author: O’Brien, J.: Patterson, J.: Van Brunt, P. J.: Yan Brunt, B. J.

text:
    In the Matter of the Application of WILLIAM HERBST and Another for Leave to Sue HENRY WINTHROP GRAY, as Receiver of the Firm of LEVY BROS. & CO.

      Receiver — leave to sue him — lien for work — not made the subject of an independent action.

    In an action brought by Hardt and others against the firm of Levy Bros. & Co., Henry W. Gray was appointed a receiver of the goods, etc., of that firm. Before the failure of Levy Bros. & Co. the firm of Herbst & Morrison had received from them certain coats which were to be made up under an agreement that Herbst & Morrison were to have a general lien upon the coats for their labor.
    Not having been paid for their labor thereon Herbst & Morrison refused to surrender the coats to the receiver, and applied for leave to sue the receiver upon this claim. The receiver had already begun a proceeding, in the action in which he was appointed receiver, to punish Herbst & Morrison for contempt.

      Held, that the property of Levy Bros. & Co. was deemed to be in the possession of the court; that the claim of Herbst & Morrison, whether equitable in its nature or a claim by them as pledgees, was a claim which should be disposed of in the receiver’s action, and that their application for leave to bring an independent action was properly denied. (Van Brunt, P. J., dissenting.)
    Appeal by the petitioners, William Herbst and Morris Morrison, who were partners, from an order, made on the 23d day of November, 1891, denying their application to sue Henry Winthrop Gray, as receiver of the firm of Levy Bros. & Co., in order to foreclose a lien upon certain property of Levy Brothers & Co.

      Abram Klvng, for the petitioners, appellants.

      G. Zabriskie, for the receiver, respondent.
   O’Brien, J.:

William Herbst and Morris Morrison applied at Special Term for leave to sue Henry W. Gray, a receiver of the firm of Levy Bros. & Co., or to interplead Mm as one of the defendants in a suit to be brought to foreclose a lien upon chattels.

By their petition the appellants claim that they performed work, labor and services as tailors, in the manufacture of certain clothing, to the value of $2*576.80, at the request of Levy'Bros. & Co.; that the said firm agreed that they should have a general lien upon 315 coats, delivered to them to be made up ; that they did the work on the coats, but have not been paid. In a suit brought by Hardt and others against Levy Bros. & Co. and others, Gray was, by an order of this court dated May 21, 1891, appointed the receiver of the said copartnership firm, and claims all the property by reason of such appointment. The affidavit which accompanies the petition states that a proceeding is now pending in this cdurt to punish the petitioners for contempt for failure to turn over to the receiver the same goods and chattels on which they claim a lien, and that the motion is made in the action of Hardt against Levy, in which the receiver was appointed. It is, upon these facts, insisted by petitioners, that nothing appears to justify the order made by the justice below, and that the denial of petitioners’ application was a refusal to allow them having a legally undisputed claim to prosecute the remedy which the law prescribed, and from seeking in the courts an enforcement of their legal and constitutional rights.

The receiver, in his affidavit, shows that the object of the action in which he was appointed receiver is to prevent multiplicity of actions, and to ascertain and adjudicate in that suit the claims of all persons in respect to the property attached by the sheriff or held under claim of lien. In respect to the delivery of receivership property to the receiver, or the surrender of receivership property by the receiver, many applications have been made by this receiver in the suit in which he was appointed, and the court, in the exercise ■of its discretion, deemed it wiser to retain all such questions for settlement in the principal suit, and not to require or permit other actions to be brought. With respect to the property held by the appellants, such an application was made by the receiver, and to forestall the decision of the court the appellants made their motion for leave to bring an independent action to foreclose their lien. Such an action as proposed is equitable in its nature, and one which can be established and enforced by a court of equity, or the court can, Iii an equitable proceeding, require tbe claimant to submit his claim in the principal suit, and can therein give such relief to the petitioner ns he may show himself entitled to.. Upon these applications at Special Term, the court has held that, even with regard to claims of a legal nature triable by right by jury, it will, in its discretion, permit such an action to be brought. This rule has not, however, been extended to actions such as this one, which is of an equitable nature, for the reason, as stated, that any claim or lien can be disposed of in the principal suit without injury to any of the claimant’s legal or constitutional rights, and thus secure the object of the principal action by preventing a multiplicity of suits. The theory upon which such action of the court is based is that where the court lias taken possession of property and appointed a receiver, it has power to try all adverse claims in the principal suit. Such a disposition of adverse claims- is in accordance with the former equity practice, which has not been taken away nor superseded by statute. And it appearing by the record that a proceeding has actually been brought by the receiver to have the claim of petitioners determined, it ivas proper for the court, in the exercise of its discretion, to deny the leave to sue the receiver, which was applied for.

We think that the order appealed from should be affirmed, with ten dollars costs and disbursements.

Patterson, J.:

I concur for the reason that it is utterly unnecessary to sue the receiver. The petitioners hold the goods as pledgees, and they have only to apply to the court on notice to the receiver for leave to sell, or if their right is disputed, for a reference to determine it. There is no propriety in putting the receiver to the expense and delay of an action when the whole matter can be disposed of by a reference in the main action, as was the practice in chancery, and as I understand it is now, for there being no provision in the Code of Civil Procedure as to applications of this- character, rule 85 of the general rules of practice should apply.

Van Brunt, P. J.:

I*n the above memorandum Mr. Justice Patterson bases his decision upon the ground that the petitioners hold the goods as pledgees, whereas the fact is beyond question that they do not hold the goods as pledgees, but as bailees and pledgees. If they held the goods as pledgees, they could sell the goods without coming into court, but being also bailees they cannot.

There never was any practice in the Court of Chancery or any other court which attempted to or could compel an utter stranger to the questions to be litigated in an action, to come into that action and try a cuestión which was entirely separate and distinct.

Yan Brunt, B. J.

(dissenting) :

I cannot concur in the conclusion arrived at by Mr. Justice O’Brien upon this appeal.

Tie seems to be of the opinion that the petitibners should be required to intervene in a suit in the issues of which they have not the slightest interest, in order that they may make available, rights which have been , conferred upon them by the owners of the property mentioned in the petition.

The papers upon which this application has been made, and the answer to the same, have been very loosely and inaccurately drawnj so that it is difficult, without some previous knowledge of the litigations out of which this receivership arose, to determine exactly the status of the parties.

But sufficient appears to show with some degree of certainty that probably the receiver has but little, if any, interest in the goods which form the subject-matter involved. The petitioners allege that the firm of Levy Bros. & Co. were indebted to them in the sum of $2,5'T6.80 for work, labor and services performed by them in the manufacture of clothing for said firm of Levy Bros. & Co., no part of which has been paid; and that in the month of May, 1891, the said firm being then largely indebted to the petitioners for work of the character above mentioned, desired the petitioners to do other work of a like character, and delivered goods for the purpose of manufacture, under the agreement that the petitioners should have a lien upon said goods, not only for the work bestowed thereon, but also for the indebtedness already existing; that, pursuant to said agreement, the petitioners received said goods and performed work, labor and services on the same, and that the whole amount of the indebtedness due to the petitioners was the sum above mentioned ; that in May, 1891, in a certain action, a receiver was appointed of the copartnership firm of Levy Bros. & Co., who claims all the property of said firm by reason of said appointment; and that the petitioners desired to commence an action to foreclose said mechanic’s lien upon said chattels, and for the recovery of their debt; and that in such action it will be necessary to make such receiver a party defendant.

It will be seen, upon a consideration of the wording of this petition, .that the petitioners had a very vague idea in regard to the rights which they had acquired by the transaction, calling the claim a ■mechanic’s lien, whereas as to the work which had already been done they held the goods as a pawn or pledge, and only as to the work which was done subsequently did they hold the goods as bailees.

It appears from the affidavit of the receiver, made in opposition to ■the application, that he has no knowledge as to the merits of the claim of the petitioners, and denies that the property in question is the property of Levy Bros. & Co., or any of them, and claims that under the order of his appointment he is entitled to possession of the same. He then alleges that the object of the action in which he was appointed was, among other things, to avoid multiplicity of suits and to adjudicate in that suit the claims of all persons in respect to any of the property attached by the sheriff in favor of the National Park Bank, as stated in the complaint therein, and that the object and beneficial relief desired in said action will be frustrated if any claimants of any goods so attached were permitted to take the same out of the possession of the receiver before an adjudication in that action, or to maintain sepai’ate actions for the purpose of establishing their several rights or claims.

