text:
    Ira Anna Harpending, Respondent, v. Elisha Gray, Appellant.

      Action on a promissory note — payment to a third person no defense.

    Semble, that in an action brought on a promissory note by the holder thereof, payment of the same to a third person, after he had parted with the possession thereof, is no defense to the action, even though the party suing upon the note paid no consideration therefor, and received it after maturity.
    Appeal by the defendant, Elisha Gray, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 28th day of March, 1893, upon the verdict of a jury for $3,479.50, by direction of the court, after a trial at the New York Circuit, and also from an order entered in said clerk’s office on the 17th day of April, 1893, denying the defendant’s motion for a new trial.

      H. L. Harrison, for the appellant.

      W. O. Campbell, for the respondent.
   Van Brunt, P. J.:

This action is founded upon a promissory note made by the defendant to his own order and indorsed, and alleged to have been acquired by the plaintiff in good faith before maturity. The defense admits the making of the note, but denies any knowledge or information sufficient to form a belief whether the alleged copy of the note contained in the complaint is a true copy of the note executed by her, and also denies any knowledge or information as to whether said note passed to the plaintiff for value before maturity; and further answering, alleges that the note has been paid, and that the note was lost or mislaid by the holder thereof, and at the request of the holder upon the representation that such note was lost, the defendant paid such note; and that defendant is informed and believes that the plaintiff well knew that the note had been lost, and had been paid by the defendant when the note came into the hands of the plaintiff.

Upon the trial it appeared that the note was made on the 13th of September, 1886, payable six months after date, and Avas delivered to one Rodney M. Whipple, who delivered it with other notes to D. II. Jhckson in part payment for stock in the Chicago Mining and Reduction Company, some time after the notes Avere made and before maturity. Subsequently Whipple had transactions with one D. G. Roberts Avliereby Roberts is alleged to have pledged Avitli Whipple, for loans to him, $15,000 of the defendant’s paper. Roberts delivered to Whipple $12,500 and Avas to send him $2,500 more; and stated to him that he and Jackson had some unsettled matters, and that Jackson had not delivered to him the last $2,500 note he was entitled to, and the matter would be fixed up after a while, and he would send it to him. It appears that Roberts never delivered the note in question to Whipple, and there is some statement of a correspondence in respect to its being lost. But it further appears that Roberts did deliver $12,500 notes upon this $10,000 loan from Whipple to him, which notes were paid; and there was also evidence tending to sIioav that the defendant paid to Whipple the $2,500 note in suit upon the theory that it Avas lost.

The evidence further shows that between the 5th and 15th of October, 1886, Roberts called with the note in question at the office of the plaintiff’s husband in East TAventy-fiftli street in the city of New York and desired to get some money upon it, and tliat the husband, having certain moneys of his wife’s, by and with her consent, bought and paid for the note.

It is urged that the evidence in regard to the buying of, and payment for, the note by the plaintiff’s husband was of such a character as to excite suspicion, and that the question should have been submitted to the jury as to the credibility of such evidence.

But the question as to the right to recover goes beyond this. There is no doubt that Jackson was a holder of this note for value, and that the defendant paid this note to Whipple after the latter had parted with the same; and there is no evidence that Whipple ever again had possession of the note, or ever had any right to the note, except upon the promise of Roberts to deliver it upon the loan of $10,000 which was entirely paid without such delivery.

It appears, therefore, that Whipple had no title to the note, and no right to collect the same. We think, therefore, that the learned court below was correct in directing the verdict, as there was no question which could be submitted to the jury. If any payment of this note was made, it was made to a party not entitled to receive it. Aside from this feature of the transaction, the fact of the ‘Ifcte having been held for so long, and some of the peculiar features in regard to its purchase, might have excited suspicion, and justified the submission of the case to the jury. But when we consider that Jackson was a holder for value, and that Whipple from the time he first parted with the note, never acquired any title thereto, never was the actual owner of the note, and never had possession of the same, it is evident that payment to him would be no defense, as against a holder of the note, even though such holder had paid no consideration and had received the note after maturity.

The judgment and order should be affirmed, with costs.

O’Brien and Parker, JJ., concurred.

Judgment and order affirmed, with costs.


source: Caselaw Access Project

author: Van Brunt, P. J.:

license: Public Domain

text:
    John Schween, Plaintiff, v. Mendel W. Greenberg, Defendant.

      Title to real estate ■ — when acceptance thereof cannot he compelled — construction, of a will.

    A person who has agreed to purchase real estate cannot he compelled to take the same if the title thereto is not marketable and free from reasonable doubt.
    The provisions of a will of a decedent, purporting to devise real estate, considered, commented upon and construed.
    Submission of a controversy upon an agreed statement of facts, pursuant to section 1279 of the Code of Civil Procedure.

      8. Gampbell, for the plaintiff.

      E. Manclel, for the defendant.
   Van Brunt, P. J.:

David Sherwood in March, 1843, died seized of the premises in question, leaving a last will and testament, which was duly admitted to probate in the Surrogate’s Court of the county of New York.

By this will he devised the premises in question to his son William fo0ife, and after his death to his children equally, their heirs and assigns forever, and then provided:

Item. In the event of any or either of my said sons or daughters departing this life without leaving lawful issue him or her surviving, I do hereby order and direct that the estate hereby given and bequeathed to such son or daughter so dying without lawful issue shall thereupon become the property of, and I do hereby give, devise and bequeath the same to such of my said sons and daughters .as may then be living, and to the lawful issue of such of them' as may be deceased. It being my will and intention that my said sons .and daughters should take and hold their shares and proportions of the estate in this article of my will mentioned, for and during their natural lives. And upon their, any or either of their decease, the same shall descend to and be had, shared and divided by and between his or her lawful issue in equal proportions, share and share alike, :and their heirs and assigns forever.”

At his death David Sherwood left him surviving his widow, who died many years ago, and six children, all of whom died prior to William, except Clarissa Ann McCoy. Those who had died prior •to "William all left issue. Clarissa A. McCoy is still living, and liad, at the death of "William, three living children and one grandchild, the son of a deceased daughter. In July, 1879, "William Sherwood died intestate, unmarried and without issue. In August, 1873, a suit in partition in this court was commenced by "W. II. II. Sherwood, the son of Samuel J. Sherwood, and grandson of said testator David Sherwood, against Susan A. Sherwood, widow of Samuel J. Sherwood, and others, which went to judgment and sale, and on the 18th of May, 1881, said property was sold under said judgment to the plaintiff, who took a deed thereof on or about the 23d of July, 1881, and went into possession, and has ever since remained in undisturbed possession thereof. Clarissa A. McCoy was made a party defendant to said partition suit and duly appeared therein, but neither her children nor the grandchild were made parties. All other persons having an interest in said property were made parties and were served or appeared. On the 16th of August, 1892, the plaintiff entered into a contract whereby he agreed to convey the land in question to the defendant. The defendant refused to take upon the ground that the children and grandchild of Clarissa McCoy were necessary parties to the partition suit, and the question is whether the plaintiff can give a marketable title and one free from reasonable doubt.

There would be no question in regard to the construction to be placed upon this will had it not been for the statement contained in the devise over by the testator that it was his will and intention that his said sons and daughters should take and hold their shares of his estate in this article mentioned for and during their natural life, and, upon their or either of their decease, the same shall be had, shared and divided by and between his and her lawful issue, share and share alike, and their heirs and assigns forever.

Here is the expressed will of the testator that, in case all his sons and daughters shall die without issue, their share shall go to the surviving sons and daughters, which they shall hold for and during their natural lives, and then follows a devise over to their issue. It seems to have been the intention of the testator, as above observed, to give only a life estate to the surviving sons and daughters, and the claim urged upon the part of the plaintiff, that where the testator in the devise over made use of the term estate he meant the property, does not seem to render tbe construction less certain. "We do not think that the construction claimed by the plaintiff is so free from reasonable doubt that the title which he proposes to give can. be said to be a marketable one. (Kilpatrick v. Barron, 125 N. Y. 751.)

The defendant should have judgment, with costs.

O’Brien and Parker, JJ., concurred.

Judgment for the defendant, with costs.


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

text:
    Charles S. Murphy, Appellant, v. William C. Jack and Another, Respondents.

      Attaahsnent, statutory only — the affidavit need not be made by a pa/rty — it maybe made on information and belief when the source of information is stated— information obtained by telephone, sufficient.

