author: Yan Brunt, P. J.:

text:
    Pierre W. Wildey, as Trustee, etc., of Gertrude C. Kearny and Other, Respondent, v. Robert E. Robinson and Another, as Executors, etc., of Joseph R. Kearny, Deceased, Respondents; Lucia L. Kearny, Appellant.

      Determination of a■ referee as to costs, how reviewed — power of the Supreme Oourt to appoint a successor to a deceased tomstee— effect of an unauthorized appointment— contract between a trustee and his cestui que trust — double commissions to am, executor and trustee.

    The disposition made by a referee, as to the costs of an action, cannot be brought up for review upon appeal if no exceptions have been filed to the conclusion of the referee and the decision of the court in respect to such costs.
    Under the provisions of the Revised Statutes the Supreme Court has no power to appoint a new trustee upon the death of the surviving trustee of an express trust. The trust, if then unexecuted, vests in the Supreme Court with all the powers and duties of the original trustee, and will be executed by any person appointed for that purpose under the direction of the court.
    Where the Supreme Court attempts to appoint a trustee, although it had no power to make such appointment, the person designated as trustee will be deemed to be a person appointed by the court for the purpose of executing the trust under its direction.
    A trustee, in order that he may establish and claim a benefit from a contract with his cestui que trust, must show that the contract is just and fair, and that the cestui que trust understood his rights, and that the making of* the contract was a voluntary and intelligent action on the part of such cestui que trust.

    An agreement between a trustee and his cestui que trust whereby the trustee is to receive commissions in excess of the amounts allowed by law, where it appears that all the duties which the trustee was to perform by reason of such agreement he was in duty bound to perform' by virtue of nis office, is void for want of consideration.
    Where the two function^ of executor and trustee coincide and run from the death of a testator to the final discharge of the person exercising such functions, inseparable and blended together, double commissions or compensation in both capacities snouid not be allowed; Dut where the duties are distinct, and where, by a judicial decree, the executor has been wholly discharged as such, and is left acting ana liable only as trustee he will be entitled to his commissions as trustee; * it is only in those cases in which the executor cannot be discharged as executor and oe left actin'? and liable only as trustee, and when both offices, from the necessity oftlití case, remain in existence, that the right to commissions as trustee must be denied.
    Appeal by the defendant Lucia L. Kearny from so much of a judgment of the Supreme Court in favor of the plaintiff, entered in the office ol the clerk of the county of New York on the 16th day of April, 1894, upon the report of a referee, as allows to the defendants Robert E. Robinson and another, as executors, etc., of Joseph R. Kearny, deceased, a certain sum as commissions to which their testator was entitled and overruled the exception of the appellant to the report of the reteree allowing commissions, and also from so much of such iudgment as directs that the costs and allowances be charged wholly against the income of a certain trust, and also from so much of said judgment as allows to the executors-commissions in excess of the rate allowed by law.

      E. L. Maynard, for the appellant Kearny.

      W. T. Emmet, for the executors, respondents.

      II. S. Ogden, for the plaintiff, respondent.
   Yan Brunt, P. J.:

This action was brought for the appointment of a trustee to succeed Joseph R. Kearny, deceased, who was at the time of his death the sole surviving trustee of the estate of Philip R. Kearny, deceased, and also to obtain a judicial settlement of the account of said deceased trustee. Upon the trial of the action the court appointed a new trustee and ordered a refere^pe for the purpose of taking and stating the accounts of the deceased trustee. The referee' took the account of the deceased trustee, and exceptions were filed to the amount of certain commissions allowed by him.and ta the allowance of others.

Upon this appeal it is sought to bring up for review the disposition of the referee as to the costs. But we do not understand that any such question can be here presented, because no exceptions have been filed as to the conclusion of the referee and the decision of the court in respect to these costs, and this point of the case will not, therefore, be discussed.

It may be proper to call attention to the fact that under the Revised Statutes there does not seem to be any power in the court to appoint a new trustee. The provision of the statute is (§ 68, vol. 1, p. 730), upon the death of the surviving trustee of an express trust, the trust estate shall not descend to his heirs noi pass to his personal representatives, but the trust, if then unexecuted, shall vest in the Court of Chancery, with all the powers and duties of the original trustee, and shall be executed by some person appointed for that purpose under the direction of the court. There is no provision in the statute authorizing the court to divest itself of the trusteeship, but it may appoint some person as its agent under its direction to execute the same. There seems to be no power to appoint a new trustee except in the case of a trustee resigned or removed; and that there is a distinction between the appointment of a new trustee and the execution of a trust devolving upon the court by some person appointed for that purpose, seems to be emphasized by the provisions of section 71 of the statute, which is as follows: “ The chancellor shall have full power to appoint a new trustee in place of a trustee resigned or removed, and when, in consequence of such resignation or removal, there shall be no acting trustee, the court, in its discretion, may appoint new trustees or cause the trust to be executed by one of its officers under its direction,” there evidently being a distinction between the appointment of a new trustee and the execution of the trust by the court through the instrumentality of some person appointed by it.

It has been held, however, that the attempt to exercise the greater power was a valid exercise of the lesser; and that, where the court has attempted appoint a trustee, although it had no power to make such appointment, the person designated as trustee would be deemed to be a person apjiointed by the court for the purpose of executing the trust under its direction.

The referee allowed the trustee, upon this accounting, commissions at tbe rate of five per cent upon all the income of the trust received and paid out by him. This ruling of the referee is founded upon two papers executed by the appellant, whereby she promised to allow to the acting executors of the will of her husband commissions of five per cent for receiving and paying out all sums of money ; and subsequently she executed a written agreement, whereby she agreed to allow to the acting executors and trustees a compensation of five per cent for receiving and paying out all sums of money.

It is claimed upon the part of the appellant that these agreements are void for want of consideration, and because of the relations existing between the trustees and the appellant, who was their cestui que trust. It is a familiar principle that a trustee, in order that he may establish and claim a benefit from a contract with his cestui que trust, must show that it is just and fair; that the cestui que trust understood his rights, and that it was a voluntary and intelligent action of such cestioi que trust. No evidence in this respect was furnished on behalf of the representatives of the deceased trustee; and it would further appear that no charges for commissions were made by the said trustee in respect to this income during his life subsequent to his accounting as executor before the surrogate in July, 1873.

It seems also to be perfectly clear that the agreement in question was void for want of consideration. All the duties which the trustees performed, or were to perform, by reason of these-agreements, they were in duty .bound to perform by virtue of their office. It does not appear under what circumstances these agreements were given, or that any consideration whatever passed from the trustees to the cestui que trust upon which the validity of the instruments could be based. ~We think, therefore, that the referee erred in giving any effect to these agreements as they were without consideration.

It is claimed upon the part of the appellant that the trustees as such were not entitled to commissions upon the principal of the estate which came into their hands as trustees, and our attention is called to various adjudicated cases in which it has been held that persons are not entitled to receive double commissions. These cases seem to hold that where the two functions of executor and trustee coincide and run from the death of the testator to the final discharge, inseparable and blended together, double commissions* or compensation, in Lotli capacities may not be allowed. But it has been expressly recognized in the decision which lias been referred to that where the duties are distinct, and where by judicial decree the executor has been wholly discharged as such, and left acting and liable only as trustee, he will be entitled to nis commissions as trustee (Johnson v. Lawrence, 95 N. Y. 162); and it is only in these cases, in which the executor cannot De discharged and be left acting as trustee, but both offices from the necessity of the case remain in existence, that the right to commissions as trustee must be denied.

In the case at bar, there has been a judicial determination that the duties of executor and trustee are not so blended that they cannot be separated but both -must continue to the end of the trust. The executor, Joseph R. Kearney, has accounted as such upon notice to all the parties interested in the estate, and he has been finally discharged from all further liability and responsibility as such executor, and his office of trustee continued. "Vith this judicial determination and this discharge of the executor, as having completed all the duties devolving upon him as such executor, it is difficult to see how the offices of executor and trustee could be more effectually severed.

"We think, therefore, that the exception in question was rightly overruled. There are other points which are attempted to be raised in reference to the right of the trustee to the commissions. But as they are not raised by exceptions, they are not properly before the court. It may be proper to say, however, with respect to the alleged release which seems to have been relied upon, that there is not the slightest evidence that any such release was ever delivered. It was found amongst the papers of the deceased trustee after his death, and is void for want of consideration and want of due execution by delivery.

