text:
    William C. Borland, App’lt, v. John Hahn, Impl’d, Resp’t.

      (Supreme Court, General Term, Fifth Department,

      Filed June 23, 1893.)

    Mortgage—Machinery subsequently placed on premises.
    One W. was the owner of three-fourths of certain premises, and with one M. leased the remainder. A partnership was formed between W. and M., the former furnishing the capital, which purchased new machinery for the building, to which it was attached by cleats. Subsequently W. made a mortgage of his interest in the premises to plaintiff’s assignor, which also stated that it was intended to include his right, title and interest in and to the mill machinery, etc., “considering the same for the purposes of this conveyance as part and parcel of the real estate hereby conveyed.” Feld, that this provision of the mortgage had no effect upon the machinery, but it still continued to be chattel, and belonged to the firm, and that plaintiff under the mortgage had no lien thereon, the mortgage not having been filed as a chattel mortgage.
    Appeal from judgment confirming the report of a referee on foreclosure, and excepting from a sale of the premises of certain machinery described in the report.
    Action to foreclose a mortgage given by the defendant Willey and wife to the Niagara County National Bank, and by said bank assigned to plaintiff, covering the undivided three-fourth part of certain lands situated in the city of Lockport.
    The following is the opinion of the referee:
    A. K. Potter, Referee.—The only question in controversy in this action is the right of defendant Hahn in certain of the mill machinery located in the mill which stands upon the mortgaged premises. The defendant Hahn obtained judgment against defendants Willey and Moore and levied an execution upon certain of the mill machinery within said mill prior to the commencement of this action. The question to be determined is, whether the levy of said execution was effectual for the purpose of securing the proceeds of such machinery to be applied upon said judgment. This involves the question whether said machinery is to be deemed real estate and covered by the mortgage now sought to be foreclosed.
    On the 11th day of August, 1879, the defendant John H. Willey and Anna Maria B. Moore, by an instrument in writing, became lessees of one undivided fourth part of the mortgaged premises, under a lease executed to them by Frank L. Allen, who was then the owner of said undivided fourth part. By the terms ■of said lease it was provided that,
    “All additions and improvements made to said mill on the premises hereby leased shall be paid by the said parties of the second part,” being said tenants. At about the same time said Willey and Moore entered into a partnership agreement whereby, as co-partners, they entered upon the business of manufacturing and vending flour and other products of corn and grain, and in the prosecution of said business entered upon the mortgaged premises and continued in such .occupation and use for ten years, pursuant to the provisions of said lease. The machinery in said mill, when they so entered, was only adapted to the making of flour by the old process of stone grinding. It became necessary very shortly after, in order to successfully conduct the said business, to change the machinery and put in that which should manufacture flour by an entirely different process, known commonly as the roller process.
    Willey and Moore became equal partners in the business, it being agreed that Willey should substantially furnish the capital and that the husband of Mrs. Moore should furnish his experience to the business The firm of Willey & Moore contracted for the putting in of the new machinery and paid for the same, part thereof being paid by the notes of the firm. The money actually employed was that which the defendant Willey contributed to the business pursuant to the partnership agreement. The machinery was for the most part fastened to the realty by cleats and screws, and in some instances by braces, but no part of it was built into the building in any such way that the removal thereof would interfere with the structure to any considerable extent. This machinery was put in from time to time and was thereafter used by them so long as the firm continued its business, and still remains upon the premises.
    Upon the 7th day of February, 1888, the defendant John H. Willey was the owner of three undivided fourths of the real estate as made up of the land and the building thereon. On the-last named day said Willey executed and delivered, with his wife, to the Niagara County National Bank, a mortgage to secure the payment of forty-four hundred and ninety-six dollars and eighteen cents ($4496.18) as therein provided, which mortgage by its terms was made to cover “ the equal undivided three-fourths parts of the hereinafter-described lands- and premises,” and then followed a description of the lands. The mortgage also contained this provision “ The first party hereto also intends to and does hereby include and convey with the above land and mill property, all his right, title and interest in and to ail mill machinery, fixtures, tools, furniture and other mill appliances and apparatus now in or about said mill, considering the same for the purposes of this conveyance as part and parcel of the real estate hereby conveyed.”
    On the 16th day of March, 1892, this mortgage was duly assigned, with the bond secured thereby, to this plaintiff.
    On the 18th day of March, 1892, the defendant Hahn recovered a judgment in this court against Willey and Moore, in their individual names, for ten hundred ninety-three dollars and sixty-seven cents, ($1093.67) damages and costs, and thereupon issued an execution to the sheriff of the county in which said property was situated, and such execution was levied by the sheriff upon, said mill machinery on the 18th day of March, 1892.
    This mortgage was entered for record in the office of the clerk of Niagara county, where the property was situated, on the 13th day of February, 1888, and was there duly recorded. It was not-filed as a chattel mortgage.
    Upon the foregoing facts the plaintiff contends that his mortgage is a lien upon the aforesaid mill machinery and has priority over defendant’s judgment His contention is, that the defendabt, Willey in fact paid for the machinery, and that by express provision in the mortgage he has made it, for all purposes of this case, real estate, and, by express provisions, subject to the conditions of the mortgage.
    I am compelled, however, to find against this claim. The money which paid for the machinery was in fact contributed by the defendant Willey, but it was contributed to the firm pursuant to the partnership agreement, and the testimony is undisputed that the firm contracted for the machinery and paid for it, and it must therefore be treated, for the purpose of this case, as having been, at the time it was put in, the property of Willey & Moore as partnership assets. Being firm property and put in and used for firm purposes it was chattel for several reasons.

      First. Because they were tenants and the ordinary rule governing machinery put in by tenants would apply. Holmes v. Tremper, 20 Johns., 29; King v. Whitcomb, 7 Bur., 263.

      Second. For all partnership purposes even lands owned and used for the business of the firm are chattel. Fairchild v. Fair-child, 64 M. Y., 471; Greenwood v. Marvin, 111 id., 423; 19 St. Rep., 612; Menagh v. Whitwell, 52 N. Y., 146; Tarbell v. West, 86 id., 280.
    The question still remains as to the effect of the mortgage upon this machinery. Was its nature changed by the execution and delivery of the mortgage with the provisions therein above recited ?
    It is well established by authority in this state that the means, by which machinery is fastened to real estate has but little to do with its becoming a fixture. The intent of the party who attaches personal to real estate is of more importance in determining whether by such attachment the personal property has become real. McRea v. Central National Banh, 66 1ST. Y., 489 ; Potter v. Cromwell, 40 id., 296.
    Ho act of the parties has been proved which would change the property from personal to real unless it is the giving of this mortgage.
    This brings us to the question how far the intent of defendant. Willey, together with the express provision of the mortgage executed by him, by which he sought to make the mill machinery subject to the mortgage as real estate, have become effectual for that purpose. At this time he was the owner of three-fourths of the realty and the owner of one-half interest in the mill machinery. As owner of the realty he was tenant in common with Borland, who had at that time become the owner of the other undivided fourth thereof. As a member of the firm of Willey & Moore, he owned one-half interest in the mill machinery, and Mrs. Moore the other one-half, subject to the rights of creditors. The firm was then occupying the premises under the lease and using this machinery. Most undoubtedly his intent and stipulation or agreement could affect no more than his individual interest in the machinery. This was all he attempted to do by the terms used in the mortgage. It was only “ all his right, title and interest ” he sought to mortgage, and he signed only his individual name. This was an undivided interest and was subject to the rights of creditors, if any.' It is difficult to see how any act or intent of his could change these partnership chattels into real estate. As has been suggested, it would be an undivided interest in each piece of machinery that could be affected by his act or intent so long as the property remained undivided. If this could be done we should have the anomaly of a given machine being, say one-half real estate and one-half chattel. This would not only seem to be out of the question as a legal proposition, but it would lead to serious difficulty if it was sought to enforce the lien of the mortgage upon the undivided half of the mill machinery. The ordinary process of foreclosure provides no way by which the value of the undivided half belonging to other parties could be ascertained and realized. To sell it separately would imply its severance from the realty by which it would become personal, and if sold with the realty this action affords no way of determining its value.
    I think it is plain that the provisions of the mortgage had no effect upon the mill machinery, but that it still continued to be chattel and belonged to the firm of Willey & Moore.
    Being assets of the firm it was personal property, and to make the mortgage valid against defendant Hahn, it should have been filed as a chattel mortgage.
    It is sufficient to say that plaintiff makes no claim under this mortgage if it be found that the property was chattel, and the mortgage in respect to it only a chattel mortgage, because it is conceded that it was not duly filed.
    My conclusion, therefore, is, that the plaintiff by his mortgage has no lien upon the mill machinery which was levied upon by the sheriff by virtue of the execution above named, being the mill machinery put upon said premises by, and belonging to, the firm of Willey & Moore, and that judgment should be had accordingly.

