author: Millee, J.

text:
    Samuel Baron, Respondent, v. Aaron Brummer et al., Appellants.
    (Argued October 7, 1885 ;
    decided November 24, 1885.)
    A policy of insurance for the benefit of a wife upon the life of her husband- is not assignable except in the cases where assignments are authorized by statute, and an assignment thereof by her cannot be compelled by a decree of the court, nor can the avails thereof be appropriated in advance by operation of law to the payment of debts, or subjected to the lien of creditors either of herself or her husband.
    As to whether after the policy has fallen due and the avails thereof have been paid over to the wife and invested in other property, this may be reached by her creditors, quwre.

    The act of 1879 (Chap. 348, Laws of 1879), which authorizes a wife to assign the policy with the assent of her husband, does not affect her right to an exemption thereof from any claim of her creditors.
    Under the provision of the acts, amending the act of 1840 (Chap. 80, Laws of 1840), which limit the exemption contained in the original act, of such policies, from claims of the husband's creditors, by declaring that where the amount of the premium annually paid out of the funds or property of the husband exceeds a sum specified, the exemption shall not apply to such portions of the premium as are in excess of the sum specified (Chap. 187, Laws of 1858; chap. 656, Laws of 1866; chap. 377, Laws of 1870), where the premiums so paid, after the contracting of a debt by the husband, do not exceed the sum limited, the creditor can acquire no lien, although prior to the contracting of the debt premiums were so paid in excess of that sum.
    Appeal from judgment of the General Term of the Supreme Court, in the first judicial department, entered upon an order made June 1, 1883, which affirmed a judgment in favor of plaintiff, entered upon a decision of the court on trial at Special Term.
    The nature of the action and the material facts are stated in the opinion.

      Alex. Blumenstiel for appellants.
    The policy was unassignable. (Brummer v. Cohn, 86 N. Y. 11; 57 How. 386.) It could not be levied upon in a creditor’s suit. (Code, 1411, 1412; 2 R. S. 273, §§ 38, 39; Campbell v. Foster,
      35 N. Y. 366, 370; Graff v. Bonnett, 31 id. 9; 35 id. 371; Hains v. Van Voorhis, 15 Abb. [N. S.] 79.) The argument that this policy is to be governed by the law as it stood when it was taken ont is fallacious. (Stockey v. Hunt, 3 Denio, 274; Sullivan v. Brewster, 1 E. D. Smith, 681; Miller v. Moore, id. 739; McLaren v. Penneyton, 1 Paige, 102; Butler v. Palmer, 1 Hill, 324; Dikeman v. Dikeman, 11 Paige, 484.) A statute modifying the exemption laws, life statutes changing the practice in suits, affects the remedy only and not the contract. (Hone v. Gould, 11 N. Y. 381; 4 Wheat. 122, 200; 12 id. 370; 9 Peters, 328; 2 Kent, 397; 2 Story on Cont. 251, 268; Waltmore v. Westover, 14 N. Y. 16; Smilie v. Quinn, Week. Dig., Dec. 30, 1881; 25 Hun, 332.)

      Julien T. Davies for respondent.
    If a receiver is appointed in this proceeding, he will become vested with the defendant’s title to this policy, without assignment on her part, merely in virtue of his nomination by the court. (Swartout v. Swartout, 5 Redf. 497; Lederer v. Ehrenfeld, 49 How. Pr. 403; Smiley v. Quinn, 90 N. Y. 492; 25 Hun, 332.) The judgment of this plaintiff to which it is sought to apply this policy, being a joint one against both of these defendants, a court of equity will compel the application of this property to this joint debt. (Revisers’ notes, 5 R. S. [2 Edm. ed.] 585.) The act of 1879 destroys the exemption of this policy as against creditors having a joint judgment, against both husband and wife. It affects the remedy and not the debt. (Morse v. Gould, 11 N. Y. 281.) The provision of the law is retroactive in express terms, and is constitutional as it affects the remedy and not the debt. (Morse v. Gould, 11 N. Y. 281.) As to the husband’s creditors the policy in suit is an ordinary life insurance policy, and subject to the claims of those creditors. (Charter Oak Ins. Go. v. Brunett, 47 Mo. 419.) Even if this policy is a statutory policy and as such cannot be subjected as a whole to the claim of this plaintiff, the sum paid in excess of the statutory premium of §300 per annum is liable for plaintiff’s judgment. (Laws of 1840, chap. 80 ; Laws of 1866, chap. 277; Laws of 1870, chap. 227; Fern v. Ward, 65 Ala. 33.)
   Millee, J.

This action is in the nature of a creditor’s bill brought by the plaintiff for the purpose of charging a policy of insurance, taken out in favor of the defendant Peane Brnmmer, the wife of defendant Aaron Brummer, upon his life, with the payment of a judgment recovered by plaintiff against said defendants. The policy was issued on the 12th of May, 1868,- and was payable on the 12th of May, 1883, or sooner if the husband should die in the mean time.

It was proved on the trial that there had been paid in premiums on the policy the aggregate sum of $5,896.97, which the court found was paid by defendant Aaron Brummer out of his funds and property. It also appeared and was found, that $357.40 was paid by defendant Joseph Herzfeld at the request of Peane Brummer. There was also a finding by the court to the effect that there was paid on said policy in excess of $500 in each year, the sum. of $1,338.60. It appeared, however, that no premium in excess of that sum was paid by the husband after the contracting of plaintiff’s debt. . The court also found as conclusions of law that the policy was assignable, and that the plaintiff had a lien upon the same, and directed that a receiver be appointed and that the defendants, Aaron and Peane Brummer, assign the policy to the receiver. Exceptions were taken to various rulings of the court upon the trial, and the defendants, Aaron and Peane Brummer, appealed to the General Term of -the Supreme Court, where the judgment was affirmed and an appeal was taken to this court.

In order to obtain the moneys arising from the policy it must be assigned by the defendants or by operation of the decree appointing the receiver and directing the assignment.

The current of authorities has been uniform in favor of the position that policies of this character are not assignable (Eadie v. Slimmon, 26 N. Y. 10 ; Barry v. Equitable Life A. Co., 59 id. 594; Barry v. Brune, 71 id. 262; Wilson v. Lawrenee, 76 id. 585; Brummer v. Cohn, 86 id. 11.) In Brummer v. Cohn (supra), an action was brought by the plaintiff to set aside an assignment of this identical policy, and it was held that it was not assignable save in the cases where assignments are authorized by statute.

Under that decision, this policy was not the subject of assignment by Mrs. Brummer, and such being the case it is very clear that the court could not by decree compel her to assign what has been determined in this court to be unassignable,, or by operation of law appropriate the avails of the policy the same as if it had been assigned for the payment of the debt of the assignor.

There is no force in the position that this policy is a chose in action as to creditors and can be reached by the appointment of a receiver in proceedings for that purpose. The law of 1840 (Chap. 80) exempts policies of insurance on the life of the husband for the benefit of the wife from the claims of the representatives of the husband or of any of his creditors, except where the amount of premium paid exceeded a certain sum per annum, and this provision was followed subsequently by amendments of a kindred character which established a settled policy of the legislature to relieve life insurance policies in certain cases from the payment of the debts of creditors. Under these various provisions it was the intention of the legislature, as settled and determined by the courts in the cases already cited, that such policies should not be subjected to the lien of creditors either of the husband or the wife; as to the former by the express words of the statute, and as to the latter by the determination of the courts, and there is no ground for claiming that either the policy or the proceeds which might arise from the same before such payment is made, are subject to be reached in advance by a creditor, or that the policy can be assigned and held by the decree of a court of equity for the benefit of creditors, until it becomes due and payable.

The question whether after the money has been paid and the avails invested in other property, which could be so reached, is not now presented. Whether it could be thus appropriated can have no effect upon the determination of the question now before us. The rights of the parties as they now exist are the subject of consideration, and not any changed condition which may arise in the future.

' The fact that the judgment is against both, husband and wife, does not affect the question arising as to the rights of the wife, nor are they changed because she has no children. The statute makes no exception which has in view any special change of circumstances, and it must be held to apply generally in all cases. The act of 1879 (Chap. 248), which authorizes the wife to assign the policy with the consent in writing of the husband, can have no effect upon the exemption because the judgment is against both the husband and wife. If has no application where there has been no assignment with the consent of the husband.

It is insisted by the respondent’s counsel that the amount of the premiums paid upon this policy forbids that it be regarded, as against the plaintiff, as issued under the act of 1840, and the amendments thereof, and reliance is placed upon the provisions of chapter 187, Laws of 1858, as amended by chapter 656 of the Laws of 1866, amending the act of 1840, which provides that the sum insured in the case of a policy taken out under the statute shall be applied to the use of the widow free from the claim of a representative of the husband or any of his creditors, but that such exemption shall not apply where the amount of premium annually paid out of the funds or property of the husband shall exceed $300, and on the subsequent statute (Chap. 277, Laws of 1870) by which the limit of the premium is increased to $500, and it is provided that the exemption shall not apply to so much of the premiums paid in any one year as shall be in excess of $500. These provisions together will not bear the construction contended for. The effect of the act of 1870 was that-the policy was to be exempted from creditors, or from any person claiming under the holder, unless the amount of annual premium exceeded the sum of $500, and where the amount paid out of the funds or property of the husband was over $500, the lien of the creditor might attach to the excess of premium so paid. Beyond this no lien or claim could exist in favor of creditors, and no action coaid be maintained for the purpose of reaching any portion of the amount insured.

Although the policy was taken out in 1868, yet the debt of the plaintiff was contracted in 1876. As the law stood at that time, the payment of the premium in each year constituted a ndw contract. The statutes which relate to the subject, and which amend the original act, are mere enabling laws and relate only to the remedy. They are, therefore, constitutional and valid, so far as they affect the obligation of the contract-

The claim of the plaintiff that he is entitled to any excess for annual premiums paid over $300, or of any other amount, is not well .supported. As we have seen by the act of 1870, the excess on which the creditor may obtain a lien must be over $500, and as the debt was contracted in 1876, and no excess over $500 annually was paid after that period, no claim is established by the plaintiff on account thereof.

There is another ground which interferes with the right of. the plaintiff to enforce his lien as to the excess of premium paid annually over $500. There was no proof to show that any of the premiums were paid by the husband. The only proof on the subject is the introduction on the trial of the statement of the insurance company showing the amount of premiums paid in cash on account of the policy. It does not appear that any of these were paid by the husband, and the finding of the court that the premiums were paid by the defendant, Aaron Brummer, out of his funds and property, is without sufficient evidence to support it. To this finding a proper exception was taken.

As the evidence stood we think the court erred in denying the motion of the defendant’s counsel to dismiss the complaint.

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

All concur.