We are of opinion that the decree should be modified in the respect above mentioned and, as modified, affirmed, without costs to either party.

Parker, J., concurred.

Decree modified as directed in opinion and affirmed as modified, without costs to either party.


source: Caselaw Access Project

license: Public Domain

text:
    M. Jacoby & Company (Limited), Appellant, v. George D. Payson and Another, as Executors, etc., of Elisha J. Denison, Deceased, Respondents.

      Principal and agent — agents power to indorse a check in the principal’s name — good faith of the indorsee.

    An agent, entitled, to collect moneys on behalf of his principal, has no authority to make an indorsement, in the name of his principal, upon negotiable paper, which imposes any liability upon his principal.
    Where a person received a check, drawn to the order of another and indorsed in such other’s name by his agent, for the purpose partially of paying the agent’s debt to such indorsee, it is notice to him that the agent, in paying his individual debt with such check, is not acting in his master’s business nor within the scope of his authority, and, as a matter of law, such person does not receive the check in good faith.
    Appeal by the plaintiff, M. Jacoby & Company (Limited), from a judgment of tlie Supreme Court in favor of the defendants, entered in the office of the clerk of the county of New York on the 2d day of July, 1894, upon the verdict of a jury rendered after a trial at the New York Circuit dismissing the plaintiff’s complaint upon the merits, and also from an order entered in said clerk’s office on the 25th day of June, 1894, denying the plaintiff’s motion for a new trial made upon the minutes.
    This action was brought to recover damages for the alleged conversion of the following check:
    “No. 230. New York, November 20th, 1890.
    “ Bank of America.
    “ Pay to the order of NX. Jacoby & Co. forty-six hundred and thirty-nine dollars.
    “THE II. B. CLAELIN COMPANY,
    “ $4,639.27. By D. N. Force.”
    Indorsed: “ M. Jacoby & Co., E. J. Denison.”
    Stamped on'face: “8. 21 Nov., 1890.”
    Stamped on left-hand margin: “ C. The Bank of America. Certified. Payable only through N. Y. Clearing House.”
    The plaintiff is a foreign corporation existing under the laws of the United Kingdom of. Great Britain and Ireland, and having its chief place of business at Nottingham, England, and is engaged in the manufacture and sale of lace curtains. August 1, 1888, the plaintiff and H. L. Fesler & Co. of New York entered into a contract by which the latter were appointed for three years thé plaintiff’s sole agents in the United States and Canada for the sale of the goods manufactured by the corporation. The contract contains, among others, the following provisions:
    “Messrs. M. Jacoby & Co. will not pay any commission for goods sold by them to the following houses. * * * ” (Wight & Co. is not one of the excepted firms.) “ Excepting the above-named firms, a commission of five per cent on the net amount of all sales made in sterling on our goods to be paid by Messrs. M. Jacoby & Co. to Messrs. TI. L. Fesler & Co. * * * A monthly statement to be rendered by Messrs. M. Jacoby & Co. of all sales and a fiy-sheet copy of each invoice to be sent to Messrs. H. L. Fesler & Co.”
    By a subsequent contract, extending the one originally made, it was provided : “Messrs. Fesler & Co. to advance the freight, duty and other incidental expenses, adding same to the sterling prices, which they will so calculate to return Messrs. M. Jacoby & Co., Limited, the net amount in sterling, sending jc sales showing the transactions in detail.
    “ Remittances to be made by Messrs. Fesler & Co. in accordance with the terms stated by them in the orignal orders.”
    In November, 1890, Wight & Co., of the city of New York, were indebted to the plaintiff in a considerable sum, and in that month they became embarrassed and unable to pay their debts in full. November 8,1890, II. L. Fesler & Co. cabled the plaintiff as follows:
    “ Have private information ; Wight & Co. failing; very soon. Shall I act ? FESLER.”
    The plaintiff replied by cable :
    “Fesler & Co.: Nottingham, Nov. 8iA, 1890.
    “Act promptly, Wight & Co. Can you obtain goods ? Remittances required. Will write you full particulars; will power of attorney be required % Reply immediately by code edition.”
    On the same day Fesler replied by cable as follows:
    “ Impossible to determine without knowing the amount; power of attorney will not be required. FESLER.”

      The plaintiff replied :
    “ Fesler, New York: Nov. 11, 1890.
    “£1,081; have omitted the interest in the account. $5,168.82.”
    Thereupon, a suit to recover the amount was begun at the instigation of H. L. Fesler & Co.
    On the 11th of November, 1890, the plaintiff executed and delivered the following power of attorney to Fritz Beinhold, of Nottingham, England :
    “ To ALL TO WHOM THESE PRESENTS SHALL COME :
    “We, John Henry Jacoby and Arthur Joynes Butler, Directors of M. Jacoby.& Co., Limited, Nottingham, England, Lace Manufacturers and Merchants, Greeting :
    “Whereas, we, the aforesaid John Henry Jacoby and Arthur Joynes Butler, having reason to believe that several firms in New York, in the United States of America, are not in a position to meet their indebtedness to the firm of M. Jacoby & Co., Limited, desire to give a general power of attorney to Fritz Beinhold to act for them in such manner as he, in his discretion, may think the circumstances, of each case may require, and to adjust any claims or differences in account that may arise with these New York firms.
    “Now these presents witness that the said John Henry Jacoby and Arthur Joynes Butler do hereby make, ordain, constitute and appoint Fritz Beinhold, of Nottingham, in the United Kingdom of Great Britain and Ireland, their true and lawful attorney and agent for them and in their name or otherwise, and on their behalf to ask, demand, receive and recover all and every sum or sums of money whatsoever that are or is now due and owing to the said company; of and on our behalf to investigate, adjust, settle and to compromise all accounts, debts, claims, disputes and matters which are, shall or may subsist or arise, and also, if necessary, to commence and prosecute and defend all actions, suits, claims, demands and proceedings touching the premises, and in any way connected therewith, and also to receive and give effectual receipts and discharges for all sums of money, claims or demands by the said company, and to prove and receive dividends, and to give receipts for the proceeds arising from all, also to give effectual receipts in full discharge of all claims, and generally to do, perform and execute all and every such act and acts, duty and duties in and about the premises as he, the said Fritz Beinhold, shall think proper, as fully and as effectually to all intents and purposes whatsoever as the said John Henry Jacoby and Arthur Joynes Butler might or could do if personally present, and also to substitute and appoint any person or persons to act under, or in the place of the said Fritz Beinhold in all or any of the matters aforesaid, and every such substitution at pleasure to revoke, the said John Henry Jacoby and Arthur Joynes Butler hereby agreeing to ratify, confirm whatsoever the said Fritz Beinhold or his substitute or substitutes shall lawfully do or cause to be done in or about the premises by virtue of these presents.
    “ In witness whereof the said John Henry Jacoby and Arthur Joynes Butler have hereunto set their hands and seals, and also affixed the common seal of the said company, the 11th day of November, in the year of our Lord, 1890.
    “ For M. JACOBY & CO., LTD.
    “John Henry Jacoby,

      “'Director.

    “For M. JACOBY & CO., LTD.
    “ Arthur Joynes Butler,
    “ Director.

    “ Signed, sealed and delivered in the presence of
    “ G-eo. Bicharos,
    “ J. H. Warner.”
    On the 19th of November, 1890} Fritz Beinhold arrived in New York, bringing with him his power of attorney. On the next day he indorsed the following substitution on the power, which he delivered to H. L. Fesler:
    “ I herewith transfer this power of attorney to Mr. H. L. Fesler, of 464 Broome st., New York. FBITZ BEINHOLD.
    “ Nov. 20, 1890.
    “ [Seal of M. Jacoby & Co., Ltd.]”
    On the twentieth of November Mr. Fesler called on Wight & Co., ■taking with him the power of attorney and the substitution, and on that day effected a settlement of the plaintiff’s claim against the firm, and received the above-mentioned checkin payment, and at the same time receipted the bills. H. L. Fesler thereupon indorsed the check, “M. Jacoby & Co.,” and delivered the same to Elisha J. Dennison, defendants’ testator, for the purpose of paying the indebtedness of Fesler to said testator of $1,050, and of receiving a check of Dennison’s for the balance, $3,589.27, payable to the order of lí. L. Fesler & Co. The check given by Fesler to Dennison was paid the next day after it was given, and Dennison’s check to Fesler was duly paid on presentation.
    Dpon the trial requests for the direction of verdicts were made, but the court submitted the question to the jury whether or not in advancing this money Mr. Dennison, the defendants’ testator, relied upon an apparent authority and acted in good faith.

