text:
    THE PEOPLE OF THE STATE OF NEW YORK ex rel. THE HANOVER FIRE INSURANCE COMPANY, Respondent, v. MICHAEL COLEMAN and Others, Commissioners of Taxes and Assessments, Appellants.

      Assessment of national bank stock — separate rolls cannot be used as a means oj discriminating against it.

    For the purpose of taxing the personal property of the relator the appellants, the commissioners of taxes and assessments of the city of Kew York, assessed the value of its capital stock and surplus at $1,459,447, and the deduction for exemptions, to which it was bylaw entitled, at $1,734,851, which exceeded the value of its capital and surplus. The commissioners also assessed, upon separate assessment rolls relating to national bank stock, national bank stocks owned by such company (such national bank stocks having been included in the valuation of the capital stock and surplus of the relator, and being stated, in the list of exemption prepared 'by the commissioners, to be of the value of $19,425) and declined to allow any deduction or exemption therefrom.

      Held, that as the national bank shares went to make up the value of the capital stock and were included in its valuation, and as after the deductions and exemptions allowed by law had been made the corporation was not liable to taxation upon its personal property, such national bank stock was not liable to taxation and could not be assessed without a violation of the Federal statute.
    Appeal from an order of the Special Term cancelling an assessment of personal property.

      George 8. Coleman, for the appellants.

      S. B. Brownell, for the respondent.
   Van Brunt, P. J.:

The respondent upon this appeal is a corporation doing business in the city of New York, and was assessed for the purposes of taxation by the appellants herein. For the purposes of such taxation the appellants assessed the value of the capital stock and surplus of the company at $1,459,447, made up as follows:

Capital at par.................................. $1,000,000

Surplus........................................ 459 , 447

Total $1,459,447

The appellants then found that the respondents were entitled to the following éxemptions:

United States bonds.............................. $1,570? 926

Amount invested in other corporations taxable on their

capital stock.................................. 44,500

Ten per cent upon capital......................... 100,000

Yalue of national bank shares held by company...... 19,425

Total...................................... $1,734,851

Being more than the value of the capital and surplus. The commissioners also assessed, upon separate assessment-rolls, relating to national bank stocks, the national bank stock of the company and declined to allow any exemptions and deductions. Upon certiorari such assessment was set aside, and from the order thereupon entered this appeal is taken. It would seem that the tax commissioners have the right to assess national bank shares upon separate rolls (McMahon v. Palmer, 102 N. Y., 176), but the use of separate rolls cannot be made a means of discrimination against national bank shares. The personal property of the respondent is assessable in the manner prescribed by law, and for the purpose of taxation the law has provided that the value of the capital stock, after making the deductions and exemptions provided by law, shall be the personal property upon which a corporation shall be assessed. For the purpose, in the case at bar, of ascertaining the value of the respondent’s capital stock, the appellants took the capital stock at par and added thereto the surplus, which two items embraced all the assets of the company, and upon making the deductions and exemptions allowed by law, no residue remained for taxation. In the capital and surplus this bank stock was included as part of the assets, and thus included there was an excess of deductions and exemptions. Now, by deducting this bank stock from the capital and surplus and putting it upon a separate list, it cannot be made, under such circumstances, the subject of taxation. This would be making a discrimination against national bank shares in contravention of the Federal statute. No other class of personal property could be made in this way a subject for taxation, and therefore, national bank stock cannot, by any such process, be withdrawn from the exemptions and deductions allowed to other personal property. The appellants having determined the value of the respondents capital stock for the purposes of assessment, the court cannot, upon this appeal, review that determination but must ascertain the rights of the parties upon that basis of valuation, the company not being an appellant or complaining of such valuation. The only question being whether that value being given to the capital stock, for the purposes of taxation, these bank shares could be taxed in addition. It appearing, as has been stated, that such national bank shares went to make up the value of said capital stock, and were included in its valuation, and that after the deductions and exemptions allowed by law the corporation was not liable to taxation upon its personal property, such national bank stock was not liable to taxation and could not be assessed without violation of the Federal statute.

The order appealed from must be affirmed, with costs.

Brady and Daniels, JJ., concurred.

Order affirmed, with costs.


source: Caselaw Access Project

author: Van Brunt, P. J.:

license: Public Domain

text:
    THE NATIONAL PARK BANK OF NEW YORK, Appellant, v. THE SEABOARD BANK, Respondent.

      Raised cheek — when the bank collecting %t acts merely as an agent it is not, after it has paid the money over to its principal, liable to the bank by whom it was paid.

    On July 15,1885, one Saxton indorsed and delivered to the Eldred Bank for collection a draft or check drawn on the plaintiff by the Wallingf ord Bank, to the order of Saxton, for eight dollars, which amount had, at that time, been raised from $8.00 to $1,800. On that day the Eldred Bank forwarded the draft, indorsed to-the order of the cashier of the defendant bank, “for collection for account of the Eldred Bank.” The defendant received it on July sixteenth, credited it in their account current with the Eldred Bank on that day, received payment thereof through the clearing-house on July seventeenth from the plaintiff, and delivered the draft to it. On July twenty-fifth the Eldred Bank-paid to Saxton the amount of the draft. Subsequent to July sixteenth, the date of the receipt of the draft, and prior to the fifteenth day of August, the day on which the alteration of the draft was discovered, payments were made by the defendant to the Bldred Bank largely exceeding in amount the balance on hand on July .■sixteenth, including the draft of $1,800. By the established course of business the defendant was not responsible for drafts or checks forwarded to it by the Bldred Bank for collection.
    The defendant having refused to pay to the plaintiff the difference between the sum of $8.00 and $1,800, after having been notified of the alteration, the plaintiff brought this action to recover the same.

      Meld, that it could not be maintained.
    That the defendant held the draft merely for collection and as agent of the Eldred Bank.

      Dickerson v. Wason (47 N. Y., 489) followed.
    'That as the defendant had credited to the account of and remitted to the Eldred Bank more than sufficient to exhaust the amount of the draft, and any credit which might have existed at the time it was made, the well settled rule — that in case of running accounts, where debts and credits are constantly occurring, payments must he applied to extinguish the debts according to the priority of ■time — required it to be held that the defendant had paid the proceeds of the draft to the Eldred Bank before the demand was made.

      National Bank of Commerce v. The National Mechanics’ Banking Association (55 N. Y., 316) followed; Bank of Commerce v. Union Bank (3 Comst., 336); Marine National Bank v. National City Bank (59 N. Y., 67); White v. Continental National Bank (64 id., 830) distinguished.
    Appeal from a judgment dismissing the plaintiffs complaint, ■entered upon the trial of this action by the court without a jury.
    In July, 1885, the Wallingford Bank, which then kept an account with the plaintiff, drew on the plaintiff a draft or check for the .sum of eight dollars, in the usual form, to the order of one Frank Saxton, and delivered the same to him. On the 15th of July, 1885, .Saxton requested the Eldred Bank to colleet the said draft or check, and thereupon indorsed the same and delivered the same to the Eldred Bank. The amount of the check at the time ■of such delivery had been raised from $8.00 to $1,800. On the .said fifteenth day of July, the Eldred Bank indorsed the check, below the indorsement of Saxton, as follows: “ Pay S. Gr. Nelson, Cashier, or order, for collection, for account of the Eldred Bank, Eldred, Pa., P. O. Heasley, Cashier,” and forwarded the same to the defendant, who was then the New York correspondent of the Eldred Bank. The defendant received it on the morning of July 16, 1885, and credited the same in their account current with the Eldred Bank on that day. On the seventeenth of July the draft -was presented to the plaintiff by the defendant, through the New York clearing house, and paid on that day as a draft of $1,800, and said draft was then and there delivered and surrendered by the defendant to the plaintiff. On the day of its receipt, July 16, 1885, the defendant notified the Eidred Bank, by postal card, of its receipt and of its credit by the defendant to the Eidred Bank, which postal card was received by the latter bank on July 17,1885. The Eidred Bank, in order to make sure that the draft was all right, intentionally refrained from paying over the proceeds to Saxton until the ü5th of July, 1885. Not having heard that there was anything wrong about the draft, it being the uniform custom of the defendant to notify the Eidred Bank of its failure to collect any of its checks or drafts, or of anything wrong in regard to them, it paid the proceeds of the draft to Saxton. The Eidred Bank received the check for collection in the usual course of its business, and forwarded the same to the defendant, its correspondent, for collection, without any special agreement in reference thereto. The established course of business between the defendant and the Eidred Bank was that the defendant did not become responsible for the draft or check, or for any draft or check forwarded to it for collection by the Eidred Bank; but in ease of nonpayment, if the defendant had made any credits, payments or remittances in anticipation of the collection of the same, or on account thereof, it was entitled to be reimbursed. At the time of the payment of the draft, the change in its amount was unknown to the drawers and to said three banks, and all said three banks acted in good faith and in ignorance of the raising of the check. Subsequent to the sixteenth of July, the date of the receipt of the draft by the defendant, and prior to the fifteenth of August, the date of the discovery that the draft was altered, payments were made by the defendant to the Eidred Bank largely exceeding in amount the balance in iiand on the sixteenth of July, including the draft of $1,800. But during all this time a balance remained in the hands of the defendants of more than $1,800, belonging to the Eidred Bank. On the fifteenth of A ugust the plaintiffs were, for the first time, informed of the raising of the draft, and on the same day gave notice to the defendant and requested the defendant to repay to it, the plaintiff, the difference between the sum of $8.00 and the sum of $1,800, which it had paid upon the draft. The defendant refused to comply with this demand, and the plaintiff brought this action to recover the said amount. The case was tried before the court, without a jury, and, the court finding the foregoing facts, the complaint was dismissed, and from the judgment thereupon entered this appeal is taken.