It is apparent from these allegations that the receiver was appointed of goods attached by the sheriff in the action of the National Park Bank against Levy Bros. & Co. for the purpose of preventing parties from taking possession of goods which were in the hands of the sheriff under the attachment, and which were to be transferred to the receiver. Now, in the first place, the petitioners are not attempting to take anything out of the possession of the receiver. The receiver, apparently, never has had possession of the goods in question, and certainly was never entitled to such possession.

The petitioners are not claiming the possession of any goods upon which the sheriff has levied an attachment, there being no evidence that the attachment was ever levied upon these goods. On the contrary, they are in the possession of the goods which have been theretofore pledged to them for a debt, and upon which they have a lien for work done subsequent to the pledge. They, therefore, have no interest in the litigations between the sheriff and the creditors of Levy Bros. & Co., in which the title to specific property is the subject-matter of investigation. And in considering the necessity of this application it is essential to bear in mind the different remedies which the petitioners have for the recovery of their debt; and the peculiar situation in which they are placed by the fact that as to a part of the debt the goods are a pledge or pawn, and as to the remainder they have a lien for work done; the one being a pledge, and the other a bailment for hire. A pledgee has the implied power to sell the pledged goods after a default by the pledgor without the intervention of any court. (Story on Bailments, 308.) But the party Avho holds a lien for work done has nb right to sell them after default. (Id., 311.)

This distinction is pertinently stated in 1 Smith’s Leading Cases (388). It is there stated that if the pawnor make default in payment at the stipulated time, the paivnee has a right to sell the pledge, and this he may do of his own accord, without any previous ■application to a court of equity, or he may sue the paAvnor for his debt, retaining the pawn, for it is a mere collateral security. If he thinks proper to sell, the surplus produced, after satisfying the debt, belongs to the paAvnor; while, on the other hand, if the paAA-n sells for less than the amount of the debt, the deficiency continues chargeable on the pawnor.

From all this it avüI be seen that a pawn differs, on the one hand, from a lien which conveys no right to sell whatever, but only a right to retain until the debt, in respect of which the lien was created, has been satisfied; and, on the other hand, from a mortgage which conveys the entire property of the thing mortgaged to the mortgagee-conditionally, so that when the condition is broken the property remains absolutely in the mortgagee, whereas a pawn never conveys the general property to the pawnee, but only a special property in the thing pawned; and the effect of a default in payment of the debt by tbe pawnor is not to pass tbe entire title of tbe thing pledged in the pawnee, but to give him the power to dispose of it, accounting for the surplus, which power, if he neglected to use the general property of the thing pawned, continues in the pawnor, who has a right at any time to redeem it. Therefore, the situation of the petitioners is that, without the intervention of a court of equity, as far as these goods are a pledge, they may sell, but as far as they are held for a lien they must foreclose their lien.

Under these circumstances, it is clear that the petitioners can only be protected in their rights by a foreclosure of the lien, including-the pawn. Standing as they do, in a position entirely separate and distinct from persons claiming title to property, which has been reduced to possession by the sheriff, under his attachment, it would seem to be a great hardship to require them, in that litigation, to determine their rights, particularly as the receiver in that suit would have no power to deprive them of the possession of the property. In fact, the. very idea of a lien of this kind and of a'pawn carries with it the right to possession; and when- possession is lost the lien is gone, differing in this respect also from a mortgage.

It may be that the receiver has-no interest whatever in this question and that the petitioners might foreclose their lien, without reference to the receiver. But if there is any question on that point, and there may be, they are entitled to have him before the court in order that the rights of all parties may be amply protected and disposed of.

- I am of the opinion, therefore, in view of the fact that these petitioners have no interest whatever in the class of litigations out of which the receivership arose, that they should be permitted to avail themselves of the security which they have received for the payment of their debt, and of the lien which they have for the work, which they have done, entirely untrammeled by controversies in which they have no interest.

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

Order affirmed, with ten dollars costs and disbursements.


source: Caselaw Access Project

author: O’Brien, J.: Yan Brunt, P. J.:

license: Public Domain

text:
    NELLIE E. FARRELL, Respondent, v. ALBERT FRIEDLANDER and Another, Appellants.

      Malicious prosecution — probable cause — no dispute as to the facts inducing the clefendant to procure the arrest — the question of probable cause is for the court alone.

    In an action brought to recover damages for malicious prosecution it appeared that. the defendants were partners and were, engaged in the manufacture of cloths; that large quantities of silk, which were to some extent under the control of the plaintiff, had disappeared; that one Deery was arrested for the larceny of cloaks belonging t.o the defendants, which were found at her residence; that Deery and the plaintiff were acquainted, and that Deery had obtained her position with the linn upon the plaintiff’s recommendation; that when Deery -was arraigned for the larceny she stated that she had obtained the clonks by the assistance of plaintiff, and that she had made garments by the plaintiff’s direction out of materials thus furnished by the plaintiff.
    Upon this statement alone, one partner, named Corwin, without the knowledge or consent of the other, procured a search warrant, searched plaintiff's premises and found nothing.

      Meld, that there being no dispute as to the facts which influenced Corwin in procuring the warrant, the question of probable cause was one for the court alone, and that it was error to submit it to the jury.
    The question as to when one partner is liable for the tortious acts of his copartner, considered by O’Brien, J. .
    How far a judgment against two joint tort feasors can be reversed as to one only, and be allowed to stand as to the other, considered by O’Brien, J.
    Appeal by the defendants,. Albert Friedlander. and Walter E. Corwin, from a judgment of tlie Supreme Court, entered in the office of the clerk of the city and county of New York on the 9th day of February, 1883, upon a verdict for the plaintiff for $2,500, after a trial at the New York Circuit before the court and a jury; and also from an order, entered in said clerk’s office on the 14th day of February, 1883, denying a motion to set aside the verdict and for a new trial.

      OhwiFs Donohue, for the aj>pellants.

      T. F. Neville, for the respondent.
   O’Brien, J.:

The action was brought to recover damages for the alleged malicious prosecution by defendants of the plaintiff. In the year 1880, the defendants, as partners, were engaged in tlie manufacture of clothes* and the plaintiff was a designer in their employ. For some time prior to the alleged wrongful prosecution the defendants missed, upon various occasions, large quantities of silk and other articles, which, as the evidence showed, were to some extent subject to plaintiff’s control. Finally, Mrs. Elizabeth Deery was arrested for the larceny of some cloaks belonging to defendants, which were found upon her person and at her residence. When arraigned before one of the police justices she stated that the stolen property had been obtained by her through the assistance of the plaintiff, and that out of the material that had thus been furnished various garments had been made by her at the plaintiff’s direction.

It also appeared that Mrs. Deery and plaintiff were acquainted, having formerly worked together at H. B. Claflin & Company’s, and Mrs. Deery had been employed by the defendants upon the plaintiff’s recommendation. Claiming to be influenced by these considerations, the defendant Corwin caused a search warrant to be issued, and in company with a, police officer went to the plaintiff’s apartment, and after an examination found no goods belonging to them in her possession. In addition to this circumstance, that no goods were found in her possession, the plaintiff showed that she was of good chai'acter, and had been engaged at a salary of forty dollars a week for many years by wholesale houses, and out of her earnings had maintained herself, father and four or five brothers and sisters.

It was also shown that the defendants, by reason of their business having fallen off, were desirous of being freed from the contract which they had made with the plaintiff to pay her the salary mentioned for the entire year of 1880, and in furtherance of this wish they had changed her employment, and for a portion of the time had refused to pay her salary, out of which a law suit arose between the parties, no doubt engendering feeling. It is these facts upon which plaintiff relies to justify her allegation that there was want of probable cause, and to support her charge of malice against the defendants in procuring the search warrant.