      John J. Adams, for the appellant.

      La/wrence Godhin, for the respondents.
   Yan Brunt, P. J.:

The submission of this question to the jury was duly excepted to, and the question presented upon this appeal "is whether upon the conceded facts there was anything to go to the jury upon any such issue.

In the determination of this appeal it is not necessary to pass upon the question as to whether an agent entitled to collect moneys on behalf of his principal has authority to indorse for purposes of collection such commercial paper as may come into his possession as such agent. . It is undoubtedly the established rule that such agent has no authority to make an indorsement which imposes any liability upon his principal. This seems to have been the rule which pervaded the cases cited in the case of Holtsinger v. National Corn Exchange Bank (1 Sweeny, 64). We find in each of the authorities cited to sustain the conclusion of the court that there was a negotiation of bills received by the agent and indorsed in the name of the principal by the agent, thereby creating an obligation upon the part of the principal to pay in case of a failure upon the part of the makers of the paper to provide for its payment. It has not, however, been authoritatively determined that where an agent receives commercial paper in the course of the collection which he is authorized to make for his principal, he may not indorse such paper for the purpose of collection, and for the purpose of collection only, it being suggested that such an indorsement is not creating any liability in the name of his principal, but is simply the gathering in of the money which the agent is authorized to receive and remit to his principal.

In the case at bar, however, this feature in respect to the indorsement seems to have been absent. Although the question as to Dennison’s good faith was submitted to the jury, and seems to have been resolved in his favor, the conceded facts of the case show that he received this check belonging to the plaintiffs, indorsed in their name by their agent, for the purpose at least of partially paying the agent’s debt to him. He, therefore, knew at the time that this check was received bearing this indorsement, that in paying his individual debts with that check the agent was not acting in his master’s business. It was apparent that the agent was not acting within his authority. There was nothing in the relations between the'principal and the agent which authorized the agent to apply his principal’s money towards the liquidation of his own debt. And as has already been suggested, when Dennison received this check, indorsed as it was by the agent, he knew that the agent was violating his authority, because at best he only had the right to receive the money for the purpose of transmission to his principal.

It is true that there was some attempt upon the trial -to show that there was some indebtedness from the principal, to the agent on account of commissions. But no definite • evidence in that regard was given. There was no proof that any of this money was due to this agent on account of .commissions. There was some pretense that some commissions were due, but that certainly is not sufficient to justify an appropriation to his own use of a principal’s money by an agent; and a party who aids an agent in a scheme of that description cannot be said to be acting in good faith. Therefore, as matter of law, it would appear that Dennison did not receive this check in good faith, as he knew that the agent was misapplying at least a portion of the proceeds. This misapplication to the knowledge of the party advancing the money, or rather the balance of the money, necessarily tainted the whole transaction and charged him with knowledge that the agent in making the indorsement was not acting on behalf of his principal.

Under such, circumstances it would seem that there was no question for the jury, there being no dispute in regard to the facts, and that Dennison, as matter of law, could not be held to have accepted the check in good faith relying upon an apparent authority.

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

Follett and Parker, JJ., concurred.

Judgment and order reversed, new trial granted, costs to appellant to abide event.


author: Yak Brunt, P. J.:

text:
    Alice B. Bullock, Respondent, v. Thomas S. Bullock, Appellant.

      Bill of particulars — ordered after answer, though refused before — contract of man'riage, how established — bill of particulars of the evidence, refused.

    The fact that a bill of particulars has been denied, a defendant before answering does not bar an, application by the defendant for a bill of particulars in order to enable him to prepar.e for the trial.
    In an action brought to obtain an absolute divorce, where it is apparent that all that the defendant needs to allege in order to set up the defense which he desires to raise, consists in a denial of certain allegations contained in the complaint, a motion made before the service of the answer for a bill of particulars will be denied.
    In an action brought by an alleged wife to obtain a divorce from her alleged husband, the defendant is entitled to know and to ascertain, through the medium of a bill of particulars, the time when and the place where the alleged marriage took place (if a ceremonial marriage is claimed), by whom it was celebrated, and, if a marriage is claimed to have taken place without any witnesses present, the time when and the place where such contract was entered into.
    There is no such thing as an implied contract of marriage; the actual existence of such a contract must be established by precisely the same class of evidence by which other civil contracts are established.
    It is the contract and not the cohabitation that makes the marriage. Cohabitation . may or may not be corroborative evidence, depending upon its character or want of character. The court will not require a bill of particulars to be furnished which will contain the evidence to be offered on that subject in an action brought to obtain an absolute divorce.
    Appeal by tlie defendant, Tbomas S. Bullock, from an order of tbe Supreme Court, made at New York Special Term and entered in the office of the clerk of the comity of New York on the 26th day of October, 1894, denying the defendant’s motion for a bill of particulars.

      B. H. Bristow, for the appellant.

      W. Moore, for the respondent.
   Yak Brunt, P. J.:

This action was brought by the plaintiff to obtain an absolute divorce. The complaint contains an allegation of marriage at the city of New York, and also an allegation that the parties thereafter cohabited together as husband and wife. The defendant, before answering, moved for a bill of particulars showing specifically when, where and by whom such pretended marriage was solemnized, or if she claims that such marriage took place without a marriage ceremony, what particular facts, acts or doings the plaintiff relies upon as establishing such marriage; when and at what particular place such facts,' acts and doings happened, and when, where and under what circumstances, and in what building or place she claims that she and defendant cohabited as husband and wife; what was plaintiff’s maiden name, by what name she was known at and immediately preceding and since the time of said alleged marriage to defendant, and whether or not she had been previously married, and, if so, to whom. The defendant alleged that he could not properly prepare his defense herein or safely go to trial without the plaintiff furnishing a bill of particulars upon the points above mentioned. The learned court denied the motion upon the ground that it did not appear that the bill of particulars was necessary in order to enable the defendant to make and serve his answer, and we see no reason to interfere'with this conclusion. It is apparent that all that the defendant needs to set up to raise the issue of marriage is a denial of the allegations contained in the complaint in respect thereto.

But it by no means follows because a motion for a bill of particulars is denied before answer, that the defendant may not be entitled to such bill of particulars in order to prepare for the trial. lie may be entitled to know the time when and the place where this marriage took place, if a ceremonial marriage is claimed, by whom it was celebrated, and if a - marriage without any witnesses present except the alleged marriage bed, the time when and the place where such contract was entered into.

It does not seem, however, that the defendant would be entitled to a bill of particulars of the alleged cohabitation, because no amount of cohabitation can make a marriage. Under certain circumstances, although no direct proof of the marriage can be giveiq from cohabitation an inference may be drawn that at some previous time a contract of marriage had been entered into between the parties. But the weight of such evidence, even in such a case, depends very largely upon its character or want of character. It is a maxim as old as the common law, that consensus non concubitus facit mai/i'imonium. It is the contract and not the cohabitation which makes the marriage. The books are full of cases holding that, in order to establish a marriage, it must be proved that such a contract was entered into per verba depresmti, and that cohabitation can never make a marriage. In other words, that there is no such thing as an implied contract of marriage. The actual existence of the contract must be established by precisely the same class of evidence by which other civil contracts are established. In the case at bar cohabitation may or may not be corroborative evidence, depending, as has already been stated, upon its character or want of character, and the evidence of the plaintiff cannot be .required to be furnished by a bill of particulars.

Ve think, therefore, that the order should be affirmed, but in order that there may be no question as to the power of the court after issue joined to make an order for a bill of particulars, leave should be given to renew such motion after issue.

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

O’Brien and Follett, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements, but with leave to renew after issue joined.


author: Per Curiam :

text:
    Housatonic National Bank, Respondent, v. James P. Foster, Appellant.

      Oovypromipe of a doubtful claim or a release of clodms, a good consideration.

    The compromise of a doubtful claim is a good consideration for a contract.
    A release by one person of his claims against another is a good consideration for a promissory note given by a third person.
    Appeal by the defendant, James P. Foster, from a judgment- of tbe Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 27th day of October 1894, upon the verdict of a jury rendered by direction of the court after a trial at the New York Circuit.