      Francis C. Barlow, for the appellant.

      Alfred Taylor, for the respondent.
   Van Brunt, P. J.:

The ground upon which the learned justice founded his judgment was that the plaintiff could not recover from the defendant because the latter held the draft merely for collection and as agents of the Eldred Bank, and had paid over the proceeds to the Eldred Bank, before it, the defendant, had received any notice of the alteration. There is no claim that there was any neglect upon the part of either the plaintiff or the defendant in relation to the payment and collection of this draft.

The two questions, then, which are presented upon this appeal are, first, whether the learned court was correct in holding that the defendant was merely the agent of the Eldred Bank, and secondly, whether it paid over to the Eldred Bank the proceeds collected upon the draft, and was thus absolved from liability. There would seem to be no question as to the first proposition were it not for the fact that the defendant, upon the receipt of the draft, before its collection, had credited the same to the Eldred Bank in the account current between the two banks. If the defendant had kept this draft, collected it and remitted the identical proceeds to the Eldred Bank, then it is admitted, in view of the nature of the indorsement, that the defendant would be simply the agent for collection of the Eldred Bank.

The case of Dickerson v. Wason (47 N. Y., 439) seems to set at rest the proposition that the mere giving of credit in account, or even remitting in anticipation of collection changes the relations between the party remitting paper and the party receiving paper for collection. In that case paper had been deposited by the plaintiff with the firm of Van Saun & Son, in New York city, for collection ; Van Safin & Son sent the paper in a letter to the defendants stating : “ Inclosed we hand you for collection * * * and when paid remit proceeds in draft on New York, etc. Protest if not paid.” The note in question was indorsed by Yan Saun & Son as follows : “ Pay Wason Everett & Co. or order for collection.”

It was received by the defendants July twenty-fourth and collected at maturity, August twenty-seventh, on which day defendants heard that Yan Saun & Son had stopped payment. In anticipation of the collection of the note in question, the defendants had remitted various sums of money to Yan Saun & Son, prior to their failure. These remittances were made as a general remittance on account current. The plaintiffs, thereupon, commenced an action to recover from Wason Everett & Co. the amount collected upon this note. It was held that the plaintiffs never had, in fact, parted with the ownership of the note to Yan Saun & Son, and that as the defendants had not remitted the money after the collection of the note, the plaintiffs were entitled to recover the same as their property. Applying the case cited to the case at bar, it would, therefore, appear that the defendant acquired no title or property in the check or draft in question or in the proceeds of such draft after its collection, but that the same was the property of the Eldred Bank and could have been recovered from the Seaboard Bank had the same become insolvent immediately after its collection.

The next question to be considered is, whether, under these circumstances, the payment over of the money to the Eldred Bank discharged the defendant from all claim or liability to the plaintiff. This question is not entirely free from doubt. The eases of Butler v. Harrison (1 Cowp., 566); Mowatt v. McClelan (1 Wend., 174); LaFarge v. Kneeland (7 Cow., 460), and Herrick v. Gallagher (60 Barb., 566), seem to sustain the principle that if money be mispaid to an agent expressly for the use of his principal, and the agent has paid it over, he is not liable in- an-action by the person who mispaid it,'but the remedy is'against the principal. And this rule seems to be recognized in the case of the National Bank of Commerce v. The National Mechanics’ Banking Association (55 N. Y , 216). There are various cases, however, beginning "with the Bank of Commerce v. The Union Bank (3 Comst., 236), where recoveries have been had for money paid on raised commercial-paper through mistake, some of which seem to militate against this rule, although the question is not discussed, nor are the facts sufficiently distinctly stated in order to form an intelligent opinion. (Marine National Bank v. National City Bank, 59 N. Y., 67; White v. Continental National Bank, 64 id., 320, and cases there cited.) And, therefore, the distinct expression of opinion in the case of the National Bank of Commerce v. The National Mechanics’ Banking Association (supra) should govern.

It seems clear that it must be held that the Seaboard Bank has paid over the proceeds of this draft to the Eldred Bank. It is true that it has not paid the distinct money received in payment of the check, but it has credited it in account and has remitted very much more than sufficient to exhaust this amount and any credit which might have existed at the time the same was made, long before the discovery of the raising of the amount of the check. Applying the well settled rule that in cases of running accounts, where debits and credits are constantly occurring, payments must be applied to extinguish the debts according to the priority of time, the amount received upon the check in question had been paid over by the defendant to the Eldred Bank. The rule above stated is sustained by the cases of Sheppard v. Steele (43 N. Y., 52); Walden v. Davison (11 Wend., 65); Allen v. Culver (3 Denio, 293); United States v. Kirkpatrick (9 Wheat., 720); Bixby v. Drexel (56 How., 478); Clayton’s Case (1 Mer., 572); In re Hallett (L R. 13 Ch. Div., 696).

It is no answer to this rule that its application turns the plaintiff out of court and puts it to the trouble, expense and delay of a suit against the Eldred Bank, because the plaintiff in this action is entitled to no greater consideration at the hands of the court than is the Seaboard Bank, neither having been guilty of negligence and both having acted in the utmost good faith. The rules of law in reference to the application of payments should not be warped unless some great injustice is done thereby, which does not appear to be the effect of the application of the rule to the case at bar.

Under the circumstances, therefore, it does not appear that any error was committed in the progress of the trial, and the judgment appealed from should be affirmed, with costs.

Bradt and Daniels, JJ., concurred.

Judgment affirmed, with costs.


author: Van Brunt, P. J.: Daniels, J.:

text:
    THE NASSAU BANK, Appellant, v. GEORGE B. YANDES, as Assignee of AUGUSTUS W. RITZINGER and FRANK L. RITZINGER, Respondent, Impleaded, etc.

      Interpleader — rot allowed unless tjiere exists a reasonable doubt as to whether the stakeholder would be safe in paying.

    Oh February 1, 1886, the firm of Bitzinger & Co., carrying on business at Indianapolis, voluntarily made a general assignment for the benefit of their creditors of all their property, of every kind and nature and wheresoever situated, to the defendant Yandes, which was duly recorded and filed. After the making of the assignment and the acceptance of the trust by the assignee, of which facts the plaintiff had notice, certain creditors of the firm brought actions against it in this State and obtained attachments, amounting to $4,731 65, against its property, on the ground that the members thereof were non-residents; these attachments were served upon the plaintiff,-which held, at the time of the assignment and of the service of the attachments, commercial paper and shares of stock of an insurance company, owned by the firm, as collateral security for the payment of notes discounted by it for the firm.
    After the indebtedness due to the plaintiff had been paid by the money received, from the payment of the paper held by the plaintiff, the assignees demanded from it the balance remaining in its hands and the stock, and upon its refusal to pay the same brought an action to recover them.
    The plaintiff, claiming that the creditors who had procured attachments had thereafter recovered judgments in the actions in which they wore issued, and that the sheriff had commenced an action against it to recover the same property, brought this action to compel the assignee and the sheriff to interplead.
    Held, that the action could not be maintained, as the facts stated did not show that there was a reasonable doubt as to the right of the assignee to recover the property
    That even if the assignment- was made with an intent to hinder, delay or defraud the creditors of the assignors, it could not be attacked by either the sheriff or tnc attaching creditors simply as such.

      Thurber v Blanch (50 N Y. 80) followed.
    The old rule that the stakeholder is entitled to be removed beyond the shadow of a'., risk and that, m order to entitle him to the protection of the court, it is. only necessary to establish that suits have been brought, or that claimants have threatened to bring them, no longer prevails, and it is now necessary to prove thai suen ciaims have some reasonable foundation and that there exists some-reasonable doubt as to whether or not the stakeholder would be reasonably safe in the paying over the money. (Per Yan Brunt, P. J.)

      Atkinson v. Mariks (1 Cow., 705) criticised.