      Joshua Gaskill (Richard Crowley, of counsel), for app’lt; Millar <£ Moyer, for resp’l
   Judgment appealed from affirmed, on the opinion of the referee.

Dwight, P. J., Macomber, Lewis and Haight, JJ., concur.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Ambrose J. Agate, Plff., v. Caroline E. House, individually and as Ex’rx of Ann Eliza Agate, Def’t.

      (Supreme Court, General Term, First Department,

      Filed May 12, 1893.)

    Judgment—Effect of beyebbal of intbblocutoby judgment.
    Upon the reversal of an interloutory judgment in favor of plaintiff and for an accounting of rents in an action to establish a trust in real estate, and the ordering of a new trial, the final judgment entered after such accounting, whose only foundation is the existence of the interlocutory judgment, necessarily falls and should be stricken from the record on motion;
    Application by defendant to strike from the record the final judgment herein, after denial of motion for such relief by the special term with leave to renew at general term.

      Action to establish a trust in favor of plaintiff in certain real estate and for an accounting of rents and profits. On a trial of the issues an interlocutory judgment was entered in favor of plaintiff and ordering an accounting, which was had and final judgment entered. The interlocutory judgment was reversed on appeal and a new trial ordered.

      George W. Blunt, for pl’ff; Page & Taft, for def’t.
   Per Curiam.

We are of that the reversal of the interlocutory judgment and the ordering of new trial in the action the final judgment, whose only foundation was the existence of the interlocutory judgment, necessarily fell, and that the special term should have stricken said judgment from the record, upon motion being made for such relief. In view of the denial of such application by the special term with permission to apply to the general term, although we think it was entirely unnecessary under the prayer for further and other relief contained in the motion papers herein, we think the motion should be granted striking from the record the said final judgment.

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


author: Follett, J.

text:
    John A. Smith, App’lt, v. The Union Milk Co., Deft; Jesse Durland, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed June 30, 1893.)

    Attachment—Affidavit—Foreign corporation.
    An affidavit and complaint in an action for breach of contract against a foreign corporation which fail to show that the contract sued upon was made or that the cause of action arose in this state, or to stale the plaintiff’s residence, is insufficient to support an attachment as against a subsequent attaching creditor, whose writ is in all respects regular and founded on sufficient facts affirmatively alleged, where there has been no personal service within the state upon, or appearance by the corporation.
    Appeal from order vacating plaintiff’s attachment upon the motion of a subsequent attaching creditor.

      Henry W. Smith, for app’lt; Maclay & Forrest, for resp’t.
   Follett, J.

The actions brought by the parties to this appeal are for the recovery of damages for the breach of contracts. Such an action may be maintained by a resident of this state against a foreign corporation, though the contract was not made in this state, and though the cause of action did not arise therein. But a nonresident cannot maintain such an action unless the contract was made within the state, or unless the cause of action arose therein. Code Civ. Pro., § 1780. Unless a foreign corporation appears in such an action, and either expressly or tacitly acquiesces in the jurisdiction of the court, none is acquired without it is established either that the plaintiff is a resident of, or that the contract was made, or the cause of action arose within, the state.

It is conceded that the defendant in these actions is a foreign corporation. Both attachments were granted exclusively on that ground and were levied on the same property. It is not shown that the defendant has been served with process in this state, or that it has appeared in either action. Therefore, it does not appear that jurisdiction of the defendant has been acquired in either action. So far as it appears, the only effect of a judgment in either action will be to bind and authorize a sale of such property as has been or may be attached before judgment entered. Code, § 707.

The sole question in this case is, did the appellant, whose atr tachment was first issued and levied, acquire a legal lien as against the subsequent attachment of the respondent?

The sufficiency of the respondent's papers to * support his attachment is not questioned. He alleges in his verified complaint, and avers in his affidavit, upon which, together with the summons and complaint, his writ was granted, that the plaintiff is .a resident of this state, and also that the promissory note, which is set up as a first cause of action, was made and dishonored in this state.

The appellant avers in his affidavit, upon which together with the summons and complaint his attachment was granted, that the defendant is a foreign corporation, with an office in this city, and has horses, wagons, milk cans, bottles and accounts within this state; and he alleges in his verified complaint that the defendant is a foreign corporation organized under the laws of New Jersey, and is doing business in the state of New York, with an office at No. 57 Sixth avenue, in the city of New York. It is also alleged in the complaint that in June and July, 1892, the plaintiff sold and delivered to the defendant milk and cream of the value of $1,168, which sum the defendant agreed to pay therefor, but has wholly failed so to do. It is not alleged where the sale or delivery was made, or at what place payment was to be made; nor is it alleged or averred that the defendant was exclusively engaged in business in this state. The papers do not affirmatively show that the contract was made, or that the cause of action arose within this state. And we do not think from the facts alleged and averred that we can infer that the contract was made or broken in this state, as against a subsequent attaching creditor whose writ is in all respects regular, and founded upon sufficient facts affirmatively alleged and averred.

The milk and cream may have been sold and delivered in New Jersey, to be there paid for. The residence of the appellant is neither alleged in the complaint nor stated in his said affidavit, nor is any fact stated from which his place of residence can be inferred. So, whether the appellant be a resident or non-resident, he failed to allege in his complaint, or to aver in his affidavit, sufficient facts to authorize him to maintain an action against a foreign corporation.

The appellant urges that a decision denying him a lien will be harsh, and founded on a technicality; that he may amend his complaint and allege or prove the necessary facts on the trial. So he may, if the defendant is personally served in this state, or appears generally and does not raise the question of jurisdictipn. He complains that the respondent moved to vacate the attachment solely on the papers on which it was granted, and this deprived him of the right to show that he is a resident of this state, and that the contract was made and broken therein. This is a risk which, under the statute, a creditor must take. If he fails to disclose a cause of action, or a legal ground for an attachment, though he may have both, a creditor having seized the same property by virtue of a valid attachment may have the prior one set aside and thus gain priority.

The order should be affirmed, with ten dollars costs and disbursements.

O’Brien and Parker, JJ., concur.


text:
    Edward Bergen, Resp’t, v. John J. Deering, App’lt.

      (Supreme Court, General Term, First Department,

      Filed June 30, 1893.)

    Partnership—Dissolution—Release of levy previously made.
    In an action to wind up the affairs of a partnership brought because of a disagreement as to its management, an order requiring the sheriff to turn over to the receiver appointed therein the property previously levied upon under executions against the firm should not be granted, where the validity of the judgments upon which the executions issued is not impeached or security offered for their ultimate payment.
    • Appeal from order directing the sheriff to deliver certain goods held by him under an execution to a receiver.

      James Kearney, for app’lt; Nathaniel Levy, for resp’t
   Per Curiam.

The litigants were but in what business they were engaged, its extent, the amount of capital employed or their liabilities are not shown. It does not appear that the firm ■or the individual members thereof are insolvent Indeed, nothing is affirmatively shown, except that the parties were engaged in some kind of business, as partners, and disagreed about its management, but in what respect is not made known. However, they finally agreed that this action should be brought to wind up their affairs through the aid of a receiver; pursuant to which a receiver was appointed. Before the appointment was made two creditors of the firm recovered judgments, upon which executions were issued and levied by the sheriff. Upon motion of the receiver the sheriff was directed to turn over the whole property taken on the executions to the receiver. The validity of the judgments is in no wise impeached, nor was any security offered for their ultimate payment.

We are unable to see any reason for depriving these judgment creditors of their legal liens for the sole purpose, so far as is disclosed by the papers, of permitting this receiver agreed on by the litigants to prosecute the business which they would not agree to manage.

The order should be reversed, with ten dollars costs and printing disbursements, and motion denied, with ten dollars ■costs.

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


author: Per Curiam.—This

text:
    Edward J. Bergen, Resp't, v. John J. Deering, App’lt.

      (Supreme Court, General Term, First Department,

      Filed June 30, 1893.)

    Contempt—Requirements op order.
    An order adjudging a party in contempt of court which does not describe the acts committed or omitted which constituted it; does not show what he shall do or pay to purge himself, nor adjudicate that the acts done or omitted impair the rights of any party to the action, is insufficient.
    Appeal from order granting motion to punish defendant for an alleged contempt of court.