The two questions presented upon the appeal are, first, was there -evidence sufficient to go to the jury as to Friedlander’s responsibility for the act of his partner, Corwin, in the procuring of the warrant; and, second, did the judge err in charging the jury as to the principle which should guide them in determining what did or did not constitute probable cause. As to the first, the evidence shows that it was the defendant Corwin that appeared before the police justice on the occasion of Mrs. Deery’s examination. He it was to whom the latter stated the fact of plaintiffs complicity in the theft; and it was he that immediately thereupon swore to the affidavit upon which the warrant was obtained, and who afterwards accompanied the officer to plaintiffs residence to conduct the search. The defendant Friedlander denied that he had anything to do with causing the prosecution of plaintiff; nor was it shown that he in any way, up to the time of the issuance of the warrant, approved or co-ojierated with his partner Corwin. The only theory, therefore, upon which his liability for the act of' Corwin could be predicated would be that he was responsible for Corwin’s act, while acting within the scope of his partnership business, in doing all he did to recover the stolen property. It is true there is a line of cases which go to the length of holding, in regard to the law relative to the joint liability of partners, as stated in Abbott’s Trial Evidence, page 211: That “ if the act itself was one within the scope of the business, and done as such, then it is not material that the other partners were ignorant and innocent; nor that it was willful; otherwise, if the act was wholly foreign to the business. If the act was presumptively a partnership act, because, though not in the line of the trade, it was incidental to the exercise of an implied power — as where a partner in collecting a debt due the firm directs an officer to make a tortious levy — then the act of one partner is presumptively that of all, and evidence that they, with knowledge of the facts received the benefits of it, is conclusive against them.”

It will be noticed, however, that the principle underlying the liability of one partner for the torts of another is governed by the principles of the law of agency, andj like the liability of a master for the tortious act of his servant, is confined within the limits of the implied authority with which each partner is vested by virtue of the partnership relations. Undoubtedly, as stated by Mr. Abbott, where one receives the benefit of the tortious act of his partner, or where the act was presumptively a partnership act or incidental to the exercise of an implied power, there the other partners, upon the well-settled principles of agency, would be liable. I can find, however, no ease which goes to the extent of holding that the malicious prosecution of offenders has been admitted to be within the power constructively delegated to one partner as the agent of another.

In Mali v. Lord (39 N. Y., 381), which was a case where a superintendent and clerk called a policeman at the store of their employer and directed him to arrest and examine the person of a lady suspected of stealing goods, the court said: “ The inquiry is, whether a merchant, by employing a clerk to sell goods for him in his absence, or a superintendent to take general charge and management of his business at a particular store, thereby confers authority upon such clerk or superintendent to arrest and detain and search any one suspected of having stolen and secreted about his person any of the goods kept in such store.” The conclusion reached was, that he was not; the reason being that it will not be presumed that a master, by intrusting his property to a servant and conferring power upon him to transact his business, thereby authorizes him to do any act for his protection that he could not lawfully do himself, if present. The principle of agency which underlies the question of the master’s liability for the act of his servant is analogous to that upon which the liability of one partner for the acts of another is predicated. The cases are numerous that it is only for acts relating to the copartnership business, or which fall within the express or implied powers or duties of a copartner, that one becomes the agent for his copartners. I do not think it can be claimed that a prosecution undertaken by one partner, without consultation with and approval by his copartner, can hold the latter liable, because it cannot be assumed that a malicious prosecution by one, even in regard to supposed thefts of partnership property, is within the scope of his partnership authority so as to make him, in respect thereto, the agent for his copartners. There being in the case, therefore, no evidence to show that the defendant Friedlander was in any way consulted, took part in, knew of or approved of the prosecution undertaken by Corwin, he should not be held responsible for the latter’s tortious act.

Judgment here having been against joint tort feasors, as it must be reversed as to one, it is doubtful if it can be permitted to stand as against the other.

Lewis v. Kahn (5 N. Y. Supp., 661), is authority for the proposition that a judgment entered on a verdict against joint tort feasors cannot be held to stand as to one and be reversed as to the other for erroneous instructions as to the latter, but will be reversed in tota.

If, however, the judgment in all other respects was free from error, we should be reluctant to disturb it, and this brings us to a consideration of the second principal question presented on this appeal, as to whether the learned trial judge was in error upon the question of probable cause. At the beginning of his charge the trial judge correctly stated the rule of law, by reading from a report the definition of probable cause as laid down by the courts of this State, as follows: “All the books agreed that proof of express malice is not enough without showing also the want of probable cause. Probable cause has been defined a reasonable ground of suspicion, supjiorted by circumstances sufficiently strong in themselves to warrant a cautious man in the belief that the person accused is guilty of the offense with which he is charged. However innocent the plaintiff may have been of the crime laid to his charge, it is enough for the defendant to show that he had reasonable grounds for believing him guilty at the time the charge was made.” Subsequently, however, the learned judge inadvertently fell into an error in charging as follows: “ The rule in a criminal prosecution is that no person can be convicted on the evidence of an accomplice, unless that accomplice is corroborated by other testimony in material matters; in this case Mrs. Deery, if her story is to be believed at all, was an accomplice, and it is for you to say, on the evidence, whether she has been corroborated, so as to satisfy you, as jurors upon your oaths, that there was any justification whatever for the complaint which was made by the defendants.”

This position of the learned judge was emphasized when requested by the defendants to charge as follows: “ If the jury believe the testimony of the witness Deery, the plaintiff cannot recover.” The judge stated as follows: “ I charge in regard to that, as I have already said, that in a criminal prosecution no verdict can be had against the defendant on the testimony of an accomplice alone, unless that accomplice is corroborated as to some material fact, and the same rule substantially prevails in regard to actions of tort.” To the charge made and to the refusal to charge as requested, exceptions were duly taken. It seems to us that it was error for the trial judge to charge the jury that iu a criminal prosecution no verdict can be had against the defendant on the testimony of an accomplice unless that accomplice is corroborated as to some material facts, and that the same rule substantially prevails in regard to actions of tort; and that for this reason if Mrs. Deery’s testimony is believed by the jury, it would uot be sufficient basis for the existence of probable cause. It must be remembered that the action was based upon wdiat took place in 1880, and that the Code of Criminal Procedure which contains the present rule as to the testimony of accomplices, was enacted on June 1, 1881. It is true that since that time, and at the time of the trial, the rule under section 399 of that Code was that a conviction could not be had on the testimony of an accomplice, unless corroborated. Prior, however, to that date such was not the rule. (People v. Everhardt, 101 N. Y., 591; People v. Dyle, 21 id., 578.)

In the latter case it was stated : “ There is no rule of law which prevents a conviction on the testimony of an accomplice alone. The utmost caution should undoubtedly be exercised; but juries are nevertheless at liberty to convict on the unsupported testimony of a confederate in the crime.” And in the People v. Everhardt (supra), Earl, J., says: Prior to the enactment of this section (399 of the Code of Criminal Procedure), it was customary for judges to instruct jurors that they should not convict a defendant of crime upon the evidence of an accomplice unless such evidence was corroborated ; and yet it was the law in this State that a defendant could be convicted upon the uncorroborated evidence of an accomplice if the jury believed it.” It will thus be seen that the rule laid down by the learned judge was given a retrospective operation, and, as applied to occurrences in 1880, the defendant’s liability was measured by a principle that at that date was, as yet, unknown to the law. Apart, however, from this consideration, because we might assume that the learned judge was stating the law as it existed at the date of the trial, and that view might have found support, we think that the whole charge is susceptible of a construction that destroys the distinction between evidence necessary to convict a criminal and the evidence necessary to show reasonable cause for the prosecution. All the authorities are uniform in holding that these questions are distinct and independent. As shown by the portion read from the report by the learned judge himself, it becomes apparent that the evidence required of defendant, to show probable cause in order to justify the prosecution, is entirely different from the character or strength of the evidence which would be necessary to convict one of crime. We think, moreover, that it was error to refuse to charge the request that if the jury believed the testimony of Mrs. Deery, that then the defendants were entitled to a verdict, for the reason that her testimony went to support the version that she g’ave in the Police Court, that plaintiff was an accomplice with her in stealing defendant’s property. It was undoubtedly, therefore, a sound proposition of law that if the woman Deery was to be believed, there was probable cause for the prosecution; and, as said in Molloy v. The Long Island Railroad Company (13 N. Y. Supp., 383), that where there is no dispute, as to the facts, the question as to the existence of probable cause is one for the court.