    The right to attach property to secure the payment of a debt before recovering a. judgment against the alleged debtor is not a common-law right, but exists by virtue of the statute, the requirements of which, and the procedure prescribed by which, must be substantially complied with by the attaching creditor in order that he should acquire a valid lien on the debtor’s property:
    It is not required that an affidavit to obtain a warrant of attachment be made by the plaintiff, nor by any one having personal knowledge of the existence of the-facts stated therein, but an affidavit made by the agent or by the attorney of' an attaching creditor, averring that the facts required to be shown -exist as theaffiant is informed and believes, stating the source of his information and the grounds of liis belief, is sufficient to confer jurisdiction on a judge to grant an. attachment.
    Where courts and judicial officers are asked to act upon affidavits made on information and belief, they require, as a matter of safety, that the source of the information, and the means by which it was communicated, be disclosed, and if the source of information be a person, it must be one whom the court can see probably had personal knowledge of the facts communicated, and the means by which the communication is made must be one which experience has shown to be usually reliable, and which a prudent man would employ in a matter of importance to himself.
    In an attachment proceeding the affidavit to procure the warrant was made by the plaintiff’s attorney, upon information and belief, the source of the information being a communication made to the affiant by the plaintiff through a long-distance telephone from Boston to New York city.

      Held, that the source of the affiant’s information was the best;

      That the means of communication was sufficiently reliable to justify the affidavit and to uphold the warrant of attachment;
    That the fact that the plaintiff was without the State and that the affiant believed that the defendant’s attachable property would be removed therefrom before an affidavit could be obtained from the plaintiff, was a sufficient excuse for presenting the affidavit of the attorney instead of that of the party.
    Judicial action can be based on information transmitted by telephone, although the affiant cannot swear that he knew and' recognized the voice of the person with whom he communicated. (Van Brunt, P. J., dissenting.)
    There can be no absolute rule by which the sufficiency of evidence to sustain attachments can be determined, and every case must depend largely upon its own facts, and somewhat upon the nature of the action, and also upon the fact between whom the question arises.
    Appeal by the plaintiff, Charles S. Murphy, from an order of the Supreme Court, made at the New York Special Term and .entered in the office of the clerk of the county of New York on the 26th day of October, 1893, directing that a warrant of attachment granted herein be vacated and set aside.
    It is alleged in the veiified complaint that the defendants pur-chased goods of the plaintiff and agreed to pay therefor $1,351.80 ■July 20, 1893, but have not paid the same nor any part thereof. The complaint ivas verified by one of the plaintiff’s attorneys for the reason, as stated in the verification, that the plaintiff was not then in this State, but in the State of Massachusetts. It is averred, on information and belief, in the affidavit that the plaintiff is entitled to recover $1,351.80, with interest from July 20, 1S93, over and above all counterclaims known to the plaintiff, that the plaintiff is a resident of Boston, Mass., and that the defendants reside at Oardiner, Me.
    The affidavit is made by one of the attorneys of the plaintiff, who states that he acquired his information on the day of the date of the affidavit from the plaintiff by a conversation carried on with him by means of a telephone, the affiant being in New York and the plaintiff in Boston. The following reason is given why the affidavit is not made by the plaintiff:
    “ Deponent asks that an attachment may be granted without waiting for' affidavits to be obtained from Boston, for the reason that it is possible, as deponent is informed and believes, to attach property to-day in New York city belonging to the defendants, but that it would be likely to be removed and lost if a day’s delay were required.”

      The complaint and affidavit were verified August 2, 1893, and a. sufficient undertaking was given, and an attachment was granted on the same day by a judge of this court, which was vacated on the papers on which it was granted by a Special Term held by another judge of this court.

      Bull'i/oan c& Cromwell, for the appellant.

      Henry D. Hotchkiss, for the respondents.
   Follett, J.:

The right to attach property to secure the payment of a debt before recovering a judgment against the alleged debtor is not a common-law right, but in this, as in most of the States, it exists by virtue of statutes, the requirements of which and the procedure prescribed by them must be substantially complied with by the attaching creditor in order to acquire a valid lien on the debtor’s property. Our Code requires the plaintiff to show by affidavit to the satisfaction of the judge granting the same (attachment) ” the necessary facts. The Code does not require that the affidavit shall be made by the plaintiff nor by any one having personal knowledge of the existence of the facts stated in the affidavit, but an affidavit made by the agent or by the attorney of the attaching creditor averring that the facts required to be shown by section 636 - of the Code exist, as the affiant is informed and believes, stating the source of his information and the grounds of his belief, is sufficient to confer jurisdiction on a judge to grant an attachment. (Buell v. Van Camp, 119 N. Y. 160 ; Bennett v. Edwards, 27 Hun, 352; Crowns v. Vail, 51 id. 204; Kokomo Strawboard Co. v. Inman, 53 id. 39 ; Globe Yarn Mills v. Bilbrough, 2 Misc. Rep. 100 ; Reichenbach v. Spethmann, 5 Month. Law Bull. 42.)

In the case at bar, the existence of the facts necessary to confer jurisdiction on the judge having been shown by affidavit, the question is, ought the judge to have been satisfied by the evidence presented? When courts and judicial officers are asked to act upon affidavits made on information and belief, they require, as a matter of safety, that the source of the information and the means by which it was communicated be disclosed. If the source of information be a person, it must be one whom the court can see probably liad, personal knowledge of the facts communicated, and tlie means by which the communication is made must be one which experience has shown to be usually reliable, and one which a prudent man would employ in a matter of importance to himself.

The source of information in this case was the plaintiff, 'the person of all others most likely to have personal knowledge of the existence of the debt, its amount and the residence of the debtors. The source of the affiant’s information is the best, and, indeed, it was not questioned by the learned judge at Special Term, nor is it by the learned counsel for the respondents, except that it is suggested that some of the information was communicated by the plaintiff’s attorney in Boston, but it is specifically stated in the affidavit that all of the jurisdictional facts were communicated by the plaintiff. But it is said that the means by which the affiant acquired his information is not sufficiently reliable to authorize or support judicial action. The means through which the plaintiff derived his information was a conversation by a long-distance telephone, the plaintiff being in Boston and the affiant in New York.

It lias been held that an attachment- may be based upon facts reported to the affiant by means of a cablegram. (Reichenbach v. Spethmann, supra.)

In the case last cited an attachment was granted and sustained on information cabled from Europe to the affiant in New York. Certainly the means would not- have been less reliable had the sender and receiver of the cablegram been able personally to have communicated with each other by telegraph and had done so. There was certainly no greater chance for error in communicating the information received by the affiant, in the case at bar, in the manner in which it was communicated, between persons interested in arriving at the exact facts, than there would have been in a communication transmitted either by telegraph or telephone, and written out and delivered in the ordinary way.

We do not think that it will do to hold that judicial action cannot be based on information transmitted by telephone, unless, as it is suggested, the affiant swears that lie knew and recognized the voice of the person with whom he communicated. Such identification is impossible in telegraphic communication, and the precaution of repeating dispatches would afford no greater security against deception than the opportunity of personal inquiry and cross-examination ■over the telephone. There can be no absolute rule by which the ■sufficiency of evidence to sustain attachments can be determined, ■and every case must depend largely upon its own facts, and somewhat up'on the nature of the action, and also between w'liom the •question arises. In the case at bar, the cause of action is a liquidated demand arising on the sale of goods. ■ The grounds for the ■attachment are the defendants’ indebtedness and that they are nonresidents of the State, two simple facts, which, as between the creditor and debtors, we think were established prima, facie by the complaint and affidavit used on granting the writ, and that the burden Avas cast on the defendants, if they desired relief from the attachment, to rebut the presumption arising from these affidavits and show affirmatively either that they Avere not indebted or that they Avere not non-residents of the State.

Had the question arisen between subsequent lienors a stricter rule might be enforced, but as between these parties it seems to us that the plaintiff should not be deprived of his lien unless the defendants overthrow ti is prima, facie case of the plaintiff.

The fact that the plaintiff Avas Avithout the State, and that the affiant believed that the defendants’ attachable property would be removed from this State before an affidavit could be obtained from the plaintiff, Avas a sufficient excuse for presenting the affidavit of the attorney instead of that of the party.

The order should be reversed, Avith ten dollars costs and printing disbursements, and the motion denied, Avith ten dollars costs, but with leave to the defendants to make a new motion upon affidaAdts for an order vacating the writ.