      James Kearney, for app’lt; Nathaniel Levy, for resp’t.
   Per Curiam.—This

This is an from an order adjudging the defendant guilty of a civil contempt of court. The order does not describe the acts which were committed or omitted by the defendant which constituted the contempt, nor is there any adjudication that any particular acts were done or omitted which amounted to a contempt. The order does not show what the defendant shall do, or how much he shall pay, if anything, in order to purge himself from contempt, nor is it adjudicated that the acts done or omitted impair the rights of any party to the action. These three provisions are necessary parts of every order adjudging a party guilty of a civil contempt.

The order should be reversed, with ten dollars costs and disbursements.

Yan Brunt, P. J., Follett and Parker, JJ., concur.


author: Van Brunt, P. J.

text:
    Thomas A. Maitland, Ex’r, Pl’ff, v. Townsend B. Baldwin, Ex’r, Def’t.

      (Supreme Court, General Term, First Department,

      Filed June 30, 1893.)

    1. Will-Power of appointment.
    Under a provision in a will giving a specified sum on the death of testator’s wife, “in such manner and form and to-such person or persons as she, by her last will and testament, may direct, limit and appoint,” the power of appointment is not limited to a direct and absolute gift, but the person exercising the power may place limitations upon the absoluteness of the enjoyment within the restrictions -prescribed by the law.
    2. Same—Trust.
    A devise of a specific sum to trustees to invest and pay over the income as in the will provided, creates an express trust, and the trustees are clothed with the legal title.
    3. Same—Suspension of alienation.
    The power of alienation may be suspended by an instrument in execution of a power of appointment; the validity of the appointment to be determined by reading it as though contained in the original instrument conferring the power of appointment.
    4. Same.
    Where the limitation as to the first takers under an appointment is valid, the trust will be upheld as to them, even if it may be invalid as to the others.
    Motion for judgment upon a verdict directed subject to the opinion of the court.

      J. K Ackley, for motion; S. P. Nash, opposed.
   Van Brunt, P. J.

This action was brought to recover a legacy. The facts of the case are as follows: One Robert J. Dillon died in November, 1872, leaving a last will and testament which contained the following provision : “At the death of my

wife I give $50,000 in such manner and form, and to such person or persons, as she by her last will and testament may direct, limit and appoint. ” He named as one of his executors Towsend B. Baldwin, who is now the sole surviving executor and trustee of said will. His wife, Sarah Parish Dillon, died on the 31st of October, 1891, leaving a last will and testament, in which she named the plaintiff as one of her executors, who alone qualified. Mrs. Dillon, by her said will, after giving some specific legacies, provided as follows:

“ Item: As to the sum of fifty thousand dollars ($50,000), over which I have a power of disposition given me by my late husband, Robert James Dillon, in and by his last will and testament in the words following, to wit: Fourthly. At the death of my wife I give fifty thousand dollars, in such manner and form, and to'such person or persons, as she, by her last will and testament, may direct, limit and appoint,’ I direct, limit and appoint as follows : I direct and appoint my executors, hereinafter named, to receive the said sum of fifty thousand dollars, and to invest the same in any securities in which trustees are authorized to invest trust funds by law, and to pay one-fifth of the income thereof to Helen McLean, daughter of George McLean, of New York city, for and during the term of her natural life; and another one-fifth of said income to Frances Cuddon, known as Sister Mary Stanislaus, of St. Edward’s Convent, of London, for and during the term of her natural life; and I direct and appoint Mrs. Susan O’Sullivan, wife of John O’Sullivan, of New York city, to receive the income of one-fifth of said principal sum of fifty thousand dollars for and during the term of ' her natural life; and I direct and appoint Mrs. Charles Beattie, wife of Rev. Charles Beattie, of Middletown, New York, to receive one-fifth of said income for and during the term of her natural life, and, upon her death, I appoint her husband to receive said income during his life, and, upon his death, or upon the death of Mrs. Charles Beattie, whichever shall last occur, I appoint her children to receive one-fifth of the principal sum of fifty thousand dollars, to be divided equally between them as they severally attain the age of twenty-one years, the eldest child of any deceased child dying in the lifetime of Mrs. Charles Beattie to take such part of said sum as its parent would have taken, if living ; and I direct and appoint Miss Rachel Cecilia Clark, of New York city, to receive the income of one-fifth part for and during the term of her natural life, and upon her death, I appoint her mother, Margaret Cecilia Clark, to receive said income for and during her natural life should she survive her said daughter.”

The defendant having refused to pay over to the plaintiff the Said $50,000, this action was brought to recover the same. Upon the trial a verdict was directed for the plaintiff, subject to the opinion of the court.

Various grounds are urged against the right of the plaintiff to recover.

It is claimed that the appointment made by Mrs. Dillon’s will is not authorized by the power, it being contended that the language of Mr. Dillon’s will implies a gift directly to some person or persons, and not a trust for the benefit of indefinite beneficiaries. The familiar rule in reference to the validity of appointments under powers contained in wills seems to be that the appointment is to be read as though it had been incorporated in the original will. And, applying this rule of construction to the will and the appointment in the case at bar, it would seem that the language is not susceptible of the construction claimed upon the part of the defendants. The gift is not to such person or persons as she may appoint simply, but it is a gift “in such manner and form, and to such person or persons, as she, by her last will and testament, may direct, limit and appoint; ” thus giving the appointee, within the limits of the law, the right to designate the manner and form in which the appointment shall be made, and necessarily the manner and form of the enjoyment under the appointment.

It would seem, therefore, that, under such a general power conferred by the will, it cannot be said that the power of appointment is limited to a direct and absolute gift, but the person exercising the power may place limitations upon the absoluteness of the enjoyment within the restrictions prescribed by the law.

It is further urged that the provisions of Mrs. Dillon’s will did not vest her executors with the legal title to the $50,000, but simply authorized the executors to receive the sum of $50,000 and invest the same, paying over the income as in the will provided ; and that this was a power in trust, and did not confer the legal title to the fund upon the executors.

Upon a reference to § 55, p. 728, vol. 1, of the Revised Statutes, we find express trusts defined. The language of the statute is: “ Express trusts may be created for any or either of the following purposes: * * * (3) To receive the rents and profits of land and apply them to the use of any person, during the life of such person, or for any shorter term, subject to the rules prescribed in the first article of this title.” And by § 3, p. 773, vol. 1, of the Revised Statutes, the provisions in regard to real estate are made applicable to personal property.

It would, therefore, appear that a devise to trustees of this $50,-000 to invest the same and pay over the income as in the will provided created an express trust, and the trustee was clothed with the legal title.

It is further urged that the appointment is invalid, as it suspends the power of alienation for more than two lives as to a part of the $50,000. _

_ As to this point, it seems to us sufficient to say that it is not necessary at present to decide the proposition. The limitation to the first takers under the will is not subject to this criticism; because, even if these limitations had been incorporated in the will of Mr. Dillon, they would have been within the protection of the statute and valid.

But it is urged that the trust cannot be sustained upon the theory that the provision for the life of some of the appointees may be good, as there is but one trust for several objects, and the donor’s scheme would be subverted by only partially enforcing it. And we are cited to the case of Haynes v. Sherman, 117 N. Y., 433 ; 27 St. Rep., 254. But, upon an examination of that case, it appears that it is not at all applicable to the case at bar, in view of the fact that there the infirmity in reference to the trust pervaded the whole trust, and it was not an invalid direction to take effect upon the termination of a valid provision, as in the case at bar. If the subsequent provisions of the appointment of Mrs. Dillon are subject to the criticisms claimed upon the part of the defendant, it will undoubtedly prevent those appointees from profiting by the appointment But, as the first takers under the appointment, for life, are not subject to this infirmity, the trust seems to be good as far as such appointment to them is concerned, even if it may be invalid as to the others; which latter point, however, we do not pretend to decide, as it is not necessary in the disposition of this case.

It is further urged that it is not allowable to suspend the power of alienation in reference to a trust estate by an instrument in execution of a power. And we are referred to 1 B. S., 737, § 128, and to Dana v. Murray, 122 N. Y., 604; 34 St. Rep., 611, as authorities for this proposition. But an examination of the statute and the case cited seems not to support this contention. In fact, the statute expressly recognizes the right to suspend the power of alienation by an instrument in execution of a power. It is to the following effect: “ The period during which the absolute right of alienation may be suspended by any instrument in execution of a power shall be computed, not from the date of such instrument, but from the time of the creation of the power.”

This is entirely in harmony with the principle which has already been enunciated, that the question of the validity of an appointment is to be determined by reading it as though contained in the original instrument conferring the power of appointment— in the case at bar, by reading the appointment of Mrs. Dillon into the will of Mr. Dillon, and determining whether, had the appointment been therein contained, it would have been valid. To the same effect in the case cited. Indeed, there seems to be no doubt as to this proposition.