We are of opinion, for the reasons given, that the judgment should be reversed and a new trial ordered, with costs to appellant, to abide the event.

Yan Brunt, P. J.:

I concur in result. There was no question for the jury upon the question of probable cause; that question depended upon the information which Corwin had' before he acted. There was no dispute in respect to that, and, consequently, the question of probable cause, was one for the court, and not the jury.

Judgment reversed and new trial ordered, with costs to the appellants to abide event.


author: Van Brunt, B. J.: O’Brien, J.:

text:
    In the Matter of the Administration of the Goods of ANTONIO J. MODERNO, Deceased.

      Surrogate’s Court —petition by a creditor for the payment of his debt — an assignee of a claim is a “ creditor.”

    It is provided, by section 2717 of the Code of Civil Procedure, that a petition may be presented to the Surrogate’s Court by a creditor for the payment of a debt against an estate, at any time after six months have expired since letters were ' .granted, praying for a decree directing the executor or administrator to pay the petitioner his claim.

      Held, that the language of the section did not limit its operation to original creditors, and that an assignee of a claim was entitled to proceed thereunder.
    Appeal by the petitioner, Adelaide O. Moderno, from so much •of an order, entered in the office of the Surrogate’s Court of the •county of New York on the 20th day of November, 1891, as denied her application for payment out of the estate of Antonio J. Moderno ■of $392.50 for expenditures made by her for services rendered by .third parties to the decedent in his lifetime.

      A. Knauth, for the appellant.
    No one appearing for the respondent.
   Van Brunt, B. J.:

This application was made by the widow of the decedent claiming to be a creditor of his estate for a decree directing the temporary-■administrator to pay certain claims set forth in her petition. A portion of the claims refer to expenditures made by petitioner for services rendered by third parties to decedent in his lifetime, such as hotel charges, nursing, etc., which were paid by her and of which she became the assignee. Another portion relates to amounts expended by petitioner for receiving vault and funeral expenses, .and another to expenditures in reference to proving satisfactorily the death of the decedent, and rendering assistance in and about the probate of the will.

The surrogate refused to direct the payment of the claims of which the petitioner was assignee upon the ground that the assignee of a claim against a decedent has no standing in court under the Code, section 2717, to compel payment; and he also refused to allow tlie payment of the expenses in reference to the probate of the will upon the ground that the necessity of these expenditures was not stated nor the particulars of the assistance rendered by the petitioner in and about proving the decedent’s death and the probate of the will. From that portion of the surrogate’s decree disallowing the assigned claims this appeal is taken.

We think the learned surrogate erred in the construction of section 2717 of the Code, that an assignee of a claim against a decedent has no standing in court by reason of said section. The provision of the section is that a petition may be presented to the Surrogate’s Court by a creditor for the payment of a debt against the estate at any time after six months have expired since letters were granted praying for a decree directing the executor or administrator to pay the petitioner his claim. The assignee of a claim is certainly a, creditor of the estate.

The language of the section does not limit it to original creditors, but to any person who, at the time of filing his petition, is a creditor of the estate, embracing, therefore, those who have acquired their claims by assignment as well as those who were original creditors, there being no distinction between the position of an assignee of a claim and the original owner of a claim if it had not been assigned.

We think, therefore, that, so far as the order denied the payment of the claims of which the petitioner was an assignee, it should be reversed, with ten dollars costs and disbursements.

Lawrence, J\, concurred.

O’Brien, J.:

I concur in the conclusion reached, that as assignee she had the same status as the original creditor under section 2717 of the Code. Though there was no formal assignment the learned surrogate rightfully says: “ The voluntary payment (by petitioner) of decedent’s debts subrogated her to the rights of his creditors, and created an assignment to her of the respective amounts paid.”

Order reversed to the extent stated in opinion, with ten dollars costs and disbursements.


text:
    In the Matter of the GLOBE MUTUAL BENEFIT ASSOCIATION.

      Insurance — co-operative life — the relation of members rests upon contract — an infant cannot be insured by such a company — cannot become a member — Lewis of 1883, chap. 175, secs. 1 and 3.
    A co-operative insurance company, incorporated under chapter 175 of the Laws of 1883, and having by-laws under which losses are payable from weekly dues collected from policyholders, cannot insure the lives of infants.
    The relation existing between the members of such a company is one of contract- and rests upon mutuality, and the legal disability of an infant is inconsistent with such mutuality.
    The provisions of sections 1 and 3, relative to the formation of such a corporation and constituting the corporators, “ and those that may thereafter be associated with them,” a body politic and corporate, imply that a member must be sui juris, since the law will not permit an infant to be a member of a corporation. The powers of insurance companies are purely statutory, and will not be enlarged by implication.
    Appeal by the Globe Mutual Benefit Association from an order of the Supreme Court, entered in the office of the clerk of the city and county of New York on the 14th day of January, 1887, restraining it from transacting business so far as the insurance of minors against accident, sickness or casualty, and the insurance of the lives of minors, is concerned.

      W. O. Tracy, for the appellant.

      I H. Maynard, assistant attorney-general, for the respondent.
   O’Brien, J.:

The sole question presented by this appeal is, whether a co-operative insurance company, incorporated- under chapter 175 of the Laws of 1883 of the State, and which has adopted, the by-laws adopted by this company, can insure the lives of minors.

Under the by-laws adopted the losses are not to be paid from assessments levied upon the members, but from weekly dues collected from policyholders. Though great stress is placed upon the difference in the mode of collecting the moneys necessary to meet death losses, between the payment of the weekly dues, as here, and the levying of assessments from time to time, as might be necessary, as provided by the by-laws of other mutual companies, no real distinction can be drawn from the mode of payment between the obligations of the members in either case. Bacon, in his work on Benefit Societies and Life Insurance (§ 161, p. 201), in speaking of a certificate of membership in such society, says: “ This certificate is in the nature of an insurance policy issued by a mutual company. * * * The conclusion, from an examination of all the eases, is, that the contract is found in the certificate, if one is issued, but it is to be construed and governed by the charter and by-laws of the society, and the statutes of the State of the domicile of the corporation.”

If we, therefore, take the act itself of 1883 (chap. 1Y5), under which this association was organized, it becomes evident that mutuality of obligation is the fundamental principle upon which these corporations are established. Sections 5 and 6 of the act spealc of the contract of insurance as a promise or agreement between the corporation and its members, and the extracts from the by-laws, which are annexed to and form a part of the certificate of membership, characterize the membership as a contract. On this branch of the subject little need be added to the reasons assigned by the learned judge below, showing that the relation between the members and the society is one of contract. Our attention, however, has been called to the case of the Chicago Mutual Life Indemnity Association v. Hunt, Attorney-General (127 Ill., 257), which it is claimed is at variance with the view that the relation is a contract one. An examination, however, of the Illinois case will show that the statutes of the two States are different. The Illinois statute authorizes a corporation, in its articles of incorporation, to prescribe the limit as to the age of applicants for membership. Upon this subject, of age limitation,-our statute is silent. Apart, however, from this difference, the opinion of the court in the Illinois case holds that the making of an assessment or the maturing of dues does not make the member a debtor of the association so as to authorize it to bring a suit for its recovery in case of its neglect or refusal to pay. This is contrary to the doctrine laid down in the case of McDonald v. Ross-Lewin (29 Hun, 87), wherein it was held that the issuance and acceptance of the certificate furnished a sufficient com sideration for the defendant’s agreement to pay any assessment-made during the time he should continue a member of the association, and that upon bis failure to pay an action would lie against him therefor. Again, as pointed out by the respondent, the contents of the certificate of membership iu the Illinois case are not given, and it may well be that it was so drawn as not to create any liability on the part of the members which would distinguish it from the views taken by our courts, that, under the acts relating to mutual benefit societies, a liability upon the part of the members to pay dues is created. In addition, however, to the reasons assigned by the learned judge below, there is another and controlling one to be derived from the statute itself. Section 1 of the act provides that any number of persons, not less than nine, may form such a corporation, and section 3 provides: “ The said corporators, and those that may thereafter become associated with them, or their successors, shall be constituted a body politic and corporate.” The persons here.referred to are the persons who are to constitute the membership of the corporation, and it is clearly implied that they are to be persons who are sui juris and competent to enter into a valid undertaking in law. In other words, an infant cannot become a member of such corporation, and thus an associate of the original incorporators, and thus make up the body politic, unless he was competent to be one of the original incorporators, or competent to become an incorporator if the company was becoming incorporated at the time that he became a member. It has frequently been held that where a statute authorizes persons to form a corporation, although the statute does not, in express terms, say that they must be of full age, yet it is implied that they shall be of full age. Here, after the act of incorporation, it was the members of the society which constituted it a continuing corporation, and it would seem reasonably clear that a person who is not competent to act for the purpose of creating it a corporation could not be competent to act for the purpose of continuing it as a corporation; and more difficult still would it be to determine, in the event of all the members of the corporation being infants, upon what grounds such members who are ineligible as corporators could be competent to continue its corporate existence or business. There is nothing in the express provisions of the Law of 1883, nor in the language of the act, which, by a reasonable intendment, can be construed into authorizing the appellant to engage in the business of insuring infants. As, therefore, the whole business of insurance by corporations in this State is now regulated and controlled by statute, in the absence of any such authority, exj>ress or implied, it will not be assumed.