      Appeal from a judgment dismissing the complaint, entered upon a trial of this action by the court without a jury.
    On February 1, 1886, and for several years prior thereto, the defendants, Augustus W. Eitzinger and Frank L. Eitzinger, were partners in business at Indianapolis under the firm name of Eitzinger & Co. Prior to said date the said firm had procured the plaintiff, the Nassau Bank, to discount five notes for $5,000 each, and had given to the plaintiff to secure the payment of said five notes a quantity of commercial paper and 230 shares of the capital stock of the Franklin Insurance Company of the par value of fifty dollars each. On said February first the said firm at Indianapolis, aforesaid, made and delivered an assignment in writing, duly signed, sealed and acknowledged by each of them, by which they assigned and conveyed all their property of every kind and nature, and wheresoever situate, to the defendant George B. Yandes in trust for the benefit of the creditors of the assignors, equally and without preference. This assignment on said date was duly filed and recorded in the office of the clerk of Marion county, State of Indiana, and a true and correct copy of the assignment was duly filed in the office of the clerk of said Marion county. The defendant Yandes on the same day accepted said trust in writing. On the second of February the assignee took his oath of office and filed his official bond, duly executed and with sufficient sureties and duly approved.
    The assignment was the free and voluntary act of the assignors, and was a voluntary or common law assignment as distinguished from a statutory or compulsory one, and was valid in the State where it was made and where the assignors and assignee then lived. The plaintiff had notice of said assignment on the day of its date. After the making and delivery of the assignment and the acceptance of the trust by the assignee, and the doing of the several acts above mentioned, divers creditors (defendants herein) of said firm brought actions against said firm in the State of New York, and obtained attachments against the property of the firm on the ground that the members thereof were non-residents of the State of New York. Said attachments were served on the plaintiffs between the 3d of February, 1886, and the 11th of February, 1886, inclusive, and amounted to the sum of $4,731.65. Prior to May 20, 1886, all the paper deposited as collateral to the five notes and other indebtedness of the firm of Eitzinger & Co. to the plaintiff had matured and had been collected, except some unpaid and protested paper, and on the 20th of May, 1886, all the indebtedness of every kind from said firm to the plaintiff had been paid. After payment of said indebtedness there remained in the hands of the plaintiff the sum of $5,856.03, the proceeds of the collaterals, the 230 shares of insurance stock and the protested notes hereinbefore mentioned. On said 20th of May, 1886, the defendant Yandes, as assignee, demanded from the plaintiff said cash, insurance stock and unpaid paper, and the plaintiff refused to comply with the demand, and on the twenty-fifth of said May said assignee brought an action in this court against the plaintiffs to recover said money, stock and protested paper. The attachment suits hereinbefore mentioned having gone to judgment (although upon no personal service on the defendants Eitzinger or appearance by them), the defendant Grant, as sheriff, began an action on or about July 20, 1886, against the plaintiff to recover the cash, protested notes and insurance stock mentioned in the complaint herein, as property which had been attached and levied upon as the property of said Eitzingers, and in said action said sheriff claimed possession of said cash and property as subject to said attachments, and that said attachments took precedence over the title of the assignee. Both of said actions were pending at the time of the commencement of this action. The plaintiff thereupon filed its bill of interpleader against the assignee, the sheriff and the attaching creditors, asking that the defendants might be called upon to interplead and settle their rights to said money and property amongst themselves, and the plaintiff be at liberty to pay said sum of money into court, and deposited said property in court. Upon the trial of said action, the court rendered judgment in favor of the defendants, and from such judgment this appeal is taken.

      George A. Strong, for the appellant.

      Francis G. Barlow, for the respondent Yandes.
   Van Brunt, P. J.:

A stakeholder has always the right where there are conflicting claims to money or property in his hands, to go into court and ask to deposit the money or property in court and leave the litigation of the questions to be carried on between the conflicting claimants.

The question which is presented upon this appeal is as to what it is necessary for the plaintiff to establish in order to show that there are conflicting claims. It is claimed upon the part of the plaintiff that all that is necessary for the stakeholder to establish is that suits have been brought or suits have been threatened by divers claimants to the same fund in order to entitle him to the protection of the court, and that the stakeholder is entitled to be removed beyond the shadow of risk in paying over the money where antagonistic rights are asserted. This view is undoubtedly sustained by the opinion of the court in the case of Atkinson v. Manks (1 Cow., 705), where the court say, in substance, that where a party had forbidden a stakeholder to pay over money to another and threatened him with a suit, the stakeholder was not bound to exercise any judgment upon the subject. This rule, however, does not seem to be the prevailing rule now in reference to this matter. As all business is conducted with some risk, as every holder of money in the payment of it over always does so at some risk, the courts have receded from the rule that all that it is necessary to establish is that some claim had been presented and have held that it is necessary, in addition, to prove that such claim had some reasonable foundation, and that there was some reasonable doubt as to whether the stakeholder would be reasonably safe in the payment over of the money. It is claimed that because the defendant, the assignee, came to the plaintiff with an asserted voluntary general assignment, made in the State of Indiana, that this related to a fact which the bank could not know, and that the bank could not know whether the assignment was a valid and voluntary assignment by the laws of Indiana, and that, therefore, the plaintiff was not required to take the risk of the existence of all those facts. It has been held by the courts of this State that a verbal assignment of a balance of account in bank was valid and the bank was liable to suit to recover such balance by the assignee, and that the bank was required to take the risk of the existence of facts, the evidence of which rested exclusively, perhaps, with the assignee and claimant. (Risley v. Phœnix Bank, 83 N. Y., 318.) And, as has been observed, no business can be conducted without hazard; the plaintiff, in the payment out of the money of its depositors upon their cheeks, takes a risk of the forgery of the check either in the maker’s signature or in the filling in of the amount; in its transactions with its customers it runs a risk that the indorsements of commercial paper may also be forged, and it get no title, and therefore, the courts seem to have inclined to the rule that a more pretext of a conflicting claim is not enough to show that the plaintiff is in any danger of loss from inability to determine to whom a debt should be paid. In the case of the Baltimore & Ohio Railway Company v. Arthur (90 N. Y., 234), it was held that the plaintiff, in an action of interpleader, must show that there is some question, as between the claimants to be tried, and that he will incur hazard in paying to either.

In the case of Dorn v. Fox (61 N. Y., 264) the court lay down the following rule: “ The rule requiring that in actions of interpleader the plaintiffs should be in doubt as to which of the claimants is in the right, must be construed in a reasonable manner. It, of course, excludes all cases where the rights of parries are clearly settled. On the other hand, so long as a principle is still under discussion * * * it would seem fair to hold that there was sufficient doubt and hazard to justify the protection which is afforded by the beneficent action of interpleader.”

It is not necessary to consider other authorities in order to show that the rule now is that a reasonable doubt must exist in order to justify the. bringing of an action of interpleader, and that any doubt is not sufficient as was said in the case of Atkinson v. Manks (supra.). We are, then, brought to the question as to whether there is any reasonable doubt as to the rights of the assignee of Kitzinger & Co., and of the attaching creditors of said firm, to said fund. It is the settled law of this State that the law of the place where a contract is made or to be performed is to govern as to the nature, validity, construction and effect of such a contract; and being valid in such place it is to be considered valid everywhere, with the exception of cases in which the contract is immoral or unjust, or in which the enforcing it in a State would be injurious to the rights, interests or convenience of such State or its citizens. (Andrews v. Herriot, 4 Cow., 510.) This rule is recognized in Guillander v Howell (35 N. Y., 657) and Warner v. Jaffray (96 id., 248). It is true that in the case of Guillander v. Howell it was held that an assignment made in the State of New York of property then being situate in New Jersey, which was void under the laws of New Jersey, carried no title to the property in New Jersey. This conclusion was arrived at because the assignment in question contained preferences which were contrary to the law of New Jersey, and that as the property was within the exclusive jurisdiction of New Jersey, and as that State protected and regulated it, and as the laws of New York had no force in New Jersey as laws, but were by comity only enforced as to a transfer of personal property situated in New Jersey, except when injurious to her own citizens, the laws of New Jersey, when in conflict with the laws of New York in respect to the transfer of such property must control. The same principle was recognized in the case of Warner v. Jaffray, and these are exceptions to the rule which has long prevailed that personal property has no locality, but must be governed by the law of the domicile of its owner, therefore, it seems to be established beyond a reasonable doubt that the property of Eitzinger & Co. held by the Nassau Bank passed to the assignee by the assignment made in Indiana on the 1st of February, 1886.

The next question to be considered is, has the sheriff or the attaching creditors acquired any rights by virtue of their attachments and the levy thereon ? The sheriff may collect and receive all debts, effects and things in action attached by him, and he may maintain any action or special proceeding in his own name, or in the name of the defendant, which is necessary for that purpose or to reduce to his actual possession an article of personal property capable of manual delivery, but of which he has been unable to obtain possession. This, however, gives neither the sheriff nor the attaching creditors any right to attack the assignment on the ground that it was made with intent to hinder, delay and defraud the creditors of the assignors. He can bring suits to collect debts and to reduce to possession personal property, the legal title to which is in the defendant in the attachment suit; but he cannot maintain ' an action to remove an obstacle to the attachment. (Gibson v. National Park Bank, 98 N. Y., 87; Moseley v. Moseley, 15 id., 334.) Title passes even by a fraudulent conveyance if executed, and, consequently, the title passed under the assignment in question to the assignee, even though it may have been a fraudulent conveyance. The sheriff, therefore, the assignment having been proved to have been executed according to the laws of Indiana, and to have been valid there, could not, in an action here in aid of an attachment, attack the same upon the ground that it was made with fraudulent intent. (Thurber v. Blanck, 50 N. Y., 80.)