O’Brien, J., concurred.

Van Brunt, P. J.

(dissenting):

I cannot concur in the conclusion of the foregoing opinion.

It proceeds upon the assumption that the attorney communicated with the plaintiff by telephone and received from him the facts necessary to be presented to the court upon the application for attachment.

The attorney did not see the plaintiff nor did he recognize his voice; where then is there any jiroof that the plaintiff cominunicated anything ? In the case of a telegram a record is made. The original dispatch is preserved and accessible, but in the case of communication by telephone nothing is left to -which any test can be applied by which the accuracy or authenticity of the alleged communication can be determined.

Order reversed, with ten dollars costs and printing disbursements, and the motion denied, with ten dollars costs, but with.leave to the defendants to make a new motion upon affidavits for an order vacating the writ.


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

text:
    Charles A. Dorney and Others, Respondents, v. William M. Thacher, as Assignee, etc., Appellant, Impleaded with Others.

      General objection to the accounts of an assignee for creditors — burden of proof— fraudulent assignment — commissions, when not allowed — when counsel fees allowed — assignee’s disbursements — right to incur expense in defense of the trust fund.

    A general objection to specific items of expenditure by an assignee in the course of the management of the assigned estate is sufficient, if the assignee is thereby apprised of the grounds of the objection.
    The contention that the affirmative of establishing the validity of objections to an assignee’s account rests with the party making the same, and that they must be made to appear well founded beyond peradventure, the assignee having the right to demand that his accounts be declared correct until the contrary is fairly and clearly established, is not supported by authority or justice.
    "Where an assignee for the benefit of creditors accepts a trust, he takes it cum onere, and must run the risk of the good faith of his assignors in transferring the property to him, and if the assignment is void he loses his commissions, a’s the creditors of the assignors cannot be called upon to pay assignee’s commissions on a fund which actually belongs to them.
    A different question, however, may be presented where the assignee has, in good faith, executed his trust or partially distributed the funds of the estate.
    "Where an assignee for the benefit of creditors is not a party to the fraud in making the assignment, and is not cognizant of the facts which make it reasonably certain that such assignment cannot stand against the attacks of creditors, his duty requires that he should resist such attacks, and in order that he may successfully do so it is necessary that he should employ counsel, and his disbursements in so doing come within the class of disbursements allowed to an assignee who is even cognizant of the fraud, for the preservation of the estate.
    The rules governing the disbursements of an assignee for the benefit of creditors differ in no respect from those relating to any other trustee.

      A trustee in defense of the trust committed to his care, is allowed out of the trust fund liis reasonable counsel fees in protecting the estate although he may have been unsuccessful, provided that he acted in good faith and as a reasonable and prudent man would do under the circumstances.
    Appeal by tlie defendant, William M. Thacher, as assignee, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 5th day of July, 1893, confirming the report of a referee, except that portion which directs that the costs and expenses of the proceeding be made a charge against the estate.

      K G. Oloyd, for the appellant.

      A. Kling, for the respondents.
   Van Brunt, P. J.:

It is true that this court in the case of Heywood v. Kingman & Thacher (29 Abb. N. C. 75), in which action an interlocutory judgment liad been entered similar in form to the one in the case at bar, decided that upon appeal from an order confirming the report of a referee appointed by such interlocutory judgment, this court could reverse such judgment without having before it a scintilla of the record upon which such judgment was founded. But the conclusion then arrived at, it seems to me, should not be extended beyond the case which was then before the court.

The question presented by this appeal is whether the referee erred in his disallowance of disbursements made by the assignee, and of commissions charged by him. In the consideration of these questions it will not be necessary to state in detail the facts under which they arose. It is urged that the referee erred in disallowing certain disbursements and commissions of the assignee, because no proper objections to the assignee’s accounts were taken. And it is claimed that such objections must be specific, and must sufficiently apprise-him of the charge which he has to meet. In support of this proposition we are referred to The Matter of Mather (61 Hun, 214), and to the case of Heywood v. Thacher, above cited. It is to be observed that the opinion in Heywood v. Thacher is based upon the case of The Matter of Mather ; and the distinction between the nature of the items objected to in these two cases seems to have escaped the attention of the court. In the Heyvoood case the objection was a general one to the whole account. In the case at bar the objection is to specific items of expenditure by the assignee in respect to the management of the estate itself. In The Matter of Mather it was sought to charge the assignee for culpable negligence in failing to bring actions to set aside judgments under executions upon which goods of the assignors were sold after the assignment, but which executions were levied prior to the same ; and the court held that a. simple general objection against such an item was insufficient because it did not call the assignee’s attention to the fact that he was charged with culpable neglect in failing to bring actions to set aside judgments.

In the case at bar the items objected to are not of this character. They are to the commissions which the assignee charges, his counsel fees, and the disbursements which he claims to have made in the administration of the estate; and when these items were objected to 'lie knew perfectly the ground of the objection.

It is further urged that, if it should be held that sufficient objections were duly filed to the account of such assignee, the plaintiffs did not assume or discharge the burden of establishing the validity of the objection. And the astounding proposition is advanced that the affirmative of establishing the validity of objections rests Avith the party making the same, and it must be made to appear beyond pcradventiore, the assignee having the right to demand that, his accounts be declared correct, until the contrary is fairly and clearly established. Citing Keiley on Insolvent Assignments, 119. "With such a rule an assignee has a protection which is defiied to any other person, Avithout any exception, before our courts. The guilt of a person charged Avith a capital crime it is not necessary to establish beyond peradventnre. The degree of proof to establish such guilt must simply be beyond reasonable doubt, and no further. It is not-necessary to combat so remarkable a proposition. ,

Attention is also called, in support of the claim of the appellant, to The Matter of Frazer (92 N. Y. 239), which Avas an accounting of an executor, Avhere it Avas held that where the executor had paid a claim based upon an alleged contract with the deceased, Avliich was presented and SAvorn to in the ordinary manner, that the burden was upon the contestant to show that it was not a just debt, and, in :the absence of such evidence, it was properly allowed — a case entirely different from the one at bar. Another question would have been presented, if the objection had been to disbursements '•made by the executor for counsel fees and expenses in the manage■ment of the estate.

"We think, therefore, that the objections were sufficiently specific to call upon the assignee to show the propriety of the disbursements made by him in reference to the management of the estate, and that the conclusions of the referee upon this point were correct without further discussion.

As to the commissions of the assignee, it seems to be impossible to imagine upon what ground such commissions could be claimed. ' The assignee having become wrongfully in possession of property 'which should have been ajiplied to the payment of the debts of the ■assignors, instead of being placed in his hands, even though it may ■be without any wn-ong of his own, certainly cannot be allowed to deplete the estate by the charging of commissions Avhich are the ■ compensation for the performance of the trust, and Avhich he has not performed or earned, to the prejudice of the creditors Avho have ■successfully assailed the assignment. It is not a question as to whether the assignee has acted prudently and in good faith and ■according to- the best light a man of ordinary prudence could obtain •under the circumstances. But he is denied the right to deplete this fund because he has been fraudulently placed in possession thereof, "to the detriment of the creditors who have unearthed and disclosed the fraud. It may be unfortunate that an assignee is, under these circumstances, deprived of the compensation he expected to receive. But when he accepts a trust of this kind, he takes it cum onere. He must run the risk of the good faith of his assignors in transferring the property to him. The creditors certainly cannot be called upon to pay the assignee’s commissions on a fund Avhich actually belongs to them, but AAdiere an assignee has in good faitli executed liis trust, or has partially distributed the funds received by him according to the directions of the assignment, before the commencement of the creditors’ action, a different question may arise.

In respect to the counsel fees and the. necessary disbursements in protecting the fund, although there is a contrariety of decisions as to whether, in the case of an assignment being set aside, they should be allowed, it seems to us that where the assignee is not a party to the fraud and is not cognizant of the facts which make it reasonably certain that such assignment cannot stand against the attacks of creditors, his duty .requires that he should resist such attacks, and in order that he may successfully do so it is necessary that he should employ counsel. Disbursements of this kind come within the-class allowed to an assignee who is even cognizant of the fraud, for-the preservation of the estate. The rules governing the disbursements of an assignee in an assignment for the benefit of creditors-, differ in no respect from those of any other trustee. The trustee,, in defense of the trust committed to his care, has always been, allowed out of the fund the reasonable counsel fees in protecting the estate, although he may have been unsuccessful, provided he-acts in good faith and as a reasonable and prudent man would do. under the circumstances. We think, therefore, that there being no. evidence that the assignee was a party to or cognizant of the frauds, for which the assignment was set aside, he was entitled to recover, as part of his disbursements for the preservation of the estate, the reasonable fees which it was necessary for him to pay in order to. protect the estate and the trust, and also such incidental disbursements in connection therewith as he could show to have been, necessary.