      Edward Sehenck, for the appellant.

      L. B. Bunnell, for the respondent.
   Per Curiam :

This action was brought to recover on a promissory note made by the defendant January 25, 1890, by which he promised to pay, two months after date, to the order of the plaintiff, $3,200. The only defense attempted to be made on the trial was that this note was a renewal of a prior note given by the defendant to plaintiff without consideration, consequently the note in suit was without consideration. The original note was given as a compromise of three acceptances drawn January 15, 1885, by Tanner & Faxon on the Fishkill Manufacturing Company for $12,200, and which purported to be accepted by said corporation. The three bills were accepted in the following form:

“Accepted, payable at 166 Fulton street, New York.
“FISHKILL M’F’G, CO.
“ Sidney J. Everett
“ Treasu/rer.”

Everett was not the treasurer of the Fishkill Manufacturing Company, but the secretary, and under the by-laws he had no authority to bind the company by commercial paper, and upon the trial he testified that he "was not authorized by the trustees or by any one to accept the three bills above mentioned, amounting to $12,200. The acceptances became the property of the plaintiff, went to protest, and the plaintiff threatened to bring actions on them against the drawers and acceptor. The defendant was the treasurer of the Eishkill Manufacturing Company, and, after considerable negotiation; he gave a note of which the note in suit is a renewal, and received from the plaintiff the three acceptances upon the agreement that the apparent liability of the manufacturing company was discharged. The compromise of a doubtful claim is a good consideration for a contract, and the release by the plaintiff of its claims against the manufacturing company was a good consideration for the note given by the defendant. ( White v. Hoyt, 73 N. Y. 505; Wahl v. Barnum, 116 id. 87; Mech. & Traders’ Bank v. Parker, 130 id. 413.)

The judgment should be affirmed, with costs.

Present — O’Brien, Eollett and Parker, JJ.

Judgment affirmed, with costs.


text:
    James Hedges, Appellant, v. William H. Payne and Another, Respondents.

      Belief from arrest, under section 572 of the Code of Oivil Procedwe— sureties cannot surrender their principal under section 591 thereof.

    Section 572 of the Code of Civil Procedure was intended to relieve from arrest under orders of arrest in cases in which the diligence required by statute was not used by the plaintiff in charging the defendant by execution.
    Such section has no application to executions, except in respect to such as may be issued where a defendant has been discharged pursuant to the provisions of such section, and the “mandate” referred to in such section is the order of arrest mentioned in the beginning thereof.
    Under the provisions of section 591 of the Code of Civil Procedure the sureties upon an undertaking given by a defendant to deliver chattels sued for or pay the sum recovered have no power to surrender their principal.
    Appeal by the plaintiff, James Hedges, 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 24th day of November, 1894, granting the defendant’s motion tliat a supersedeas be allowed in the action and relieving him from imprisonment under a certain order of arrest.
    ' Ilenry E. Howland, for the appellant.

      Arthur H Smith, for the respondents.
   Yan Brunt, P. J.:

This action was begun in the year 1888 to recover possession of certain personal property or the value thereof in case delivery could not be had.

On the 12th of January, 1888, an order of arrest was issued against the defendant Payne and he was arrested thereunder. 'Subsequently Payne gave an undertaking under subdivision 2 of section 575 of the Code of Civil Procedure, the defendant having been released by the sheriff previously under an improper undertaking. The defendant Payne having answered, the issues thus raised were tried and a verdict rendered for the plaintiff on the 10th of April, 1891, and on the 8th of May, 1891, final judgment was entered in favor of the plaintiff against the defendant.

On the 6th of June, 1891, the defendant Payne appealed to the General Term. Judgment of affirmance was entered in March, 1892. The defendant gave no undertaking upon this appeal.

On March 30, 1892, execution against the specific property was issued with the alternative directions required by section 1731 of the Code of Civil Procedure. This execution was returned unsatisfied April 29, 1892. On June 30, 1892, an execution against the person of the defendant Payne was issued and returned not found August 27, 1892, and kept alive by other executions until May 3, 1893. On the 16th day of November, 1894, the defendant Payne obtained an order to show cause why he should not be relieved from imprisonment under the order of arrest above mentioned, or any execution against him issued or to 'be issued. This motion was granted and from the order granting the same this appeal is taken.

The motion was made under section 572 of the Code of Civil Procedure, which is as follows: “ Except in a case where an order of arrest can be granted only by the court if the plaintiff unreasonably delays the trial of the action, or neglects to enter judgment therein within ten days after it is in his power to do so, or neglects to issue execution against the person of the defendant within ten days after the return of the execution against the property, and in any event neglects to issue the same within three months after the entry of the judgment, or whenever it shall appear to the satisfaction of the court that the plaintiff in an action or a judgment creditor in a judgment delays the enforcement of his remedies therein' by collusion, or for the purpose of allowing the debtor to remain in prison under the mandate in any other action before the issuing of the mandate in favor of such creditor, so as to produce a continued and extended imprisonment by virtue of the separate mandates in the different actions, the defendant must, upon liis application made upon notice to the plaintiff, be discharged from custody, if he has already been taken under the mandate against him in such action; or, if he has not yet been imprisoned therein, be relieved from imprisonment by virtue of such mandate by the court in which the action was commenced, unless reasonable cause is shown why the application should not be granted. A defendant discharged as prescribed in this section shall not be arrested upon an execution issued upon the judgment in the action.” It would seem that this section has no application to executions, except in respect to such as may be issued in cases where a defendant had been discharged pursuant to this section. It was intended to relieve from arrest under orders of arrest where the diligence required by the statute was not used by the plaintiff in charging the defendant by execution. The relief to be granted seems to show that this must be the interpretation of the section.

If the defendant has already been arrested he must be discharged from arrest. If not, he is to be relieved from imprisonment by virtue of the order of arrest. The word “ mandate ” is used' (elegance of language seemingly being considered of more importance by the codifiers than precision of expression), but it is evident that the mandate referred to is the order of arrest mentioned in the beginning of the section. The defendant in this action, had been arrested, and consequently the second provision did not apply. Neither can the first apply because the defendant had already been discharged from arrest by the giving of the undertaking to deliver the chattels sued for or pay the sum recovered. The sureties under sucli an undertaking cannot surrender their principal (§ 591), and the defendant was not even constructively in custody as he would have been had the bail such power. There was no situation, therefore, to which section 572 could apply. The court could not discharge the defendant from custody, when his discharge had already taken place and the defendant was not in custody. Neither could the other relief provided for by the section be granted because the defendant had been imprisoned. The order appealed from must be reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.

Parker and O’Brien, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.


author: Parker, J.:

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    Joseph C. Hand, Respondent, v. Ferral C. Dinniny, Jr., Appellant.

      Bona jid-e holder for value — surrender of a promissory note and, the taking of another in lieu thereof.

    The surrender to a party of his own promissory note, and the taking in lieu thereof a negotiable note made'by a third party before its maturity, makes the party receiving such latter note a Iona fide holder for value, provided that the note surrendered was a valid obligation, of which fact its existence constitutes prima facie evidence which may be overborne, however, by proof that it was void for want of consideration.
    Appeal by the defendant, Ferral C. Dinniny, Jr., 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 23d day of November, 1894, upon the verdict of a jury rendered 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 26th day of November, 1894, denying the defendant’s motion for a new trial made upon the minutes.

      John J. Adams, for the appellant

      Jesse Stearns, for the respondent.
   Parker, J.:

Tlie plaintiff alleged the making of a promissory note for $5,346.25, payable to the order of D. A. Loring, who indorsed it without recourse and delivered it so indorsed.to the plaintiff, who became and still is the holder and owner thereof for value.

The answer admitted the making and delivery of the note; denied that the plaintiff was the owner and holder thereof for value, and alleged that it was given to the payee, together with the sum of $Y,000 in cash, under a written agreement that the payee would deliver to the defendant in consideration therefor the yacht Aztec in perfect order and ready for use on or before the 10th day of May, 1894; that Loring, the payee, failed to perform his contract in part, in that he did not deliver the yacht at the time agreed upon, nor in a condition provided for by the terms of the contract, so that defendant was compelled to, and did, lay out for the purpose of putting the yacht in the condition Loring agreed she should be in when delivered, the sum of $'T23.4'T, which sum, together with items aggregating $610 in addition, the defendant set up by way of counterclaim. .When the plaintiff rested the trial court was of the opinion, rightly, we think, that the evidence established prima, facie at least, that the plaintiff was the owner and holder of the note for value, and for the purpose of shortening the trial the court inquired of defendant’s counsel whether he intended to show that the plaintiff had notice of the special facts relied upon by him in support of the counterclaim- alleged in the answer.