Applying this rule of construction to the will of Mr. Dillon, and the appointment of Mrs. Dillon thereunder, it would seem, as already suggested, certainly as to the first lives contained in the appointment, that it was good, no matter what may be the determination as to the subsequent estates attempted to be created. As to the point that the proper parties are not before the court, it seems to be sufficient to say that this being an action at law, and no such objection having been taken either by answer or demurrer, the same was waived.

We are of opinion, therefore, that the motion for judgement upon the verdict should be granted, with costs of this application and costs in the court below.

Follett and Parker, JJ., concur.


text:
    Robert K. Dow, App’lt, v. The Iowa Central Railroad Co., Resp’t.

      (Supreme Court, General Term, First Department,

      Filed June 30, 1893.)

    Specific performance—Railroad re-organization agreement.
    Upon re-organization of a railroad the agreement of the bond holders provided that .the owners of stock of the old road might acquire stock in the new upon certain terms, and that if any should decline or fail to pay the assessment .the privilege should be ratably distributed among the holders of debt certificates and stock who had paid their assessments. The holder of such stock accepted the privilege and made one payment and then died, and no more payments were made although notices of assessments and a final notice limiting the time for payment were sent to his administrator. Held, that the issue and delivery of stock in the new company would not be compelled upon tender of the assessments after the date fixed as the limit of time in which the privilege could be exercised.
    Appeal from judgment of special term dismissing complaint.

      Leopold Wallach, for app’lt; James Thomson, for resp’t.
   Van Brunt, P. J.

This action was virtually an action for specific performance, although other relief was asked.

The facts in the case appear to be substantially as follows: In 1887 the Central Iowa Railway Company had made default in payment of interest upon its mortgage bonds, and upon its car trust certificates secured upon its rolling stock, and proceedings were commenced for the foreclosure of its'mortgages. In these circumstances the bondholders and the holders of the car trust certificates entered into an agreement in writing, among themselves, under date the 12th óf May, 1887, looking to the ¡purchase of the railroad and properties of said company. By said agreement they appointed the individual defendants in this suit a committee to carry out the plan of reorganization therein provided for, who duly accepted. The agreement contemplated a purchase of the property and a reorganization of the same in the interest of "the bondholders and holders of the car trust certificates and of such of the stockholders, preferred and common, of the old company as might ‘go in and assent to the said agreement upon the terms therein stated. The various portions of the roads were afterwards sold under decrees of foreclosure entered in the circuit courts of the United States for the southern district of Iowa and the northern district "of Illinois, and bought in for the said committee, who thereafter caused to be organized the defendant corporation, Iowa Central Railway Company, and conveyed the property so purchased by them to it.

Among the, provisions of the bondholders’ agreement is the following : “The said committee are empowered to give to the holders of each share of the common stock of the present company one share of common stock of the reorganized company, upon payment by such holder to the committee of fifteen dollars upon each share,” to be used by the committee as provided in the third article of said agreement; that is to say, for pay rolls and supply bills, secured claims, repairs and improvements upon the road and property, expenses of the committee, including counsel fees, and compensation to the members thereof and other disbursements needed to effectuate their trust. The surplus of the funds arising from assessments were to be paid over to the reorganized company.

It is further provided: “ Should any holder of * - common stock decline or fail to pay the assessment * * of fifteen dollars, the privilege of receiving common stock of the reorganized company, upon making such payment, shall be ratably distributed among the holders of debt certificates and of preferred and common stock who shall have paid their assessments, and in ■ case they do not accept such privilege, the same' shall be allotted by the committee, in their discretion, to other persons who may be willing to accept the privilege and make the required payments. Holders of such * * * common stock whose address is lodged with the committee, or noted upon the stock ledger of the company, shall be deemed to "have declined the offer of the said privilege after twenty days written or printed notice mailed to such person at such address. All persons making said payments * * * as shall be required by the committee will be entitled to receive for the amount thereof certificates of indebtedness of the reorganized company, which certificates will bear no interest, and the time for tne payment of the principal shall be at the option of the company, but shall be convertible into preferred stock of the company.”

Under the provisions of the agreement, the committee fixed the instalments in which the fifteen dollars per share on common stock should be paid at seven .in number; six of two dollars each and the last of three dollars. At the date of this agreement John H. Eickins owned one thousand shares of the common stock of the old company represented by ten certificates, each certificate being .for one hundred shares. He paid the instalment of two dollars per share and his certificates were thereupon indorsed as follows :

“ Assent to agreement of May 12, 1887, with Edward H Perkins, Eussell Sage, Giles E. Taintor, Simon Borg, Edmund E. Chase', Charles C. Allen, James Thompson, Horace J. Morse, committee. First instalment two dollars per share paid. For the committee. (Signed)
“ Mercantile Trust Company of Hew York.
“By C. Hunter, Cashier.”

Almost immediately afterwards Eickins died, and when the time fixed by the committee for the payment of the second instalment of two dollars arrived, in January, 1888, the stock was held by the public administrator, Mr. Morrison, as administrator of Eickins’ estate, and was so held by the public administrator until sometime in December, 1891. During the period that the stock ■was so held by the administrator notice of the various instalments ■called for by the committee were mailed to the public administrator and to one Mi-. Owen Murphy, at Toronto, who seemed to be looking after the interests of the next of kin of the decedent. Both Mr. Murphy and Mr. Arnold, the assistant of the public administrator, had interviews with Mr. Morse, the secretary of the committee, and were aware of the provisions of the bondholders’ agreement, and knew that assessments were due and unpaid, and also that the administrator had no funds with which to make payment. None of the assessments were paid by the administrator. The committee, about April 28, 1889, issued the following notice, •which was mailed to the administrator:

“ Final Notice.
“ Holders of coupon debt certificates, first and second preferred and common stock, who have not paid their assessments on the same, must do so on or before Wednesday, May 29th, or forfeit all participation in the reorganization.
“This notice is peremptory, and no further extension of time will be made.”

The remaining instalments, other than the first which was paid by Bickins, were not paid by the administrator, and the stock was, “sometime after April, 1890, purchased by the plaintiff and the certificates delivered to him, with the indorsements aforesaid •thereon, for about two hundred and seventy-six dollars.”

In the latter part of December, 1891, the plaintiff tendered the amount which was due upon the various assessments upon the ■.stock in question, which was declined, upon the ground that the time had passed for the receiving of assessments. Whereupon •this action was commenced to compel the delivery of the stock. 'Hpon the trial the complaint was dismissed, and from the judgement thereupon entered this appeal is taken.

The learned counsel for the appellant, throughout the whole of "his argument, seems to claim that it was necessary that some action should be taken upon the part of the bondholders’ committee (because it is to be observed that the agreement for reorganization was a bondholders’ agreement, and a bondholders’ agreement only) to forfeit some rights which the owner off the stock, whom he now represents, had in that reorganization agreement.

But it seems to us that this is an entirely mistaken view to -take of the relations of the parties. As already observed, the reorganization agreement was one of the bondholders only, and when the mortgages to secure these bonds had been foreclosed, .and the property purchased by the reorganization committee, the holders of the stock had no interest in such property, having been •cut off by the foreclosure proceeedings.

This being the condition of affairs under this reorganization •agreement, the committee were empowered to give to the holders •of stock in the prior organization certain privileges in the corporation to be formed under the reorganization scheme. These privileges were tobe acquired by the payment of certain assessments, and might be withheld entirely by the bondholders’ committee. By this agreement it was further provided that should any holder of stock decline or fail to pay his assessments, the privilege of receiving such stock in the reorganized company should be ratably distributed amongst the holders of debt certificates and of stock who shall have paid their assessments ; and in case such persons did not accept the privilege, the same should be allotted by the committee, in their discretion, to other persons, who might be willing to accept the privilege and make the required payments*. And the agreement further, provided that the holders of stock whose address was lodged with the committee, or noted upon the stock ledger of the company, should be deemed to have declined the offer of such privilege after twenty days’ notice mailed to such persons at such address.

After the committee had called for these assessments upon the-stock represented by the plaintiff, after the time had elapsed, and. after the rights of other parties had intervened by reason of the terms of the agreement, the plaintiff seeks to compel the delivery of this stock. It seems to us there is no question but that the holders of debt certificates and of stock who had paid their assessments became entitled as matter of right to claim this stock upon payment of the assessment where the holder of the original stock had failed to do so pursuant to the terms of the reorganization agreement.

It required no proceedings upon the part of the reorganization committee to terminate the rights of a defaulter under this agreed-men fc. The conditions of the agreement executed themselves. The moment the old stockholders made default, the rights-of others intervened which they could enforce, and which the committee could not ignore.