The order appealed from should, therefore, be so far reversed and: the question as to the allowance to be made to the assignee for his. reasonable and necessary disbursements, including counsel fees in the protection of the assignment, referred to the same referee, with costs of appeal to the appellant and costs of a new reference to be paid out of the estate.

Parker, J., concurred.

O’Brien, J.:

The court at Special Term confirmed the report of the referee on-a reference to pass the account of the defendant Thacher as assignee under an assignment. for the benefit of creditQrs. In an action brought by plaintiffs in their own behalf only, the assignment and certain confessed judgments were set aside on the ground that they created preferences of more than one-third of the assignor’s estate, in violation of chapter 503 of the Laws of 1887. Similar decrees in eleven other actions were entered, which would more than exhaust the property in the hands of the assignee, and which, by the terms of the decrees, after an accounting, were to be turned over to a receiver.

This appeal as now presented, and that of Heywood v. Kingman (29 Abb. N. C. 75), are clearly distinguishable. Here specific objections were filed and additional exceptions taken to the assignee’s account by the counsel for the successful judgment creditors. Moreover, there are now a number of judgment creditors who are interested in the proper accounting by the assignee, and who have the right to and did take exception to the assignee’s account, and whose claims will exceed all that has been realized by the assignee. Having been successful in setting aside the assignment, they can question the conduct of the assignee in the management of the assigned estate.

With respect to sums paid to stenographers, typewriters and other clerks and employees of the assignee, as the referee upon the evidence held that they were legally indefensible, they were properly disallowed.

The only questions which seem to us to require any comment or discussion relate to the refusal of the referee to allow the assignee his commissions and sums paid to counsel in defending the assignment against the attacks of hostile creditors.

Smith v. Wise (132 N. Y. 172) is authority for the proposition that in an action to set aside a general assignment, wherein it was proved and found that there was actual fraud on the part of the assignor and assignee, counsel fees and disbursements in defending the action were not allowable because they were made, as stated, in furtherance of the fraudulent scheme.” And in Dexter v. Adler (1 N. Y. Supp. 684) it was held at Special Term that where the assignment was Set aside for fraud, participated in or not by the assignee, there no commissions could be- allowed. In Mayer v. Hazard (49 Hun, 222) it was held that the assignee for creditors should not be allowed for the expense of resisting a successful suit to set aside the assignment.

We regard it, therefore, as settled law that neither legal services, commissions nor disbursements will be allowed in a case where the assignment is set aside for actual fraud, of the assignor, in which the assignee participated. "Where, however, the assignee has not been guilty of fraud, but has acted in good faith, and where the assignment itself is not void, but merely, voidable at the instance of a creditor who successfully assails it for acts of the assignor, it has not been decided by the Court of Appeals that necessary disbursements incurred by the assignee in good faith, including sums paid for counsel fees in defending the trust estate, should -not be allowed.

Mayer v. Hazard and Dexter v. Adler (supra) are seeming •authorities against such allowance, but as the soundness of the doctrine held in those cases has been often questioned, it remains to be ■determined whether or not they should be further extended and followed.

In considering the questions, therefore, we think a distinction is to be made between the right of an assignee to commissions, and the right to necessary disbursements, including the payment of fees to counsel in defending unsuccessfully the assignment.

As to commissions, these should not be allowed, for the reason that as they are predicated upon the discharge by the assignee of his duties, they cannot be considered as having been earned in a case where the estate has not been administered, and where the administration of the property has been taken from the assignee and placed in the hands of a receiver. "We are clear that a commission of five per cent, which is the compensation fixed by statute, should not be awarded to an assignee who has not been called upon to discharge his duties, nor do we think that the court is requmed to make any allowance, by way of compensation, less than the statutory commissions, because with respect to both commissions and allowance it may be said that the assignee, having come wrongfully into possession of the property which should have been applied to the payment of the debts of the assignors, instead of being placed in his hands, even though it may be without any wrong of his own, should not be allowed to deplete the estate by the charging of commissions to the prejudice of creditors who have obtained a lien by commencing their action, and in such suit have successfully assailed the assignment. "Where, however, the assignee has proceeded in good faith to discharge his duties and administer the estate, and has converted the property and distributed it before the creditors’ suit is commenced, then an entirely different question would be presented, and it may be that commissions at the statutory rate, or an allowance, should be made to the assignee. As correctly said by the presiding justice : “ It is not a question as to whether the assignee has acted prudently and in good faith and according to the best light a man of ordinary prudence could obtain under the circumstances. But he is denied the right to deplete this fund because he has been fraudulently placed in possession thereof to the detriment of the creditors who have unearthed and disclosed the fraud. It may be unfortunate that an assignee is, under these circumstances, deprived of the compensation he expected to receive. But when he accepts a trust of this kind he takes it cum onere. He must run -the risk of the good faith of his assignors in transferring the property to him. The creditors-certainly cannot be called upon to pay the assignee’s commissions on a fund which actually belongs to them, but where an assignee has, in good faith, executed his trust,, or has partially distributed the funds received by him according to the directions of the assignment, before the commencement of the creditors’ action, a different question may arise.”

Upon the question of necessary disbursements, including a reasonable sum to counsel in advising the assignee, and in defending the assigned property from the attacks of hostile creditors, other considerations favorable to the assignee’s right to reimbursement, seem to us to be present and to be supported both by reason and authority.

In Noyes v. Blakeman (3 Sandf. 531, 543) it was said: “The law is most clearly settled, and it would be a reproach to its principles or its ministration were it otherwise, that all the necessary expenses of a trustee, that is, all expenses of every kind which are reasonable and in good faith incurred by him for the defense, protection or reparation of the estate are to be treated in equity as a charge in all cases.”

And in The Matter of the Atty.-Gen. v. N. A. Life Ins. Co. (91 N. Y. 57) it was said: “ The principle upon which counsel fees are granted in such instances is that of necessary disbursements, and it stands upon the same ground as any other necessary expense for the preservation of the fund. Often and usually the trustee has no interest outside of the performance of duty. What he does is for the benefit of others whose interests are for the time being in his keeping. He owes them no duty to expend his own money for their benefit, and whatever he does so expend in the reasonable and prudent care of the trust fund is properly allowed to him as an expense.”

In Downing v. Marshall (37 N. Y. 380, 389) it was said: “ His (the trustee’s) duties relate to the property and interests of others, and he is to be indemnified for necessary expenses in protecting such trust property, and lias an equitable lien upon it for such expenses.”

, As said in the supplement to Bishop on Insolvent Debtors (2d ed. 56) : “ The general rule' being thus unquestioned, the inquiry is whether it includes expenses of litigations unsuccessfully undertaken or defended by the assignee without practical benefit to the estate, assuming them to have been incurred in good faith and with the prudence which an intelligent and careful man would show in his own affairs. A rule which would preclude a trustee from such allowances wotxld certainly be a severe one. It would require of him an infallibility of judgment which we do not expect in the highest judicial tribunals where opinions are sometimes conflicting. It is suggested in Meyer v. Hess (supra) that an assignee may protect himself against loss by calling upon the creditors to indemnify him before he proceeds with litigation. It is doubtful whether this is a practical protection to the assignee.”

The logical conclusion from Meyer v. Hazard & Hess (17 N. Y. St. Repr. 26) is that an assignment which on its face is perfectly valid, and so far as the assignee is concerned, was executed in good faith, is to be surrendered by the latter to the first or any attack made upon it, or else protected at his own risk and expense. If, however, the assignee should be unwilling at liis own risk and expense to defend the assignment, and should fail to receive indemnity from friendly creditors, there are cases which might be cited as seeming authority for the view that he would be responsible for neglect of duty in permitting the trust estate, without action on his part, to be wrested from his possession. We do not think an assignee or trustee should be placed in such a dilemma, nor do we think the law places him in any such position of risk.

