as if such repeal had not been effected.” It is incumbent on the defendants, as the first step in the argument based on the general rule adverted to, to show that if the repeal of section 1023 is held to relieve the referee from the duty imposed by that section, it will be, as to this case, retrospective legislation. But so far as the repeal operated upon the referee, it simply relieved him from a duty not yet performed, and which he was not bound to perform until the decision. The statute prescribed his duty in a certain contingency, and before the performance of the duty became imperative, and before he had performed it m fact the legislature repealed the statute imposing the duty. The statute as to him was prospective and not retrospective. Nor was it retrospective as to the defendants if by the general rule of law the procedure in an action is governed by the law regulating it at the time any question of procedure arises. It is well settled that the legislature may change the practice of the court and that the change will affect pending actions in the absence of words of exclusion. Southwick v. South-wick, 49 N. Y. 527. The court cannot under guise of an amendment or repeal of a statute cut off any substantial right of a party to have his case decided on the merits according to the law of the land. But it would be a very inconvenient rule, tending to great confusion, if a rule of practice existing when an action is commenced attaches itself to the substance of the right in litigation so that it could not be' changed, or that a law changing procedure should be held inapplicable to subsequent proceedings in pending actions unless in terms made applicable thereto. It is the right of a party to have his case heard and decided in the orderly course of legal procedure, but he has no right to demand that the procedure prescribed when the action was commenced should remain unchanged. He prosecutes his action subject to the power of the legislature in matters of practice to abrogate rules -existing when his action was brought, or make additional rules, and all subsequent proceedings will be governed thereby. The defendants when they submitted the proposed findings put themselves in a position in which, except for the repeal of section 1028, they would have been entitled to specific rulings on the propositions submitted. The section did not make it the duty of a party to submit proposed findings, but was permissory only. Under section 1022 it was made the duty of the court or referee trying the case to state in the decision or report, the facts found and the conclusions of law separately, although no findings were submitted by either party. •, Section 1023 imposed an additional duty upon the court or referee in case proposed findings were submitted. But it was a duty relating to procedure only, and the repeal of the section after the defendants had submitted findings interfered with no legal right of the defendants, nor did the fact of the submission take the case out of the operation of the repealing statute. The defendants had no right to have the report or decision made except in such form or manner as the law required when the decision or report was made. The obligation of the court or referee to pass upon findings submitted was born of the statute and died with it. The case is brought within the effect of the Repealing A-ct, not because the repeal operates retrospectively, but because a law changing procedure applies thereafter as well to actions pending and undetermined when the law was passed as to actions subsequently commenced, unless the former are specially excepted.

The second ground taken by the defendants, that section 31 of the Statutory Construction Act of 1892 saves the case from the operation of the Repealing Act, is answered by what has been said. The only right which accrued to the defendants upon the submission of the proposed findings was the right to demand from the referee an observance of the provisions of section 1023. But it was a conditional right only, and the abrogation of the duty to pose upon the findings consequent upon a repeal of the section was not in any proper sense an impairment of any act theretofore done by the defendants or any right accrued to them. The change left unimpaired all defenses to the action. The repeal of the section acted directly and immediately upon the duty of the Court or referee, and only incidentally upon the particular case in question. The defendants could no longer require the performance of the duty in their behalf, because the legislature had changed the procedure and abrogated the duty. The taking of a step under section 1023, which, if the section had remained in force, would have entitled them to demand the performance by the referee of the duty imposed thereby, was not an act done which conferred a right, protected by section 37 of the Statutqry Construction Act from the ordinary operation of the Repealing Act

We think the order below was right and it, therefore, should be affirmed, with costs.

All concur.

Order affirmed.


author: Bartlett, J.

text:
    The People ex rel. The Western Electric Company, App’lt, v. Frank Campbell, as Comptroller, et al., Resp’t.

      (Court of Appeals,

      Filed April 16, 1895.)

    Taxes— Corpora tians—Foreign .
    Where a corporation, engaged in manufacturing telephone and telegraph apparatus, is an Illinois corporation, having its main office and principal manufactory in that state, but conducting an extensive business in this state, and also purchasing and selling general electric supplies not manufactured by it, which it is authorized to do by its charter, such corporation is not excempt by the Corporation Tax Act from taxation on the-amount of its capital employed here.
    Appeal from order of the general term of the supreme court in the third judicial department, which affirmed a decision of the respondent, as comptroller of the state of New York, imposing an assessment upon the capital employed by the relator, a foreign corporation, in this state, and quashed a certiorari to review the same.

      Edwin T. Rice, Jr., for app’lt; T. E. Hancock, attorney-general, for resp’t.