But it is said that as late, and even after the plaintiff tendered the assessment upon the stock which he represented, the' committee received payments from other persons. Upon an inspection of the record it would appear that, although the payments were actually received at that time, notes had been given at a prior time and accepted by the committee for assessments which were not paid until about the time of the plaintiff’s tender. Whether the committee had the right to accept these notes or not is not a question which it is necessary for us to determine. That is a question between them and those whom they represent, with which the plaintiff has nothing to do. Because the committee may have failed in their duty in one instance does not give the court power to compel them to violate their duty in another.

It has already been said that this action was for specific performance; and this designation of the action was made advisedly, because that seems to have been the actual scope of the action, to compel the committee to deliver this stock which had been agreed to be delivered upon the payment of the assessments under the agreement, blow, the one principle which underlies the enforcement of all contracts is that the plaintiff shall prove that he has performed all the conditions of the contract upon his part; and if he fails to do that, he cannot maintain an action for specific performance. It is a familiar principle that a party seeking to enforce a contract must allege and prove that he has performed its conditions upon his part, unless the other contracting party, having the power so to do, has waived these conditions. It does not require any action upon the part of the other contracting party to preclude a recovery upon a contract where the party seeking to recover is in default. The mere fact of the existence of the default precludes such recovery. The reorganization committee are not insisting upon a forfeiture. They are asking nothing. But the plaintiff seeks to be relieved from a default and to have the same rights as though he had performed his contract. We are not aware of any branch of equity jurisprudence which authorizes the court to insist that one party shall perform the contract, and to relieve the other party from its obligations.

The opportunity to enter into this new organization, after foreclosure of the mortgages and the purchase of the property by the reorganization committee, was a privilege extended to the stockholders. As already intimated, their rights in the property, which their stock was supposed to represent, had been cut off by the foreclosure. They were entitled tó nothing, and this option or privilege was offered to them, and they had a right to accept or reject it as they saw fit The holders of the plaintiff’s stock having accepted, but failed to comply with his contract of acceptance by making the payments which were conditions precedent to his right to receive the stock sought to be recovered in this action, it is difficult to see upon what basis the plaintiff could possibly succeed. All argument is a mere restatement of the proposition that a party seeking to enforce a contract must prove that he has complied with the conditions therein contained to be performed by him; and this the plaintiff certainly has not done.

We think, therefore, that the judgment should be affirmed, with costs.

Follett and Barrett, JJ., concur.


text:
    Maggie Fox, Resp’t, v. The Mayor, etc., of New York el al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed June 30, 1893.)

    1. Negligence—Railroad—Opening between cab and platform.
    Plaintiff, while leaving a Brooklyn bridge ear at the station, which had a curved platform, was shoved by someone and fell into an opening between the car and platform, which she testified was eighteen inches, while defendants’ witnesses testified it was eleven, and a half inches. There was a conflict as to whether the platform was sufficiently lighted, and it appeared that a large number of persons had alighted from the cars under similar circumstances without injury. Held, that under the circumstances the mere existence of such an opening was not negligence.
    3. Same—Request to charge.
    In such case the court refused to charge on request that if the jury believed that the platform was lighted with electric lights as testified to by defendants’ witnesses, the verdict must he for defendant, and that there was no evidence that the space between the platform of the car and station was unnecessarily wide, and that the only question which they might consider was whether it was properly lighted. Held, error.

      Appeal from judgment entered upon verdict recovered at circuit and from order denying motion for new trial.

      Theodore Connoly, for app’lt; J. D. Bell, for resp’t.
   Van Brunt, P. J.

This action was brought to recover damages for injuries alleged to be sustained by the plaintiff upon alighting from one of the cars running over the Brooklyn bridge.

It appears from the evidence that the plaintiff was a passenger upon the cars of the bridge upon the 2éth of January, 1890, havirfg boarded the cars about half-past six in the afternoon, and as she was about to step off the car, on its arrival and stoppage at Brooklyn, she received a shove, and fell into the open space between the car and the platform, and was thereby injured.

Evidence tending to show that the platform was improperly lighted was given upon the part of the plaintiff; and it was also claimed that the opening between the platform of the car and the bridge was of an improper and dangerous width.

It was shown that the bridge opposite to the platform of the car where the car stopped was on a curve, and that necessarily the centre of the car was much nearer to the platform than the two ends. It further appears that for a considerable period of time the plaintiff had been accustomed to cross the bridge daily. But it was claimed by the plaintiff that, upon previous occasions, she had gotten off the middle of the car, which was, necessarily, nearer the platform than the end from which she alighted at the time of the happening of the accident in question. Evidence in reference to the distance from the ends of the car to the platform was conflicting; and also as to the condition of the lights the testimony upon the part of the plaintiff being that the ends of the car were from eighteen to twenty inches from the platform, and the middle from four to seven inches, whereas upon the part of the defendant the evidence was to the effect that the ends were within eleven and one-half inches of the platform, and the centre within one inch thereof. With respect to the lighting, also, the evidence of the plaintiff was that it was dark, so that you could not see on getting off the cars, and upon the part of the defendant that the platform was brilliantly illuminated by electric lights. The defendant showed that a large number of persons had both boarded and alighted from the cars, and that, under the conditions existing at the time of the happening of the accident, no one had ever been injured from a similar cause.

The court thereupon submitted the question of the liability of the defendant to the jury, who found a verdict in favor of the plaintiff, and denied a motion for a new trial. And from the order and judgment thereupon entered this appeal is taken.

It has not been considered necessary in the foregoing statement of facts to enter into an examination of the details of the testimony, but simply to present the salient features which bring up the question which it is considered necessary to review; which is whether there was any evidence upon which negligence could be predicated against the defendant, because of the distance between the cars and the platform upon which the passengers alighted.

This question has been considered upon various occasions by the-courts; and the rule which has been adduced therefrom is that a machine or structure not obviously dangerous, which has been in daily use for years, and has uniformly proved adequate, safe and convenient, may be continued in use without the imputation of negligence.

Applying this rule to the case at bar, it would seem that in view of the large number of persons passing over the Brooklyn bridge upon the cars running thereon, who had alighted from-those cars without accident, the mere existence of an opening of the width described by the witnesses was not, of itself, negligence.. That some opening had to exist is manifest, because the car and. the platform could not possibly make a perfectly close connection. The force of this rule was sought to be overcome by showing that upon the elevated' railways in this city certain means had been resorted to by which this space was bridged under certain circumstances. But there was no evidence that any such appliance was in general use; and there being nothing to call the attention of the defendant to the fact that the structure as it stood was insecure or unsafe, there was no duty calling upon the defendant to adopt this peculiar device, which, so far as appears, i» only used by one corporation.

The principles laid down in the case of Ryan v. Manhattan, 121 N. Y., 126; 30 St. Rep., 624, seem precisely to cover the questions involved in the case at bar. In that case, the ground upon, which a recovery was claimed was that the defendant had left an-improper and dangerous opening in the pathway of its passengers without any necessity therefor; the court stating that the question presented was whether the opening into which the plaintiff stepped was or was not wider than necessary, so much so as to produce danger to the passengers. After alluding to the peculiar-conditions attending the case then under discussion, the court said: “ Thousands upon thousands, often in a hurry, and thronging in crowds, had stepped over this opening without harm or danger.” And the court asked the question : “ How is it possible to say that an opening, thus tested by years of use, was-negligent in its origin or maintenance? Indeed, the plaintiff adds to the force of this fact She had taken the cars at that, point a hundred times or more, and gives unconscious testimony to its safety by seeking to show that, on this one occasion, a change had occurred and the opening was wider than usual. Her whole case depends upon that allegation, and its burden rested upon her. She meets it by a guess. In her testimony she estimated by the eye that the width of the opening was-fourteen to fifteen inches. She did not notice the opening at all until just as she was lifted out of it, and was looking straight at the car and not at the opening when she stepped in. This was contrary to her habit, and without any apparent reason. Ho one else stepped into the opening. The other passengers seem to have found no difficulty and encountered no risk. She alone, paying no attention to her steps, went blindly into-the opening. If she had exercised even ordinary care, there is-no reason to suppose that her safety would have been endangered.”

It is sought by the evidence in the case at bar to vary it from that of the case cited, by the claim that the plaintiff was jostled as she was leaving the car, and thus fell into the opening. But this in no way makes the act of the defendant negligence in maintaining the cars and platform in the condition which for a large number of years had been found to be a sufficient provision for the safety of passengers. Thousands had passed over this opening without the slightest inconvenience, and as every passenger upon alighting from the car is bound to know that some space must exist between the platform and the car, it is their duty to take some precautions in order that they may not step therein.