Judgment reversed.


source: Caselaw Access Project

author: Finch, J.

license: Public Domain

text:
    Caroline A. Stewart, Appellant, v. George Crysler et al., Respondents.
    (Argued October 7, 1885 ;
    decided November 24, 1885.)
    Where lands of a non-resident of the county are occupied by a resident of the town wherein they are situated, they must be assessed to the occupant; they may not lawfully be assessed either to the owner or as non-resident lands, and such an assessment is void. (1 r. S. 389, §§ 3, 3, as amended by chap. 176, Laws of 1851, and by chap. 153, Laws of 1878.)
    By the charter of the city of Syracuse (Chap. 500, Laws of 1868), it is provided that the assessors shall perform all the duties and possess all the powers of assessors in the different towns of the State. By the act in reference to the assessment and collection of taxes in the county of Onondaga (§ 10, chap. 858, Laws of 1867), the county treasurer’s deed for land sold for unpaid taxes is made presumptive evidence that all proceedings prior to the sale were regular. Lands of plaintiff in said city were valued against him by name and as owner, in that part of an assessment-roll devoted to non-resident lands. Plaihtiff was a non-resident of the county, and the lands were occupied by a resident of the city. The lands were sold by the county treasurer for non-payment of the tax, and a deed thereof executed by him to defendants, the purchasers, which deed was duly recorded. In an action to set a'side the deed as a cloud on plaintiff’s title, held, that the assessment and sale were illegal and void, and the deed invalid; but that as the deed was prima faeie evidence of the regularity of the proceedings, the action was maintainable; also, that it was no defense that the time of redemption had not expired, and plaintiff might have redeemed, or that under the general act (Chap. 437, Laws of 1855), notice to the occupant to redeem, and the record of the official certificate of non-redemption are essential to the validity of the deed ; that she was not bound to redeem from a void assessment, and conceding the general act to be applicable in Onondaga county, still as the burden was imposed upon the owner of showing the invalidity of the deed, there was a cloud upon his title.

      Jackson v. Esty (7 Wend. 148); Bush v. Davison (16 id. 550); Lucas v. McEnerna (19 Hun, 14), distinguished.
    Appeal from judgment of the General Term of the Supreme Court, in the fourth judicial department, entered upon an order made April 14, 1883, which affirmed a judgment in favor of defendants, entered upon a decision of the court on trial at Special Term.

      This action was brought to set aside, as a cloud on plaintiffs title, a tax deed of the county treasurer of the county of Onondaga to defendants of certain lands situate in the city of Syracuse.
    The material facts are stated in the opinion.

      John P. Hunt for appellant.
    The assessment made of plaintiffs lands is void. (2 Laws of 1868, 1034; 1 R. S. [6th ed.], 934, §§ 2, 3; id. 936, §§ 11,12,13 ; Hilton v. Fonda, 86 N. Y. 347; 1 R. S. [Banks’ 6th ed.] 958, § 49; Whitney v. Thomas, 23 N. Y. 283; Newman v. Supervisors, 45 id. 679; N. Y. & H. R. R. Co. v. Lyon, 16 Barb. 651.) The statute was not complied with as to the notice of hearing of objections, it being only published on seven days. (2 Laws of 1868,1038; Bunce v. Reed, 16 Barb. 347; Howard v. Hatch, 29 id. 297.) The non-publication of notice to redeem invalidated defendants’ tax deed. (Thompson v. Burhans, 61 N. Y. 53; Hilton v. Bender, 69 id. 81.) The State laws being made a part of the Onondaga act are applicable. (People v. Smith, 69 N. Y. 175; Whitney v. Thomas, 23 id. 283; Clark v. Davenport, 95 id. 482; 98 id. .127; Crook v. Andrews, 40 id. 547; Scott v. Onderdonk, 14 id. 9; Boyle v. City of Brooklyn, 71 id. 5; Rumsey v. City of Buffalo, 97 id. 114.)

      Homer Weston for respondents.
    A void deed is not a cloud, and there can be no action in equity to remove it. (Cox v. Clift, 2 N. Y. 118.) It not appearing upon the face of the deed that notice to redeem.was published, and the proof of service upon the occupants not being recorded therewith, the deed would be open to these objections in any proceedings the defendants might take to obtain possession of the property; and such would be the rule even in summary proceedings. (People v. Howlett, 76 N. Y. 574.) Where a defect would be developed in the proceedings to acquire possession, equity will not sustain an action to remove the deed as a cloud. (Clark v. Davenport, 95 N. Y. 477; Guest v. City of Brooklyn, 69 id. 506.) The failúre of the tax-title owner to produce the treasurer’s certificate that the occupant had not redeemed pursuant to notice would prevent recovery. Laws of 1885, chap. 427, § 73; Stewart v. Crysler, 21 Hun, 287.) When this action was commenced, the two years allowed the purchaser to serve the occupant with notice had not expired, hence the deed was inoperative as a conveyance, passing no title, and not sufficiently perfected to be a cloud. (Laws of 1855, chap. 427, § 68; Comstock v. Beardsley, 15 Wend. 348; Bush v. Davison, 16 id. 550; Sanders v. Yonkers, 63 N. Y. 489.) The deed is not evidence of the proceedings subsequent thereto. (Laws of 1867, chap. 858, § 10.) Notwithstanding the deed, the plaintiff’s right of redemption was perfect under the statute, and the treasurer’s receipt proof thereof in any proceeding to acquire possession. (Laws of 1855, chap. 427, §§ 74, 75.) The defect specifically alleged in the complaint, failure to publish the redemption notice, and the alleged defect proved under the general allegation, failure to serve the occupant’s notice, misdescription in the Courier, assessment to. owners by name, assessors’ published notice of revision, the return of the city to the county treasurer, are not defects outside of the record of the proceeding in the sale of the property for non-payment of the tax requiring proof by extrinsic evidence. (Blackw. Tax Titles [1st ed.], 598; Hilton v. Bender, 69 N.Y. 75.) Plaintiff’s proof and theory of this case disclose for her an adequate remedy at law, and her right of redemption was still perfect, and hence she had no occasion to come into court for relief, and the complaint was properly dismissed. (Laws of 1855, chap. 427, §§ 68, 74.) There being a provision in the act of 1867 on the subject of redemption, the general law requiring publication of notice does not apply, but it is abrogated by the later statute, with repealing clause. (People v. City of Brooklyn, 69 N. Y. 605 ; People v. Smith, id. 177.) The fact that the legislature made selections from sections 22 to 83 of such parts of the general law as fit into and fill out a complete system for Onondaga county shows considerate provision in detail, and the intentional omission of section 61 on the part of the' legislature. (Excelsior Petroleum Co. v. Lacy, 63 N. Y. 425.) The legislature did not intend that a six-months’ notice should be given to the occupant, or that the evidence of the service of such notice be recorded with the deed. The requirements of section 68 are clearly inconsistent with the Onondaga system. (69 N. Y. 177, 605.) The putting of the land in the non-resident part of the roll and assessing it against the owners by name is in accordance with the Revised Statutes, the land being occupied by a person other than the owner. (Banks’ Stat. [6th ed.] 934, §2; Van Rensselaer v Cottrell, 7 Barb. 127; Johnson v. Learn, 30 Barb. 616.) The assessment is in exact compliance with the requirements of the Syracuse charter. (2 Laws of 1868, 1033, chap. 500, §22.) The system of Onondaga county makes no distinction in the collection of taxes between residents and non-residents, and for non-payment the lands of each are sold at the same time. (2 Laws of 1868, 1033, chap. 500, § 19.) The sum assessed becomes a lien on the real estate when the roll is filed with the city clerk, and is first collectible out of goods or chattels in Syracuse or Onondaga county. (2 Laws of 1868, 1037, chap. 500, § 2.) Under the statute no error in the name of the owner or occupant invalidates the assessment. (Odell v. Odell, 21 Weekly Dig. 90.) The fact that the notices for correction of errors were published as prescribed by statute. (Anonymous, 2 Hill, 375, note b.) Without the word “ successive,” or of like meaning, in connection with “day” the legislature intended a reasonable notice should be given for objections or correction of errors; and in any view it was a substantial compliance with the statute. (Coleman v. Shattuck, 62 N. Y. 364; Watkins v. Inge, 24 Kans. 616 ; State v. N.B. M. Co., 15 Nev. 388.) Plaintiff was not misled, for she knew the tax was not paid. ( Wehle v. Conner, 69 N. Y. 552 ; Watkins v. Inge, 24 Kans. 616.) The whole provision as to re-assessment is simply a direction to the assessors; and the manner and time are largely within their discretion. (People v. Allen, 6 Wend. 486, Parrish v. Golden, 35 N. Y. 462; Alcott v. Robinson,
      21 id. 154.) The city treasurer and tax receiver is not required to make a certified return to the county treasurer. (2 Laws of 1868, 1039, § 3.) The return is simply for the convenience of the treasurers in settling their accounts, and hence the form or manner thereof is not material. (2 Laws of 1868, 1038-39, chap. 500, § 3; Bradley v. Wood, 58 N. Y. 401.) The Courier publication was not erroneous so as to mislead. It was covered by the section 34 of the General Laws; under the special law it was covered by the deed. (Stewart v. Crysler, 21 Hun, 287.) Upon the whole case, in view of the evidence and the allegations of the complaint, plaintiff was not entitled to recover. (Lehman v. Robert, 86 N. Y. 239; Globe Mut. Life Ins. Co. v. Reals, 79 id. 202.) Where the tax is rightly and justly laid under the existing laws, equity will not remove its lien without payment. (Heywood v. Buffalo, 14 N. Y. 542.) Weighing the whole evidence in the scale of substantial compliance with the statutes, the plaintiff has not been harmed by the so-called irregularities, and the trial court was right in dismissing the complaint. -(Sharpleigh v. Surdam, 1 Flipp. Cir. Ct. 486; De Treville v. Smalls, 98 U. S. 525; Kelly v. Sanders, 99 id. 441; Hubbard v. Windsor, 15 Mich. 146 ; Gow v. Tidrick, 48 Iowa, 284; Coleman v. Shattuck, 62 N. Y. 348.)
   Finch, J.

The duty of assessors in subjecting real estate to taxation is prescribed by the statute, which carefully bounds, and restricts their jurisdiction. (2 R. S. [7th ed.] 989, §§ 1, 2, 3.) Before the amendment of 1878 (Chap. 152), the proper construction of the enactment had been determined in this court. (Buff. & State Line R. R. Go. v. Supervisors of Erie Co., 48 N. Y. 101.) It was ruled that when the owner and occupant both reside in the town where the land is situated it may be assessed to either ; where the owner does not reside in the town but there is an occupant who does, it must be assessed to the occupant; and when neither of them reside in the town, it must be assessed as non-resident land. The statute as amended passed under- our review in Hilton v. Fonda (86 N. Y. 346). The result of that review was stated to he “ that the assessors of a town have no power by law to assess lands, though lying in their town, to one who is not a resident of that town or of their countynor does the jurisdiction of the assessors to value the lands for the purpose of a tax draw to them “such further or other power as that an unlawful act of assessing them to a person, who, though the owner, was not a resident of the town or county, nor an actual occupant of the lands, can be excused as an erroneous exercise of power.” Such is the rule under the general statute. The county of Onondaga has a tax system in many respects peculiar to itself and differing in numerous details from that prescribed for the State at large. (2 Laws of 1867, p. 2156, chap. 858.) But the changes begin at that point in the ordinary process where the work of the assessors is ended, and the tax-rolls have been delivered to the collector. By the terms of section 12 the general laws of the State in relation to the assessment and collection of taxes are made applicable where the Onondaga act makes no specific provision. And in the charter of the city, of Syracuse as amended, (2 Laws of 1868, 1034), it is provided as to assessors that they shall perform all the duties, and possess all the powers conferred upon assessors in the different towns of the State, and be subject to all their obligations. So that, in determining the fundamental question in this case, whether the assessment sought to be canceled is valid or void, we must be governed by the general law applicable to the State at large.