The reply of counsel was such as to justify the court in ruling that it would decline to receive defendant’s proofs relating to the counterclaim. But we think there was error in refusing to allow the defendant to cross-examine the plaintiff with reference to the consideration of the note surrendered by the plaintiff when he received defendant’s note from Loring.

We have said that when plaintiff rested he had established prima facie that lie had paid full value for the note in question, and this assertion is based upon the testimony of the plaintiff that at the time of the transfer of the note to him he held a note for $5,000 made by D. A. Loring which became due in July, 1892, and that he surrendered this note to Loring, and paid him seventy-eight dollars in cash for defendant’s note, which sum, together with the interest due on tlie note, equaled the face value of the note in controversy. The surrender to a party of his own promissory note, if valid and enforcible, and the taking in lieu thereof a negotiable note, made by a third party, before its maturity, constitute the party a bona fide holder for value. (Brown v. Leavitt, 31 N. Y. 113; Pratt v. Coman, 37 id. 440.)

But the note surrendered must be a valid obligation in order’ to constitute the party a bona fide holder for value. Its existence constitutes prima facie evidence of the fact, but it may be overborne by proof that it was void for want of consideration.

After the plaintiff had testified to the existence of the note and his surrender of it to Boring, defendant’s counsel undertook to cross-examine him in relation to the consideration of the note surrendered. We quote from the record: Q. What was the consideration for the former note of $5,000? A. What was it for? Q. Yes? [Objected to.] The Court. — I do not see that that is of any consequence. 'defendant’s Counsel. — 'Suppose there was no consideration for it. The Court.— I will not go into that. Defendant excepts.”

Clearly it was a mistake to hold, as the court did in effect, that an entire absence of consideration for the Boring note would necessarily not affect the question whether plaintiff was a purchaser for value of this note. It may well be that the testimony of the witness would have shown that there was ample consideration, but we cannot so assume as the evidence was excluded on plaintiff’s objection.

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

Yan Brunt, P. J., and O’Brien, B, concurred.

Judgment reversed, new trial granted, costs to appellant to abide event.


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    Michael Elias, Respondent, v. The Manhattan Railway Company and Another, Appellants.

      Elevated railroad — damages to real estate — basis of a finding as to fee damage.

    In an action brought to recover damages to real estate, sustained by reason of the construction and operation of an elevated railroad, the fact that property in the immediate vicinity of plaintiff's premises had increased in value to a greater proportionate extent than the property in question is insufficient evidence upon which to base a finding of fee damage.
    Appeal by the defendants, The Manhattan Railway Company and another, 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 20th day of July, 1894, upon the decision of the court rendered after a trial at the New York Special Term enjoining and restraining the defendants from maintaining or in any way using the elevated railroad structure erected by them in front of plaintiff’s premises, unless they paid to the plaintiff certain specified amounts as and for the fee and rental damages sustained by the real estate by reason of the erection and operation of such road.

      Alfred A. Wheat, for the appellants.

      F&win M. Felt, for the respondent.
   Parker, J.:

Defendants’ motion to dismiss the complaint made after the plaintiff had rested his case should have been granted. There was no evidence upon which an award for either rental or fee damages could be based. The case seems to have been tried upon the theory that about all the plaintiff had to do was to show the presence of the elevated railroad, and ask the court to guess the amount of damage.

Upon the question of rental damages the plaintiff testified that he bought the property in 1886, six years after the railroad went into operation, for about $75,000, and paid out about $6,000 in putting it in repair; it then rented for about $7,910 annually, and there has been no substantial change since.

He did not show what the property had rented for before the building of tlio railroad; the course of rents of other property in that immediate vicinity, but not along the line of the railroad; offered no proof of complaint of the railroad by tenants, or of inability to rent stores or apartments, or decline of rents in any of them.

Some of these facts may have existed, but not one of them was proved by plaintiff, nor any other fact upon which the court could predicate a finding of rental damage. As to question of fee damage he did produce a witness who testified that certain lots off the line of the elevated railroad and in the immediate vicinity of plaintiff’s property, had increased in value to a greater proportionate extent since 1880 than the lots on Second avenue. But this, standing alone, was not sufficient. Said the court in the Becker Case (131 N. Y. 510): “We then said (Bohn’s case) there was no other evidence to sustain a finding of damage than the fact that property on the side streets had increased in value to a greater proportional extent than land on the avenue in question, and we said that fact was not sufficient upon which to base such finding.”

Plaintiff’s case was barren of other testimony tending in that direction. It did not even contain an expression of opinion that the elevated railroad had, in any way, harmed plaintiff’s property.

Nor was plaintiff’s situation improved by the testimony offered on the part of defendants. It is true that Meagher testified that he purchased the property after the buildings had been built up one story, subsequently completed them, and he estimated the total cost of the property to him at $12,000 a lot. There was no evidence as to its market value when completed. And the evidence is that its present market value is about the same. Meagher also testified that he rented the property after it was completed for $6,636 a year, while, according to the plaintiff’s testimony, its present rental value is about $7,938 a year.

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

Yan Brunt, P. J., concurred.

Judgment reversed, new trial granted, costs to appellants to abide event.


author: Parker, J. :

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    Juliet M. Myers, Appellant, v. The Commercial Travelers’ Mutual Accident Association of America, Respondent.

      Life insurance policy — admission of evidence as to a witness’ statement.

    Upon the trial of an action, brought to recover on a life insurance policy issued by a mutual accident association, one of the plaintiff’s witnesses was asked on cross-examination whether he had stated to a certain person that he had talked with a son of the plaintiff, and that he (the witness) did not think they had any claim against the defendant. The answer of the witness, received over the plaintiff’sobjection and exception, was, “I don’t remember that; I wouldn’t take my oath that I didn’t, but I have absolutely no recollection of it.”
    The witness had no interest in the controversy, and it had not then been made to appear, nor was it afterwards, that he had any right to speak for or represent the plaintiff.

      Held, that what such witness thought or said of the general merits of the claim was neither competent nor relevant;
    That, as it could not be said that the error did not result in harm, it could not be disregarded, and necessitated the reversal of the judgment rendered in favor of the defendant.
    Appeal by tlie plaintiff, Juliet M. Myers, from a judgment of tbe Supreme Court in favor of tbe defendant, entered in the office of the clerk of the county of New York on the 11th day of September, 1891, upon the verdict of a jury rendered after a trial at the New York Circuit dismissing the plaintiff’s complaint upon the merits, and also from an order made on the 15th day of June, 1891, and entered in said clerk’s office denying the plaintiff’s motion for a new trial made upon the minutes.

      Won. JB. Hurd, Jr., for the appellant.

      M. W. Yam, Auken, for the respondent.
   Parker, J. :

Defendant in November, 1889, issued to Egbert G. Myers a certificate of membership, by which, among other things, it agreed that in the event of his death by external, violent or accidental means, it would pay to this plaintiff the sum represented by the payment of two dollars by each member of the association ; but in no event to exceed the sum of $5,000. On the evening of July 26, 1892, Mr. Myers was found dead, submerged in nine feet of ivater, in the swimming bath of J. A. Payne, at 214 South Broad street, Philadelphia. The deceased had gone to Philadelphia from New York that morning, and was apparently in robust health. The bath was a pool thirty feet wide by one hundred feet long; the sides and bottom were of stone and cement; the water was from three to nine feet deep, and there were spring boards and ladders from which swimmers could jump and dive, and ropes were fastened on the sides at a distance of three feet from each other to which swimmers might cling for rest. A few minutes before eight o’clock on that evening Myers entered the bath house, and at a quarter before nine he was found dead at the bottom of the pool. There were fifty or sixty persons in the water with him, which was at blood heat.

Plaintiff’s theory of the case was that the insured, while swimming, dived in the water and struck some hard substance at the side or bottom of the pool, with his head, rendering him unconscious, during which time he drowned. On the other hand, defendant endeavored to establish that the insured had heart disease, and that his heart ceased to act while he was supporting himself by the rope, suspended above the water, where he was last seen alive.