It is our opinion that the order appealed from should be affirmed, with costs.

Lawrence, J., concurred.

Yan Brunt, P. J.:

I cannot concur in the reasons' which Mr. Justice O’Brien has assigned for the conclusion which he has reached upon this appeal.

There is no doubt, that if there was any legal obligation upon the part of the members of the appellant to pay any dues or assessments, that then no contract of insurance of a minor could be made, because a minor could not enter into any contract which imposed a legal obligation upon it which could be enforced. But in the case at bar I find no authority for the levying of an assessment or any obligation upon the member to pay the dues.

The only result of the failure to pay the dues is the suspension of membership, precisely the same as in the ordinary insurance companies the failure to pay the premium forfeits the policy. There is, therefore, no contract upon the part of the assured to do anything; the payment of the dues being only a condition precedent of the continuance of the membership or insurance, and in this respect the case at bar differs materially from that of McDonald v. Ross-Lewin (29 Hun, 87), there being in that case an express agreement to pay assessments.

But, upon an examination of the language of sections 5 and 18 of the act under which the appellant is incorporated, it will be seen that the action of the member is contemplated by the statute, it providing by section 5 that where any corporation, association or society which issues any certificate, policy or other evidence of interest, or makes any promise or agreement with its members whereby, upon the decease of a member, any money or other benefit, charity, relief or aid is to be provided or rendered by such corporation, association or society to the legal representative of such member or to the beneficiary designated by such member, etc. This language clearly confines the designation of the beneficiary to the member himself and to no one else, henee assuming that the member is capable of acting in a legal manner in reference to the matter of insurance, which a minor cannot do. It is for the member to designate whether the loss shall be paid to his legal representatives or to some other beneficiary. And this view is reinforced by a consideration of the language of section 18, which provides.that membership in any corporation, association or society transacting the. business of life or casualty insurance, or both, upon the co-operative or assessment plan, shall give to any member thereof the right at any time, with the consent of such corporation, association or society to make a change in his payee' or payees, beneficiary or beneficiaries without requiring the consent of such payee or beneficiaries.

Here, again, we have it assumed that the members have the capacity to act in changing their beneficiaries with the consent of the corporation, carrying out the privileges conferred by the fifth section, of designating who the beneficiary of the insurance should be. These things it being impossible for a minor to do, and being the necessary incidents of membership, the power to designate being a necessary part of the insurance, it is clear that minors cannot become members of such an association.

The order should be affirmed, with costs.

Order affirmed, with costs.


author: Lawrence, J.:

text:
    GUSTAV WHITE and Another, Appellants, v. JONAS HEIMERDINGER and JULIA HEIMERDINGER, Respondents.

      Sales ■— a credit given upon the faith of a letter promising to keep certain money at the i isk of a business — confession of judgment foi' the armount of such money — bad as to creditors.

    A mother, in order to give her son credit, wrote a letter as follows:
    “New York, January 35, 1889.
    “To whom it may Concern: — That I, Mrs. Julia Heimerdinger, have loaned my son, Jonas Heimerdinger, ten thousand dollars, to be paid back at his option, and leave same to him, at the risk of his business, for five years.
    “JULIA HEIMERDINGER.”

      Tlie son delivered the letter to a commercial agency, where it was seen by persons who, upon the faith of it, sold goods to the son, who failed in 1889 and confessed judgment in favor of his mother for this sum, which exhausted his assets.

      Held, that the confession was void as to the creditors.
    That a contractual relation was created between the mother and vendors, to whom the letters were shown, by which she agreed that if they- extended credit to her son she would allow the sum of $10,000 to remain in the business,- subject to all its exigencies, for the term of five years.
    Appeal by tlie plaintiffs, Gustav White and Simon Oberfelder, from a judgment of the Supreme Court, entered in the office of the clerk of the city and county of New York on the 5th day of May, 1891, dismissing the complaint upon the merits after a trial before a referee.

      Henry I. London, for the appellants.

      Alexander Blumenstiel, for the respondents.
   Lawrence, J.:

The letters signed by Julia Heimerdinger, the mother of Jonas Heimerdinger, were undoubtedly given for the purpose of enabling -Jonas to obtain credit in his business. The first letter, which is dated January, 1889, reads as follows:

“January, 1889.
“To whom it may Concern : — That I, Mrs. Julia Heimerdinger, have loaned my son, Jonas Heimerdinger, ten thousand dollars, to be paid back at his option, and leave same to him at the risk of his business. « JULIA HEIMERDINGER.”

The second letter reads as follows :

“New York, January 25, 1889.
“ To whom it may Conoern : —■ That I, Mrs. Julia Heimerdinger, have loaned my son, Jonas Heimerdinger, ten thousand dollars, to be paid back at his option, and leave same to him at the risk of 1ns business for five years. « JULIA HEIMERDINGER.”

To these letters a statement of the assets and liabilities of Jonas were attached. The first letter was delivered to the mercantile agencies of Bradstreet and Dunn. When the letter was shown to the representative of Dunn’s agency he told Jonas Heimerdinger that the loan would have to be paid into the business for a specified time, or that he would have to make a special partnership and have his mother come in as a special partner, and that it would be necessary for Mrs. Heimerdinger, to make it of any available use, to have a specific term put in, and that it should be acknowledged. It was after this conversation with the representative of Dunn’s agency that the letter dated January 25, 1889, was delivered to such representative by Jonas Heimerdinger. The evidence establishes that these letters and statements were submitted to the plaintiffs in this action, and that the plaintiffs relied upon all the said written or printed statements, and the said letters attached thereto, in making the sales to Jonas Heimerdinger, and would not have made the same had it not been for such statements and letters and the communication of the contents thereof to them by said mercantile agencies.

The referee, before whom the cause was tried, finds that from February 4, 1889, to September 28, 1889, plaintiffs sold to defendant Jonas Heimerdinger merchandise of the value and of the amount of $1,249.13, upon which, after deducting cash paid and merchandise returned, there was a balance due and unpaid from the defendant Jonas Heimerdinger to the- plaintiffs, before the month of December, 1889, of $445.62. He also finds that in the said month of December, 1889, the defendant Jonas Heimerdinger became insolvent and owed the sum of nearly $6,000 to his creditors, and failed in business, which said sum still remains due and unpaid by him to his said creditors; that on the 20th of December, 1889, he confessed judgment in favor of his mother for the sum of $10,016.62, which judgment was duly entered in the office of the clerk of the city and county of New York, was duly docketed and execution was duly issued thereon to the sheriff of the county of • New York, and thereupon the said sheriff collected and paid over to the defendant Julia Heimerdinger, out of the property of Jonas Heimerdinger sold by him under such execution, the sum of $6,531.56. It is also found by the referee that on the 20th day of December, 1889, when Jonas confessed judgment to his mother, he knew that he was insolvent and indebted to creditors in the sum of nearly $6,000. It is further found by him that the defendant Julia Heimerdinger subscribed the letters above referred to, with the intent and purpose that they should be shown to the mercantile agencies of the city of New York. He also finds that the confession of judgment -was not made with any intent, on the part of the defendant Jonas Heimerdinger, to give unlawful preference to the defendant Julia Heimerdinger over his other creditors, nor for the purpose of hindering, delaying, cheating or defrauding the said plaintiffs or any other creditors; and that said confession was made for the purpose only of paying an honest and bona fide debt.