It is proven in this case that the plaintiff is the owner of' the land assessed, and is a non-resident of the State; that the land was actually occupied by one Savage, .who resided in the town, using the lot in question for the storage of lumber. It follows that the sole jurisdiction of the assessors was to value the land against the resident occupant and so initiate a charge upon him personally. They had no jurisdiction to value the lands as against the owner, since he was a non-resident, nor could they be assessed as non-resident lands since they were not unoccupied. (2 R. S. [7th ed.] 989, § 3.) How, no assessment was made against the occupant which alone was lawful. On the contrary, the lands were valued against the plaintiff by name and as owner, and so a charge upon her personally was initiated. It is true that such assessment appears in the part of the roll devoted to non-resident lands, but that cannot alter the legal effect of the assessment as establishing a personal charge. By the city charter the warrant to the collector commands him to collect from the several persons named in the assessment-rolls the several sums mentioned in the last column opposite their respective names.” Wherever in the roll there is a name with a tax opposite, that tax becomes a charge against that person, which the officer must collect of him if possible. The same mode of assessment appeared in Johnson v. Learn, (30 Barb. 618), and, while the general doctrine of that case has been made inapplicable by later amendments and decisions, its ^reasoning as to the effect of naming the person assessed appears to be sound. But in any event the lot here assessed could not be lawfully assessed either to the plaintiff, or as lands of a nonresident, and the assessment was equally void whichever construction should be adopted.

There was thus a void assessment against the lands of the plaintiff. The case shows a sale for non-payment of the taxes ; a purchase by the defendants ; the execution and delivery of a deed from the county treasurer of Onondaga county to them ; and the record of such deed in the proper clerk’s office. In that condition of affairs this action was brought in equity to set aside and cancel the tax deed as a cloud upon the plaintiff’s title. The respondents further contend that the action cannot be maintained because, upon the plaintiff’s own theory, the deed is void upon its face, and the intervention of equity is not essential. So far as this contention is sought to be supported by a claim that the time for redemption had not expired and the plaintiff might have redeemed, the answer is that she was not bound to redeem from a void assessment, and such remedy only tended to enforce and perpetuate the wrong. The Onondaga act makes the deed conclusive evidence that the sale was regular, and presumptive evidence that all the previous proceedings were regular according to the provisions of the act (§ 10). By section 9 it is made the duty of the county treasurer to execute the deed if the lands are not redeemed as in the act provided, and the deed may be recorded in the same manner and with like effect as a deed acknowledged or proved. The resultant inquiry is, whether the respondents, in seeking to enforce their title, would be obliged to develop the fatal defect in the assessment. (Clark v. Devenport, 95 N. Y. 477.) We think not. By the Onondaga act the hare production of the deed carries with it a presumption that all the prior proceedings were regular. The expiration of the time to redeem and the fact of no redemption are conditions under the law which must precede the giving of the deed, and are included in the presumption which is attached to it. It is claimed, however, and such was the ruling of the General Term, that the general act (Laws of 1855, -chap. 427) providing for notice to the occupant to redeem, and the record of the official certificate of non-redemption are essential to the validity of the deed, and their absence would leave the purchaser without a prima facie right. The question whether these general provisions apply to the Onondaga act is one of no little difficulty; but assuming that they do apply, the deed is yet prima fade evidence of the right to recover possession. The general act relates to lands returned as nonresident lands and so presumed to have been unoccupied when the assessment was made. But since at the later period of the sale an actual occupancy may have arisen, in such case notice and proof of its service are required. But as against the grantee in the tax deed there is no presumption of such actual occupancy, and when he puts that deed in evidence his case is made, and the burden falls upon the adversary of developing a defect in the deed by showing that at the time of sale or within the allotted period of redemption there was an actual occupancy which made the deed, standing alone, ineffectual. The cases cited by the General Term went upon the ground that actual occupancy at the date of the comptroller’s deed was conceded or fully established. (Jackson v. Esty, 7 Wend. 148; Bush v. Davison, 16 id. 550; Lucas v. McEnerna, 19 Hun, 14.) There is no doubt about that, but, especially under the provisions of the Onondaga county act, the deed is prima facie valid, and the ' plaintiff may rest upon it until the fact of occupancy is developed by his adversary. That is an extrinsic fact to be proven by' the defendant to destroy the force of the deed with which he is confronted, and it cannot be said that the respondents here, in ejectment against the plaintiff, could not succeed in making a prima facie case without developing the defects in their title. There was thus a cloud upon plaintiff’s title. Under the Onondaga act the deed carried with it all necessary presumptions and imposed upon the plaintiff the need of establishing either that there was an actual occupancy when the assessment was made or when the deed was given. Each of these were extrinsic facts, outside of the record, and-the plaintiff has established them both.

The judgment should be reversed and a new trial'granted, costs to abide the event.

All concur.

Judgment reversed.


author: Ruger, Ch. J.

text:
    William J. King, Jr., Appellant, v. Thomas Leighton, Respondent.
    The bankruptcy of one member of a firm only works a dissolution of the partnership to the extent of disabling it from entering into new engagements or assuming new obligations, except such as are required to complete its unfinished business and to wind up its affairs.
    It is the duty of the solvent members to take possession of the firm assets, perform its contracts, extinguish its liabilities and close up its business, and it is the right of the representatives of the bankrupt partner, unless there are peculiar circumstances exempting the particular case in equity from the general rule, to have an accounting, not only with respect to the completed business of the firm, but also as to the profits of all business unfinished at the dissolution, but completed afterward, and, at their option, to such as may be realized from new business entered into and carried on with the assets of the firm.
    In an action for an accounting between former partners it appeared that the parties entered into a partnership for the purpose of building bridges; by the partnership agreement plaintiff was to furnish shop room, power and machinery as his share of the capital, defendant to give his personal attention to the business, to have the direction and control thereof, and . to furnish any additional capital. Plaintiff became bankrupt, defendant thereafter continued the business, finishing the contracts then on hand, and making new'ones. After plaintiff’s bankruptcy the parties agreed that defendant should pay, and he was charged rent by plaintiff’s assignee in bankruptcy for the use of the building, power and machinery. After the partnership contracts were substantially completed, defendant agreed to pay and was charged an increased rent. The referee allowed plaintiff his share of the profits on the incompleted contracts. The j udgment was reversed by the General Term, on the ground that the collection of rent indicated an intent to waive any interest in said profits. HeM untenable; that it was not a necessary or legitimate deduction from the facts that the acceptance of rent operated as a release of plaintiff’s interest, or showed an intent to waive his claim to the prospective profits.
    (Argued October 8, 1885 ;
    decided November 24, 1885.)
    The implication of a contract between parties upon a subject to which their attention has been directed, and which they have omitted to provide for by express agreements, should not be made by a court, except to enforce a manifest equity, or from unequivocal acts of the parties indicating an intention to effect such a result.

      Collender v. Phelan (79 N. Y. 366); McClean v. Kennard (L. R., 9 Chan. App. 336), "distinguished.

      King v. Leighton (32 Hun, 419), reversed.
    Appeal from order of the General Term of the Supreme Court, in the fourth judicial department, made on the 5th day of October, 1880, which reversed a judgment entered on the report of a referee. (Reported below, 22 Hun, 419.)
    The nature of the action and the material facts are stated in the opinion.

      Sherman S. Rogers for appellant.
    Defendant was bound to render a faithful account, and King had an absolute right to suppose he would fulfill his obligation. (Mead v. Bunn, 32 N. Y. 275; Story on Part., § 172; Collyer, §178.) Where there is any mistake, or omission, or accident, or fraud, or undue advantage by which an accounting is in truth vitiated and the balance incorrectly fixed, a court of equity will not suffer it to be conclusive upon the parties. (Story’s Eq. Jur., § 523 ; Farnham v. Brooks, 9 Pick. 212 ; Banow v. Rhinelander, 1 Johns. Ch. 550; Wharton v. May, 5 Ves. 26; Baker v. Spencer, 47 N. Y. 562; Chappeaulaine v. Dechiaux, 4 Cranch, 306.) The defendant wás rightly compelled to account for the profits received by him in the completion of the contracts held by the firm at the time of the plaintiff’s failure. (Lind, on Part. 1029 ; 1 Pars, on Part. 476, notes b, c c; Case v. Abeel, 1 Paige, 393 ; Washburn v. Goodman, 17 Pick. 519 ; McClean v. Kennard, 9 Ch. App. Cas. 336; Collyer on Part.,. § 546; Willett v. Blanford, 1 Hare, 253 ; Brown v. DeTastet, Jacobs, 284; Peacock v. Peacock, 16 Ves. 57.)

      William F. Cogswell for respondent.
    The plaintiff cannot be heard to allege that the settlement was fraudulent, for the reason that a court of equity will not assist a party whose deception is attributed to the want of diligence .fairly to be expected from a reasonable person. (Marsh v. Keating, 2 Clark & Pin. 281; Thomas v. Barton, 48 N. Y. 193; Upton v. Tribilcock, 91 U. S. 54, 1 Story’s Eq. Jur., § 197; Smith v. Nelson, 62 N. Y. 286 ; Long v. Warren, 68 id. 426.) The referee erred in charging the defendant with one-tliird of the profits upon contracts which had been entered into before the dissolution of the partnership, which were performed by the defendant with his capital and by his skill solely, after such dissolution. (Willett v. Blanford, 1 Hare, 253 ; Simpson v. Chapman, 4 De G., Mac. & G. 154; Wedderburn v. Wedderburn, 2 Keen, 752; Collender v. Phelan, 79 N. Y. 366.)
   Ruger, Ch. J.

The General Term reversed the judgment entered in favor of the plaintiff, upon an accounting between partners, on the ground that the referee erroneously allowed him the profits made upon certain unfinished contracts, which were completed after the assumed dissolution of. the firm, occasioned by the bankruptcy of the plaintiff. This was held to follow from the effect, ascribed by that court, to the acts of the plaintiff and his receiver and assignee in bankruptcy, in collecting rent from the defendant for the use of the plaintiff’s shops and machinery, in completing such contracts. The partnership agreement between the plaintiff and defendant provided for the formation of a firm to carry on the business of building bridges together under the name of T. Leighton '& Co., at Buffalo, the plaintiff to contribute shop-room, power and machinery as his share of capital in the enterprise and to receive one-third of the profits, and the defendant to devote his personal attention, contribute whatever .additional capital was necessary to cony on the business, and have two-thirds of the profits. It was held that the collection of rent for the use of such property after plaintiff’s bankruptcy, indicated an intention on his part to waive any interest in the profits thereafter made, in completing the Unfinished contracts, and was equivalent to a withdrawal of the capital contributed by him to the firm. It was further held that the plaintiff did not thereby waive his interest in the assets of the firm, but that such interest consisted only of a share in the value of the contracts as they existed at the time of the bankruptcy, and that the defendant by his appropriation of the firm’s contracts after plaintiff’s bankruptcy, became liable to that extent only to the plaintiff. We are unable to agree with either of the propositions stated.