       Affirming 62 St. Rep. 3

   Bartlett, J.

The relator seeks in this proceeding to review, on certiorari, the assessment of taxes by the comptroller on its capital employed in this state for the years 1889, 1890, 1891 and 1892.

The Western Electric Company is an Illinois corporation with its main office and principal factory located in the city of Chicago, but it also conducts an extensive manufacturing and general business in the city of New York. In this state it manufactures telephones and telegraph apparatus and also purchases and sells articles it does not manufacture which are used by telephone and telegraph companies, such as line wire, insulators and general electric supplies.

The counsel for the relator insists that the determination of the comptroller should be reversed for two reasons, viz.:

1. The relator is a manufacturing corporation wholly engaged in carrying on manufacture within this state.

2. Even if that position cannot be maintained, the tax imposed by the comptroller for each of the years under review is excessive in amount.

As to the first point it is urged that the relator’s case is similar to that presented by the record in the People ex rel. Tiffany & Co. v. Campbell, 144 N. Y. 166; 63 St. Rep. 44; that the relator is a manufacturing corporation of precisely the same character as Tiffany & Co., and is engaged in carrying on manufactures in the state of New York in the same manner.

The ease of Tiffany & Co. is distinguishable from the case at bar and is not decisive of the question now presented.

Tiffany & Co. is a manufacturing corporation organized under the laws of this state for the manufacture and sale of gold and silverware and other articles of ornament and use; it employs about eighty per cent, of its capital in this state, of which amount all except twelve or fifteen per cent, is invested in its manufacturing business ; the amount not employed in manufacturing is used in the purchase and sale of good.; of foreign manufacture to make the stock complete and meet the demands of customers.

It was claimed that the amount so used in the purchase of foreign goods was incidental and subsidiary to the exercise of its corporate powers, and as a result that the entire amount of capital employed in this state was exempt from taxation.

This court refused to adopt that view and held that Tiffany & Co., within its corporate powers, was only a manufacturing corporation authorized to sell its own goods, and that the purchase and sale of goods it did not manufacture was ultra vires; that while the state could intervene to prevent this usurpation of power if the public interests required it, the corporation was subject to a tax on its outside and unauthorised transactions; that as to its legitimate corporate business it was wholly engaged in carrying on manufacture within this state and the capital so employed was not taxable.

This is all that was decided in the case of Tiffany & Co.

In the case at bar we have a different state of facts.

It appears by the return to the writ of certiorari, and is not denied in this proceeding, that the relator is a corporation organized under the laws of the state of Illinois to manufacture, buy, sell, lease or otherwise procure, own and dispose of electric and electric telegraph and telephone instruments and apparatus of all kinds, and all parts of the same; to acquire by purchase patent and other rights and franchises; to acquire and dispose of capital stock of other corporations.

Under this grant of corporate power it is manifest that the relator is not only empowered to manufacture and sell its own goods, but is authorized to buy and sell electric and electric telegraph and telephone instruments and apparatus of all kinds and all parts of the same. Unlike Tiffany & Co., the relator is not confined to the manufacture and sale of its own products in its business conducted in this state, but in the purchase and sale of general electric supplies is acting strictly within its corporate powers.

It, therefore, follows that the relator is not wholly engaged in carrying on manufacture within this state, and, consequently, is taxable on the amount of its capital stock employed here.

If it seems a harsh and unwise rule that imposes upon a foreign corporation a tax upon a large amount of its capital that it brings into this state, and employs in a legitimate and prosperous manufacturing business which requires for its factory real estate valued at nearly a quarter of a million of dollars and gives employment to four hundred and fifty skilled workmen, it is a subject that should be brought to the attention of the legislature, as courts must enforce the law as written.

It would seem that a wise public policy should encourage manufacturers and so adjust taxation as to promote the investment of foreign capital within the state in manufacturing enterprises.

It now remains for us to consider whether the comptroller, in fixing the amount of capital employed within this state, as the basis of the tax imposed, has named an excessive amount; for the year 1889 he has determined the amount to be $750,000, and for each of the other three years $1,000,000.

It is the established rule, settled by the repeated adjudications of this court, that the determination of the comptroller must stand upon the question of valuation unless clearly shown to have been erroneous. People ex rel. A. C. & D. Co. v. Wemple, 129 N. Y. 558; 42 St. Rep. 400 ; People ex rel. Roebling's Sons Co. v. Wemple, 138 N. Y. 587; 53 St. Rep. 297.

A careful examination of the record satisfies us there is evidence to support the determination of the comptroller.

The order appealed from should be affirmed, with costs.

All concur.

Order affirmed.