Plaintiff, in support of her theory, produced laymen who testified that his health had always seemed to be good; that he was but twenty-three years of age; had not had since childhood any sickness except trifling stomach or throat troubles; his weight was 140 pounds; he was five feet eight inches in height; was a rosy cheeked, ruddy complexioned man, and always had been fond of and was active in athletic sports, which, with him, included base ball, lawn tennis, boating and swimming.

She called two physicians, one of whom had doctored him for tonsilitis about a month before his death. He testified that on that occasion he examined his heart and found it apparently normal, with no indication of organic disease. Eight days before his death he was accepted as a first-class risk by the Massachusetts Life Insurance Company, an examination being made by Dr. "William Gray Vermilye, examiner-in-chief of the company. The result being that he passed the deceased as a man of more than ordinaiy good health, with a pulse of seventy, soft and regular, who had no heart murmurs, and in whom there was no indications of heart disease, and whose urine was normal.

Against this evidence the defendant presented the testimony of Dr. Sidebotham, who made the autopsy upon deceased. He testified that there was no water in the stomach, none in the lungs; that the left ventricle of the heart was hypertrophied; the walls of the heart soft, aortic opening admitting not quite two fingers, and valve thickened. That he discovered nothing to indicate that cause of death was drowning, and gave it as his opinion that death was caused by hypertrophy of the heart, with an aortic stenosis.

Plaintiff further introduced testimony tending to show that a short time prior to his entering the water there was no lump or abrasion on his forehead or temple, but when his body was taken from the water there was a lump or abrasion. "Whether there was a lump on his forehead when he was discovered at the bottom of the pool was regarded by both parties as an important circumstance in view of the character of the evidence to which we have adverted.

Defendant’s counsel conducted his side of the case throughout the trial on the theory that there was no such injury discovered. The plaintiff called Joseph C. Leggett, who testified that he had known the dead man for twelve or fourteen years, and was his friend; that after his death he saw him first at an undertaking establishment on Eighth avenue, and that there was then an abrasion on his head, on the temple.” On cross-examination the witness said he didn’t know Dr. Lyon, to his knowledge, but that he had been called upon within a few days after the death by a gentleman who made inquiries of him touching the death of Myers.

Then this question was put: Q. Did you tell Dr. Lyon in one of these interviews that you had a talk with J. Weston Myers the night before, and that you did not think they had any claim against this defendant company? [Objected to as incompetent and irrelevant. Objection overruled. Plaintiff excepts.] A. I don’t remember that. I wouldn’t take my oath that I didn’t, but I have absolutely no recollection of it.”

The witness had no interest in the controversy; it had not then been made to appear, nor was it afterwards, that he had any right to speak for or represent this plaintiff, and clearly what witness thought or said of the general merits of the claim was neither competent nor relevant.

The defendant’s brief asserts, as the best answer to be made to an attack upon tins ruling, tliat “ it was competent for defendant to show any admission made by plaintiff or by her son or the witness Leggett if followed by evidence connecting her with it; such testimony was also relevant. The witness’ answer, however, rendered evidence as to plaintiff’s connection with such admission unnecessary.” It will be observed that this answer concedes the incompetency of the evidence at the time it was admitted, but says in effect that he could have cured the error if the answer of the witness had been such as to have made it necessary.

In other words he says, if the witness had answered yes, it would have been necessary for me to have shown plaintiff’s connection with the witness. But, as the answer was of no consequence, it was not necessary for me to do so. We do not agree with him as to the effect of the answer, but think it may have been almost as damaging as though the answer had been in the affirmative.

The reply “ I don’t remember that. I would not take my oath that I didn’t, but I have absolutely no recollection of it,” may not unlikely have persuaded some members of the jury that he.had made such a statement to Dr.-Lyon, and that such was the fact.

Certainly its tendency must have been to raise a doubt in the-minds of some of the jury whether he did not say it, and even that doubt may have had an important bearing in the disposition made by them of the issues submitted.

As we cannot say that this error did not result in harm, it cannot be disregarded.

The judgment should be reversed, with costs to the appellant to abide the event.

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

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


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    Wenstrom Electric Company, Respondent, v. Charles H. Bloomer and Others, Defendants; Benjamin N. Payne and Another, Appellants.

      Right to bring an action of interpleader — relief under section 820 of the Code of Givil Procedure.

    In order to entitle a party to interplead claimants to property in his possession he must be exposed to danger, vexation and loss from conflicting independent claims to the same thing, of which he is the holder, as well as from claims that are dependent.
    The facts essential to the maintenance of an action of interpleader are that two or more persons have a claim against the plaintiff; that they claim the same thing; that the plaintiff has no interest in the thing claimed, and that he cannot detexmine, without hazard to himself, to which of such persons the thing claimed belongs, and further, that there is no collusion between him and any of the parties, and that he is prepared to bring the money or thing claimed into court.
    Section 820 of the Code of Civil Procedure, providing for motions to be made for interpleader, was intended to prevent the cumbersome procedure by action, and substitute that by motion, and none but a stakeholder can obtain relief ■ under such section of the Code which recognizes the same rule which has prevailed in actions of interpleader.
    Appeal by tlie defendants, Benjamin N. Payne and another, 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 21st day of January, 1895, continuing during the pendency of the action a temporary injunction and enjoining and restraining the defendants from in any way interfering with or attempting to collect or receive or pay over a certain fund in the hands of the defendant Noble, or from taking any proceedings at law or in ecpiity in connection with said fund, with notice of an intention to bring up for review upon such appeal an order made at the New York Special Term on the 21st day of December, 1891, and entered in said clerk’s office, granting a temporary injunction.

      Franklin Pierce, for the appellants.

      Reginald H. Arnold and G. W. Miner, for the respondent.
   Yan Brunt, P. J.:

The defendants, Charles H. Bloomer, Walter C. Bloomer and Nathan Bushnell, were electrical contractors, doing business under the firm name of Bloomer Bros. & Co., and on the 28th of February, 1894, they entered into a contract with one William Noble, who was then engaged in erecting the Hotel Empire in the city of New York, for the construction and erection by them of an electric light plant in said hotel, the terms of payment to be eighty-five per cent of the value of the work done and materials furnished each month as the work progressed, the final jiayment to be made on the completion of the work by the promissory note of said Noble, payable in ninety days. On the 30th of March, 1894, the plaintiff entered into a contract with Bloomer Bros. & Co. for the furnishing of certain dynamos for this work. It agreed to deliver the dynamos F. O. B. cars New York city, for the sum of $1,500; terms of payment to be one-third on the successful starting of the plant, and the balance by three months’ note of Mr. Noble, indorsed by Bloomer Bros. & Co.; the title and ownership of the dynamos to remain in the plaintiff until paid for.

In July, 1894, the firm of Payne & Sons sold to Bloomer Bros. & Co., engines to be placed in said hotel, but, as they alleged, they would not part with their property until they had obtained some security therefor; and accordingly on the 1st of August, 1894, Bloomer Bros. & Co. entered into an agreement with said Payne & Sons, whereby Bloomer Bros. & Co. assigned to said Payne & Sons, the balance due under their contract with Noble, and whereby they authorized said Payne & Sons to receive said balance, and to give a receipt and acquittals thereof in their firm name. On the 2d of August, 1894, Noble acknowledged the receipt of the information in respect to the assignment, and in writing accepted the order, and promised to pay to them the balance due to Bloomer Bros. & Co.,, making such payments in accordance with said contract. Thereafter, and on the eleventh of October, the said Bloomer Bros. & Co. gave an order for $660 to one Winthrop G. Bushnell, the brother of one of the members of the firm, which they claim to be due from the defendant Noble on said contract. The complaint alleges that the defendant Bloomer Bros. & Co. was insolvent, and that the alleged orders to Payne & Sons and Bushnell were given in fraud of the rights of the plaintiff, and that Payne and Bushnell were endeavoring to collect the same balance or so much thereof as their respective claims amounted to, and the plaintiff was also endeavoring to collect its claim from said Noble out of said balance, and that Noble was ready to pay said balance into court according to tbe terms of his contract, and refused to pay the same or any part thereof, or give any note therefor to any of the parties thereto until ordered and directed by the court; and, further, that if said Noble was allowed to pay the .same to the defendant Bloomer Bros. & Co., with whom he made said contract, the plaintiff and all other claimants to said fund would be unable to collect any part of their respective claims out of said fund or from Bloomer Bros. & Co.