The action was brought for an accounting between partners and incidentally to set aside and vacate a written release of plaintiff s claim against the firm of T. Leighton & Co., executed by him to the defendant, on February 2S, 1873, about eight months after the bankruptcy, and which was claimed to have been procured by the defendant through fraudulent representations as to the value of plaintiff’s interest in the assets of the firm.

The referee found upon evidence, sufficient as we think to support the finding, the fact that such fraudulent representations were made by the defendant, and that the release was given by the plaintiff in reliance thereon. He thereupon held that the release was void, and ordered a general accounting as to all partnership matters between the parties, and the same was thereupon had before the referee, and resulted in a judgment in plaintiff’s favor.

The rent in question appears to have been paid under the following circumstances: About the time of the plaintiff’s bankruptcy, he and the defendant entered into a contract whereby the -defendant agreed thereafter, to pay $20 per day for the use of the shops, power and machinery, and subsequently in July, 1873, after the partnership work had been substantially completed, modified the same by agreeing to pay for such property, with some increased facilities, the sum of $35 per day. During the period covered'by this contract the defendant occupied the premises in question not only for the purpose of completing the partnership work, but also in prosecuting an extensive business on his individual account. No objection was ever made by .him to the payment of such rent, or claim that he was entitled to the possession of such shops, power and machinery free of rent by virtue of the partnership agreement. It does not appear that any thing was said at the time of making this agreement between the parties as to the special reasons why rent was required to be paid, or with reference to a transfer of the plaintiff’s interest in the firm assets to the defendant, or a release thereof, or a withdrawal of plaintiff’s capital from the firm, or the manner of completing or closing up its unfinished business.

We do not think under these circumstances that it was a necessary or legitimate deduction from the facts, that the acceptance of rent operated as a release of plaintiff’s interest in the partnership assets, or as the indication of an intention to waive his claim to a share of the prospective profits which might arise from the uncompleted business of the firm. The contract to pay rent has a legitimate operation, as a modification of the partnership agreement, induced by the changed conditions effected by the plaintiff’s bankruptcy, a-nd the individual business expected to be thereafter carried on by the defendant, without extending it by implication to a subject not mentioned by either ' party at the time, and probably not within their contemplation. It is altogether probable that the plaintiff, induced by the misrepresentations of the defendant as to the prosperity of the firm business and his interest therein, was led to believe it had but little value, and was too insignificant to require, special stipulation or care; but it is nevertheless true that neither party did at that time enter into express stipulations with reference either to the completed or ineompleted business of the firm. ' When the firm became dissolved by the plaintiff’s bankruptcy it was not permissible for the defendant to take new contracts and carry on the business in its name, and being apparently desirous of still continuing in the same line of business at the same place, it became necessary for him to first acquire that right from the plaintiff or his assignee.

Nothing appears in the case to rebut the inference that an amount was agreed upon as rent, apportioned to the individual business expected thereafter to be carried on by the defendant in the demised premises, and that inference is strengthened by the fact that a largely increased sum was paid as rent after the partnership business was completed. The finding that the express release of the plaintiff’s interest in the firm assets to the defendant, was fraudulent and void, would seem to require as a necessary consequence, a similar finding as to the validity of an implied release, founded apparently upon acts induced by the same influences. The implication of a contract between parties upon a subject to which their attention has been directed and which they have omitted to provide for, .by express stipulation, should not be made by a court, except to enforce a manifest equity, or to reach a result which the unequivocal acts, of the parties indicate an intention to effect.

Having arrived at the conclusion that the receipt of rent did not have the effect claimed for it by the respondent, it remains to be seen whether any error occurred on the trial which required a reversal of the judgment by the General Term.

It is claimed that such error was committed in allowing the plaintiff to recover the profits made after the dissolution of the firm as shown by the amount actually received, instead of awarding him the value of the pending contracts at the time of dissolution. Reference to the authorities does not justify the claim made on behalf of the defendant. The elementary writers concur uniformly in the proposition that the bankruptcy of one member of a firm, works a dissolution of the partnership only to the extent of disabling it from entering into any new engagements or incurring new obligations, except those required to complete its unfinished business, and wind up its affairs. The bankrupt still remains liable upon all existing contracts, and his interest in the partnership as well as his individual estate may be resorted to for the enforcement of such liabilities. The assignee of a bankrupt member of a firm becomes tenant in common of its assets with the solvent partners, and is entitled to an accounting and to receive the bankrupt’s share, whatever it may be, after; the payment of the partnership liabilities and a settlement of their accounts. (Lindley on Partnership, 930, 848, 849.) He has no right to the possession of the assets, or to interfere in the conduct of the business by the solvent partners in winding up its affairs, but is entitled to an accounting not only with respect to its completed business, but also as to all profits thereafter made, upon its unfinished contracts or enterprises, and at his option to such as may be realized from new business entered into and carried on with the assets of the firm. (Lindley on Partnership, 831, 832, 931; Crawshay v. Collins, 15 Ves. 218.)

After the dissolution by death or bankruptcy the solvent or surviving members become trustees of the assets for the purpose of winding up its affairs and distributing its effects, and they will not be allowed to reap á profit made by the use of the partnership assets after dissolution. (Case v. Abeel, 1 Paige, 393 ; Murray v. Mumford, 6 Cow. 441.) As a general rule surviving or solvent partners cannot take the assets of the firm at a valuation as of the time of the dissolution. They have a right to the possession and control of the assets, but it is for the purpose only of satisfying the liabilities of the firm and turning the effects into money in the manner most advantageous to the interests of all concerned. (Case v. Abeel, supra ; Collyer on Part., § Í99; Pars, on Part., 505; McClean v. Kennard, L. R., 9 Ch. App. 342.) If they delay closing up its affairs, and paying off the retiring member they render themselves liable for the profits made after dissolution at the option of the representatives of such member. (Story on Part., § 343.) It is said that solvent partners cannot resist a bill by an assignee for a share of the profits of a subsequent trading on the ground that the assignee did not require an immediate settlement, because it is no more the duty of the assignee to require this, than it is the duty of the solvent partners to make it (Pars, on Part. 505), and when the solvent partner omits to close up the partnership, and pay off the retiring partner, he is liable for any profits made by the continuance of the business with the firm assets. (Lindley on Part. 831).

If at the time of such bankruptcy there are adventures, contracts, or enterprises, outstanding unperformed, the assignee is required to wait until they are concluded and adjusted, and then collect the share or interest of the bankrupt as shown by the result. (Pars, on Part. 503.)

It was conceded in the case of Collender v. Phelan (79 N. Y. 372) that the executors of a deceased partner were entitled to the profits made upon contracts pending, unperformed at the death of their testator, and thereafter completed; but in that case, under peculiar circumstances, it was held that such interest had passed to the .surviving partner by virtue of certain transfers of the partnership assets made to him, by the executors, and that such profits could not, in that case, thereafter be recovered by the executors. The case is not an authority for the defendant’s contention here. In the case of McClean v. Kennard (L. R., 9 Ch. App. 336), it was held that upon the death of a member of a firm, his estate was entitled to share in the profits of a contract unperformed at the time of death, and that those profits were to be the actual profits ascertained when the contract was completed, and not by valuation or sale of the contract as of the time of death.

Thus, as the result of an examination of the authorities, we are clearly of the opinion that upon the dissolution of a firm by the death or bankruptcy of one of its members, it is the duty of the surviving or solvent members to take possession of the firm assets and perform its contracts, extinguish its liabilities and close up its business, in the manner most advantageous to the interests of all the parties concerned ; that it is the right of the representatives of a deceased or bankrupt partner to share in the profits of all business unfinished at the dissolution, but completed afterward, and that a valuation of such business as of the time of the dissolution will not be required unless peculiar circumstances exempting the particular case in equity from the operation of the general rules, exist. ( Wedderburn v. Wedderburn, 22 Beav. 84; Simpson v. Chapman, 4 DeGex., M. & G. 154 ; Case v. Abeel, supra ; Collyer on Part., § 199; Pars, on Part. 505.)

The circumstances existing in this case do not render it an exception, or authorize upon an accounting, any allowance to the solvent partner for advances made, or services rendered, in closing up the partnership affairs.

At the time of the plaintiff’s bankruptcy the firm was solvent, having accumulated property to the amount of nearly $50,000, which remained in the possession of the solvent partner applicable to the payment of partnership obligations, the expense of completing its unfinished business, and satisfying any balance owing by the bankrupt to the solvent partner. By the terms of the original partnership agreement the defendant was to give his personal attention and services to the conduct of the business, and have the direction and control thereof, and he did no more than this, after the plaintiff’s bankruptcy. The plaintiff was under no obligation to devote his services to the partnership, and contributed after his bankruptcy, in the performance of his partnership obligations, all that he was required to do before. The firm occupied the same premises, and used the same power, tools and machinery after as before the bankruptcy, and not a circumstance appears in the case upon which any equity can be based calling for an allowance to the defendant, for capital furnished or services rendered for the firm’s benefit. The defendant has done nothing more than to perform the duty which the law imposed upon him of winding up the affairs of the partnership after its dissolution, and in this case he has been relieved from the necessity of advancing means or incurring risks in closing up such business by its unquestioned financial ability to respond to all engagements. * * *

The order of the General Term should be reversed, and the judgment entered upon the report of the referee affirmed, with costs.

All concur, except Danforth, J., not sitting.

Order reversed, and judgment affirmed.

       The omitted portion of the opinion is taken up with a cousideration of alleged errors committed by the referee, in rejecting items of expense alleged to have been incurred by the defendants ; it contains nothing of general interest.


author: Andrews, J.

text:
    Nelson B. Killmer, Appellant, v. The New York Central and Hudson River Railroad Company, Respondent.
    (Argued October 9, 1885 ;
    decided November 24, 1885.)
    The common-law duty imposed upon common carriers to carry goods upon being paid a reasonable compensation does not preclude special contracts between railroad corporations and shippers regulating the freight charges; and where freight has been carried for a long course of years at the schedule price, the shipper making no objection as to the reasonableness of the charge, he must be deemed to have assented to the charge as reasonable, and to have voluntarily waived any objection thereto; at least the receipt of the freight by the company at the tariff rate has no element of extortion, and an action is not maintainable to recover back any portion thereof, although evidence is given authorizing a finding that the charge was more than a reasonable sum for the transportation.
    As to whether the authority conferred upon the H. R. R. R. Co. by its charter (§ 31, chap. 363, Laws of 1831), “ to fix, regulate and receive the tolls and charges by them to be received for the transportation of property,” abrogates, as to it, the common-law duty to carry goods at a reasonable compensation, and authorizes it, or its lessees, to charge what it pleases, qumre.