It is necessary that such an action as respects personal property should be brought by the judgment creditor, after his remedies at law have been exhausted. But it is claimed that the sheriff, in the actions which he has brought against the plaintiff, might show that the assignment was invalid even in Indiana, and that, by the finding of the court in this action, he is not precluded from so doing. This suggestion seems to be answered by the proposition which has been heretofore discussed, namely, that in order to entitle it'to judgment in an action of interpleader, the plaintiff must show that there is reasonable ground to suppose that the title of one of the claimants is uncertain. There is no pretense in the proofs that there is any claim on the part of the sheriff that the assignment in question was not valid according to the laws of Indiana; and if there were such pretense, there is nothing whatever in the case to show that any such claim has the slightest foundation in law. The mere fact of what the sheriff may claim, or may not claim, does not raise the reasonable doubt required by the law, but such reasonable doubt must be supported by proof raising a question upon which the court may pass judicially.

The result, therefore, is that the judgment appealed from must be affirmed, with costs.

Brady, J., concurred in the result.

Daniels, J.:

The property in controversy in this aqtion consists oi an indebtedness of the plaintiff to the defendants Ketzinger in the sum of $5,956.03 and 230 shares of insurance stock, together with- three protested notes. This sum is the balance remaining owing by the plaintiff out of the proceeds of paper held as collateral by it, upon which a further sum had been collected sufficient to pay and extinguish the indebtedness owing to itself. This balance was a debt existing against the plaintiff, and when the attachments were issued,, which were mentioned in the complaint, it could be no otherwise seized than by the service of a copy of the attachments, with notice showing the property attached, as that was provided for by subdivision 3 of section 649 of the Code of Civil Procedure. The protested notes, if the creditors had been desirous of seizing them under the attachments, might have been actually taken by the sheriff; but as they do not appear to have been of any actual value no attempt was made to levy by the attachments upon them in that manner; neither did the sheriff attempt to make any actual seizure of the 230 shares of stock. But for the purpose of attaching this property, as well as the indebtedness of the bank, copies of the attachments, with the notices allowed to be served by this section of the Code, were served upon the plaintiff, and it is upon the judgments recovered in the actions in which the attachments were issued, and without any personal service of the summons upon the debtors, that the sheriff has brought his action against the plaintiff to recover this balance of the indebtedness and the other property mentioned.

But as the debtors themselves executed and delivered a general assignment of their property for the benefit of their creditors, in the manner in which that was authorized to be done by the laws of the State of Indiana, before either of the attachments had been issued, the indebtedness now in controversy did not become subject to the attachments. So much of the property as was capable of manual delivery was required to be taken into the sheriff’s actual custody to constitute an attachment or seizure of it by subdivision 2 of section 649 of the Code.’ No such seizure was made, either of the protested notes or of the shares of stock. As to those articles the sheriff accordingly acquired no lien upon them under the attachments, and he had no title whatever upon the facts, as they were made to appear beyond controversy, upon which he could maintain any action against the plaintiff. The attachments were likewise entirely inoperative upon the balance of the indebtedness owing by the bank to the debtors, for after an assignment of such an indebtedness has been made it is incapable of being seized under attachments issued against the assignor. This was considered very fully in Thurber v. Blanck (50 N. Y., 80), and it resulted in Ihe determination that property incapable of manual delivery, after its assignment, could not be reached by its seizure through the medium of an attachment, but that the remedy of the creditor to recover it was by a proceeding in equity to set aside the assignment or transfer when that might be done, after the recovery of a judgment, and the issuing and return of an execution upon it. The same view was adopted and maintained in Smith v. Longmire (24 Hun, 257), and it was so far also followed in Bates v. Plorisky (28 Hun, 112).

These authorities all agree in maintaining the inability of an attaching creditor to attach the property claimed to be that of his debtor, consisting of choses in action incapable of a manual delivery, when they have been previously assigned and transferred by him to another party, and being incapable of seizure under the attachments, the sheriff has no authority for bringing or maintaining an action against the debtor for the recovery of the amount of the debt, for-it is only when the debt itself may have been attached that the sheriff has been authorized to maintain an action for its recovery by virtue of subdivision 4 of section 708 of the Code of Civil Procedure. Neither as to the protested notes, inasmuch as they were not actually attached or taken into the sheriff’s custody, nor the shares of insurance stock which might have been seized in the same manner, nor the balance of the indebtedness due from the bank, did the sheriff acquire any right to recover in the action brought by him against the plaintiff. His inability to maintain the action, and his failure to secure a legal seizure of any part of the property or indebtedness in dispute, appear clearly and beyond controversy upon the face of his proceedings. As to the effect of what has been done by him no legal uncertainty remains under the construction which has been given to the provisions of the Code by the authorities which have been cited. The plaintiff was, therefore, in no legal danger whatever, and subjected to no possible risk from the proceeding or the action taken by the sheriff, and it accordingly was not in a position in which it could require either the sheriff or the creditors in the attachments to be interpleaded with the assignee under the general assignment for the determination of the right to or the disposition of this property.

The title of the assignee, as it has' been established and shown in the opinion of the presiding judge, is free from legal dispute, and neither the money or property can justly be withheld from him by the plaintiff as long as it so plainly appears that the adverse claim is entirely devoid of legal foundation. If the creditors represented in the attachments can maintain a paramount right to this indebtedness, that can only be done after judgments recovered by them against their debtors and the issuing and return of executions, and the successful impeachment of the assignment through the intervention of creditors actions. And as neither the debtors nor the assignee were within this State it follows that this remedy, even of the attaching creditors, must be pursued where personal service of process can be made upon them, or their appearance can otherwise be enforced in actions commenced against them. Until the title of the assignee shall be set aside or superseded in this or some other legal manner, or a lawful seizure shall be made, he is entitled to the balance of the indebtedness and property in dispute, and neither the attaching creditors nor the sheriff acting in their behalf have even a colorable claim upon which they can resist the right of the assignee to this balance and the property.

The judgment in the case, as directed by the presiding judge, in his opinion, should, therefore, be affirmed.

Brady, J., concurred in result.

Judgment affirmed, with costs.


text:
    THE CINCINNATI COOPERAGE COMPANY, Respondent, v. MICHAEL O’KEEFE and Others, Appellants.

      Manufacturing corporations — 1848, chap. 40, sec. 12 — the report to he made thereunder must he made and filed after January first.

    The report which is by section 12 of chapter 40 of 1848, required to be made by corporations created thereunder within twenty days from the first day of January in each year, must be made, filed and published within the twenty days which follow the first day of January, and the requirement of the statute is not satisfied by a filing and publication in the month of December preceding.
    Appeal from a judgment in favor of the plaintiff, entered upon the trial of this action by the court without a jury.
    The plaintiff is an Ohio corporation. The New York Brewing Company during the years 1883 and 1881 was a domestic corporation created and existing under the laws of the State of New York for the formation of corporations for manufacturing, mining and other purposes. During the said years the defendants were the trustees of the said New York company. In the year 1884, and prior to the 19 th of February of that year, the plaintiff sold and delivered to the New York Brewing Company goods to the amount of $1,015, for which the company gave the plaintiffs their note, dated February 19, 1884, payable three months after date. At the time of the making of said note, and at the maturity thereof, the defendants were still the trustees of the Brewing Company. The note, although long past due, has never been paid. On the 1st day of January, 1884, more than a year had elapsed from the time of the filing of the certificate of incorporation of the New York Brewing Company, which company did not, nor did the defendants nor any of them within twenty days from or after the 1st day of January, 1884, or at any time thereafter, make a report stating the amount of the capital of said company or of the proportion actually paid in, or of the amount of its existing debts, nor did they at any time after the 1st of January, 1884, publish such a report or file the same in the office of the clerk of any county in the State of New York. On the 22d of December, 1883, such a report dated on the 21st of December, 1883, signed by the defendants, was published in the New York World, and on the 28th of December, 1883, filed in the office of the clerk of the city and county of New York. The plaintiff upon this state of facts, having brought its action against the trustees to recover its claim for a failure to file such report, judgment was rendered in its favor, and from such judgment this appeal is taken.

      Michael M, Forrest, for the appellants,

      Samuel TJntermeyer, for the respondent.
   Van Brunt, P. J.:

The question involved in this case is whether the provisions of the statute requiring every company incorporated under the manufacturing act of 1848 within twenty days from the first day of January to make a report which shall be published and filed, authorizes the making, filing and publishing of such report within twenty days before the first day of J anuary, as well as within twenty .days after the first of January.