We see no good reason, therefore, either in principle or upon authority, why an assignee who has himself been guilty of no fraud, and who undertakes to discharge the duties of a trustee under an assignment which is not void, should not be allowed such proper and necessary disbursements as he in good faith may have made, either in collecting, protecting or defending the trust property.

The judgments confessed were more than one-tliird of the property of the assignors, and under the rule held in the earlier cases, an attempt to give an-unlawful preference in excess of the statutory limitation of one-tliird, was held to he fraudulent; Here, therefore, the judgment creditors succeeded upon this ground, and no appeal having heen taken from such judgment, it is conclusive. It is proper, however, in this connection to recall the fact-that the earlier cases have all been overruled by that of The Central National Bank v. Seligman (138 N. Y. 435), which decided that confessed judgments, in excess of the one-third allowed by law, do not operate to make the assignment for the benefit of creditors void as fraudulent, but that such judgments are to be considered as preferences, and, if in excess of the legal proportion of the assignors’ estate, are to he reduced to a lawful amount.

Here, the assignee not having been a party to the fraud alleged as the ground of the creditors’ successful attack, and the testimony showing that he acted in entire good faith, without knowledge of the prior confessions of judgment until after the attack upon the assignment was made, and in the light of the decision in Central National Bank v. Seligman (supra), we think that reasonable disbursements made and sums paid to counsel for defending the assignment, should be allowed.

Our conclusion, therefore, is that the report should in all respects be confirmed, except as to the disallowance of necessary disbursements made by the assignee, or sums by him paid to counsel in defending the assignment, and that the question of the amount of such allowance should be referred to the same referee for decision, with costs of the appeal to ap2>ellant, and the cost of the reference to be paid out of the estate.

' Order modified as directed in opinion, and as modified affirmed, without costs of appeal to tlie appellant, and costs of a new reference to be paid out of the estate.


author: O’Brien, J.:

text:
    The People of the State of New York, Respondent, v. Hyman Lesser, Appellant.

      Criminal action — conviction on the. testimony of a single witness — when a new trial will he granted — evidence insufficient, to warrant a conviction.

    The common law permits a conviction on a criminal trial, in the face of a denial of guilt by the accused, on the testimony of a single witness.
    It is the province of the General Term of the Supreme Court to order a new trial if satisfied that the verdict against a prisoner was against the weight of evi- ■ dence or against the law, or that justice requires a new trial whether exceptions were or were not taken upon the trial. (Code of Crim. Proc. § 527.)
    Upon the trial of a prisoner for grand larceny in stealing a watch, the complainant testified that she did not see the defendant take the watch, but that no other person between the time when she wound the watch and placed it on the mantelpiece, and the time when she missed it, had entered her apartment in which it was. The defendant testified that he had not seen nor taken the watch, that he knew nothing about it, and in addition he produced two witnesses who testified as to his good character. The jury rendered a verdict of guilty.

      Held, that the evidence was insufficient to warrant a conviction;
    That the court should, upon the defendant’s request, have advised the jury to acquit him, upon the ground of the insufficiency of the evidence.
    Appeal by the defendant, Hyman Lesser, from a judgment of the Court of General Sessions held in and for the county of New York, rendered on the 20th day of October, 1893, convicting him of the crime of grand larceny.

      Alexander Rosenthal, for tlie appellant.

      George G. Battle, for tlie respondent.
   O’Brien, J.:

The defendant, a Pole, who, at the time of his arrest was twenty-nine years of age, was employed by one Samuel Etreicli as a canvasser for crayon pictures. On October 2, 1893, lie called at the apartments of complainant, one Mrs. Foster, and endeavored to obtain an order from lier for a crayon picture. Slid stated “ that she did not want anything more to do with picture people, that they were frauds.” Instead, however, of permitting him to go, she continued the conversation about the picture business, and finally invited him into the sitting room to show him some pictures which she had-bought from some other firm, and for which she claimed she had been charged an excessive price. This was between ten and eleven o’clock in the morning.

She testified that her watch was on the mantelpiece where she had placed it, after winding it up, aDout fifteen minutes before the defendant came in. While he was in the sitting room she left to go into the dining room to get her receipt to show defendant how she had been, as she claimed, defrauded on the pictures she had previously bought, and after remaining out five or ten minutes she returned with the statement that she could not find the receipt. And then after some further conversation, in which the defendant urged her to purchase a frame, he left the apartments after giving her his address. Some five minutes afterwards the complainant claims to have missed the watch, and two days thereafter she caused the defendant’s arrest upon the charge of stealing it.

The complainant said that she did not see defendant take the watch, but testified that no other person, between the time when she wound the watch and placed it on the manteljnece and the time when she missed it, had entered her apartments, and that no other person, therefore, had had an opportunity to take it.

The defendant denied that he had seen or taken the watch, or that he knew anything about it, and in addition he produced two witnesses who testified as to his good character.

The jury found a verdict of guilty, and the sole question presented is, whether, upon this evidence, the motion made on behalf of the defendant, that the court advise the jury to acquit him upon the ground that the evidence was insufficient, should not have been granted.

Although, under certain systems of jurisprudence, a conviction could not be had where the testimony of the complainant is directly contradicted and offset by the testimony of a defendant, this rule has never prevailed at common law, which permits a conviction in the face of a denial of guilt by the accused on the testimony of a single witness. Where the testimony is direct, this rule is not likely to work injustice, because there will always ai-ise or be present circumstances which will be corroborative of such witness. Thus, if in this case, the complainant had seen the defendant take the watch, she would naturally have made some outcry, or taken some action which would have brought about the immediate apprehension of the prisoner, and this would result either in showing that, with -the consciousness of guilt and to avoid arrest, the defendant fled, or, if he remained, in finding the property in his possession. In the instance cited, the chances of error or injustice being done, or of one being wrongfully accused, would be slight. Where, however, the evidence, as here, is purely circumstantial, depending at best upon an opportunity to take the watch, assuming it was, as 'stated by complainant, on the mantelpiece, little or no chance is given to one accused of demonstrating his innocence, except as was done in this case, by denial of the accusation and by presenting evidence of good character, which in such a case is entitled to considerable weight.

It may be that the complainant was positive of the time when she last saw the watch prior to the defendant entering her apartments, and she may be quite certain about the fact of winding it fifteen minutes before he entered. And still we know that the memory is fallible, and mistakes as to the placing of articles in one place rather than in another, or in assuming with respect to an object we are accustomed to see daily that at a particular time we saw it in a particular place, are not infrequent. That it was possible for the complainant to be mistaken about the placing of articles is shown by the fact of her unsuccessful search for the receipt in the dining room. As against the circumstantial evidence, therefore, in this case, we lia\re the fact that the defendant lawfully, and upon the invitation of the complainant, entered her apartments; and his conduct therein and his leaving his address when departing are slight facts weighing in his favor. With these in mind we have then the circumstantial evidence of the complainant, offset by the positive denial of the defendant, which is supplemented by the proof of two witnesses as to his good character and honesty; and yet, without any proof as to her standing or character (which, however, is presumptively all right), the complainant is permitted on her uncorroborated statement to secure the conviction of the defendant.

When we recall the presumption that the law always indulges in as to the innocence of one accused, the necessity of establishing the guilt of a prisoner beyond a reasonable doubt, and the force and effect which in a case of this kind should have been given to evidence of good character, we think' it would have been a proper exercise of the power vested in the trial court to have advised the acquittal of the prisoner upon the ground that the evidence was insufficient. Assuming that defendant was innocent, we fail to see how he could have met the charge in any other way than by the evidence which was presented; nor are we able to find a single incriminating circumstance in his manner of entering or leaving the apartments, or in his subsequent conduct, which corroborates the complainant’s story. At the time the watch is said to have been stolen the prisoner ivas engaged in honestly earning a living, and prior to the charge made had never been guilty of any crime, ail'd his character for honesty was supported by those by whom he had been employed, one of' whom had known him from boyhood. In our opinion it would be destroying the presumption which arises in favor of the innocence of the accused, and permitting the subversion' of the rule which requires the establishment of guilt beyond a reasonable doubt, to allow this conviction to stand.

It is the province of this court to order a new trial if satisfied that the verdict against the prisoner was against the weight of evidence or against the law, or that justice requires a new trial, whether exceptions shall have been taken or not in the court below (Code Crim. Proc. § 527); and we think that in this case an instance is presented where the danger of mistake and injustice requires that upon testimony so slight and insufficient as was here given to support the charge, the prisoner should have another opportunity to vindicate his innocence, or the complainant to produce some stronger evidence of his guilt.