    Appeal from judgment of the General Term of the Supreme Court, in the first judicial department, entered upon an order made May 25, 1883, which affirmed a judgment in favor of defendant, entered upon an order dismissing plaintiff’s complaint on trial.

      This action was brought by plaintiff, as assignee of the firm of Slawson Brothers, to recover an excess over what was alleged to be a reasonable charge for the transportation of milk over the Harlem railroad, of which road defendant was the lessee. The material facts are stated in the opinion.

      Charles B. Myer for appellant.
    The defendant, as a common carrier, created such by charter for the sole purpose of serving the public, was bound to transport freight for reasonable compensation. (Laws of 1831, chap. 263, § 21; Laws of 1831, chap. 270, § 21; Tonnelle v. Hall, 4 N. Y. 140; King v. Pease, 1 Nev. & Man. 690; Gildart v. Gladstone, 11 East, 685 ; Barrett v. S. & D. R. R. Co., 2 Mann. & G. 164; Niblett v. Pottow, 4 Moore & Scott, 595 ; Parker v. Gt. W. Ry. Co., 7 Mann. & G. 288; C. & A. R. R. Co. v. Pittsburgh, 1 Pittsb. 396; Davison v. Co. Com’r, 18 Minn. 482; Rogers v. Burlington, 3 Wall. 654; Olcott v. Supervisors, 16 id. 678 ; B. & M. L. R. R. Co. v. Brooks, 60 Me. 569; Allen v. Jay, id. 124; Munn v. Illinois, 94 U. S. 70; Kimball v. B. & A. R. R. Co, 70 N. Y. 569 ; Laws of Mass., 1829, chaps. 26, 93; Laws of Mass., 1830, chap. 4; Casey v. Erie & N. E. R. R. Co., 2 Casey, 287; Perrire v. C. & D. C. Co., 9 How. 184; P. & R. I. R. R. Co. v C. V. M. Co., 68 111. 493; Beekman v. S. & S. R. R. Co., 3 Paige, 74; R. R. Com'rs v. P. & O. C. R. R. Co., 63 Me. 274; Comm. v. F. R. R. Co., 12 Gray, 187; Laws of Mass., 1845, chap. 191; M. & L. R. R. Co. v. Fisk, 33 N. H. 308 ; Gt. W. R. R. Co. v. Sutton, L. R., 4 H. L. 236; C. & A. R. R. Co. v. People, 67 Ill. 17; McDuffee v. R. R. Co., 52 N. H. 447; Sanford v. C. R. R. Co., 12 Harris, 382; Aldnuth v. Inglis, 12 East, 537; Munn v. Illinois, 94 U. S. 70; Spofford v. B. & Me. R. R. Co., 128 Mass. 329; Crouch v. Gt. N. R. R. Co., 11 Exch. 750.) The statutory right to “ fix the charges ” does not permit the exaction of unreasonable rates. (Parker v. G. W. R. R. Co., 11 C. B. 545 ; Edwards v. G. W. R. R. Co., id. 588; Baxendale v. G. W. R. R. Co., 16 C. B. [N. S.] 138; Sutton v. G. W. R. R. Co., 3 Hurlst. & Colt. 800; Swan v. Williams, 2 Mich. 439; C. & A. R. R. Co. v. People, 67 Ill. 17; Sloan v. P. R. R. Co., 61 Mo. 31; Camblos v. P. & R. R. Co., 9 Phila. 441; Ruggles v. People, 91 Ill. 265; Stewart v. E. & W. T. Co., 17 Minn. 391; Slaughter-House Cases, 16 Wall. 48.) The legislature will not be held to have been so indifferent to the trusts committed to it as to have granted arbitrary control over such vital public interests to a mere creature of the law. (R. R. Com'rs v. P. & O. C. R. R. Co., 63 Me. 274; Sanford v. C. R. R. Co., 12 Harris, 382.) If section 21 of the charter of the Harlem Railroad Company is to be construed as giving the defendant the right to exact whatever rates it arbitrarily pleases, unreasonable and extortionate if it pleases, then it is unconstitutional. (Const., art. 1, § 6 ; Murray v. H. L. Co., 18 How. 276; Bouvier’s Law Diet.; Taylor v. Porter, 4 Hill, 145; State v. Beswick, 13 R. I. 211; 5 Webster’s Works, 487 ; Bank v. Okley, 4 Wheat. 235; State v. Simons, 2 Speirs, 761; State v. Doherty, 60 Me. 509; Cooper v. Williams, 5 Ohio, 392; Buckingham v. Smith, 10 id. 296; Munn v. Illinois, 94 U. S. 12.) The Harlem charter originally granted the power of exacting exorbitant rates, at the pleasure of the respondent, under the last section of that charter, reserving to the legislature the right to alter, amend or repeal the same. That power was repealed by section 9, chapter 270, Laws of 1847, which provided that “ any railroad company receiving freight for transportation shall be entitled to the same rights and be subject to the same liabilities as common carriers.” (Root v. Gt. W. R. R. Co., 45 N. Y. 532.) There was no special service rendered by the respondent beyond that which it was required to render under its charter and as a common carriel’. (Story on Bail., § 509 ; Gt. W. R. R. Co. v. Hawkins, 18 Mich. 427; Stewart v. Erie & W. T. Co., 17 Minn. 390; Wibert v. N. Y. & E. R. R. Co., 12 N. Y. 245 ; Tierney v. N. Y. C. & H. R. R. R. Co., 76 id. 305; G. & C. U. R. R. Co. v. Rae, 18 Ill. 489 ; Laws of 1850, chap. 140, § 36.) The payments to the respondent, to the extent of the excess over reasonable rates, were not voluntarily made and can be recovered back. (Cowper, 218; 2 Stark, on Ev. 66; Ashley v. Reynolds, 2 Esp. 723; Shaw v. Wood

      cock, 7 Barn. & Cress. 73; Alter v. Backhouse, 3 Mees. & W. 633 ; Mowatt v. Wright, 1 Wend. 360; Chase v. Dwinal, 7 Green!. [Me.] 134; Ripley v. Gelston, 9 Johns. 208; Harmony v. Bingham, 12 N. Y. 116 ; Tutt v. Ide, 3 Blatchf. C. C. 249 ; L. & T. R. R. Co. v. Pattison, 41 Ind. 313; Steele v: Williams, 8 Exch. 631; Shepherd v. Chewter, 1 Campb. 275; Wheadon v. Olds, 20 Wend. 174; Waite v. Leggett, 8 Cow. 196; Lake v. Artisans' Bk., 3 Abb. [N. S.] 209; Rheel v. Hicks, 25 N. Y. 291; Chapman v. City of Brooklyn, 40 id. 379 ; Kingston v. Eltinge, id. 395; Schwinger v. Hickock, 53 id. 386; L. R., 3 Q. B. Div. 144, 147, 150; L. R., App. Cas. 1039; Curtis v. R. & S. R. R. Co., 18 N. Y. 544; Lamb v. C. & A. R. R. Co., 46 id. 289.) Slawson Bros, had a right to have their milk transported by the defendant, and the defendant, as a common carrier and public functionary, was bound to carry it for a reasonable rate. (Parker v. Gt. W. R. R. Co., 7 Man. & Gran. 292; Sutton v. Gt. W. R. R. Co., L. R., 4 H. L. Cas. 249 ; C. & A. R. R. Co. v. C. & V. W. C. Co., 79 Ill. 130.) No protest was necessary. (R. R. Co. v. Lockwood, 17 Wall. 379; Swift v. U. S., 111 U. S. 22; McGregor v. Erie, 35 N. J. L. 89-113 ; Peters v. R. R. Co., 42 Ohio, 275 ; M. & M. R. Co. v. Steiner, 61 Ala. 595 ; Nelson v. H. R. R. R. Co., 48 N. Y. 499; Zinn v. N J. St. B. Co., 49 id. 445; Sloan v. P. R. R. Co., 61 Mo. 32; Bentley v. Bentley, 7 Cow. 701; Potter v. Deyo, 19 Wend. 361; Harris v. White, 81 N. Y. 547;, Lamb v. C. & A. R. R. Co., 46 id. 289.) The respondent is bound as a public servant, created to perform a public function and sblely for the purpose of serving the public, to do so impartially and equally. (Camblos v. P. & R. R. R. Co., 9 Phila. 442; S. E. Co. v. M. & L. R. R. Co., 8 Fed. Rep. 799; Piddington v. S. E. R. Co., 5 C. B. [N. S.] 112; Peck v. N. S. R. R. Co., 10 H. L. Cas. 571; Crouch v. Gt. N. R. R. Co., 11 Exch. 750; C. B. & Q. R. R. Co. v. Parks, 18 Ill. 464.) The fact that a lower rate is charged one shipper than another is evidence that the higher rate is pro tanto unreasonable. (Gt. W. Ry. Co. v. Sutton, L. R., 6 H. L. 237; Messenger v.
      P. R. R. Co., 36 N. J. L. 411; Piddington v. S. E. R. Co., 5 C. B. [N. S.] 112.)

      H. H. Anderson for respondent.
    There being a special contract no cause of action existed. (Story on Bailments, § 543; Wells v. S. Nav. Co., 2 Comst. 209; Thomas v. B. & P. R. R. Co., 10 Metc. 472; N. P. Co. v. B. & M. R. R. Co., 1 Gray, 270.) The defendant has full power to fix the rate of transportation in the absence of a special agreement. (Laws of 1831, chap. 328; Laws of 1846, chap. 280; Laws of 1846, chap. 216, §§ 17, 23; Laws of 1850, chap. 9, § 3; 1 Laws of 1847, chap. 270, § 9, p. 298 ; Laws of 1850, chap. 140, §§ 28, 33, 36; 2 Laws of 1869, chap. 917, pp. 23, 99, §§ 4, 8; Laws of 1874, chap. 240, p. 294; Fisher v. N. Y. C. & H. R. R. R. Co., 46 N. Y. 644; Grosvenor v. Same, 39 id. 34; C., B. & Q. R. R. Co. v. Iowa, 94 U. S. [4 Otto] 161.) The moneys were voluntarily paid upon a claim of right, and they cannot be recovered back. The onus is upon the plaintiff to show that the money paid was extorted from him unjustly by duress of goods. (Briggs v. Boyd, 56 N. Y. 289; Flower v. Lance, 59 id. 610; Quincey v. White, 63 id. 370; Mowatt v. Wright, 1 Wend. 355; Clark v. Dutcher, 9 Hill, 673.) It being shown that the rate was known to the shipper, as he shipped without objection, his assent to the rate charged is to be implied. (Nelson v. H. R. R. R. Co., 48 N. Y. 498; Grosvenor v. N. Y. C. R. R. Co., 39 id. 34.)
   Andrews, J.