For the solution of this question, it is possible to refer with entire '.eonfidenee ,t® .the opinion of the learned justice who tried this case in ,th©,court.Ibelow,' by whom it was held that the reasonable construction <of ¡the ¡act was that the publishing and filing must be done within ¡twenty-.days after the first of January; and that this requirement is not -satisfied by a filing in the month of December previous, .although done within twenty days before the first of January. It is to be observed -that the intention of the legislature was to require ■each corporation, at fixed periods, to give a history of its condition, in order that creditors might ascertain the same and enter into ■engagements with such corporation, upon the information furnished by the statement required by law.

In the case of Cameron v. Seaman (69 N. Y., 396), it is assumed by the Court of Appeals that there is no question upon this subject, .and Mr. Justice Andrews, who wrote the opinion of the court, says:

The statute intended to give the companies twenty days after the first day of January, in each year, to make up their accounts and prepare the statement to be embodied in the report. * * * The law implies, in the^absence of an express provision on the subject, that the filing and publication must be within a reasonable time after the twenty days, and this requirement, in view of the object of the ¡statute, could only be satisfied by prompt performance and diligent .action on the part of the trustees.”

This construction was based upon what the court deemed to be the general purpose of the section, namely: To provide authentic information to creditors of the company, and those who might have dealings with it, of its financial condition, at fixed recurring periods, ¡so as to enable them to act intelligently in their transactions with ■the corporation.

The claim that the report having been filed on the twenty-eighth of December was on file during the first twenty days following the first of January, and therefore complied with the law, is clearly untenable in view of the decision in Cameron v. Seaman (supra). That case holds that the report must be made within the twenty days following the first of January, although it maybe filed and published within a reasonable time thereafter. The requirement of tbe statute is explicit as to the making, but is somewhat indefinite in regard to the filing and publishing. This report, therefore, not having been made within twenty days after the first of January, did not comply with the statute, and the judgment must be affirmed, with costs.

Brady and Daniels, JJ., concurred.

Judgment affirmed with costs.


author: Van Brunt, P. J.

text:
    In the Matter of DAVID W. WILLIAMS, Deceased.

      Letters of administration — the non-residence of the person entitled to receive them does not prevent their being granted to him.

    Tlie surrogate of New York having granted letters of administration upon the estate of one David Williams who died in Tennessee, leaving him surviving no widow, child or father, to the mother of the said David, an appeal was taken therefrom by a half brother of the deceased, who resided in this State, upon the ground that the mother being a non-resident of this State was excluded from acting as administrator by the policy of the law of this State.

      Held, that the decree of the surrogate should be affirmed.
    Appeal from a decree of the surrogate granting letters of administration upon the goods, chattels and credits, in the county of New York, of David W. Williams, deceased, to Lucy E. Williams.

      Thomas Jaolcson, for Fielding L. Williams, appellant.

      John Uobnian, for Lucy E. Williams, respondent.
   Van Brunt, P. J.

The decedent died in June last, at Clarksville, in the State of Tennessee, leaving him surviving no widow, child or father, but leaving him surviving a mother and a half brother. One Polk D. Johnson, of Tennessee, was in July last appointed administrator in that State. There are assets of the deceased m this county and applications for authority to administer upon those assets have been made on behalf of three persons; the decedent’s mother, Lucy E. Williams, the respondent herein; his half brother Fielding L. Williams, the appellant, and the said Polk D. Johnson. The learned surrogate granted letters of administration to the mother, Lucy E. Williams,, to the exclusion of the half-brother. The mother was not a resident or the State of New York, but the half-brother was such resident.

It is claimed, on the part of the appellant, that Lucy E. Williams being a non-resident was disqualified, and that, therefore, the surrogate erred in issuing letters of administration to her in preference to his half-brother, who was a resident of this State. The provisions of the Revised Statutes (2 R. S., 74) as amended by the Laws of 1867, chapter 782, section 6, jirovide as follows:

“ Section 27. Administration in case of intestacy shall be granted to the relatives of the deceased who'would be entitled to succeed to his personal estate, if they, or any of them, will accept the same, in the following order: First, to his widow; second, to his children ; third, to the father; fourth, to the mother; fifth to the brothers; sixth, to the sisters ; seventh, to the grandchildren; eighth, to any other next of kin who would be entitled to share in the distribution of the estate.”

Under this provision it is clear that the mother would be entitled to letters of administration in preference to the brother who claims them. It is, however, urged on the part of the brother, that the mother being a non-resident is excluded from receiving such letters. It is not claimed that there is any express provision of the statute which calls for such an exclusion, but that it is the policy of the law,as derived from the legislation upon the subject of administration, to exclude a person who is a non-resident where there are residents Capable of administering the estate. In support of this proposition our attention is called to section 2662 of the Code which contains provisions as to when a citation is required, and who shall be cited upon the application for letters of administration.

This section provides that every resident shall be cited, and the surrogate may, in his discretion, issue a citation to non-residents. It is argued, therefore, that as this section in terms dispenses with the necessity of a citation to non-residents, an application here to obtain letters of administration may be made without any notice to non-residents, no matter what degree of kinship they may sustain to the deceased. In answer to the argument thus advanced that this section supports the claim of the appellant, it is sufficient to say that the section does not provide that whenever a resident makes such application such notice may be given, but that the provisions of the section apply to every application for letters of administration, and leave it discretionary with the surrogate whether persons out of the jurisdiction of the court shall receive notice of the application or not, a very common class of legislation in reference to special proceedings of this character which determine no property rights. Section 32 of 1 Revised Statutes page 75, is very significant upon this point, in the classes named as persons who are not qualified to receive letters of administration. It is as follows: “No letters of administration shall be granted to a person convicted of an infamous crime, nor to anyone incapable by law of making a contract, nor to a person not a citizen of the ITnited States, unless such person reside within this State,” etc.

The language “nor to a person not a citizen of the United States, unless sncli person reside within this State,” seems to be very significant in this connection, because it contains a clear implication that a person who is a citizen of the United States, although not residing within this State, is not intended to come within the prohibition of the law. In this provision of the statute the framers thereof had before them the question as to the residence of the applicant for administration, and if they had intended to exclude, or had supposed that the policy of the law excluded nonresidents from administering, they certainly, in connection with the provision in regard to citizenship, the absence of which they pronounced to be a disqualification unless the person applying resided within this State, would have included non-residence of a citizen among the disqualifications. It is no answer to these suggestions to say that the provisions in reference to non-residents, who are not citizens, were intended to apply only to those who were seeking to obtain ancillary letters of administration, because if that-had been the intention of the legislature, it would have been very easy for them to have said so. .No reference is made to ancillary letters and the statute is entirely general in its character. The statute having expressly provided as to the priority of the persons to whom letters ol administration shall be granted, and having determined as to disqualifications, nothing can be added to it by judicial legislation, and the withholding of letters of administration cannot be justified unless the applicant is disqualified by the statute itself. (Coope v. Lowerre, 1 Barb. chap. 45; Emerson v. Bowers, 14 N. Y., 449.) Restrictions or modifications of statutes by implication are not to be favored, and unless the provisions are clearly inconsistent and cannot stand together, full effect must be given to all. No provision of the statute is impaired in any manner by giving to section 32 its full effect, and restricting it to its declared provisions. Simply placing non-residents upon a different position from residents as to notice of applications for administration upon assets existing within this State conveys to our mind no intimation or intention upon the part of the legislature to exclude any others than those whom they have expressly declared shall not be entitled to administration.

The decree of the surrogate, therefore, seems to have been correct, and should be affirmed, with costs.

Brady and Daniels, JJ., concurred.

Decree affirmed, with costs.


author: Brady, J.:

text:
    ADOLPHUS H. STOIBER, Respondent, v. ROBERT C. THUDIUM and WILLIAM K. THUDIUM, Defendants.
    Attachment— Oode of Givil Procedure, §§ G3S and, 638 — the affidavit need not show ' that an action has been commenced.

    Upon an appeal from an order denying a motion to vacate an attachment, upon the ground that it appeared on the face of the order on which the warrant was granted that at the time the application was made for the warrant the action had not been commenced or the summons served, or issued' for service, it appeared that, in the affidavit presented to the judge who granted the attachment, it was stated “that the plaintiff is about to commence an action against the defendant for the cause above stated by issuing the summons hereto annexed.”
    Reid, that as the summons was made out and accompanied the affidavit a sufficient compliance with the requirements of section 638 of the Code of Civil Procedure was shown.
    That section 636 of the said Code does not require that the affidavit should state that an action had been commenced, but simply that one of the causes of action specified in section 635 existed, and the plaintiff, after obtaining the attachment, has thirty days in which to serve the summons.

      Ptekardt v Antony (27 Hun, 269) followed.
    Appeal by junior attaching creditors from an order denying a motion to vacate a warrant of attachment.

      D. G. Briggs, for Bacon, Baldwin & Go., junior attaching creditors, appellants.

      F. R. Smith, for plaintiff, respondent.
   Brady, J.:

The motion was made upon the ground that it appeared on the face of the affidavit on which the warrant was granted that at the time the application was made for the warrant this action had! not been commenced or the summons served or issued for service'. In the affidavit presented to the judge who granted the attachment it was stated “that the plaintiff is about to commence an action against the defendant for the cause above stated by issuing the summons hereto annexed, and no previous application for an attachment has been made herein.” It appears, therefore, that a summons was made out and accompanied the affidavit by being annexed to it. This is undoubtedly a sufficient compliance with section 638 of the Code, in the broadest view that can be taken in favor of the appellant’s motion.