It would seem, therefore, that the construction of the platform and cars formed no ground for a recovery; and the only evidence upon which a recovery could be had was that the platform was not properly lighted, bringing the case within that of Boyce v. Manhattan, 118 N. Y., 314; 28 St. Rep., 692.

The defendant requested the court to charge that, if the jury believed that the platform was lighted on the night of the accident with electric lights, testified to by defendant’s witnesses, the verdict must be for the defendant. The defendant also requested the court to charge that there was no evidence that the space between the platform of the car and the station was unnecessarily wide ; and that the only question which the jury might consider was whether it was properly lighted.

It was error for the court to refuse these two requests, as it enabled the jury to speculate upon the duties of the defendant in regard to the running of their cars and the construction of their platforms, which question should not have been left to it.

The judgment should be reversed, and a new trial ordered, with costs to appellant to abide event.

Follett and Barrett, JJ., concur.


author: Barrett, J.

text:
    The Bank of New York National Banking Ass’n, Pl’ff, v. The American Dock & Trust Co., Def’t.

      (Supreme Court, General Term, First Department,

      Filed June 30, 1893.)

    1. Warehousemen—Irregular receipts—Bona rides or holder.
    Where a warehouse receipt acknowledging the receipt of goods from, a person who is the president of ■ the warehousing company and signed by such president is_ presented by him for an advance of money thereon, the person to whom it is presented is put upon inquiry and is bound to verify its genuineness; he cannot rely upon the president’s statements.
    2. Same—Evidence.
    In an action upon such receipt, which in fact was false, it is not error to exclude evidence of the statements made by the officer at the time of the loan, as any representations made by him at such time are his individual statements simply, and not official statements binding on the company.
    Motion' by the plaintiff for a new trial upon exceptions ordered to be heard in the first instance at general term.

      John B. Whiting, for app’lt; Thaddeus D. Kenneson, for resp’t.
   Barrett, J.

The main question here is whether the plaintiff is to be treated as a bona fide holder of the warehouse receipt up-on the faith of which it advanced money to the defendant’s president, Stone. This warehouse receipt was signed “ M. W. Stone, Pres.’t,” and it acknowledged the receipt on storage at the American docks, for account of M. W. Stone, of 162 bales of cotton. This acknowledgment was false. The company .had received no •such cotton. Stone had simply prepared and signed the paper to raise money thereon for his own private purposes.

There is no question here of general authority. Both the president and the treasurer were expressly authorized by the board of directors to sign warehouse receipts. If, in the present case, therefore, this particular receipt had been made out in the name of some one disconnected with the company, and the plaintiff had innocently and in good faith advanced money to such person thereon upon the strength of official representation, a recovery could doubtless have been had. There is ample support for this proposition in the case of Fifth Avenue Bank v. Forty-second Street & Grand Street Ferry R. Co., decided by the court of appeals .and reported in 33 N. E. Rep., 378; 50 St. Rep., 712. But here the receipt was made out in the name of the president and was signed by him. The plaintiff knew that the Stone named in the receipt was the same person who, as president,- had sigped it. The implication was that the defendant’s president had attempted to contract with himself as an individual. The instrument not only acknowledged the receipt of the goods, but specified the terms and conditions of the pretended bailment. Upon the presentation of such a document to be used for Stone’s personal benefit, the plaintiff was at once put upon inquiry and was bound to verify its genuineness in a proper way. It certainly could not rely upon the representation of the officer whose very appearance in the transaction was what called for the inquiry. Any representation that he made would necessarily have been individual and not official. The law does not recognize his acting in the dual capacity. He cannot at the same moment borrow the money as an individual and as an officer represent the genuineness of the security.

The case on this head is directly within the principle enunciated in Manhattan Life Insurance Company v. Forty-second Street & Grand Street Ferry R. Co., 46 St. Rep., 130; and in Moores v. Citizens' Nat. Bank of Piqua, 111 U. S., 164.

There is a plain distinction between the present case and those cases where the instrument simply acknowledged the officer’s interest in the company. This distinction was pointed out in Titus v. The President, etc., 5 Lans., 250; S. C., 61 N, Y., 257, and the rule laid down in Claflin v. Farmers & Citizens' Bank, 25 N. Y., 295, was not questioned. That rule, in substance, is, that when what purports to be the company’s contract shows upon its face the officer’s use of his official position for his own benefit, every one to whom the contract comes is put upon inquiry. See, also, Nuendorff v. World Mutual Life Insurance Co., 69 N. Y., 398; Pratt v. Dwelling House Mutual Life Insurance, 53 Hun, 101; 25 St. Rep., 784; Farrington v. South Boston R. R. Co., 150 Mass., 406.

The plaintiff was permitted to show the actual transaction between it and Stone, that is, the loan of the money, relying upon the warehouse receipt and in ignorance of its character. What was excluded was Stone’s representations. But these representations, as we have seen, were not official. The representations were made at the bank, when Stone applied for the loan, and were simply his individual statements with regard to his own private business.

Even if admitted, they would not have helped the plaintiff, for nothing that Stone- could have said at the time and under the circumstances would have absolved it from the duty of further inquiry. And no other inquiry was made.

The exceptions should be overruled, and judgment ordered dismissing the complaint, with costs of this application and of the trial.

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


text:
    George F. Vietor et al., App’lts, v. Moritz Bauer et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed June 30, 1893.)

    Bills and notes—Diversion—Bona pide holder.
    Defendant Bauer made a note to his own order, indorsed the same and delivered it to one L. for the specified purpose of having the same discounted and returning the proceeds to said Bauer. Instead of doing so L., three days before it was due, transferred the note to plaintiffs, who credited its amount on an old account against L., and in the following fall, on receiving a payment from him, executed to him a release in full. In an action upon said note, Reid, that there was no consideration for the note; that plaintiffs were not bona fide holders thereof, and that the complaint was properly dismissed.
    Appeal from a j udgment dismissing the complaint, entered on the report of a referee.

      James Dunne, for app’lts; Benjamin N. Cardozo, for resp’ts.
   Follett, J.

This action was brought to recover on a promissory note made by Moritz Bauer, September 18, 1885, whereby he promised to pay to his own order $2,500, four months after date, at the Murray Hill Bank. It fell due January 21,1886.

It is alleged and admitted that afterwards the maker and Cacilie Bauer, the other defendant, indorsed the note; but it is denied that it was made or indorsed for value, and it is also denied that it was delivered. As an affirmative defense, it is alleged that the note was made, indorsed and delivered to Leopold Levy for the purpose of having the same discounted and the proceeds given to the defendants.

The referee found that the note was made and “ indorsed to the said Leopold Levy for the specified purpose of having the same discounted, and the proceeds thereof forthwith turned over to the defendants, or that otherwise the said note should he returned to them."

This finding is supported by the evidence. A witness, who was present when the note was made and delivered to Levy, testified: “ I recognize the handwriting of the note; what I recollect to have occurred in the interview between Moritz Bauer and Leopold Levy, having reference to this note, is that Mr. Bauer-handed that note to Mr. Levy, requesting Mr. Levy to have that note discounted for him in the Bowery National Bank, Levy saying that he would get Mr. Hamilton to give him the money for it. Mr. Hamilton is the cashier of the Bowery National Bank. Bauer told Levy he needed the money very particularly, and asked if Levy would try and get it for him to-morrow, and Mr. Levy said he would try and have it done for him the next day, and that if he did not he would return the note the next evening to Mr. Bauer.”

There was no dispute on the trial about the fact that the note was not discounted by any bank. October 15, 1885, Levy was. indebted to the plaintiffs in the sum of $3,940.36 on account, which was carried on their books under the head of “ suspended debtors.” In the autumn of that year Levy went to Europe, carrying with him the note, and an agent of the plaintiffs followed him for the purpose of collecting their account. What occurred there does not appear. On the 18th of January, 1886, the plaintiffs, at the city of New York, received by mail this note from Levy, who was then in Germany. The plaintiffs, after making inquiry as to the responsibility of the maker and indorser, credited Levy’s account with the note. Three days afterwards, January 21, 1886, the note fell due and was protested. February 4, 1886, this action was begun, and an answer was interposed, denying the validity of the note. In November, 1886, an agent of the plaintiffs met Levy in Montreal, Canada, received from him $500 in cash, and executed and delivered.to him a release in full of the claims of the plaintiff. These facts were found by the referee, and the findings are supported by the evidence.

Hnder this state of the evidence it was well found by the referee that there was no consideration for the note, but that it was. made and delivered to Levy for the purpose of having the same discounted and the avails delivered to the maker, and also that the plaintiffs did not receive the note before it fell due in part satisfaction or discharge of their account against Levy.