The judgment, therefore, should be reversed and a new trial ordered.

Van Brjjnt, P. J., and Parker, J., concurred.

Judgment reversed; new trial ordered.


text:
    In the Matter of the Application of The Metropolitan Elevated Railway Company Relative to Acquiring Title to Certain Real Estate. (In re Jones.)

      Mmiuent domain — powers of commissioners to view the premises — review of their award.

    The commissioners, appointed in condemnation proceedings to ascertain the fee damage resulting to certain property from the construction and maintenance of an elevated railroad, have a right to view the premises in question, and are entitled to act to some extent upon their judgment, hut the fact that such commissioners viewed the premises, and to some extent acted upon their own judgment, aided by ocular evidence, does not deprive the court of its right to review their award upon the question of damages.
    Appeal by Elvira Purdy froin the appraisal and report of commissioners in condemnation proceedings, and from an order of the Supreme Court, made at the New York County Special Term on the 30th day of June, 1891, and entered in the office of the clerk of the county of New York confirming said appraisal and report.

      C. P. Cowles, for property owner, appellant.

      A. O. Townsend, for the petitioner, respondent.
   O’Brien, J.:

The premises involved in this proceeding are two old-fashioned stores and tenements, situated on East Twenty-third street, between First and Second avenues, and near the Twenty-third street station of the Second Avenue line of elevated railway, and together are thirty-seven feet six inches in width by ninety-eight feet nine inches hr depth. As shown by the diagram or map, the structure of the railway is immediately over the north curb of the street, leaving between such structure and the house line only the sidewalk, the station referred to being also immediately in front of these premises.

No question of rental value was involved., the commissioners’ duty being to ascertain the fee damage resulting from the building and maintenance of the road. They found that such construction and maintenance of the railroad “interferes with the light, air and access which would otherwise be derived by said lots from said street.” And this conclusion is fully supported by the evidence and by the relative positions of the structures of the road and the premises. The value of so much of the easements of light, air and access appurtenant to the premises as were taken was found by the commissioners to be $730, and the real question presented ivpon this appeal is as to the adequacy of that award.

' It is true that in this proceeding the report shows that tlie commissioners, as they had a right to do, viewed the premises, and they were entitled to some extent to act upon their judgment. But as said in Perkins v. The State of New York (113 N. Y. 660): “The fact that the commissioners are required to view the premises and to act to some extent upon their own judgment, informed by ocular evidence, does not deprive this court of the power to review their award upon the question of damages. They may adopt some erroneous rule of damages, and their findings may be such, and the case upon all the evidence may be such, as to show that they misconceived the facts and erred in their estimate.” •

It is not usual for this court to interfere with an award made by commissioners, but we think that this record presents an exceptional case, where the power which the court has should be exercised in favor of the property owner. As is well known, and as appears by ’the record, in certain streets the property is more seriously injured by the presence of tlie elevated structure than in others. In the upper part of the city and upon the wide avenues, where considerable space exists between the structure itself and the house line, the damage will never be so serious as will necessarily result to property situated, as the premises in suit are, on East Twenty-third street, where tlie structure extends over the north curb of the street, immediately in front of the premises. That resultant damage from the contiguity and nearness of this structure in Twenty-third street to the premises, and by reason of the station immediately in front thereof, is proven, appears not only from the report of the commissioners, but also from the testimony in the case; and that this damage is substantial and not nominal seems to us evident. The course Of rental values with respect to the two houses in suit is shown, by which it appears that after the road went into operation the rents began to decrease, continued to fall, and have ever since diminished.

Where, therefore, as here, it is shown that the construction of the railway and its operation produced conditions which, injuriously affected the premises in question, we think it was. an inadequate amount to fix the value for both houses of the easements so taken at the sum of $750. Had the appraisers given that amount for each house, it would not have been out of the way, because, according to the testimony of the experts offered on behalf of the property owner, the value of the easements so taken ivas placed between $5,333 as the lowest estimate and $16,000 as the highest for the entire premises.

Of course the commissioners were not required to take even the lowest estimate given by the property owner, because on the part of the petitioner it was shown that this street had been for many years largely a residential street, and that for some years prior to the coming of the elevated road it had been undergoing a transition into use for stores, factories and business. There was also evidence tending to show that the elevated railway largely increased the traffic in this block and street, and that such increase tended to enhance the value of the land for the modern uses of the street. If, as the result of the weight to be given to such testimony, the award liad been considerably. below $5,000, we should not have been inclined to disturb it; but, from an examination of the entire record, we are of opinion that the commissioners erred in their estimate by giving an inadequate award, and that the confirmation of their report would result in injustice to the property owner.

We think, therefore, that the order of confirmation should be reversed, and the report set aside, with costs, and the matter sent to hew commissioners for a new appraisal.

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

Order of confirmation reversed and report set aside, with costs, and matter sent to new' commissioners for new appraisal.


text:
    John T. Elliot, as Administrator, etc., of Charles H. Elliot, Appellant, v. The Mutual Benefit Life Association of America, Respondent.

      Life insurance policy — evidence of an application therefor ■ — false answer in the application — knowledge of the falsity thereof immaterial — time within which an action should be brought.

    The evidence which is proper and sufficient to show, in an action against an insurance company, an application for a policy of life insurance and the rejection thereof by a company other than the defendant, considered and commented upon.
    When in an application for a policy of life insurance, the applicant warrants his answer to a certain question, it is immaterial whether he did or did not know his answer to be false.
    A policy of life insurance provided that the by-laws and regulations of an association, the insurer, were to be considered as part of the contract between the insurer and the insured. The by-laws contained the provision that in any suit upon a certificate of membership or claim thereunder, after the expiration of one year after the death of the insured, such lapse of time should be taken and deemed conclusive evidence against the validity of the claim, any Statute of Limitations of any State or government to the contrary notwithstanding.

      Held, that such stipulation was sufficient to prevent a recovery on the policy in an action brought after the expiration of one year from the death of the insured, providing that there was no evidence showing or tending to show that the defendant had waived such condition.
    Appeal by the plaintiff, John T. Elliot, as administrator, etc., of Charles II. Elliot, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 30th day of March, 1892, dismissing the plaintiff’s complaint after a trial at the New York Circuit.

      Ilenry G. Atwater, for the appellant.

      H. T. Lovatt, for the respondent.
   O’Brien, J.:

The action was brought to recover on a policy of insurance for $5,000, delivered by defendant to one Charles E. Blumner on August 1, 1887, and assigned to one Charles II. Elliot. Blumner died January 8, 1890, and Elliot on June 9, 1891, and thereafter letters of administration were taken out by the appellant.

The defenses to the action were, that defendant was imposed upon by Bhunner by the suppression of facts which he should hav.e divulged, and by false and fraudulent statements and misrepresentations, which constituted breaches of warranty, and that the claim was barred by a special contract limitation of one year.

The policy- provided that “ if any misrepresentations or fraudulent or untrue answers or statements shall have been made, or if any facts which should have been stated to the association have been suppressed * * * then in either event this agreement, shall become null and void.” And in the written statement made-, to the medical examiners the assured warranted the answers made by him to be true.

In his application the assured stated that no company had ever declined to grant insurance on his life ; and in support of the view that this was a false statement, an application made by the assured, in 1883, to the Equitable Life Assurance Society was produced and offered in evidence, which showed that it had been declined by that, company.

In laying the foundation for this testimony, the defense called the doctor who made the examination of Bhunner, and he testified that having concluded that it was a doubtful risk, he declined to recommend that a policy he issued, placing his declination on the application, and forwarded it to the Equitable Company in New York. In addition to the medical examiner, two other doctors, employed by or connected with- the Equitable Company were examined, one of whom testified that before the report was sent to the home office he signed his name to it, and the other that, after-being'received at the home office, he indorsed upon it, “Declined by Examiner,” over his initials. And to show what action was taken by the company, this witness further said that the report with these indorsements was in the nature of a recommendation of the medical director to the executive officers not to issue the policy. “ From us it goes to the executive department, and from there it goes to the executive officers, who would give the final transmission to the compahy, that of Dr. George W. Phillips.” And in response to the question whether it was Dr. Phillips’ action which made the rejection, he answered yes. Thereupon the paper was offered in evidence.