The cases of Mills v. Corbett (8 How., 500) and Blossom v. Estes (84 N. Y., 614), cited on behalf of the appellant, so far as they affect this case, favor the propriety of the disposition made of the appellant’s motion. It is not necessary to make any extended review, however, of any of the cases or of the section of the Code under which the attachment was issued, for the reason that the question is substantially disposed of in this department in the case of Pickardt v. Antony (27 Hun, 269), in which it was held, upon consideration of the various sections of the Code affecting the question, that it need not appear upon the affidavits used upon the attachment that an action has been commenced or that a summons has been served, and that decision was founded upon the proposition that section 636 did not .require a statement that an action had been commenced, but simply that one of the causes of action specified in section 635 existed, and that the plaintiff, after obtaining the attachment, had thirty days in which to serve the summons. Therefore the omission to refer to process in the papers upon which the application for an attachment rested was not any evidence that the summons had not issued. Here the statement was positive that the summons was issued when the application was made for an attachment, because it formed a part of the papers upon which the application was made.

There can be no doubt that the order from which the appeal was taken was right, and it should be affirmed, with ten dollars costs and disbursements.

Daniels, J., concurred.

Order affirmed, with ten dollars costs and disbursements.


author: Daniels, J. :

text:
    THOMAS HOGAN, Appellant, v. GEORGE S. FIELD and Others, Respondents.

      Negligence — when an employee cannot recover for injuries caused by the negligence of himself and associates in the work.

    Upon the trial of this action, brought by the plaintiff to recover damages for injuries sustained by his falling from a scaffold where he was working with others, as riveters, in the erection of a bridge for the defendant, it appeared that the fall was occasioned by the breaking of a scantling used in the construction of the scaffold, at a point where it contained a knot, the scantling being described as cross-grained and wind-shaky. Neither the defendants nor their superintendent took any charge or direction of the construction of the scaffold, but committed the duty of erecting it to the plaintiff, another riveter working with him, and one McCaulley, a looker-on. The evidence showed that suitable timber was provided for the erection of the scaffold, and that it was left to the plaintiff and the other riveter to select the timber and secure the scaffold by ropes or supports as they might deem best, and that the injury was occasioned by their negligence in not selecting proper scantling or properly lashing or supporting the same.

      Held, that as the injury sustained by the plaintiff was solely attributable to the inattention or want of skill of himself and his immediate associates, who were engaged in the work, he could not maintain this action.
    Appeal from a judgment entered on the dismissal of the plaintiff’s eom plaint at tlie circuit.

      William II. Shepard, for the appellant.

      Joseph II. Ohoate, for the respon dents.
   Daniels, J. :

The plaintiff was injured in January, 1883, by falling from a scaffold, upon which he himself and others were working as riveters in the erection of a bridge near Highland Falls. He and the persons working with him were in the employment of the defendants and under the general direction of their superintendent. The scaffold from which he fell was about twenty-eight feet above the floor beams and near thirty feet in length. It fell in consequence of the breaking of one of the scantling used in its construction, at a point where it contained a knot, and it was generally described as cross-grained and wind-shaky. The scaffolding had been used by the riveters one day, and then it was moved by them for use at a different place in the construction of the bridge, and on the second day the timber broke and the plaintiff fell to the ground, a distance of about thirty-three feet. But neither the defendants nor their superintendent took any charge or direction of the construction of this scaffold. There were two piles of timber not far from the bridge, from which the material was to be obtained for the erection of the scaffold, and the service of erecting it was committed to the plaintiff and Hutchinson, another riveter working with him, and McCaulley, who was a holder-on. Hutchinson selected the timber for the scaffold, and, with the assistance of other men, it was taken to the place where the scaffold was erected. There it was received by the plaintiff and McCaulley. It was hoisted with ropes to its position, where it was received by the plaintiff and McCaulley, who lashed it at the ends to posts with ropes, McCaulley being at one of the posts and the plaintiff on the other. The plaintiff’s testimony was, that they fixed and lashed it to suit themselves, through the direction of Bockwell, the foreman. No posts or supports were placed under the middle of the scaffold, but it seems to have rested wholly on the posts to which it was in this manner secured; and while they were rigging it up, the plaintiff testified that there was no other person upon it but himself, McCaulley and Hutchinson. It appeared, further, from the testimony of Hutchinson, that they did not consider it important to fasten the scantling in the center. Ilis statement was : “We did not consider it necessary for this stick. Hogan, McOaulley and I talked about it, and there was something said about tying it up. We looked at the stick and we concluded the stick was good enough. We did not have as much confidence in the one that did not break, and we concluded we would tie it up. We spoke of tying them both up in the center, and we concluded that the one that broke was the best and soundest looking one.” It is not clear from the evidence of Hogan, on his re-examination, that he intended to deny this statement, but he did say that he heard no conversation between anybody upon the subject of using ropes to suspend the scaffold in the center. It was further proved that there was other timber which might have been used in the erection of the scaffold, and there was no evidence of any inability to obtain entirely sound timber from the piles to which these persons had access for the erection of the scaffold.

Hnder this evidence it is very clear that the scaffold fell by reason of the inattention and carelessness of the persons employed in its construction, of whom the plaintiff was one, and as McCaulley testified was the leader. It is true that the construction of the scaffold was no part of the business of the riveters, but under the direction of the person in charge of the work, they, without objection, undertook the erection of it and had the control and management of the work. It was left so far entirely to themselves. They could have secured it by ropes in the center, or by supporting it from beneath if they had been disposed so to do, or by using other, or a larger amount of timber in its construction, and in that manner have assured themselves against the risk of accidents in the performance of their work while standing upon the scaffold. Their failure to do this was negligence, with which the plaintiff, equally at least with the others, was chargeable, and it was because of that negligence that the scaffold gave way and he fell to the ground and received this injury.

The case is not within the general principle applied in Benzing v. Steinway (101 N. Y. 547), for the work was wholly entrusted to the plaintiff and his two associates, and it was their own want of care, skill or attention that produced the injury. And when a person in the employment of another sustains an injury by reason of snob want of care, skill, or attention, be bas no legal grounds of action against tbe common employer. (Brick v. Rochester etc., R. R. Co., 98 N. Y., 211.)

The injury sustained by the plaintiff was solely attributable to the inattention or want of skill of liimself and bis immediate associates who were engaged in this work, and the general legal principle applicable to this class of cases, with these facts established against the plaintiff, will not permit him to maintain an action for damages against the defendants in whose employment each of these persons was engaged. the judgment dismissing the complaint at the circuit was right and it should be affirmed.

Van Brunt, P. J., and Bartlett, J., concurred.

Judgment affirmed.


author: Daniels, J.:

text:
    MARGARET SLATTERY, Respondent, v. ALBERT F. SCHWANNECKE and GEORGE HEWLETT, Appellants.

      Sale on foreclosure — a purchaser acquires all .the rights of the mortgagor — when a mortgagee purchasing at a sale and conveying the land to a bona fide purchaser will be compelled to account to the holder of an unrecorded deed who was not made a parly to the foreclosure action — the effect of filing a lis pendens is avoided by proof of notice of the unrecorded deed — what evidence is required to charge a client with notice of facts known to his attorney.

    By the judgment entered in this action the plaintiff was declared entitled to redeem certain premises in the city of New York from a mortgage executed by one Decker, on December 13, 1877, to one Hewlett, to whom the premises, on September 32, 1880, had been sold at a sale under a judgment entered in an action brought by him to foreclose the mortgage, to which action the present plaintiff was not made a party. The deed from the referee having, on December 17,1880, been recorded in the register’s office, the premises were thereafter conveyed by Hewlett to the defendant Schwannecke for the consideration of $2,500, $2,000 of which was secured by a mortgage upon the premises.
    The plaintiff claimed to be entitled to redeem under a deed from Decker, executed on July 25, 1878, but not recorded until March 15, 1881, the action of foreclosure having been commenced on July 26,1880, and a notice of the pendency of such action having been filed in the office of the clerk of the city and county of New York on July 16, 1880. From the evidence given upon the trial the court found as a fact that the plaintiff Hewlett had actual and express notice of this deed at and before the time of the commencement of the action.