We deem it unnecessary to consider the the question argued by counsel, whether the authority conferred upon the Harlem Railroad Company by its charter (Laws of 1831, chap. 263, § 21) to “ fix, regulate and receive the tolls and charges by them to be received for the transportation of property,” etc., enables the company or its lessees, as claimed in behalf of the defendant, to charge what it pleases, and abrogates as to them the obligation imposed upon common carriers by the common law, to carry goods delivered for carriage upon being paid a reasonable compensation. There is certainly much authority against the construction contended for by the defendant. But we are of opinion the defendant is entitled to prevail in this action, upon the ground that under the circumstances proved, and assuming that there was evidence upon which the jury might have found that the defendant had charged, and that Slawson Bros, had paid more than a reasonable sum for milk transportation, the payments were voluntary and not made under duress, or induced by fraud or deceit, or under circumstances which entitle Slawson Bros., or their assignee, to recover back the excess.

In general terms, the action is brought to recover from the defendant the sum of $60,000, which, the complaint alleges, was exacted from Slawson Bros, by the defendant, between December, 1873, and December, 1879, for the transportation of milk from points on the line of the Harlem railroad to the city of New York, such sum being, as alleged, the excess paid by Slawson Bros, for such transportation, beyond a reasonable charge, in order to obtain possession of their property. Slaw-son Bros, were'milk dealers in the city of New. York. Their supplies .were procured on the line of the Harlem road, and from 1866 to 1879, the milk purchased by them was transported in .cans on the defendant’s road from the place of shipment to the city of New York by a special milk train, and the empty cans were returned over the defendant’s road to the place of shipment. For this service the defendant, during this period, up to May, 1877, charged a tariff rate of sixty cents for every forty gallons of milk carried, and after that date a rate of forty-five0cents. It was the custom of the defendant to require dealers to pay the freight at the time the milk was delivered in New York, but in dealing with Slawson Bros, this custom was at times departed from and payment made after delivery.’ There was never any agreement between Slawson Bros, and the defendant as to the rate of freight to be charged or paid beyond what may be implied from a general tariff rate fixed by the defendant and known to the Slawson Bros, and the payment by Slawson Bros, for the service at that rate. It was admitted on the trial that Slawson Bros. paid the freight daily at the tariff rate without making any objection. The evidence is uncontroverted that from 1866 to August, 1879, a period of thirteen years, there were almost daily shipments by Slawson Bros, over the defendant’s road, and not only was there no negotiation between the parties as to the rate of freight to be charged, but there was never any complaint or remonstrance on the part of Slawson Bros., that the charge was excessive. The firm shipped the milk, paid the tariff rate for the transportation, asking no questions and apparently waiving all inquiry. The complaint bases the right to recover on the ground of extortion. The extortion, if any, consists simply in the fact that the defendant fixed an excessive rate, which Slawson Bros, paid without objection. If Slawson Bros, are entitled to recover under the circumstances, then every person who at any time within six years before the commencement of an action, has paid to a carrier by rail, vessel, or other conveyance, an unreasonable charge for the carriage of goods, whether in one or a thousand instances, and, whether the carrier is an individual or a corporation, can maintain an action to recover back the excess paid beyond a reasonable charge, although he paid without demur, and by not objecting apparently assented at the time to the propriety of the charge. The counsel for the plaintiff, in his able argument, cited cases from the English courts, arising under what is known as the equality clause in English railroad charters, and statutes, which in substance prohibits preferential rates between shippers, and requires equality of charge under similar circumstances. The cases referred to, in general, were actions brought by the shipper against whom a discrimination had been made in violation of the act, to recover back money exacted from him as a condition of carrying or delivering his goods in excess of the sum charged to other shippers for a similar' service, and the actions were maintained, except where the inequality of the charge was known to the shipper or his agent and was paid without objection, in which case it was held that the plaintiff could not recover. (Evershed v. Lond. & N. W. R. R. Co., L. R., 3 Q. B. Div. 144; S. C., L. R., 3 App. Cas. 1029 ; Gt. W. R. R. Co. v. Sutton, 3 H. & C. 800; S. C., L. R., 4 H. L. Cas. 226; Laneashire R. R. Go. v. Gidlow, L. R., 7 H. L. Cas. 517; Parker v. Gt. West. R. R. Co., 7 Man. & Gr. 253.) In those cases there was a violation of a specific statutory duty on the part of the railroad corporation, and in all of them, the payment was made either under protest, or in ignorance of a fact which could only be known, in general, by the corporation, and which was concealed by the shipper.

What is a reasonable sum for transportation of goods on the great railroad lines of the country in a given case is often a complex question, into which enters many elements and considerations, and is incapable of exact solution. The legislature has reserved in the general act for the formation of railroad compatiies, the right to regulate the question of freights,' and' in the charter of the Harlem railroad the right to alter, amend, or repeal the same. (Laws of 1850, chap. 140, § 28, subd. 9; Laws of 1831, chap. 263, § 18.) While this reservation of power by the legislature does not probably exclude the enforcement of the common-law duty through an action in behalf of an individual injured by its violation, it is a safeguard against any long-continued abuse and oppression on the part of railroad corporations. But the common-law duty does not preclude special cohtracts between railroad corporations and shippers, regulating the freight charge, and where, as in this case, freight has been carried for a long course of years, at schedule price, the shipper making no objection and no inquiry as to the reasonableness of the charge, and when it was his interest to object if the charge was unreasonable, he must, we think, be deemed to have assented to the charge as reasonable, and to have voluntarily waived any objection thereto. At least the receipt by the company of the freight at the tariff rate, under such circumstances, has no element of extortion. The company is doubtless better informed than the shipper as to what would be a compensatory or reasonable charge, but many of • the facts which enter into the formation of a judgment on the question are accessible to the shipper, and it would not be in accordanee with general principles of justice that he should be permitted to forbear all means of ascertaining the truth, and after the lapse of years for the first time open a question which he did not, at the time of the transaction, regard of sufficient importance to engage his attention.

We are of opinion that this action cannot be maintained. The express admission that the payments sought to be recovered, were made without objection, renders it unnecessary to consider whether the small part of the claim-which accrued after the service of the notice of August 2'0,1879, stands in any different position from the rest. There is no evidence that the notice was authorized by Slawson Bros., but if it was, in view of the admission, no question arising upon the notice is involved in the case.

The judgment should be affirmed.

All concur..

Judgment affirmed.


text:
    William H. Hersee et al., Appellants, v. Roderick D. Porter, Respondent.
    (Submitted October 12, 1885 ;
    decided November 24, 1885.)
    The provision of the Revised Statutes (1 R. S. 398, § 2) authorizing a tax collector to levy an unpaid tax “by distress and sale of the goods and chattels of the person who ought to pay the §ame, or of any goods or chattels in his possession,” refers to actual, physical, and not merely legal or constructive possession, and an actual possession by the consent of the owner, although unaccompanied by any ownership in the possessor, is a possession within the meaning of the statute.
    The said provision is not in conflict with the provision of the State Constitution (Art. 1, § 6) declaring that no person shall be deprived of property “ without due process of law ” and prohibiting the taking of private property “ for public use without just compensation.”
    Accordingly held, where personal property which had been mortgage_d and which, after default in payment of the debt secured, remained in the possession of the mortgagor, he using it the same as before, was while so in his possession seized and sold by a collector by virtue of a tax warrant duly issued for the collection of a tax against him, that the purchaser acquired a good title.

      Appeal from judgment of the General Term of the Supreme Court, in the fourth judicial department, entered upon an order made the second Tuesday of June, 1883, which affirmed a judgment in favor of defendant, entered upon the report of a referee.
    This action was for the alleged conversion of certain personal property.
    The material facts are stated in the opinion.

      G. A. Scroggs for appellants.
    When the distraint and sale of the property described in the complaint was made the plaintiffs were the absolute owners, and entitled to the immediate actual possession thereof. (Thomas on Mort. 445, 509, 510; Brown v. Bennett, 8 Johns. 96; Ackley v. Finch, 7 Cow. 290; Langdon v. Bud, 9 Wend. 80 ; Ferguson v. Lee, id. 258 ; Champlin v. Johnson, 39 Barb. 606; Spraights v. Hawley, 39 N.Y. 441; Farrell v. Hildreth, 30 Barb. 178; Case v. Boughton, 11 Wend. 106; The absolute owner of property is not only entitled to the immediate possession of it, but as such owner he holds constructively the actual possession of it. (Cary v. Hotaling, 1 Hill, 311; Ash v. Putnam, id. 302; 10 Wend. Ill; 3 N. Y. 506; 11 Johns. 376 ; Clarke v. Skinner, 20 id. 465 ; Shannon v. Shannon, 1 Schoales & Lefroy, 324; Barrett v. Warren, 3 Hill, 353.) The appellants were also in possession as the bailors of James T. Fulton, Jr., their bailee ; the possession was only that of a mere naked bailee. (Fuller v. Acker, 1 Hill, 473; 2 Blackst. Com. 389 ; Story on Bail., 9, § 4; id. 123, § 93, i.) The tax debtor’s possession of the property was not such a possession as the proper construction of the section of the statute on that subject intends and requires. (1 R. S. [6th ed.] 591, § 7; Stockwell v. Veitch, 38 Barb. 650; Sharp v. Speir, 4 Hill, 76; 2 Burr. L. Dic. 349, 811; Thorn v. Burling, 11 Johns. 285 ; Barrett v. Warren, 3 Hill, 348 ; Cary v. Hotaling, 1 id. 311; Ash v. Putnam, id. 302; Root v. Chandler, 10 Wend. Ill; Ely v. Ehle, 3 N. Y. 506, 507; Farrell v. Hildreth, 38 Barb. 178.) Replevin would lie in such a case. (Fuller v. Acker, 1 Hill, 473; Ely v. Ehle, 3 Comst. 506; Pangburn v. Par