Application was made on these facts for a temporary injunction, which was granted, and, upon motion, the same was made permanent during the pendency of the action, and from the order thereupon entered this appeal was taken.

It is claimed upon the part of the plaintiff that this is an action of interpleader and that it may be brought by the plaintiff instead of the defendant Noble. No authority for this proposition has been cited, and it seems to be at variance with the practice which existed in the Court of Errors and has continued down to the present time. In order to entitle a party to interpleader he must be exposed to danger, vexation and loss from conflicting independent claims to the same thing, of which he is the holder, as well as from claims that are dependent. The facts essential to maintain the action of interpleader are, that two or more persoAs have a claim against the plaintiff, that they claim the same thing, that the plaintiff has no interest in the thing claimed, and that he cannot determine, without hazard to himself, to which of such persons the thing belongs, and, further, that there is no collusion between liim and any of the parties, and that he will bring the money or thing claimed into court. These rules have been recognized in the case of Crane v. McDonald (118 N. Y. 648), and also in the case of Schell v. Lowe (75 Hun, 43), in which case the similarity between motions made under section 820 of the Code of Civil Procedure for interpleader and actions of the same nature is adverted to. The section of the Code was intended to prevent the cumbersome procedure by action, and substitute that by motion; and it is apparent that none but a stakeholder can obtain the relief under the section of the Code, recognizing the rule which had prevailed in actions of interpleader.

There is not the slightest intimation that Noble is not able to respond to all of tliese claims, and lie is not before the court asking for relief or bringing the fund into court.

The order appealed from should be reversed, with ten dollars costs and disbursements, and the motion for injunction denied, with ten dollars costs.

O’Brien, J., concurred.

Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.


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    The Pacific Mail Steamship Company, Respondent, v. The Panama Railroad Company, Appellant.

      Insolvency — release from the obligation of a contract — common ea/rriers — contracts giving equal, but not exclusive privileges.

    The fact that one party to an agreement has reason to fear the insolvency of the other party thereto, is not sufficient to release him from the agreement, the consideration of which he has received.
    An agreement was entered into between the Panama Railroad Company and the Pacific Mail Steamship Company whereby the Panama Railroad Company granted and conveyed unto the Pacific Mail Steamship Company all and singular the docks, wharves, piers, structures, lighters, loading and unloading facitities, appurtenances and appliances, afloat and ashore, used, owned or controlled by it in its said Central American line about and for each and every port upon the said Pacific ocean between the ports of Panama and Acapulco, to have and to hold the same unto the said Pacific Mail Steamship Company, its successors and assigns forever.
    The second article of said agreement provided as follows, the Panama Railroad Company “further hereby grants, sells, assigns and conveys unto the said Steamship Co., its successors and assigns, entirely and absolutely its good will in the service and carrying trade between the said ports of Panama and Acapulco, and any and every intermediate point on the Pacific ocean, and between any and every one or more of such intermediate ports, and it hereby, for itself, its successors and assigns, covenants and agrees to and with the said Steamship Co., its successors and assigns, that it shall not and will not at any time or times hereafter engage, directly or indirect!}’, or in any manner concern itself in carrying on or conducting any service whatsoever by vessel in whatsoever manner propelled from any of such ports to any one or more of the others thereof lying between the said ports of Panama and Acapulco.”

      Held, that by the transfer of the good will of the business mentioned in said agreement the Panama-Railroad Company did not undertake to give exclusive privileges to tlie Pacific Mail Steamship Company in reference to the issuing of through bills of lading for merchandise to be transported upon the railroad of the defendant in respect to business, as between the ports of Panama and Acapulco and intermediate ports;
    That an attempt on the part of the Panama Railroad Company to confer exclusive privileges in reference to bills of lading upon another company was in violation of its sale of the good will of the business to the Pacific Mail Steamship Company; that the true construction of such agreement between the parties was that no exclusive privileges in reference to the business which was the subject-matter of the agreement should be given to other parties;
    That the Pacific Mail Steamship Company should be upon at least an equal footing with any other corporation operating connecting lines, and that the Panama Railroad Company should refrain from making any arrangement with any other company conducting steamship service between Panama and Acapulco, or any intermediate port, for the purpose of diverting the business between Panama and Acapulco from the Pacific Mail Steamship Company, but that it was not intended that the Panama Railroad Company should give the Pacific Mail Steamship Company the privilege of fixing the rates of transportation over the road of the Panama Railroad Company.
    Appeal by the defendant, The Panama Railroad Company, 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 December, 1894, upon the decision of the court rendered after a trial at the New York Special Term, and also from an order made at the New York Special Term and entered in said clerk’s office on the 24th day of December, 1894, granting the-plaintiff an ■extra allowance.

      F. F. GoudeH and W. J. Ourtis, for the appellant.

      F. Lawterbaoh, for the respondent.
   Yan Brunt, P. J.:

The plaintiff is a domestic corporation organized and existing under chapter 266 of the Laws of 1848, and the acts amendatory thereof, for the purpose of building, purchasing and operating a line or lines of vessels to be propelled solely or partially by the power or aid of steam or other expansive fluid or motor power, and to be run and propelled in navigating the Atlantic and Pacific oceans. The defendant is also a domestic corporation organized and existing under chapter 284 of the Laws of 1849, and the acts amendatory thereof, for the purpose of constructing and maintaining a railroad with necessary appurtenances across the Isthmus of Panama, and of purchasing and navigating such steam or sailing vessels as may be proper and convenient to be used in connection with the railroad to be constructed. Ever since its incorporation the plaintiff has operated lines of steamships between the Isthmus of Panama and the port of San Francisco on the Pacific ocean, and between the city of New York and the port of Aspinwall or Colon on the Atlantic side of the isthmus. The Pacific service has. included and still includes various intermediate ports between and inclusive of Panama on the south and Acapulco on the north. Since 1885 the defendant has operated its line of railroad between the ports of Colon and Panama, transferring freight,, passengers and mail between those points, which was almost wholly destined for points and places beyond the isthmus, and a great part of the freight and a large proportion of the passengers transported by the defendant have been carried beyond the isthmus by the plaintiff company. In 1870 the defendant, pursuant to powers granted by its charter, established a line of steamships running between the ports of Panama and Acapulco, stopping at intermediate points, which line was known as the Central American line, and continued to operate until the making of the agreement hereinafter mentioned on or about the 1st of October, 1872.

Prior and up to the making of this agreement between the plain-, tiff and the defendant in 1872, agreements existed between the defendant and certain connecting lines, including the plaintiff, for the issuance of through bills of lading and for favorable rates for the carriage of merchandise from, to or through said ports by such connecting lines. On the 1st of October, 1872, a formal agreement was entered into between the plaintiff and the defendant whereby the defendant sold to the plaintiff this Central American line,, including the ships used therein and their appurtenances afloat and ashore, and its service, business and good will for the price of $700,000 in cash.

By the first article of this agreement the defendant “grants,, sells, assigns and conveys unto the said Steamship "Co. (the plaintiff), all and singular the docks, wharves, piers, structures, lighters, loading and unloading facilities, appurtenances and appliances, afloat and ashore, used, owned or controlled by it in its-said Central American line about and for each and every port upon the said Pacific ocean, between the said ports of Panama and Acapulco, to have and to hold the same unto the said Pacific Mail S. S. Co., its successors and assigns forever.”

By the second article of said agreement the defendant “ further hereby grants, sells, assigns and conveys unto the said Steamship Co. (the plaintiff), its successors and assigns, entirely and absolutely its good will in the service and carrying trade between the said ports of Panama and Acapulco, and any and every intermediate port on the Pacific ocean, and between any and every one or more of such intermediate ports, and it hereby, for itself, 'its successors and assigns, covenants and agrees to and with the said Steamship Co., its successors and assigns, that it shall not and will not at any time or times hereafter engage, directly or indirectly, or in any manner concern itself in carrying on or conducting any service whatsoever by vessel in whatsoever manner propelled from any of such ports to any one or more of the others thereof lying between the said ports of Panama and Acapulco.”