The defendant tlien offered in evidence a memorandum made by Dr. Phillips on the application, stating that the application was declined, the indorsement being in these words: Declined by Ex. G\ W. P.” The objection to this paper being received with the memorandum of Dr. Phillips upon it was, that it was the declaration of a third party, and it is now insisted that the failure to call Dr. Phillips and prove what his action was, was fatal to the admissibility of the paper, the argument being based upon the rule that a mere memorandum is not evidence against third parties, except when made in the usual course of business, and when it is shown that the party who made it is dead.

In this argument, however, the counsel overlooks the fact that it was not sought to show what action had been taken by Dr. Phillips, but rather, what was the action of the company. And there being no objection taken, and no point made but that the indorsement was in the handwriting of Dr. Phillips on the original application, the question is presented whether this is competent evidence of the ■action of the company. If such action had been by a resolution of the board of directors, upon proving the authenticity of such resolution by the minutes of the company, a proper foundation would have been laid for the admission of the minutes in evidence to prove the action of the company. We think the same principle is ■applicable where, as here, the action of the company is to be determined, not by reference to resolutions iri its minutes, but by what was done by the person authorized to state the company’s action. .As shown, the person upon whom this office and duty devolved was Dr. Phillips. And there would be as much force in the suggestion that, after the minutes of a board have been properly proved, before they would be admissible it would be necessary in all cases to produce the secretary who wrote them, as in this case to insist that, before the action of the company could be shown, it would be necessary to call Dr. Phillips, who was acting for the company, and whose memorandum was made, not for himself, but for the company, as evidence of the action it had taken.

The other argument against the force to be given to this evidence, that although the application was declined, there was no proof that .such declination was known to the assured, we regard as equally unsound. It is true, as suggested by appellant, that the verb “ decline ” has two meanings, but in its ordinary acceptation it meant, just what it said in connection with the language used in the question, and which could not have been misunderstood by the assured. It required him to state whether he had made any previous application to another company, and whether such application had or had not been declined. Having warranted his answer, whether he knew or not was immaterial, because by reason of such a warranty he was bound to know whether it was true or not; and having taken the risk of that, even though he had no actual knowledge, and no proof was offered to show it was a willful falsehood, it was sufficient for the defendant to show as a matter of fact that the answer was false. He had applied in August, 1883, for a policy in the Equitable Life,, and when he made his application to the respondent four years later,, in 1887, he knew that none had been granted, and yet he warranted the answer which he made, that an application had not been made by him to»any other company and declined.

The assured also stated that he was not afflicted with any disease or disorder; that he had not had any serious illness, local disorder or personal injury, tending to shorten life; that he had never had dizziness or disease of the bladder or urinary organs. He was asked to give the name and residence of his usual medical attendant, and he stated that he had not consulted one. To show that these statements were not true, the uncontradicted evidence given by Dr. Baldwin, who examined Blumner in 1883, was that, upon an examination of the urine of the assured, he found it contained sugar,, from which he concluded that it indicated diabetes. And, in addition, the son of the assured, in his testimony, says that lie heard his' father speak of the fact of having trouble with his kidneys, and that, he was accustomed, prior to his death, to use test tubes for the purpose of ascertaining about his kidney trouble or urinary trouble, and that lie had at different times before his death at least three physicians who attended him for a number of years and up to his last, illness. The plaintiff presented no evidence to destroy the force and effect of this testimony, and, therefore, there was no conflict, which required that the learned trial judge should.submit the question to the jury.

In addition to the defenses thus considered, there is another which we regard as equally fatal to the plaintiff’s right to recover upon the evidence as it stood, and which justified the dismissal of the complaint. The policy provided that the by-laws and regulations of the association were to be considered as part of the contract between the assurer and the assured. These contained the provision that in any suit upon a certificate of membership or claim thereunder, after the expiration of one year next after the death of a member, the lapse of time should be talcen and deemed conclusive evidence against the validity of the claim thereby so attempted to be enforced, any Statute of Limitations of any State or government to the contrary notwithstanding. It appears, therefore, from the date already given of the death of Blumner, and the time when the action was commenced, that this suit was not brought within a year; and under the authorities which permit the parties by contract to fix a different Statute of Limitations than that provided by law, this was fatal to a recovery, unless there was some evidence in the case sufficient to submit to the jrn-y, tending to sho-w that the defendant had waived this condition. For that purpose we have examined the record, but find no such evidence. It does appear that those representing the plaintiff endeavored, within the year prior to the beginning of the suit, to effect a compromise, hut there was nothing done by the association which could be construed into a waiver of its right to insist upon the condition as to the time of bringing the suit.

It is claimed, however, that the proof offered as to the by-laws was not conclusive for the reason that, although by-laws of the defendant which contained this provision were offered in .evidence, it was not shown that they were the by-laws which were in existence at the time the policy or certificate of membership was taken out. The answer to this, however, we think is to be found in the fact that in the first place the bill of particulars called attention to this by-law of the defendant as contained in the contract between the parties, and stated that it was adopted January 12, 1885, and that a copy of the same was attached and incorporated, and made a part of the bill of particulars. In this state of the pleadings the counsel for defendant offered the by-laws in evidence, and they were admitted and marked as an exhibit, without any objection being taken thereto, and without the point now sought to be availed of having been made. In the bill of particulars referred to it was stated that the said by-law is evidenced by the minutes, and the book in which the same are kept of the defendant,” and, in the absence of any objection, we are to assume that the minutes and the book in-which they were kept were the testimony offered, and that the extract, which is one of the exhibits in the case, was taken therefrom. Ve cannot assume, for the purpose of interfering with the judgment, and, in the absence of any objection or exception, that incompetent proof of such by-laws was offered, but we think, in view of what is stated in the bill of particulars, that the reasonable and fair inference to be drawn from the manner in which .the by-laws were admitted is, that they were properly proven, and by competent evidence were shown to be the by-laws in force at the time the policy was taken out by the assured.

We think that, upon any of the grounds to which we have referred, the ruling of the trial judge was right, and that upon the whole case the judgment should be affirmed, with costs.

Paekee, J., concurred; YaN Bruot, P. J., concurred in result.

Judgment affirmed, with costs.


author: O’BuieN, J.:

text:
    In the Matter of the Application of The New York Elevated Railroad Company, Relative to Acquiring Title to Certain Real Estate. (In re Clarkson.)

      Eminent domain — when, a single appraisement of damage should he made — assess. ment of damages —■ benefits, at what time existing, to he considered.

    A proceeding was commenced to acquire title for tlie purpose of an elevated railroad, to certain easements, appurtenant to a lot of land on an avenue upon which was an apartment house, and an order was entered appointing commissioners to make the appraisal. At tlie time of the institution of these proceedings there were two tracks in front of the premises in question; thereafter, and prior to the entry of the order appointing commissioners, an additional or interior track or siding between the original two tracks was constructed.
    By a stipulation between the parties it was agreed that the third track and track walks should be considered in the award to be made by the commissioners; that the award should be made for the entire structure, and that the petition and judgment of condemnation and the order appointing commissioners be deemed amended so as to include the additional structures.
    The commissioners concluded that the damage resulting to the premises for the taking of the easements by the tracks and structures described in the original petition was nominal only, for which they awarded six cents, but that the pecuniary damage resulting from the taking of the easement by the third track and track walks was the sum of S3,500.

      Held, that the commissioners should have made a single appraisement for the single entire structure, and that for their failure to do so, their report and award, together with the order confirming the same, should be reversed.
    In condemnation proceedings or in the assessment of fee damage, no past benefit is allowable except such as is then operative.
    In an action brought to recover past damages to property by reason of the construction and operation of an elevated railroad, any benefits, accruing to the property during the same period for -which damages are sought to he recovered, should he considered. But where condemnation proceedings are brought, not one day of past damages can be added to the condemnation damages allowed by the commissioners, or to the fee damage in a suit. The assessment of fee damage is eo instanti as of the date of the award; and in proceedings to condemn, the action has reference to the property as it stands, taking the damage as of that day, 'and the benefit as of that day from the railroad as it stands on that day.
    It is error for commissioners in condemnation proceedings to fix the present injury to the property sustained by the construction and operation of an elevated railroad, and to deduct therefrom all past benefits, irrespective of whether the property at the present time enjoyed such benefits; but it does not necessarily follow that all inquiry into the history of the property is to be excluded.
    Cjross-appeals by the petitioner, The New York Elevated Railroad Company, and by Benjamin E. Romaine and others, property owners, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 22d day of July, 1893, confirming the report of commissioners of appraisal, and also from the report,, appraisal and award of such commissioners.