      Held, that, even if this notice were established, it would not affect the defendant Schwannecke, who was, to the extent of the $300 (which it was to he presumed from the recitals in the deed he had paid), to be treated as a purchaser in good faith.
    That the defendant Schwannecke’s right to be treated as a horn fide purchaser was not affected by the fact that Hewlett did not acquire title by a direct conveyance from Decker, as the effect of the foreclosure and sale was precisely the same as though Decker had executed and delivered a deed of the premises to him.
    That it did not follow from this result that the plaintiff would be deprived of all remedy, if the action could be legally maintained in other respects, as the defendant Hewlett might still be required to account for what he had received upon the sale and conveyance of the property, and in that manner the plaintiff might secure an equitable adjustment of her rights.
    That in order to avoid the effect given to the filing of the Us pendens by section 132 of the Code of Procedure, which was applicable to the filing of the notice in the action of foreclosure, it must be shown that Hewlett, the plaintiff therein, had notice, at or before the time of its commencement, of the existence of the deed to the plaintiff. That proof of this fact would probably defeat the judgment in the foreclosure suit, so far as to render it inoperative against the present plaintiff, as it would have been a fraud on Hewlett’s part to foreclose his mortgage and sell the property without making the plaintiff a party to the action if he, in fact, knew her to be the owner of the equity of redemption.
    That as there was no evidence to prove that Hewlett himself had any notice or information of the existence of the deed from Decker, the finding that he had such notice could only be supported by a finding that he was affected with notice of the existence of the deed, from information given concerning it to his attorneys, who had loaned the money which the mortgage was given to secure, and had acted as his attorney in the action brought to foreclose it.
    That the evidence given in this case was not sufficient to sustain such a finding, as it did not show that the information or knowledge of the attorney was acquired while engaged in the business of Hewlett, or that the information, however acquired, was retained by the attorneys down to the time of the commencement of the action of foi'eclosure and was then present in their minds.

      Holden v. N. T. and Erie Bank (72 FT. Y. 286) distinguished.
    Appeal from an interlocutory judgment recovered at tbe Special Term.

      Abner O. Thomas, for tbe appellants.

      James G. I)e LaMare, for tbe respondent.
   Daniels, J.:

By the judgment which has been recovered the plaintiff is entitled to redeem premises situated on the easterly side of Jackson avenue in the city of New York, from a mortgage executed by Clara Decker and Peter P. Decker, her husband, to secure the sum of $2,000, with interest from the 13th of December, 1877. This mortgage was foreclosed by George Hewlett, the mortgagee, in the year 1880. Under the judgment in the foreclosure suit the premises were sold on the 22d of September, 1880, and the plaintiff Hewlett, in the action, became their purchaser, and a deed was executed and delivered to him on the twenty-eighth of the following October, and recorded in the register’s office of the county of New York, on the 17th of December, 1880. He held the title under this purchase, until the 4th of February, 1881, when he conveyed the property to the defendant Schwannecke, for the consideration of $2,500, $2,000 of which was secured by a mortgage on the same premises, executed by the vendee to the vendor. The deed from Decker and wife to the plaintiff was executed on or about the 25th of July, 1878, but it was not recorded until the 15th of March, 1881, while the action of foreclosure of the mortgage held by the defendant Hewlett, was commenced on or about the 26th of July, 1880, and a notice of the pendency of the action was filed in the office of the clerk of the city and county of New York on the 16th of July, 1880. And it was because of the fact that the deed to the plaintiff was not on record at the time when the foreclosure action was commenced, that she was not made a party to the foreclosure suit. But to remove the effect of the omission to record the deed to the plaintiff, evidence was given from which the court found as a fact, that the plaintiff Hewlett, in the foreclosure suit, had actual and express notice of this deed, at and before the time of the commencement of that action. But if this notice was established as a fact in the case, it did not affect the defendant Schwannecke, for there is no pretense that he had any information whatever of this pre-existing deed to the plaintiff in this action. And as it is to be presumed, from the recital In the deed to him, that the sum of $500 was actually paid, as a part consideration for the sale of the property, in addition to the execution and delivery by him of the mortgage to secure the residue of the purchase-price, he was so far a purchaser of the property in good faith, for value, for this recital in the deed was evidence of the payment by him of so much, of the purchase price. (Lacustrine Fertilizer Co. v. Lake Guano, etc., Co., 82 N. Y., 476, 483.)

This position has, however, been denied by the counsel for the plaintiff, for the reason that Hewlett did not acquire title by a direct conveyance from Decker. But the effect of the foreclosure and sale was precisely the same as though Decker had executed arid delivered a deed of the premises to Hewlett. For it was provided by the statute both preceding and at the time when the sale was made and which has become a part of the Code of Civil Procedure, that the deed upon the foreclosure sale should vest in the purchaser the same estate, as if it. were executed by the mortgagor and mortgagee of the property. (3 R. S. [6th ed.] 199, § 102; Code § 1632.) And neither of the authorities brought to the attention of the court by the counsel for the plaintiff, hold anything in conflict with this conclusion. For while it has been held that the recording act will affect conveyances founded only on a purchase of the right of the moitgagor, this conveyance was strictly within that principlet To entitle it to the protection of the recording act it was no. necessary that the deed of the property should be executed by Decker himself. It was sufficient that the conveyance executed by the referee was equivalent to a deed executed by him, and designed to convey his title, which under these provisions of the statute it actually did. What the rule of construction requires, which these authorities have stated and settled, is that the conveyance shall be operative and effectual in the way of conveying the title of the person appearing upon the record to be the owner of the property. (Raynor v. Wilson, 6 Hill, 469, 473; Wood v. Chapin, 3 Kern., 509, 520; Gillig v. Maass, 28 N. Y., 191, 209.) And its application to this conveyance is confirmed by Seward v. Huntington (94 N. Y., 104, 114), and its force in that respect is in no way diminished by anything that was said in Tarbell v. West (86 N. Y., 280, 288). As to this defendant, therefore, the right of the plaintiff to redeem was not established, and so far the judgment certainly was unwarranted.

But it does not follow from this result that the plaintiff would be deprived of her remedy if the action has been legally maintained in other respects, for the defendant Hewlett might still be required to account to her for what he has received upon the' sale and conveyance of the property, and in that manner to secure an equitable adjustment of her rights. (Meehan v. Forrester, 52 N. Y., 277, 281.) And an equally important inquiry is therefore presented whether the action has been maintained against the defendant, Hewlett. At the time when it was commenced section 132 of the Code of Procedure was applicable to the filing, and the effect of the filing of the notice of Us pendens. Por by section 3356 of the Code of Civil Procedure, chapters 14 to 21, inclusive, did not go into effect until the first of September, 1880, and the like provisions, which by different sections have been made a part of this Code, are contained in chapter 14. By the preceding section contained .in the Code of' Procedure, requiring the filing of a notice of the pendency of the action in suits affecting the title to real property, it was provided that this should be done in foreclosure cases twenty days before judgment, and that the notice must contain a description of the property, the date of the mortgage, the parties thereto, and the time and place of recording the same The notice which was filed complied with these requirements, and this section further provided where that shall appear to be the fact, that “ from the time of filing, only, shall the pendency of the action be constructive notice to a purchaser or incumbrancer of the property affected thereby; and every person whose conveyance or incumbrance is subsequently executed, or subsequently recorded, shall be deemed a subsequent purchaser, or incumbrancer, and shall be bound by all proceedings taken after the filing of such notice, to the same extent as if he were made a party to the action.” And this latter provision has been enforced and carried into effect according to the import of the language used in its enactment. (Stern v. O’ Connell, 35 N. Y., 104; Lamont v. Cheshire, 65 id., 30; Kindberg v. Freeman, 39 Hun, 466.) And it was to avoid its effect that the evidence was given in this action, from which it has been found that Hewlett, the plaintiff in the foreclosure- suit, had notice at or before the time when- it was commenced, of the existence of this deed to the plaintiff. And if he had, that would probably defeat the judgment in the foreclosure suit, so far as to render it inoperative against the plaintiff, for it would have been a fraud on his part to foreclose his mortgage and sell the mortgaged property without making the plaintiff a party to the action, if he in fact knew her to be the owner of the equity of redemption. And it could have beem.no part of the design, in the enactment of this statutory provision, to jwomote or sanction a fraud of this description.

.But there was no evidence whatever in the case tending to prove that Hewlett himself had any notice or information of the existence of the deed from Decker to tbe plaintiff. So far the finding that he had actual and express notice was without foundation in the evidence. But what the court undoubtedly designed to find as a fact was that Hewlett had become affected with notice of the existence of the deed, from information given concerning it to • his attorneys, C. & N. D. Lawton. They had loaned the money for the plaintiff for which the mortgage was taken from Decker. This loan was made on or about the 13th of December in the year 1877. And after the making of the loan the bond and mortgage remained in the possession of the attorneys, who collected the interest and looked after the property for the defendant Hewlett. And in September, 1878, the husband of the plaintiff testified that he informed the Lawtons of the fact that the plaintiff had a deed of these premises. Their evidence, as well as the evidence of a clerk in their office, -was in conflict with the testimony of this witness. But under the rule laid down in Sherwood v. Hauser (94 N. Y. 626), the finding of the court on this conflict of evidence cannot be interfered with. And it may be added that there are probably few cases under that rule, in which the court will not be precluded by a finding of fact, either by a referee or the court, where there is a conflict of evidence, from reviewing the conclusion, although it may strongly preponderate, as it does in this case, in favor of the defendant.