It is difficult to see how it can be claimed, on this state of facts, that it was within the power of Jonas Heimerdinger, after the letters and statements above referred to had been communicated to the plaintiffs, to make a confession of judgment in favor of his mother which would swallow up all his available assets and leave nothing for his other creditors. It is perfectly clear that it was the intention of Mrs. Heimerdinger to lead the plaintiffs and all others, who might see and rely upon her letters, to believe that the $10,000 which she had lent to her son was to be at the risk of the business and subject to all its hazards and vicissitudes, otherwise it could be a matter of no importance to the creditors of Jonas whether his mother had or had not loaned him that sum. If that sum was liable to be withdrawn at any moment and repaid by him, the security of the creditors was thereby lessened and reduced. The change which was ■made in the phraseology of the first and second letters, so as to state a specific time for which the loan was to be continued, was made at the instigation of Dunn’s agency and for the express purpose of making his financial condition appear sounder to the creditors.

We do not deny the doctrine which is laid down in the cases referred to by the learned referee, to the effect that a debtor may at any time waive an unexpired credit upon any demand against him, and allow his creditor to take judgment immediately for the sum due to-him. Those were cases, however, as we understand them, in which the rights of third parties did not intervene. Here it may well be held, as claimed by the counsel for the appellant, that there was a contractual relation between the defendant, Julia Heimerdinger, and the plaintiffs and the other creditors of Jonas, to whom the letters might be shown, in and by which Julia Heimerdinger agreed that in consideration of plaintiffs extending credit to the defendant Jonas, the $10,000 loan should be allowed to remain in the business, subject to all the exigencies thereof, for the period -of five years. We think, therefore, that the plaintiffs have established a cause of action against the defendant, Julia Heimerdinger, and that they are entitled to a judgment against her, that the amount of their judgment against the defendant, Jonas Heimerdinger, be paid out of the proceeds of the sale of the latter’s goods.

For these reasons we are of opinion that the judgment below should be reversed, and a new trial ordered, with costs to appellant to abide the event.

Van Brunt, P. J., and O’Brien, J., concurred.

Judgment reversed and new trial ordered, with costs to appellants to abide event.


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

text:
    THE SIXTH AVENUE RAILROAD COMPANY, Respondent, v. THE MAYOR, ALDERMEN AND COMMONALTY OF THE CITY OF NEW YORK, Appellant.

      Municipal corporations — an equitable action will not lie to vacate an assessment in New Torh city —the remedies of owners are fixed by the consolidation act.

    In 1860 an assessment upon a street railway company for paving a street through which its cars ran was confirmed. In an action brought by the company against the city of New York, in 1884, to vacate and set aside the assessment, it ivas held that the assessment was duly confirmed and that the company had no cause of action. It was thereafter decided that the rails, ties and tracks of a street surface railroad are not assessable for street improvements. The comptroller of the city of New York,- in 1891, advertised the -property of the street railroad company for sale under said assessment. Thereupon the company brought an action in equity to vacate the assessment and obtained an injunction restraining the sale.

      Meld, that the action could not be maintained, being forbidden by section 897 of chapter 410, Laws of 1882, the consolidation act.
    That section 897 applied to all sorts of assessments, whether void upon their face or not.
    Appeal by the defendant, tlie Mayor, Aldermen and Commonalty of tbe City of New York, from an order of the Supreme Court, -entered in the office of the clerk of the city and county of New York on the 25th day of June, 1891, granting an injunction to restrain the city from selling the railroad of the plaintiff, its property and franchises, for the non-payment of an assessment of $13,108.37, or from taking any proceedings to enforce or collect said assessment during tlie pendency of the action. The railroad was advertised to be sold in March, 1891.
    It appeared, by an affidavit read in opposition to the motion for an injunction, that on or about the 30th day of October, 1884, a suit was begun by the service of a. summons and complaint in another action entitled as above. The previous action was begun to vacate and set aside the same assessment as is involved in this case. An answer was interposed on or about the 12th day of February, 1885. Said action came on for trial on the 27th day of April, 1885, before the Honorable Miles Beach at a Special Term of this court. Findings of fact and conclusions of law were duly filed, and it judgment was entered thereon on the 17th day of June, 1885, whereby it was adjudged, among other things, that the said assessment was duly confirmed, and that the same had not been paid, and that the plaintiff had no cause of action against the defendant, and that the complaint should be dismissed upon the merits, with costs.
    Said judgment was'duly entered on the 17th day of June, 1885, and on that day a copy thereof with notice of entry was duly served on the attorney for the plaintiff. No appeal was taken therefrom.

      William II. Clark, for the appellant.
    B'u/rrill, Zabriskie & Burrill, for the respondent.
   Lawrence, J.:

In its complaint the plaintiff demands judgment that a certain assessment may be adjudged not to be a lien on the railroad of the plaintiff, or any part thereof, and that defendant and its officers and agents, etc., be enjoined and restrained from selling or taking-any proceedings to sell said railroad, or any of its railroad tracks, etc., for the non-payment of said alleged assessment, and from taking any proceedings to enforce or collect the same, and from making any lease of said railroad, or any part thereof, and that the comptroller and collector of assessments and clerk of arrears be restrained and enjoined as aforesaid during the pendency of this action. The preliminary injunction which was granted at the Special Term was subsequently continued after hearing, and from the order entered upon the decision in the plaintiff’s favor this appeal is taken.

Tlie assessment referred to in the moving papers was for the paving of a portion of Sixth avenue, between Carmine street and Forty-second street, which was confirmed as far back as December 21, 1860, and it appears by the affidavit of Mr. Campbell, read in opposition to the motion, that, in a previous action between these parties, in which judgment was rendered on the 17th of June, 1885, it was adjudged, among other things, that the said assessment was duly confirmed, and that the same had not been paid, and that the plaintiff had no cause of action against the defendants, and that the complaint should be dismissed upon the merits, with costs. That action was brought, as appears from the complaint, which forms a part of the answering papers to this motion, for the express purpose of having the assessment above referred to vacated and set aside, and the cloud upon its title removed, and that the assessment be adjudged to be no lien on the plaintiff’s railroad, franchises and interest in the realty. It was long ago held that, where proceedings upon an assessment are void upon their face, the Court of Chancery had no jurisdiction to interfere and set aside the assessment, or to restrain the corporation from proceeding to sell tlie land assessed on the ground that the complainant had a perfect remedy at law. (Van Doren v. The Mayor, 9 Paige Ch., 388; Van Rensselaer v. Kidd, 4 Barb., 17; Heywood v. Buffalo, 14 N. Y., 534; Crooke v. Andrews, 40 id., 547.)

Inasmuch as it has been decided by the court of last resort in the case of the People ex rel. Davidson v. Gilon (126 N. Y., 147), that the rails, ties and tracks of a street surface railroad are not assessable for street improvements, it would appear upon the face of the proceedings that the assessment was void, and that, therefore, under the cases above cited, the plaintiff would be entitled to no relief in equity. The statute in regard to sales for assessments and taxes has been altered since the case of Yan Doren and similar cases were decided, and by section 941 of the consolidation act, which was taken from chapter 381 of the Laws of 1871, it is provided that all leases executed by the comptroller, and witnessed by the clerk of arrears upon a sale for unpaid assessments, “ shall he presumptive evidence that the sale and all proceedings prior thereto, from a/nd i/ncluding the assessments on said lands and tenements, for taxes or assessments, or Groton water rents, and all notices required hij law to he given previous to the expiraUon of the two years allowed to redeem, were regular and according to the provisions of the statute in such cases made and provided?'