1 The agreement to receive it in part satisfaction and discharge of the account, in November, 1886, was long after this suit was begun.

This case has now been three times tried. On the first trial a verdict was directed for the plaintiffs. At that time it was not alleged in the answer that the note was made and delivered to Levy for a particular purpose, and had been by him diverted. On the trial the defendants offered to prove this fact. The evidence was objected to as immaterial and incompetent, but not on the ground that such a defense was not pleaded. The court, in considering the question as to whether the plaintiffs were holders for value, said: “ That the defendants were not precluded from, making this defense to the note by the credit of it as a payment on the account they had against Levy is quite well established by the authorities. By that credit they neither parted with any value, nor surrendered anything whatever on the faith of it If they had, they would stand in a very different legal position, requiring the exclusion of this defense. But if they shall be deprived of this credit by the proof of this defense, their account will stand as it did before, as a legal demand against their debtor, Levy. Their right to enforce and collect it will be in no manner affected by the fact of this credit, and its effacement through proof of the fact that Levy had no authority to use the note for that object. And where that is the condition of the holders of commercial paper, fraudulently diverted from the purpose for which it had been made and indorsed, there the maker and indorser may relieve themselves from liability upon it by proof of such facts as were proposed to be shown in this instance. 11 St. Rep., 531.

On the second trial, the question whether the maker received ,a consideration for the note from Levy was submitted to the jury and found for the plaintiffs. The general term in reviewing the case, 32 St Rep., 198; again held that under the undisputed evidence given by and in behalf of the plaintiffs, they surrendered nothing when they received the note in January, 1886. That they were not holders for value, and that their subsequent discharge of Levy from all liability on the account did not affect the legal status of the plaintiffs at the time they received the note.

The learned referee, in deciding this case, followed the rule laid down by this court in this case, and it may be added that the rule as stated is supported by a long line of adjudications in this state.

The judgment should be affirmed, with costs.

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


text:
    Emma Keller et al., Resp’ts, v. Henry Feldmann, App’lt.

      (Supreme Court, General Term, First Department,

      Filed June 30, 1893.)

    Deed—Cancellation for fraud.
    A contract for the.sale of a building and lot by defendant to plaintiffs contained a covenant that the westerly wall was independent. The deed, which was drawn by an attorney who acted for both parties, and who recorded it, omitted reference to such wall. The plaintiff who transacted the business could not read, and relied on the representations of defendant and the attorney respecting the wall. Defendant knew that the wall was not an independent one. After coming into possession plaintiffs discovered the facts, tendered a reconveyance, and demanded the purchase money. Held, that they were entitled to a judgment setting aside the conveyance and directing a repayment of the purchase price.
    Appeal from a judgment at special term in an action to set aside a deed of premises, cancel a purchase money bond and mortgage and cancel an assignment of another bond and mortgage, upon the ground, as alleged in the complaint, that the statements of defendant in the contract of sale, that the westerly wall of said house is an independent party wall, were and are false and untrue.

      John Henry Hull, for app’lt; Langbein Bros. & Langbein (George F. Langbein, of counsel), for resp'ts.
   Per Curiam.

The defendant, by -an agreement in 'writing, contracted to sell to the plaintiffs a house and lot situated on the southerly side of Seventh street. The contract contained a covenant that “ the westerly wall of said house is an independent wall.” Subsequently a deed was delivered, which did not contain a similar covenant, and there was not in fact an independent westerly wall. After the grantees had been in possession of the premise for a short time they discovered the absence of the wall, and also the fact that the deed contained no covenant in respect tó it. Thereupon they 'tendered to the grantor a reconveyance of the premises, and demanded that the contract be rescinded, and the purchase price of the premises refunded. This was denied, and shortly thereafter plaintiffs instituted this suit, alleging in the complaint that they had been fraudulently induced to accept the conveyance, -and basing thereon a demand for judgment 'that the deed be set aside, and the grantor compelled to refund to them the money and securities which they had turned over to him. The trial court found, upon evidence sufficient to support the findings, “ that at the time of the delivery of said deed to the plaintiffs, the plaintiffs relied upon and believed the statements and representations of said defendant, mentioned and described in said contract, that the westerly wall of said house is an independent wall, to be true, and in consideration thereof ” paid the purchase price; “that the said statements and representations -of said defendant in said contract that the westerly wall of -said house is an independent wall were false and untrue ;”-"that during the time the defendant was the owner of the premises he- “ was informed by two of his tenants in said house that there was no westerly wall; * * * -and that at the time the contract was "made, or the deed delivered, or at any other time, he did not inform the plaintiffs of these matters, and-did not disclose any of -the same, but suppressed them from the knowledge of the plaintiffs;” “ that the-said contract and deed was drawn, and the execution and delivery of each of the same was attended to, by a lawyer who was retained by and acted for both the plaintiffs and defendant, * * * yet he, the lawyer, drew said deed for the defendant, and omitted therefrom the covenant that the westerly wall of said house is an independent wall, or any mention of any walls or house, and allowed and permitted such deed to be delivered to plaintiffs, talcing such deed himself, on behalf of said plaintiffs, and recording the samein the register’s 'office of the city and county of New York, and neither he nor the defendant informing the plaintiffs of such omission or suppression, or disclosing the same to said plaintiffs, and leaving them entirely ignorant of the same; * * * that the plaintiff Emma Keller, who acted for the plaintiffs, could not speak, read or write the English language, and could not read said deed, the same was not read over to the plaintiffs, and they were ignorant of its contents; * * * that plaintiffs were entirely ignorant of the omission and suppression and concealment, that the westerly wall was an independent wall was not covenanted and contained in said deed, or that in fact there was no westerly wall to said house.” These facts, taken in connection with the other findings made by the trial court, establish a legal fraud on the part of the defendant, and fully justify the judgment rendered setting aside the conveyance and directing a repayment of the purchase price.

The judgment should be affirmed, with costs.

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


text:
    Cornelia R. Kane, Ex’rx, App’lt, v. Robert Lenox Belknap, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed June 30, 1893.)

    Money had and received—Proof of investment.
    On the trial of an action brought to recover certain money received by defendant from plaintiffs testator, and which defendant claimed he had invested under a power of attorney from deceased, the only question left in the case was whether defendant actually invested §5,000, as was his duty to do. It appeared that defendant and deceased were in the habit of borrowing of each other to keep their bank accounts good, and that §5,000 was loaned by deceased to defendant on a certain day and deposited to the latter’s credit. The person who was bookkeeper for both parties at the time testified that at a subsequent date the defendant drew a check for §5,000 against deceased’s account, which was never used, but which was to have been invested in a contract with the firm of Grant & Ward, who subsequently failed, and that instead defendant paid his previous loan of §5,000 by investing it in the contract. A letter was introduced in evidence, written after the failure of Grant & Ward, showing that deceased had given his. consent to the investment. Held, that a verdict was rightly directed for defendant.
    Appeal from a judgment in favor of defendant entered upon the verdict of a jury directed by the court.

      Platt & Bowers (John M. Bowers, of counsel), for app’lt; Robert W. Weeks, for resp’t.
   Follett, J.

This action was brought to recover §14,000 on account of the following sums of money received by the defendant from the plaintiff’s testator at the following dates: December 20, 1883, $5,000; December 27, 1883, $10,000; May 1, 1884, $5,000. It is admitted that $6,000 of this sum was subsequently paid. The complaint contains two causes of action: (1) Charging the defendant with negligence in investing these sums in Grant & Ward contracts; (2) with not having invested said sums as was his duty to do. On the 1st day of October, 1873, the plaintiff’s testator executed and delivered to the defendant a power of attorney, which is, in its terms, broad enough to authorize the investment by the defendant of the sums mentioned in the way in which he claims to have invested them. This power remained in force until the death of William H. Kane, which occurred in December, 1886. The defendant, in his answer, admits that he received the foregoing sums of money, belonging to the testator, at. the dates mentioned, for investment, and alleges that he invested the same pursuant to the directions of said Kane, and pursuant to the general authority and discretion given to him, and has since fully accounted therefor, and paid over the entire proceeds thereof. The plaintiff admits, on this appeal, that as to the first and second items it was right to direct a verdict for the defendant, but insists that it was error to refuse to submit to the jury the question as to the plaintiff’s right to recover for the $5,000 received May 1, 1884. There was an entire failure to sustain the first cause of action, for the evidence furnished by the testator’s letters and the testimony of Stevenson established, beyond doubt, that the testator authorized the defendant to invest in those so called contracts. May 9, 1884, the defendant wrote Kane, stating that he had invested these sums in Grant & Ward contracts, and informed him of the failure of that firm. On the 26th of the same month, Kane replied, saying, among other things relating to the same subject: I do not blame you at all, as I gave you my consent to your loaning it to them before I left, last fall.” Stevenson, a witness called by the plaintiff, testified that he heard Kane direct the defendant to invest $20,000 of his money in those contracts. In addition to this the statements rendered by the defendant to the plaintiff from time to time showed that such investments had been made, and the sums allowed as profits had been credited to Kane.