      Brainard Tolies, for the petitioner, appellant.

      W. H. Beckham, for Buek, appellant.

      Charles H. Strong, for Romaine et ah, appellants.
   O’BuieN, J.:

This proceeding was begun on the 21st day of October, 1889, under the provisions of chapter 140 of the Laws of 1850, to acquire title to the easements in Ninth avenue necessary to be taken for the purposes of petitioner’s railroad appurtenant to a certain lot of land on the southeast corner of Ninth avenue and Seventy-third street, on which is a large apartment house known as the Westport.. Thereafter, and on December 22,1891, an order was entered appointing commissioners to make the appraisal. At the time these proceedings were instituted the property was owned by Charles Buek,, and there were two tracks in front of the premises. Between that time and the entry of the order appointing the commissioners the property was transferred, to tbe Romaines, and an additional or interior track or siding between the original two tracks was constructed for use of express trains in passing the Seventy-second street station.

By stipulation between the parties it was agreed that the third track and track walks should be included in the award to be made by the commissioners, which was to be divided between Buek and the Romaines in the proportion of two-thirds to Buek and one-third to the Romaines, in accordance with an agreement made between them. The stipulation between the parties, among other things, provided as follows:

(1) That the petition and judgment of condemnation and the order appointing commissioners be deemed amended so as to include the said additional structures hereinbefore described, and an order to that effect may be entered by any party without further notice.

“ (2) That the commissioners make their award as for the entire structure as it actually exists at the date of this stipulation, including both the structure described in the original petition and the additional structure hereinbefore described.”

The order appointing the commissioners as amended followed the terms of this stipulation, and, among other things, provided that the ■commissioners were to appraise so much of the property of the respondents “ as has been or will be taken by reason of the construction, maintenance and operation of the elevated railroad of the petitioner in Ninth avenue, as the same is now constructed, maintained and operated, and as described in the amended petition herein, and by the additional track and structures described in said amended petition.”

The commissioners, overlooking the language of the stipulation and the terms of the amended order, instead of appraising the ■damage done by the entire structure regarded as a whole or unit, entered upon an inquiry, first as to the injury to the property resulting from the construction of two tracks, and then considered the damage resulting from the third, or additional track; and as a result of such a division of the subject they concluded that ■ the damage resulting to the premises for the taking of the easements by the tracks and structures described in the original petition, which had reference 'to two tracks, was nominal only, for which they awarded six cents; but they concluded that the pecuniary damage resulting from the taking of the easements by the third track and track walks was the sum of $2,500.

From such conclusion all the parties appeal; the petitioner or railroad company upon the ground that in making a separate award for the interior track the commissioners acted contrary to the stipulation of the parties and to the order of the court from which their authority was derived; and the land owners upon the ground that the commissioners erred in their application of the rule as to the benefits, general and special, which should have been allowed to the railroad in diminution of the damages actually suffered by the property.

We agree with the petitioner that, under the situation of the parties, which, called for an appraisal of the damages done by an entire existing structure viewed as a unit, and under the order entered in conformity with this stipulation, the commissioners should have made a single appraisement for a single entire structure, which would be the structure as described in the amended petition, including the three tracks and track walks. We fail to see by what theory or right the commissioners .were justified in departing from the requirements of the stipulation or the-order; and for the error in this respect, the report and award, together with the order confirming the same, must be reversed.

We think, also, that the landowners are right in asserting that the theory upon which the commissioners proceeded was erroneous. The latter state in their opinion, after quoting from the Bohm and Becker Cases (129 N. Y. 576; 131 id. 509): “The Court (of Appeals) has shown a determined purpose to adhere to the rule that in estimating the value of the easements or property taken, the diminution in value of the abutting property to which such easements attached must be ascertained; that such diminution is to be measured by the difference between the actual market value of the property as it is, and what that value would have been if the railroad had not taken such easements ; that in the solution of the problem evidence of benefits occasioned by the road in the enhancement of values is pertinent; and that if it appears that the value of the abutting property is greater by reason of the road than it would have been if the easement in question had not been taken, no consequential injury lias resulted to tbe dominant estate, and the value of sucb easements is, therefore, nominal.”

Though with correct principles to guide them, the commissioners fell into the error of assuming that the value of the easements or property talcen was to be determined by considering the injury done, as offset by all past benefits.

Tlie inquiry in condemnation 'proceedings is to be directed to an ascertainment of the net result to the property as of the time of the award, and it is the injury which tlie property then suffers, as offset by the benefits which it then enjoys, that is to determine the award, if any, to be made. In other words, in condemnation proceedings, or in the assessment of fee damage, no past benefit is allowable, except such as is at present operative. And in considering these questions it is always important to bear in mind the distinction between the elements necessary where the action is brought to recover past damages, and where, as here, proceedings are brought in condemnation. In the former, any benefits accruing to the property covering the same period for which damages are sought to be recovered should be considered. But where condemnation proceedings are brought, not one day of past damages can be added to the condemnation damages before commissioners, or to the fee damage in a suit. Tlie assessment of fee damage is eo instcmti as of the date of the award. In proceedings to condemn, the action has reference to the property as it stands, talcing the damage of the day, and the benefit of the day, from the railroad as it stands on that day.

As said in the Pappenheim Case (128 N. Y. 436): “ In such case, the inquiry must be, what would be the fair market value of tlie whole property at the time of condemnation, without the railroad, and the difference between that sum and the present market value of the property left, with the railroad in existence, would constitute the measure of damages to which the owner would be entitled.”

And as said by the presiding justice in Kenkele v. Manhattan, Ry. Co. (55 Hun, 400): “ If proceedings under the statute were initiated now, the present value of these easements would necessarily be allowed, not what tlieir value was when tlie road was constructed. The defendants could have had this latter rule of dam.ages if they bad commenced their proceedings to acquire title when they began the construction of their road. They have not done this, but have refused to pay until compelled to do so by the strong arm of the law, and, hence, as they only pay now, they must pay •what the property taken is worth now.”

The commissioners, therefore, in fixing the present injury to the property, and then deducting therefrom all past benefits, irrespective of whether the property at the present time enjoys such benefits, overlooked the correct theory upon which their determination should have proceeded.

Although the real inquiry is as to the net damage, if any, to the property at the date of the award, considering the present benefits which the property is enjoying, .whether special or general, we do not desire to be understood as holding that upon such an inquiry the ■evidence should necessarily be restricted to the condition of the property as of the time of condemnation. It is true, as we have ¡said, that it is a consideration of the property as of that time by which the question of the value of the easements sought to be condemned must be determined; and though past benefits, whether special or general, which at that time are not operative, are not to be. taken into consideration ■ — ■ because it is the value of the property as it existed at the date of condemnation that is to be determined — it does not necessarily follow therefrom that all inquiry into the history of the property is to be excluded. Because, in determining the consequential damages resulting to property from a destruction ■of the easements taken by the road, it might, in certain cases, be difficult to tell the amount thereof without going into the history of the property. Thus, with respect to the property here involved, the road has been built, and the easements taken, and in determining the present net injury to it from the taking, against which can be offset the benefits, general and special, which it now enjoys, the line of inquiry might naturally go back over its history for the purpose of furnishing the necessary evidentiary facts, from which the result may be reached as to what the damages are, after giving the benefits, ■special and general, which the property received and is enjoying at the date of condemnation. In other words, a distinction should be ■carefully observed between the fact to be proved and evidence which may be admissible in proof of such fact.

We do not say, therefore, that past benefits may not be considered as matter of evidence, or that the commissioners are prevented from resorting to any other competent evidence which is relevant for the purpose of solving the inquiry presented to them as to the award, if any, which should be made as compensation for the easements taken. To hold that the history of the property might not be gone into would in effect be saying that resort should not be had to evidence which, in a given case, might, be the only evidence that could be furnished.

As our conclusions are as equally favorable to the appeal taken by the land owners as to the one taken by the petitioner, which affects the entire report and award, and the order confirming the same, these should be reversed, and a new appraisal be had, but without costs to either party as against the other.

Yan Brunt, P. J., and Follett, J\, concurred.

Order reversed and new appraisal directed, without costs.