As tlie lease is presumptive evidence of the regularity of all the proceedings anterior to the sale, there would he an apparent cloud up>on the plaintiff’s title, and under the authority of the cases of Scott v. Onderdonk (14 N. Y., 9) and Allen v. The City of Buffalo (39 id., 386); Rumsey v. the City of Buffalo (97 id., 114) and similar cases, there would be ordinarily jurisdiction to restrain the sale of the plaintiff’s property under an illegal assessment, and to pirevent the creating of a cloud upon the title. Section 897 of the consolidation act (chap. 410 of 1882), however, expressly provides that: “No suit or action in the nature of a bill in equity or otherwise shall be commenced for the vacation of any assessment in said city, or to remove a cloud upon title, but owners of property shall be confined to their remedies in such cases to the proceedings under this title.” This provision was held in Mayer v. The Mayor, etc., of the City of New York (101 N. Y., 284), to be unqualified and to apopfiy to every class of assessments. By that section, therefore, the power of this court to grant injunctions in cases of this character was absolutely taken away; and although the pffaintiff may, on its papers, make out a case which in the absence of that section would entitle it to relief, we are of opfinioir that the plain provisions of the consolidation act require us to hold that this action cannot be maintained.

We regret to be obliged to reach this conclusion, because it is apparent that the assessment in question was illegal and void, and it seems to be a hardship that the plaintiff should be compelled to submit to a sale of its premises, and of the creation of an apoparent cloud upon its title, and to be obliged to assume the burden if proceedings should be taken, under the lease to oust it of its property, to show the invalidity or illegality of the assessment. Such, howevei’, seems to be the only course left open to it. (See Matter of Smith, 99 N. Y., 424, 427; Chase v. Chase, 95 id., 373; Matter of Brainerd, 51 Hun, 380, 384, 385.) The defendant, however, relies upon the judgment which was obtained in the former action as a bar to this action. That point it is unnecessary to discuss, if the views above expressed are sound.

We are, therefore, of the opinion that the order appealed from should be reversed, with costs and disbursements to the appellant.

Van Brunt, P. J.:

I do not think that the statute making the lease presumptive evidence of certain facts in any respect alters the position of the plaintiff from what it would have been had the statute not been passed.

The lease is presumptive evidence of the regularity of the proceedings, but it is not evidence that the property therein described is liable to taxation, it appearing upon its face that it is not. If, therefore, the property of the plaintiffs is not liable to assessment, it appears upon the face of proceedings; and if lease executed, upon face of lease, therefore, and lease would be no cloud. I think that the injunction should be vacated.

O’Brien, J.:

For the reason that an action of this nature is forbidden by section 897 of the consolidation act, I concur in result.

Order reversed, with costs and disbursements to the appellant.


text:
    THE HANOVER FIRE INSURANCE COMPANY, Respondent, v. THE GERMANIA FIRE INSURANCE COMPANY, Appellant.

      Metra allowance — when, the “subject-matter involved” affords no basis therefor— injunction — an appeal from a judgment without exception brings up the question.

    In an action between two insurance companies the complaint alleged that the plaintiff and the defendant entered into an agreement to form an underwriter’s agency tobe managed by one Stoddard, and which was to be wound up in a manner ih said agreement provided for; that the agency had terminated, but that the defendant obstructed Stoddard in his duties of closing- the matter; it demanded judgment of specific performance, and an injunction restraining the defendant from interfering with the actions of Stoddard, but demanded no money judgment.
    A temporary injunction was made permanent upon the trial, no money judgment was ordered, and an extra allowance was granted.

      Meld, that there was no basis for the granting an extra allowance, and no power to grant it.

      That neither a statement in the complaint that the business of the agency was large and profitable, nor an allegation in the answer that the agency was worth $50,000, established the existence of such a basis.
    That the fact that the allowance was inserted in the findings, and that no specific exceptions were taken to the findings, did not prevent the appellate court from reviewing the matter.
    That the question was one of power, and that an appeal from the judgment brought up, on the face of the record, that question for decision.
    Appeal by tlie defendant, the Germania Fire Insurance Company, from so much of a judgment of the Supreme Court, entered in the office of the clerk of the city and county of New York on the 9th day of October, 1891, as adjudged that plaintiff should have an extra allowance of $2,000, or costs, amounting to $2,172.15, including an extra allowance of $2,000.

      Ernest Hall, for the appellant.

      George W. Gotterill, for the respondent.
   Lawrence, J.:

This is an appeal by the defendant, the Germania Fire Insurance Company, from so much or such part of the judgment, entered in favor of the plaintiff against the defendant, as grants to said plaintiff an allowance of two thousand dollars ($2,000), in addition to costs.

The complaint sets forth that the plaintiff and defendant companies entered into an agreement whereby they formed the Underwriters’ Agency, to be carried on under the management of the defendant Alexander Stoddard, of which the defendant Kaki was .appointed treasurer, and which agreement terminated, by its terms, on the 31st of December, 1883, and by the terms of which agreement the business of the agency was to be wound up upon the termination of the contract, under the direction and management of the general agent, unless both of the contracting parties objected to his so acting; that the defendant Alexander Stoddard is 'the only person who can be procured for the purpose of winding up that business, without great detriment to the interest of the parties, that, notwithstanding said agreement, the defendant company has hindered, obstructed and continues to hinder and obstruct the said Stoddard in closing up the said business, and demands judgment that the defendant company specifically perform said agreement and be enjoined and restrained from, in any manner, preventing or interfering with the closing np, by said Stoddard, of the. business of said agency, or with the assets, money, property, matters, or any of them, pertaining to the liquidation or closing up of said business, and from appointing or continuing or otherwise placing any other person other than-the said Stoddard to act in and about the liquidation, settling up or closing up of the said business; and that the said John E. Kahl be required, by the mandate or order of this court, to obey, honor and recognize all the acts of said Stoddard in and about the closing up of the said business, and that he be restrained from preventing and obstructing .the closing up of the same; and that plaintiff have such other and further relief as to the court may seem just and equitable, together with the costs of the action.

The answer of the defendant, while admitting the making of the agreement set forth in the complaint and the employment of Stoddard as general agent, denies any violation of the agreement on their part, and sets up as a separate defense that the general agent, during the continuance of the Underwriters’ Agency, composed of the plaintiff and defendant companies, and in violation of his agreement with them, undertook the formation of another underwriters’ agency of the same character, and to do business in the same territory as the said former agency, between the Hanover and Citizens’ companies, to the exclusion of the defendant company, and for that purpose made use of the name, agents, facilities, e.tc., of said agency; .and alleges that, by reason of said act, the said Stoddard was not a fair, impartial and fit person to .be entrusted with the management .and winding up of the affairs of said" agency. The answer demands judgment that the complaint may be dismissed and that said Stoddard may be declared to have violated his agreement, and be enjoined from interfering with the property or affairs of said Underwriters’ Agency; and that he and the plaintiff be enjoined from using the name of the New York Underwriters’ Agency in conjunction with any one excepting the defendant company. An injunction during the pendency of the action was granted, upon motion by the plaintiff, which, upon appeal, was affirmed by the General Term of this court, and upon the trial it was determined that the plaintiff was entitled to the injunction demanded in the complaint.

It will be observed that in the complaint no pecuniary judgment is demanded against the defendants or either of them. There is an allegation in the fifth paragraph of the complaint that the business carried on under the agreement became large and profitable, and there is an affirmative allegation in the thirteenth paragraph of the-defendant’s answer that the name of the New York Underwriters’ Agency possessed and possesses a pecuniary value of at least $50,000..

As was before stated, the Special Term, in rendering judgment, determined that the plaintiff was entitled simply to an injunction giving no pecuniary judgment, but it awarded to the plaintiff, in addition to the costs, an extra allowance of two thousand dollars. ($2,000), and from that provision in the judgment the defendant, The Germania' Fire Insurance Company, lias appealed.

It has frequently been determined that where no sum of money is claimed in the pleadings or allowed to the plaintiff, there is nothing upon which an extra allowance can be based, and that the court has no power to grant it.

In Conaughty v. The Saratoga County Bank (92 N. Y., 401) it was held that the provisions of the Code of Civil Procedure, section 3253, in reference to extra allowances, simply authorizes such an allowance in an action wherein rights of property are involved, and a pecuniary value may be predicated of the subject-matter ; the importance of the litigation in any other than in its pecuniary aspect affords no basis for the allowance, and when no money judgment is asked or rendered and the subject-matter involved is not capable of a money value, or the value is not shown, the allowance is not authorized. The term subject-matter involved,” refers simply to property or other valuable things, possession, ownership or title to which is to be determined by the action. It does not include other property, although it may be directly or remotely affected by the result.