      tridge, 7 Johns. 143; Thompsons. Button, 14 id. 84; Clark v. Skinner, 20 id. 465 ; Denham v. Wickoff, 3 Wend. 280; Root v. Chandler, 10 id. 111.) The appellants were not in privity with Fulton, the tax debtor, in any way in connection with or in relation to the property seized by the tax collector. Coan v. Osgood, 15 Barb. 588 ; Clark v. Skinner, 20 Johns. 465; 19 Mich. 98; 3 N. Y. 506.) The appellants were the absolute owners of the property seized by the tax collector at the time of its seizure, and they were then, as such owners, in the constructive possession of it. (Dudley v. Daley, 38 N. Y. 403, 406; Stanley v. Gaylord, 1 Cush. 550.) Mere possession does not warrant the presumption of ownership. (Dudley v. Dawley, 30 Barb. 407; Saltus v. Everett, 20 Wend. 274.) Whilst prevention of the sale is forbidden by replevin or otherwise, the right of the owner of the property to assert and enforce his title to the property sold by other forms of action is not taken away by the statute. (People v. Albany, 7 Wend. 485; Fuller v. Allen, 7 Abb. 13; Vocht v. Reed, 79 Ill. 491; Ely v. Ehle, 3 N. Y. 509.) The statute is unconstitutional and void. ( Wallace v. Karlenowefski, 19 Barb. 118; Bloodgood v. M. & H. R. R. Co., 18 Wend. 9; Taylor v. Porter, 4 Hill, 140; Kent’s Com. Lect. 20; 1 Kent’s Com. O. 449 ; 1 R. L. [Kent & Ead. ed.] 547.) It is inconsistent with the letter and spirit of those express provisions of the Constitution. (Const., art. 1, §§ 1, 6; Wynehamer v. People, 13 N. Y. 378, 401,418, 426; 2 Kent, 12; Taylor v. Porter, 4 Hill, 140; Westervelt v. Gregg, 12 N. Y. 202; Wilkinson v. Island, 2 Pet. 657; Powers v. Bergen, 2 Seld. 358; Stewart v. Palmer, 74 N. Y. 183; 2 Kent’s Com. 340; 53 N. Y. 245; Mulligan v. Smith, 8 Pac. Coast L. J. 499; Grant v. Courter, 24 Barb. 232.) The appellants were not lawfully deprived of their property by a rightful exercise of the power of taxation. (Matter of Mayor, etc., 11 Johns. 77; Cooley on Taxation, 32; People v. Mayor, etc., 4 N. Y. 19; Providence Bk. v. Billings, 4 Pet. 514; McCullock v. Maryland, 4 Wheat. 428 ; Clark v. Rochester, 14 How. 183; Calder v. Bull, 3 Dall. 386; Fletcher v. Peck, 6 Cranch, 135; Wilkinson v. Leland, 2 Pet. 657; Taylor v. Porter, 4 Hill, 140 ; Howard v. Moot, 64 N. Y, 262; Spraights v. Hawley, 39 id. 441; Dubois v. Webster, 7 Hun, 371.) Taxation without an assessment and notice thereof is a nullity, and all proceedings toward or in collecting a tax of an individual or his property, upon whom there has been no assessment for it and notice of such assessment, is invalid and void for want of jurisdiction. (Stewart v. Palmer, 74 N. Y. 183; Cooley on Taxation, 259, 266; Philadelphia v. Miller, 49 Penn. St. 440; Overing v. Foot, 65 N. Y. 263; People v. Supervisors, 70 id. 228; 74 id. 183, 191, 193 ; State v. Demorest, 32 N. J. 528; Litchfield v. Vernon, 41 id. 123; 4 Comst. 424; 74 N. Y. 189.) The right of eminent domain is subject to the constitutional restriction — “ nor shall private property be taken for public use without just compensation.” (19 Barb. 118 ; Brevoort v. Grace, 53 N. Y. 245; 4 id. 422; Stuart v. Palmer, 74 id. 189; People v. Westchester, 4 Barb. 64.) In the case at bar the appellant’s property was taken to pay Fulton’s tax, and consequently for his use and benefit. ( Varrick v. Smith, 5 Paige, 1; Brevoort v. Grace, 53 N. Y. 245; Bloodgood v. M. & H. Ry. Co., 18 Wend. 1; Embury v. Conner, 3 N. Y. 511; Taylor v. Porter, 4 Hill, 140; Matter of Albany St., 11 Wend. 149; Stuart v. Palmer, 74 N. Y. 186; Sears v. Gotterell, 5 Mich. 251; Weismer v. Village of Douglass, 54 N. Y. 100 ; Bertholf v. O'Reilly, 74 id. 182.) The proceeding, as formulated above, is prescribed by the legislature for collecting a tax of a delinquent tax payer. It is a proceeding judicial in its nature — a function which the legislature has no right to exercise in such a case. (Matter of McDonald, 32 Hun, 506 ; Kilbourn v. Thompson, 103 U. S. 168; Taylor v. Porter, 4 Hill, 140; People v. Brady, 56 N. Y. 182; Const., art. 1, § 1; L. S. & M. S. R. R. Co. v. Roach, 80 R. Y. 339; Howard v. Moot, 64 id. 268; Happy v. Mosher, 48 id. 313.)

      G. H. Piper for respondent.
    The statute contemplates that the goods and chattels of one person, although he be the absolute owner thereof, may be taken and sold to pay the tax of another person, providing the property is in the possession of the person who ought to pay the tax, and no claim of property to be made thereto by any other person shall be available to prevent a sale. (2 R. S. [7th ed.] 1008, §§ 2, 4; Sheldon v. Van Bushirh, 4 Comst. 477.) The plaintiff’s property was not seized and sold without due process of law. (People v. Mayor, etc., 4 Comst. 419 ; Pauly v. Wahle, 29 Hun, 116.)
   Andrews, J.

The defendant claims title to the horses, omnibus and baggage wagon, for the conversion of which this action is brought as purchaser at a sale thereof by the tax collector of Niagara Falls, on the 30th day of September, 1879, by virtue of a tax warrant duly issued for the collection of a tax assessed on the real estate of one Fulton in said village, used for hotel purposes, for the sum of $398.96, the sale having been made by the collector pursuant to said warrant to satisfy the tax. The property on and prior to October 14, 1877, was owned by Fulton, and was used by him in connection with his hotel business. On that day it was mortgaged to the plaintiffs to secure a debt owing by him to them, and the mortgage by its terms became due October 1, 1878. Fulton made default in the payment of the mortgage debt, but he continued in possession of the mortgaged property after default, as before, using it in connection with his business, until its seizure by the tax collector under the warrant. On the sale the plaintiffs gave public notice that they were the owners of- the property, and that it could not be lawfully sold for the tax against Fulton. This presents the only question in the case.

The defendant justifies the levy and sale under the provision of the Revised Statutes (1 R. S. 398, § 2), which is as follows : “ In case any person shall neglect or refuse to pay the tax imposed on him, the collector shall levy the same by distress and sale of the goods and chattels of the person who ought to pay the same, or of any goods and chattels in his possession, wheresoever the same may be found within the district of the collector; and no claim of property to be made thereto by any other person, shall be available to prevent a sale.” It is claimed on behalf of the plaintiffs that Fulton at the time of the levy and sale by the tax collector was not in possession of the property within the meaning of the statute, and second, that if he had possession within the statute, the property was in the plaintiffs, and that the statute so far as it authorizes the sale of the property of one person to satisfy a tax against another is unconstitutional and void. The claim that the plaintiffs, upon default of the mortgagor to pay the mortgage debt, became the absolute owners of the mortgaged chattels, and that in the absence of any special agreement changing the relation, the possession of Fulton after that time was that of a mere naked bailee, cannot be successfully controverted. (Fuller v. Acker, 1 Hill, 473.) It is also true that the general owner of personal property is deemed constructively in possession, although the actual custody may be that of an agent, servant, or bailee. This principle is frequently applied in determining who are proper parties to actions, and in administering remedies. But the statute in question evidently refers to actual physical possession, and not to mere legal or constructive possession, and an actual possession by the consent of the owner, although unaccompanied with any ownership in the possessor, is a possession within the meaning of the statute. It is not necessary in this case to draw a distinction between it and cases where the property may be temporarily on the premises of another, for the owner’s purposes or without his consent. In this case the plaintiff permitted Fulton to continue in possession and use the property after default, up to the time of the levy, a period of nearly a year, without any ostensible change in the character of his possession. We think there can be no doubt that the property was in his possession within the meaning of the statute at the time of the levy.

The principal ground upon which the counsel for the plaintiffs relies for the reversal of the judgment, is, that the statute is unconstitutional. The argument has been presented by the learned counsel for the plaintiffs with great elaboration and ability but we deem it unnecessary to follow it in detail. It is claimed that legislative authority to seize and sell the property of A. to pay the tax of B. is not due process of law, and also that it violates the constitutional injunction that private property shall not be taken for public use without just compensation. (Const., art. 1, § 6.) Confining the proposition to this bare statement, its correctness may be admitted. But the statute in question adds the additional prerequisite or condition, that to authorize the property of A. to be taken for a tax against B. the property must be in the possession of B. at the time of the taking or rather, the statute does not inquire whether the legal title is in A. or B. but it conclusively adjudges it to be in the person taxed for the purposes of seizure and sale, provided it is in his possession. For the purpose of collecting the tax, the actual ownership, in contemplation of the statute, follows the actual possession. The possession under the statute is not „ merely a badge of ownership, it is title, so as to subject the property to seizure and sale for a tax against the possessor. Is the statute a violation of any constitutional guaranty? It has a very close analogy in the common-law proceeding of distress for rent, which permitted the distraint of the property of a stranger found on the demised premises. The law of distress for rent was the law of this State up to 1846. The principle that the property of a stranger on the demised premises, might be distrained was always recognized in our legislation, although its rigor was relaxed and its hardships mitigated from time to time by qualifications and exceptions. (2 R. S. 502, § 14.) I am not aware that the constitutionality of this feature of the law was ever questioned. Its validity has frequently been assumed by the courts. (Holt v. Johnson, 14 Johns. 425; Spencer v. M’ Cowen, 13 Wend. 256; Gilbert v. Moody, 17 id. 354.) It is to be observed that this stringent remedy was permitted to enforce obligations between individuals. The similar remedy given by the tax laws is to enforce the sovereign and indispensable power of taxation. The section of the Re vised Statutes now in question, was not an introduction by the revisers of a new remedy for the collection of taxes. The authority to seize and sell any property in the possession of a person taxed, for the payment of the tax, has been a part of the statute law of the State since 1801. A provision in almost identical words with the section in the Revised Statutes, is found in the act entitled “An act for the assessment and collection of taxes,” passed in that year (Laws of 1801, chap. 178, § 10) and from that time to this has been a part of the statute law. For more than three-quarters of a century this provision has been on the statute books, and we may reasonably assume has been frequently enforced, but its validity has never, so far as we know, been challenged in the courts. The principle upon which the statute is founded has been impliedly affirmed in two cases, although in neither was the precise question in judgment. (Sheldon v. Van Buskirk, 2 N. Y. 473 ; Lake Shore R. R. Co. v. Roach, 80 id. 339.) In view of this long continued acquiescence by the executive, legislative and judicial departments of the government in the legislation now in question, the’ court would not, we think, be justified in departing from the common understanding that the statute authority to seize any property in the possession of a person taxed, for the payment of the tax, justifies J;he seizure and sale of the property of a third person so situated. Each individual in the community has notice of the law, and is presumed to understand that if his chattels are by his consent or permission in the possession of another, they can be taken for a tax against the person in possession. The law was probably framed to prevent fraud and collusion, and disputes as to title, and each individual in the community may be assumed to have consented that his property shall be subject to the right of the State in this way to enforce the power of taxation. The State only receives the sum to which it is entitled. As between the owner of the property seized and the person taxed, the latter ought to have paid the tax, and we see no reason to doubt that if payment is enforced out of another’s property in his possession, the true owner has a remedy against the person who ought to have paid it. The question , of the constitutionality of a similar statute was considered and decided in Michigan, in the case of Sears v. Cottrell (5 Mich. 251), and the court, one judge dissenting, affirmed its, constitutionality.

The proceeding in the case before ns was an execution of a power of government in respect to taxation, and although the right to take the plaintiffs property for the tax was not adjudged in a judicial procéeding, the act of the legislature, and the acts of the administrative officers thereunder, is, we think, due process of law within the meaning of the Constitution. The plaintiffs property was not taken by the right of eminent domain, but under the taxing power, and no question, therefore, arises under the clause of the Constitution prohibiting the taking of private property for public use, without just compensation. (People v. Mayor, etc., 4 N. Y. 419.)