The sole question left in the case is whether the defendant, on the 1st day of May, 1884, actually invested $5,000 with Grant & Ward, for Kane. That he had authority to make such investment is established beyond question; and it is also conclusively shown, by the correspondence between them subsequent to the failure of Grant & Ward, that the defendant reported that he had invested that sum with them, and that Kane acknowledged his right to make the investment Did the defendant make a misstatement in regard to having made the investment? If he did, he is liable. Was there sufficient evidence to make this a question of fact for the jury? It is claimed that the investment was effected through the following transactions: March 13, 1884, the defendant drew a check on the bank account of Kane for $5,000, which was deposited to the credit of the defendant’s bank account. This was, in effect, a call loan made by Kane to defendant through the agency of the latter. It may be that the terms of the power of attorney are not broad enough to authorize the defendant, as agent, to borrow for himself the money of his principal. However, this point- is not raised, and it appears from the evidence thaf defendant had previously borrowed money of Kane in the same manner, and. had made loans to Kane by checks drawn upon his account, which were deposited to the credit of Kane’s bank account. This seems to have been a mode adopted of keeping their bank accounts good. The defendant insists that he paid this loan May 1, 1884, by investing $5,000 in a Grant & Ward contract, and by depositing to the credit of Kane’s bank account a check for $33.33, interest on thé loan at the rate of five per cent. Kane’s bank account is in evidence, in which there is this entry: “ May 1, 1884, call loan of March Í3th pd., and int., 5 per ct., $33.33.” An account showing this item was rendered by the defendant to Kane up to July 10, 1884, who acknowledged its receipt by a letter dated August 1st, in which he says that the account is correct In the same account, Kane is charged with an investment of $5,000 on that date, which is the item claimed to have been invested in a Grant & Ward contract. The assertion of the defendant is that instead of drawing a check against his own account, and having it credited to Kane’s bank account, he paid the loan by investing the sum as before stated. The plaintiff, to establish her cause of action, called Mr. Stevenson, defendant’s bookkeeper, who also kept the account of Kane while he was absent in Europe. He testified positively that the defendant, on the 1st of May, paid the loan by investing $5,000 in a Grant & Ward contract, and that he personally made that investment The plaintiff seeks to raise a doubt as to the truthfulness of this testimony by producing Kane’s check book, which, during the early part of 1884, was kept by Stevenson. In this book there is a check and a stub, of which the following are copies:

Stub.

Check.

4,460. 3 No. 4,460. New York, 1 May, 1884. 1st May, 1884. M National Bank of Commerce. R. L. Belknap, for Pay to the order of W. P. Stevenson Pive investment in Ó. & Thousand.... W., 5,000. 1 $5,000, William H. Kane. By R. L. Belknap, Atty.

This check has never been used, and the signature has been canceled. Stevenson, who drew the check and made the investment as the agent of the defendant, testified that the check was not used, so as to avoid two unnecessary transactions and entries, to wit, the drawing of a check by the defendant on his bank account in payment of the loan from Kane, and depositing it to his credit, and then the use of the check above set forth in payment for an interest in a Grant & Ward contract purchased by the defendant for Kane on that date. This was positively testified to, and we are unable to see any suspicious circumstances connected with the transaction, making it necessary to submit to the jury the question of the truthfulness of the undisputed testimony of Stevenson. More than this, after Kane’s return from Europe this check book was returned to and used by him, and the transaction was never repudiated nor questioned by him. If, as the plaintiff asserts, the defendant did not make the investment, and his claim to have done so was a fraudulent afterthought, it is difficult to see why no attempt was made to conceal this so-called evidence of guilt, as there was ample opportunity for doing so. We think the check and stub, in connection with the circumstances, sustain, rather than discredit, the testimony of Stevenson, and that a verdict was rightly directed for the defendant, and that the judgment should be affirmed, with costs.

Van Brunt, P. J., concurs.


author: Parker, J.

text:
    The Bucyrus Steam Shovel & Dredge Co., Resp’t, v. Siegmund T. Meyer et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed June 30, 1893.)

    Bills and notes—Accommodation indorsements—Evidence.
    In an action on a promissory note defendants alleged that it was indorsed by them for the accommodation of plaintiff, and upon an agreement that they should be protected and indemnified against payment. On the trial the maker’s manager testified that he was sent either by the maker or plaintiff’s president to obtain defendants’ indorsement; that defendants refused the same unless a written request therefor was made by plaintiff’s president, and that he wrote a letter stating that the indorsement was requested by plaintiff. Held, that the question whether the indorsement was for plaintiff’s accommodation should have been submitted to the jury.
    Appeal from a judgment entered on the verdict of a jury directed by the court in an action against the indorsers of a promissory note, and from an order denying a motion for a new trial.

      Melville H. Regensburger, for app’lts; Howard Mansfield and Albert Symington, for resp’t.
   Parker, J.

This is an action on a promissory note alleged to have been made by one Simmons,.and indorsed by the defendants Meyer. Simmons did not answer, but the other defendants did, admitting the indorsement, but alleging, by way of defense, that the indorsement was made for the accommodation of the plaintiff, and upon an agreement with it that they would be protected and indemnified against the payment thereof. On the trial, Nathaniel S. Bailey testified that on March 20, 1891, the date of the note, he was the office manager for the maker Simmons; that he was requested either by the president of the plaintiff or the maker, and in the presence of both of them, to take the note in suit to the office of Mr. Meyer, to get his indorsement on it; that he failed to get the indorsement; and that, on his return with the note, he had a conversation with the president of the plaintiff, which he details as follows:

“ I said to him that Mr. Meyer declined to indorse the note. He asked me to make another effort, saying that he wished to have the same indorsement on the paper as he had on the previous paper, so that he could use it 'at his bank. I told him that Mr. Meyer had said: ‘Send that note back to me with a letter stating that Col. Harris [plaintiff’s president] requests my indorsement on the note, and I will place it there.’ * * * I

wrote a letter to Mr. Meyer while Col. Harris was there, in which I stated that this indorsement was at the request of the Bucyrus Company. This is the letter I wrote:

“ ‘45 Broadway, March 20, 1890.
“ ‘Messrs. S. T. Meyer & Son—Dear sir: I enclose herewith a. note dated this day at two months for $3,857.50, which the Bucyrus Steam Shovel & Dredge Company request that you indorse.
“‘Yours, truly, Jas. A. Simmons.
u <per n. s, Bailey.’
“ The note came back indorsed.”

This is substantially all the evidence relating to the procurement of the indorsement. Other questions were asked of Mr. Bailey, and excluded, which we think he should have been allowed to answer, in view of the fact that he went to Meyer with the acquiescence, if not at the request, of Col. Harris, and that it was Bailey’s report of what took place that led to the writing of the Tetter stating that the plaintiff requested the indorsement. He was asked:

“Q. Did Mr. Meyer say anything to you as to the purpose of making any inquiries of you,—as to the purpose or object for which the Bucyrus Steam Shovel & Dredge Company wished the note? Q. Was anything said by Mr. Meyer at that interview as to whether the indorsement was for the accommodation of the Bucyrus Steam Shovel & Dredge Company ? Q. Was anything said at that interview by you to Mr. Meyer as to the use which the note was to be put to ? ”

It may well be that answers to these several inquiries might have thrown some light on the question whether the indorsement was for the accommodation of the maker or the plaintiff; but, without other evidence than that disclosed by the record, the defendants were entitled to have the jury pass upon the question whether they were accommodation indorsers for the plaintiff or not. This right was denied them, the court directing a verdict in favor of the plaintiff. It is quite probable that the suggestion which appears in the record, that the plaintiff surrendered to the maker at the time of receiving the note in suit a note for substantially the same amount, bearing the indorsement of the defendants Meyer, may have had weight with the court in determining that the defendants were not accommodation indorsers for the plaintiff. Their indorsement on the prior note is suggested only, not proved. It is alleged in the complaint, but denied in the answer. The note was not produced on the trial, nor was any competent evidence tending to show an indorsement received or offered. Had there been, the refusal of the court to permit the defendants to testify that they had not indorsed such a note would have constituted error. The judgment should be reversed and a new trial granted, with, costs to the appellants to abide the event.

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