The only point open for consideration, therefore, is whether the evidence, as it may be most' favorably construed for the plaintiff, established the fact that notice of this deed was given to the attorneys in such a manner as to become binding upon Hewlett the mortgagee. The evidence to prove notice was wholly derived from the testimony of her husband, and that was that in September, 1878, he had a conversation with N. D. Lawton, which was after-wards continued and completed in the presence and with the participation of Cyrus Lawton. His testimony was: “Iwent therein regard to the abstract of title. Q. Abstract of title of what ? A. Of this Jackson avenue bouse. Q. You went where ? A. To Mr. Lawton’s office. Q. Tell us all that was said ? A. I showed bim the contract I bad with Mr. Peter Decker in reference to that house and other matters; I then stated that my wife had the deed. Q. What else ? A. He took the contract and brought it out to the elder Mr. Lawton. * * * They stated that was Mr. Peter Decker’s writing and signature, and they asked me if I was Mr. John Slattery; I said no, that I was P. H. Slattery; that is all I remember of that interview. Q. Was there something said "about an abstract? A. Yes, sir; I said I went there for the abstract and they referred me over to a gentleman named Runk in Proadway; Charles Runk the name is. Q. In stating to them that you were after an abstract, what, if anything, did you say about .the deed ? A. I told him my wife had a deed of that property'; I took the deed from Mr. Peter Decker for my wife. Q. And your wife is Margaret Slattery, the plaintiff in this case ? A. Yes. Q. After that did you call there again ? A. Yes; I called some time after in regard to the abstract; I saw the elder Mr. Lawton. Q. Mr. Cyrus Lawton ? A. Yes; that was a month or two after; then he stated there was some gentleman in the same building with him who had the abstract and he would get me a copy; he would give me a copy for five dollars. Q. Did you call there a third time? A. I did, in 1879. Q. Who did you see there ? A. I saw the younger Mr. Lawton. Q. Mr. N. D. Lawton? A. Yes. Q. Did you say anything about the deed at that time? A. I did. Q. What did you say to him? A. The first conversation I had with him I told him that my wife was anxious to have the house completed, and as he was acting for Mr. Hewlett I asked him if it was customary to advance something of the mortgage before the house was fully completed; I told him my wife was anxious to have the house finished up; he then acted angry, and stated he had commenced a foreclosure; that was the last interview I had with him except when I tendered the money. Q. After that did you call with Mr. Brown and make any tender there? A. Yes, sir. Q. Whom did you see? A: I saw the young gentleman. Q. Mr. N. D. Lawton ? A. Yes, sir. Q. What took place ? A. I asked him if he would take the money, if he represented Hewlett; he said yes he was acting for Mr. Hewlett. * * * Q. Tell us what took place ? A*. He refused to take it. * *' * Q. Can .you fix the day? A. I think it was May 3, 1881, between one and two o’clock, or twelve and one o’clock.” When the foreclosure suit was commenced John Slattery was made a defendant, and there was added to his name in the title “ and-Slattery, his wife.” But this latter name was stricken out of the case upon the fact being discovered by one of the attorneys that John Slattery had no wife. This addition to the title, accordingly, as it was not intended to include the plaintiff, in no -way increased the weight of the evidence given to prove notice of the outstanding deed. It rather rebutted the fact of information being given to the attorneys of that deed, for it indicated their ■understanding to be that John Slattery, and not the plaintiff, was the person who had acquired some interest in the mortgaged property. The important inquiry in the case, accordingly, is whether this evidence of Patrick H. Slattery, assuming it to have accurately stated what had transpired between himself and the attorneys, •established such a notice of the deed to his wife as became binding upon Hewlett, the plaintiff in the foreclosure suit. It is evident from the testimony, as it has been given from the case, that the witness did not repair to, and was not present in, the office of the attorneys upon any business of Mr. Hewlett. Neither were the attorneys at the time he was there on either of the interviews, except the last, engaged in any business or transaction for Hewlett, and in the last interview nothing appears to have been said concerning the deed, and if it had been made the subject of conversation it would not have been important, as the rights of these parties had previous to that time become fixed and settled. In the first •two interviews the witness was at the office on his own business, to •obtain an abstract of the title. In the third his object was equally that of his own business, to make inquiries concerning the completion of the house, and what he stated to the attorneys concerning the deed to his wife was no more than incidental remarks made in the course of the two interviews relating to his effort to obtain the ■abstract, and that under the rule applicable to notice affecting the principal, by information acquired by his agent, was not sufficient to prove notice to Hewlett himself. For that purpose the law has required that the information or knowledge of the agent shall be acquired by him in the business of his principal.

This was held in Weisser v. Denison (10 N. Y. 68), where it was said that “the principle that notice to an agent is notice to the principal is quite familiar, but is only applicable to cases in which the agent is acting in the course of his employment. Were it otherwise, and did it extend to acts unauthorized and outside of the employment, whether trespasses or even felonies, the master might be made responsible for all acts, whether tortious or otherwise, done by his servant while in his employ or acting professedly in his behalf, if he did not act at once by disclaiming the authority” (Id. 77). And this was approved in Welsh v. German Bank (73 N. Y., 424, 429), and in Bennett v. Buchan (76 id., 386). The evidence of this witness tended to prove no such notice, inasmuch as the attorneys were not in either of these interviews acting for, or engaged in the business of, Hewlett, but were responding to. inquiries made by the witness in his own business or that of his. wife.

Still if the information stated to have been given concerning the existence of the deed had been in the minds of the attorneys as a fact at the time of the commencement or during the progress of the foreclosure suit, that would have affected Hewlett, under the authority of the case of Holden v. N. Y. and Erie Bank (72 N. Y. 286), for there it was held when the bank acted -by its president having such knowledge it was bound by it, no matter how it might have previously been acquired. And this result was considered to follow “because when it acted through him as president in any transaction where that knowledge was material and applicable, it acted through an agent who at that very time had a knowledge of facts which gave a character to the transaction as fair and justifiable, or the reverse, and whose duty it was to make that knowledge known to his principal.” (Id. 294, 295.) But in the present case there was no further evidence of the fact that this information or knowledge was retained' by the attorneys down to the time of the commencement of the foreclosure suit, than the inference arising out of the evidence of this witness, that late in 1878 he had informed the attorneys of the existence of this deed. This, however, is simply an inference, and its existence is not compatible either with the evidence or the conduct of the attorneys themselves, who very clearly had no reason for omitting to make the plaintiff a party defendant to the foreclosure suit if they understood her to be the owner of any interest in the property affected by the mortgage. Their interest was in fact the other way. It was to bring into the action all persons having or claiming to have an interest in the property mortgaged, and in that manner to secure a complete and effectual title through the foreclosure. The omission of the plaintiff as a party could be attended with no possible advantage to the plaintiff in the foreclosure suit, or to his attorneys, for her deed, even if it had been recorded at the time when it was given, was subsequent and subject to the mortgage.

There could have been no reason for omitting to make her a defendant in the action if the attorneys had at the time of its commencement any impression, or knowledge, of the fact that she had acquired the title of the mortgagor. And that they designed to include in the action the grantee of Decker is made to appear by the circumstance that John Slattery was in fact made a defendant in the suit, and it was proved by Patrick H. Slattery, the witness, that he was carrying on business in the name of John Slattery and represented him in its transactions. And that may very well have led to the conclusion that John Slattery was the person to whom Decker had conveyed his interest. The change in the policies of insurance made at their instance indicate the like impression to have existed in the minds of the attorneys, for in January, 1879, an indorsement was made in the policy, stating it to be understood that John Slattery was the owner of the property, and in the insurances afterwards effected a similar statement was repeated, and it was to include and cut off that interest that John Slattery was made a defendant in the action. How the information was acquired that John Slattery had become interested in this property no otherwise -appeared than by the statement of the witness, N. D. Lawton, that they understood from Mr. Decker that he was the owner. But this was stricken from the case on motion of the plaintiff, and to that ruling the defendant excepted, and properly so, too, for they had the right, in fact, to show what information they had acquired before the commencement of the action concerning the ownership of the equity of redemption.

But it is quite apparent from the conduct of the attorneys that they did not have the impression that any other person than John Slattery bad become interested in the property, after the execution of the mortgage to Hewlett, and for that reason he could not be charged with the information previously given to them by Patrick II. Slattery, disclosing the existence of this deed. The information seems to have passed out of their minds, and that fact distinguishes this case from that of Holden v. New York and Erie Bank (supra), and the positive testimony of the attorneys themselves, clearly asserted the absence of this information or knowledge, at the time when they commenced the action to foreclose the mortgage. As the ease was presented, therefore, there was no such evidence adduced upon the trial as charged the defendant, Hewlett, with notice of the existence of the deed to the plaintiff. And without that notice she was, under this section of the Code of Procedure, bound by all the proceedings taken in the action the same as if she had been made a party to it, and the judgment in this action should be reversed and a new trial ordered, with costs to abide the event.

Van Brunt, P. J., and Bartlett, J., concurred.

Judgment reversed, new trial ordered, costs to abide event.