In this case no evidence whatever was given upon the trial as to the pecuniary value of the name the “New York Underwriters’ Agency,” and no pecuniary judgment was rendered in favor of the plaintiff and against the defendant. The case, therefore, seems to come within the decision in Conaughty v. The Saratoga County Bank (supra), and numerous cases cited in the opinion of the court in that case. It is said, however, by the respondent’s counsel in his points, that as the allowance and the costs were inserted in the findings of the learned justice, and as no specific exception was taken to the findings in which such allowance was contained, and the appeal being simply from that part of the judgment which awards the allowance, this court has no power to review the determination of the court below in respect thereto. We cannot accede to this view. The cases relied upon by the counsel for the respondent are not cases, as we understand them, in which the court did not possess the power to make the determination appealed from. They were cases which arose either upon'an erroneous reception or rejection of evidence on the trial, or in which the question determined was one within the discretion of the court, in which case the determination could not be reviewed without an appropriate exception. Here,. if the views above expressed are correct, the court had no power, under the provisions of the Code, to grant any allowance whatever, and there was no basis whatever upon which it could be determined, even if thé court had the power to grant an allowance, whether it exceeded the limitation prescribed by the Code. The case of Murray v. Church (1 Hun, 49, 51), relied upon by the respondent’s counsel, was a case where the allowance was within the discretion of the court, and in that case the court held that there was in the case nothing showing that the discretion of the court was improperly exercised; but if there were anything of that nature in the case, it would not aid the appeal, because no exception was taken and presented for consideration. That case was different from the case at bar, because, as already stated here, the question is one of power, and an appeal from the judgment brings up a question which this court has the right to examine into and review.

The case of Munro v. Smith (23 Abb. N. C., 276), is not in conflict with these views, inasmuch as there it appeared by the plaintiff’s affidavit, which was uncontradicted, that he had spent fifty thousand dollars ($50,000) in advertising articles on which he used the trademark, and that the right to the exclusive use of the trade-mark belonged to him.

Mr. Justice Brady, delivering the opinion of the court in that case, distinguishes it from the case of Coates v. Goddard (34 Super. Ct. [J. & S.], 118), on the ground that, in the latter case plaintiff had not recovered any judgment, but one directing a perpetual injunction. The same distinction exists in the case before us.

For these reasons, we are of the opinion that so much of the judgment below as awarded an allowance of $2,000 to the plaintiff should be reversed, with costs and disbursements.

Van Brunt, P. J., and O’Brien, J., concurred.

So much of judgment as awarded an allowance of $2,000 to the plaintiff reversed', with costs and disbursements. ■


author: Patterson, J.:

text:
    In the Matter of the Petition of PAUL GANTERT, a Creditor, to Compel the Sale of Real Estate of WILLIAM A. JUCH, Deceased.

      Will — a power of sale to pay debts — where it exists a creditor cannot proceed under the Oode, section 2749.
    It is provided by section 2749 of the Code of Civil Procedure that the real properly of a decedent may be disposed of to pay his debts, except where it is devised expressly charged with their payment.
    The will of a testator directed his executors to pay his debts, and gave them in a subsequent clause a full and general power of sale.

      Held, that such a power, not limited to any .particular purpose, would be deemed to include a power to sell for the purpose of paying debts.
    That where such a power existed the proceeding authorized by section 2749 of the • Code of Civil Procedure could not be maintained.
    Appeal by Paul Gantert, a creditor of William A. Juch, deceased, from an order of the Surrogate’s Court of the county of New York, entered in that office on the 9th day of November, 1891, sustaining exceptions to a referee’s report filed herein, overruling the report of the referee and dismissing this proceeding to compel the sale of the real estate of William A. Juch, deceased.
    The will of William A. Juch was as follows:

      Fvrst. I order and direct my executors and trustees hereinafter mentioned to pay all my just debts and funeral expenses as soon after my decease as may be convenient.

      Second. I give, devise and bequeath unto my said executors and trustees all my estate, real, personal or mixed, of every name and nature whatsoever, and to which I now am or may hereafter be entitled to either in law or equity in and upon the following trusts, nevertheless, to wit: * *

      Lastly. I hereby nominate and appoint my beloved wife, Wilhelmine Jucli, my friend, Isaac E. Valentine, and my beloved son, William A. Jucli, Jr., the executrix, executors and trustees of this my last will and testament, giving and granting unto my said executors and trustees full power and authority to sell and convey any and all my real estate, either at private sale or public auction, and to make, execute and deliver good and sufficient conveyances therefor I further authorize and empower them, or the survivor or survivors of them, to borrow or raise any sum or sums of money on bond and mortgage on any and all my real property that may be needed to pay off existing mortgages, and to reduce the' principal sum of any and all mortgages on any of my real property by increasing the mortgage or mortgages on other pieces or parcels of my real estate; or whenever it may be for the best interest and advantage to my estate to make any changes in the amounts of the mortgage liens on my property, to make and enter into any and all leases for a term of years and less for any and all my real property; to make all necessary repairs; to alter any building or buildings erected or in the course of erection of. any and all my real property, and finish to completion any house or houses that I may erect on any of my property which shall be unfinished at the time of my decease; also to make such improvements on any of my vacant property by the erection of buildings thereon as they may deem for the best interests of my estate.
    It is my wish and will that neither of my executors and trustees shall be required to furnish and file any bond or other security before entering upon the performance of their respective duties as such executors and trustees.
    In witness whereof I have hereunto set my hand and seal this twenty-eighth day of November, eighteen hundred and eighty-seven.
    (Signed.) WILLIAM A. JTICIÍ.

      A. O. Thomas, for the petitioner, appellant.

      Thomas Allison, for the executors, respondents.
   Patterson, J.:

The appellant presented a petition to the surrogate asking that an order be made directing the sale of his deceased debtor’s real estate to pay his debt. The surrogate sent it to a referee to take proof, and report with his opinion. The application was made under sections 2749 et seq. of the Code of Civil Procedure, which provide, in substance, that such an order as was asked for may be granted, except where the real estate devised is expressly charged with the payment of debts. The debtor left a will which was duly admitted to probate, and in that will he directed his executors to pay all his just debts and funeral expenses, and he gave his executors a power of sale of his realty in the following words: “ Giving and granting to my said executors and trustees full power and authority to sell and convey any and all my real estate, either at private sale or public auction,” etc. Tie created, by his will, certain trusts, which we will assume, for the purposes of this matter, to be invalid (but do not so determine). The referee was -of the opinion that the application should be granted, but the surrogate determined that the power of sale was sufficient to authorize the executors to sell the realty for the payment of debts, and, therefore, it was not necessary to resort to the proceeding instituted in his court by the creditor.

It is not controverted that if this ruling of the surrogate is correct the land should not be sold in the manner or by the proceeding instituted by the creditor, and the single question, therefore, is as to the true interpretation of the power of sale. Is it to be exercised solely in connection with the trusts created by the will, or is it broad enough to confer a power to convert the realty into personalty for the payment of debts ? If it is to be exercised only for specific purposes, the reasonable and necessary interpretation would be to restrict its exercise for those purposes, but if it is for all the purposes of the will, that is, to pay debts and funeral expenses as well as for other purposes; there can be no limitation imposed upon it. This requires • an examination. and analysis of the whole will, and making it we can find nothing which limits the power *of sale to any specific object. It was conferred in order that the donees of the power might carry out the purposes of the will, one of which was the payment of debts. The payment of such debts under the scheme of the will was just as much one of the objects of the testator, comprised within the power of sale, as any other. It is a general power of sale to complete and carry out the intention of the testator; and it is unnecessary to inquire whether an equitable conversion was operated, ipso facto, by conferring the power. The real question in the case is as to the extent of the power of sale and the purposes for which it may be lawfully exercised, and we agree with the learned surrogate that “ the power of sale is unlimited and unrestricted to any particular purpose, and is broad enough to include a power for the payment of debts,” and that there being a valid power of sale for that purpose the proceeding should not be maintained. The decree of the surrogate is affirmed, with costs.

Van Brunt, P. J., and O’Brien, J., concurred.

Decree affirmed, with costs.