The judgment should be affirmed.

All concur.

Judgment affirmed.


text:
    Adolph Hermann, Respondent, v. The Niagara Fire Insurance Company, Appellant.
    The authority of a broker, who is not a general agent to place and manage insurance on his principal’s property, but is specially employed to procure insurance on certain property, terminates with the procurement of the policy ; no authority can be implied from the original employment to discharge the contract.
    Plaintiff authorized K. & B., insurance brokers, to procure insurance on certain property for a sum specified ; they procured a policy from defendant, which was delivered to plaintiff; it contained a clause giving the company the right to terminate the insurance “ on giving notice to that, effect." Defendant directed its agents to cancel the policy; they notified K. & B. of this fact, and arranged with them to issue a policy in another company to take the place of defendant's policy. K. & B. agreed to procure said policy from defendant, and thereupon defendant’s agent wrote a policy in another company. Plaintiff had no knowledge or information as to this arrangement until after a loss, and had the original policy in his possessiou. Held, that the notice to K. & B. was not notice to plaintiff, and the transaction did not operate as a cancellation of defendant’s policy.

      S. O. Co. v. T. Ins. Co. (64 N. Y. 85), distinguished.

      (Argued October 15, 1885 ;
    decided November 24, 1885.)
    A clause in the policy declared that any person other than the assured procuring the policy should be deemed an agent of the assured, not of the company, “in any transaction relating to this insurance.” Held, that this did not constitute K. & B. continuing agents, or make the notice to them binding upon plaintiff.
    Plaintiff resided in New York ; the property insured was in Troy. Defendant gave evidence tending to show a local custom in Troy, that notice of cancellation may be given to the broker who procures the insurance. This custom was unknown to plaintiff. Held, that the custom was inadmissible to control or affect the contract.
    The policy required notice of a loss to be served forthwith on the company; it accepted final proof of loss without objection that this condition had not been complied with, basing its refusal to pay on the ground that the policy had been canceled. Defendant’s agent was at the fire, and its officers knew of it soon after. . Held, that a strict compliance with the provision was waived.'
    Appeal from judgment of the General Term of the Supreme Court, in the first judicial department, in favor of plaintiff, entered upon an order made June 5, 1883, which overruled defendant’s exceptions and directed judgment upon a verdict.
    This action was upon a policy of fire insurance. The material facts are stated in the opinion.

      William Allen Butler for appellant.''
    The position of the plaintiff that Kennedy & Buell were not his agents in respect to the insurance after the policy had been delivered by them to him is untenable. (Standard O. Co. v. T. Ins. Co., 64 N. Y. 85.) The agency of Kennedy & Buell must, therefore, be regarded as a continuing one in reference to the insurance. The express provision in the policy that the person procuring the insurance shall be deemed the agent of the insured in any transaction relating to the insurance has been upheld by this court. (Rohrback v. G. Ins. Co., 62 N. Y. 47; Alexander v. Same, 66 id. 464 ; Whited v. Same, 76 id. 415.) The notice of loss to be given forthwith, required by the policy, was a condition precedent to be performed by plaintiff, without proof of which he cannot recover. (Inman v.
      W. F. Ins. Co., 12 Wend. 452; Brink v. Hanover F. Ins. Co., 80 N. Y. 108; Goodwin v. Mass. Mut. Ins. Co., 73 id. 480; Sherwood v. A. Ins. Co., 10 Hun, 593.)

      N. B. Hoxie for respondent.
    Such agency of Kennedy & Buell, as existed in reference to the policy in suit, was one that the law infers from the receipt and retention by the plaintiff of the policy thus procured, and it naturally would and did terminate when the policy had been delivered to plaintiff and the premium paid by him. (May on Ins., § 138; Hodge v. Security Ins. Co., 33 Hun, 587.) The possession of the policy was sufficient evidence of his authority and agency to cancel or modify it. ( Whited v. Germania Ins. Co., 76 N. Y. 415 ; 109 U. S. 278; Van Valkenburgh v. Lenox Ins. Co., 51 N. Y. 465; Nat. F. Ins. Co. v. Isett, 14 Rep. 378 ; Adams v. M. & I. Co., 12 Ins. L. J. 787; Tehler v. N. O. Ins. Co., 14 id. 734; S. O. Co. v. T. Ins. Co., 64 N. Y. 85 ; Collender v. Dinsmore, 55 id. 200.) An insurance company will be held to an exact and full compliance with this condition if it is sought to be availed of. (McLean v. R. Ins. Co., 3 Lans. 421; Goit v. N. P. I. Co., 25 Barb. 189 ; May on Ins., § 67 ; Wood on Ins. 106 ; Runkle v. C. Ins. Co., 11 Ins. L. J. 94.) If the exchange of the policy of the Insurance Company of North America for defendant’s policy had been consummated, that would not have been a refunding of the premium. The premium was paid in money and could be refunded only in money. (Hathorn v. Germania Ins. Co., 55 Barb. 28; F. Ins. Co. v. Marsey, 33 Penn. St. 221; Hollingsworth v. G. I. Co., 45 Ga. 294; AEtna Ins. Co. v. Maguire, 51 Ill. 342.) The policy of the Insurance Company of North America was inchoate and conditional while that of the defendant was absolute, it was not in any just sense a fair and equal substitute for that of the defendant. (Lapin v. Charter Oak Ins. Co., 58 Barb. 325 ; Graham v. Phoenix Ins. Co., 77 N. Y. 171.) When an insurer, with knowledge of a claim made under a policy, rests his defense exclusively upon other grounds, he is treated as having waived all objections to the seasonableness or sufficiency of notice or proofs of loss, and cannot afterward avail himself of defects therein, (State Ins. Co. v. Maacheus, 9 Vroom, 564; Wood on Ins. 726, § 420.)
   Andrews, J.

Regarding the evidence in the most favorable light for the defendant, the authority conferred by the plaintiff on Kennedy & Buell, was to procure insurance to the extent of $8,500 upon the plaintiff’s factory building, and the machinery and furniture therein, in the city of Troy, either in companies which they represented' as agents, or in other companies. In execution of this authority Kennedy & Buell in the first instance, placed the entire insurance in their own companies. Subsequently, on some of the companies refusing to carry the risk, they procured the defendant, through Kelly & Knox, its agents, to issue the policy in question, in place of the policies which had been canceled. The defendant’s policy was dated February 11, 1880, and was for the period of one year. The plaintiff resided in the city of. New York, and the firms of Kennedy & Buell and Kelly & Knox, in the city of Troy. Upon the receipt by Kennedy & Buell of the defendant’s policy from Kelly & Knox, the former firm forwarded it to the plaintiff in New York, and it remained in his possession until after the fire. There was no transaction between the plaintiff and Kennedy & Buell subsequent to the forwarding of the policy, except the payment by the plaintiff to them of a premium account, which included the premium on defendant’s policy. The principal question in the case arises on the defense of cancellation. The policy provides that the company may terminate the insurance on giving notice to that effect and refunding a ratable proportion of the premium for the unexpired term.” The defendant prior to March 16,1880, directed Kelly & Knox to cancel the policy. On that day they notified Kennedy & Buell of this fact, and an arrangement was made between the two firms, that Kelly & Knox should issue a policy in another company, to take the place of the defendant’s policy, and that Kennedy & Buell should procure from the plaintiff the policy in question and deliver it to Kelly & Knox. Kelly & Knox thereupon wrote a policy in the Insurance Company of North America, and sent it to Kennedy & Buell, and the return premium on the defendant’s policy, and the premium on the new policy were adjusted by entries in the mutual accounts of the two firms. The fire occurred March 20, 1880. The defendant’s policy was then in the plaintiff’s possession, and he had no knowledge or information of the transaction in respect to the cancellation, until after the fire. We are of opinion that that transaction did not operate as a cancellation of the defendant’s policy. The defendant reserved the right to cancel the policy on notice to the insured. This condition would be satisfied by personal notice to the plaintiff, or to an agent authorized to receive it. But the authority of a broker employed to procure insurance for his principal, such broker not being a general agent to place and manage insurance on his principal’s property, terminates with the procurement of the policy. It cannot in reason be held to continue after the insurance has been procured, and the policy has been delivered to the principal. An agent to procure a contract, has no power to discharge it implied from the original authority merely. If he possesses that power, it arises from some actual or apparent authority superadded to the mere power to enter into the contract. In this case Kennedy & Buell had no general authority to represent the plaintiff in all matters relating to the insurance as did the agent in the case of Standard Oil Co. v. Triumph Ins. Co. (64 N. Y. 85), nor had they any apparent authority to accept notice of cancellation. The defendant’s agent, when the transaction of March 16, 1880, took place, knew that Kennedy & Buell had sent the policy to the plaintiff in New York, and that it was then in Kis possession. The defendant relies upon a special clause in the policy which declares that it is a part of this contract that any person, other than the assured, who may have procured this insurance to be taken by this company, shall be deemed the agent of the assured named in the policy, and not of this company, under any circumstances whatever, or in any transaction relating to this insurance.” This clause was primarily intended, no doubt, to define the relation of the insured to a person who applied for and procured the insurance, in a ease where the same person was also agent for the insurer in taking risks and soliciting insurance; or, in other words, in a case of double agency. The obvious meaning of the clause is that the person procuring the insurance shall, in respect to that matter, be deemed the agent of the insured; whatever his relations to the company in other respects may be, and that in any transactions in respect to the particular insurance, he shall not be deemed the agent of the company, by reason of such other relations. But it does not declare that in all transactions relating to the insurance, after the inception of the contract, he shall be deemed the agent of the insured, but only that in respect to such other matters or transactions he shall not be deemed the agent of the company. The agent procuring the insurance may, in a given case, be the agent of the insured in transactions subsequent to the inception of the policy, but this would depend upon his actual authority. The special clause does not purport to constitute him a continuing agent, and such a construction would be very unreasonable. This clause has been construed in several cases in substantial accord with the views here expressed. (Grace v. Am. Cen. Ins. Co., 109 U. S. 278; White v. Conn. Fire Ins. Co., 120 Mass. 330; Adams v. Man. & Build. Ins. Co., 12 Ins. L. J. 787.) The local custom in Troy, that notice of cancellation may be given to the broker who procures the insurance, was unknown to the plaintiff, and in so far as-’it assumes to make the broker an agent of the insured to receive notice of cancellation, although he had no such authority in fact, it is an attempt to override the legal construction of the contract, and was inadmissible to control it. The point that there was no forthwith service of notice of the fire, as provided in the policy, is answered by the fact that the defendant accepted the formal proofs of loss, and placed its refusal to pay the insurance on the ground that the policy had been canceled. The defendant’s agent was at the fire. The company’s general officers knew of-the fire soon after it happened. It needs but little evidence, under such circumstances, to justify the conclusion that the insurer had waived strict compliance with the provision as to notice.

We thinlc the judgment .should he affirmed.

All concur.

Judgment affirmed.