From the time of the execution of this agreement until the 25th of August, 1875, there appeared to have been various agreements, written and verbal, entered into between the parties to this action regulating the conduct of the business which was being transacted by them, and the prices to be realized therefor. On said 25th of August, 1875, an agreement in writing was entered into between the parties to this action, the first paragraph of which is as follows : “All agreements, written or verbal, heretofore made between the parties hereto, are hereby abrogated and terminated by the consent of both parties hereto, and all business between the parties after the 31st day of March, 1875, to be done and settled for under this agreement, provided that qll business prior to March 31st, 1875, is to be settled for under the then existing agreement.”

It is evident when we consider the balance of"the agreement that it was not the intention of the parties to abrogate every and all written agreements which had been entered into between them, and that it was not intended to abrogate the agreement of 1872, above referred to, and that the only agreements which it was intended to do away with were those regulating the traffic between the two companies, because it will be seen upon an examination of tbe agreement of August 25, 1875, that it relates solely to details regulating the traffic of the two companies and the division of the moneys received therefor. This agreement provided that it should continue in force for five years unless sooner terminated by the giving of a notice by either party of. its intention to terminate the same in three months from the .date of the giving of such notice.

On the 27th of August, 1875, a supplemental agreement was made embracing a branch of the same subjects.

Prior to November, 1875, serious disagreements had arisen between the Panama Railroad Company and the Pacific Mail Steamship Company, and in consequence thereof the railroad company had attached the ships of the steamship company for debt due it, and was threatening to take possession of its ships by which it carried on its business between New'York and Aspinwall.

In January, 1876, the defendant railroad company entered into an agreement with one Clyde, living in Brooklyn, whereby it was agreed that said Clyde should, during the existence of the contract, act as the sole and exclusive agent of the defendant at New York and at San Francisco and at all other ports or places to or from which steam vessels might be run by said plaintiff during the continuance of said contract, and that Clyde should have the exclusive right to issue all through receipts and bills of lading, and all through passenger tickets, etc. The contract between Clyde and the railroad company gave to Clyde the advantages which the Pacific Mail Company had formerly enjoyed, and practically enabled him to control the carrying business between New York and San Francisco by way of the Panama railroad, which contract was transferred to the Panama Transit Steamship Company, and was, on the 13th of November, 1876, in full force and effect.

On the 31st of May, 1876, the Panama Transit Steamship Company granted to the Pacific Mail Company certain benefits secured to it by its contract of January, 1876, with the railroad company, upon condition that there should be an equitable division between the parties of the profits of the business, etc. Thereupon the transit company, with the consent of the railroad.company, granted to the Pacific Mail Company an equal interest in the benefits and advantages therein specified and granted, to endure until the 1st day of October, 1879. On the 13th of November, 1876, a traffic agreement was entered into between the Panama Railroad Company of the first part and the Pacific Mail Company, and the Panama Transit Steamship Company of the second part. At the time of the making of this agreement, the Pacific Mail Steamship Company was largely indebted to the Panama Railroad Company, and one of the provisions of the agreement was that its net earnings should be applied each month by the transit company towards the payment of the indebtedness of the Pacific Mail Company to the Panama Railroad Company. This agreement made between the defendant, the plaintiff and the transit company continued to endure until the month of February or thereabout.

On the 1st of February, 1878, another formal agreement was entered into between the parties to this action^ in which the purposes of the organization of the railroad company are recited, and that in order to secure to said railroad the permanent and regular control of the business which naturally sought the isthmus, and to prevent the embarrassments, delays and loss of business which it had in past times suffered by reason of its want of control of the management of the main ocean line, from and through which its principal business was derived, it had been found necessary, proper and convenient for said railroad company to own or control such ships and property as were necessary for a continuous line between San Francisco and New York and to and from such other ports in connection with said isthmus as its business might from time to time demand. And after further reciting that said steamship com.pany, meaning the Pacific Mail Steamship Company, was then engaged in business on both the Atlantic and Pacific oceans, and was running a regular line between San Francisco and certain ports northward thereof and New York, and also a branch line to certain Central American and Mexican ports, which business was valuable to it, and that it was desirous of arranging for a continuance of the same on a permanent basis in connection with said railroad company, and was also desirous to procure from said -railroad company the means necessary to purchase the steamships of the Panama Transit Steamship Company, and the rights and privileges which said transit company then enjoyed by reason of the contract with said railroad company whereby a large and valuable portion of the business of said steamship company was lost to it, etc., the steamship company (the plaintiff) agreed to sell and deliver to the railroad company (the defendant) certain steamships and other property for a price therein named, and further agreed in respect to the maintenance of the steamship service for the full term of fifteen years from the date of the agreement, to pay to the railroad company certain sums of money and proportion of earnings arising from transportation.

It was also provided, amongst other things, in said agreement of February, 1878, that said steamship company should have the exclusive right to issue all through receipts and bills of lading, and all through passenger tickets between all ports and places, to and from which steam vessels might be run by the steamship company to the railroad and in connection therewith, and that the said company should attend to and perform all the ordinary duties appertaining to such agency; but that said agency of the steamship company should not extend to either of the ports of Panama or Aspinwall.

It was also provided by said agreement that, under certain contingencies, the railroad company might declare that the agreement of the 1st of October, 1872, made between the parties thereto with respect to certain business on the Central American and Pacific coast, should be abrogated and that the same should thenceforth be absolutely void.

During the continuance of said agreement of 1878 the plaintiff made an agreement with eighteen railroad companies known as the Trans-Continental Association, the business of which entered largely, in competition with the business of the defendant company, and had abandoned the practical control entirely so far as its through business was concerned between New York and San Francisco to the Trans-Continental Association and had agreed that it would not' run more than three ships per month between New York andAspinwall on the Atlantic ocean, and between Panama and San Francisco on the Pacific ocean, in consideration of which it was to receive the sum of $75,000 per month from the Trans-Continental Association, which payment enabled it to carry out its agreement above referred to, and to make its monthly payment to the Panama Railroad Company.

Some months prior to the termination of the agreement of 1878, by its own limitation, negotiations were initiated between the parties with the expectation and hope of effecting some new contract for the adjustment of their relations and for their mutual good, and an agreement was in fact reached, when, shortly prior to the time when the contract was to be executed, the Pacific Mail Company declared that it had become unable to guarantee any fixed sum of business and to make the cash payment which had constituted one of the principal conditions of the former agreement. The Pacific Mail Company was induced thus to withdraw from the conditions orally agreed upon by a notification received from the Trans-Continental Association that it would no longer continue its monthly allowance. Without this aid the Pacific Mail Company was unable, it asserted, to stipulate any fixed payment, and it, therefore, insisted that the conditions of the contract should be accordingly modified. The Pacific Mail Company was not at this period in prosperous circumstances and was slow in paying its debts. Notwithstanding this fact efforts were made in good faith by the defendant to arrive at some just agreement which would secure the rights of the company and enable it to go on harmoniously, but the parties finally split' upon the question as to who should have the right to make the rates, it being insisted by the railroad company that it could not safely permit the steamship company so to do, and the steamship company refusing to abdicate its right, real or supposed, to fix the rates in favor of the railroad company.

Prior to the 1st of February, 3893, the day of the termination of the agreement of February, 1878, by expiration of time, the defendant notified the plaintiff that it would not permit it on and after said February 1, 1893, to issue through bills of lading, and the defendant sought to find some other corporation that was able and willing to act as its agent in the procuring of business and in the issuing of through bills. The Chilian Steamship Company was organized and had had business relations with the railroad company as the carrier of freight and passengers between Chili and Panama, and with that company negotiations were commenced by the defendant, and were pending but undetermined at the time of the issuing of the injunction in this action, for a traffic agreement which would have conferred upon the Chilian Company certain exclusive privileges in reference to its business with the defendant company which would necessarily give it an advantage in the transaction of such business, but it was not intended to make any discrimination against the Pacific Mail Company in respect to the privileges enjoyed by it from those enjoyed by all other persons or corporations in the world excepting such Chilian Company.

This action having been commenced by the plaintiff and an injunction issued, as above referred to, the negotiations with the Chilian Company ended.

Upon the trial of the action, the foregoing facts appearing, judgment was directed in favor of the plaintiff enjoining the defendant from entering into any agreement with the Chilian Company or with any other company, or with the owner of any vessel for transportation by sea of goods, passengers or mail, between the ports of Panama and Acapulco; and substantially enjoining the defendant from entering into any arrangement with any other company than the Pacific Mail Company for the issuance of through bills of lading. And from the judgment thereupon entered this appeal is taken.

The question which is presented upon the admitted facts in the case at bar is, does the plaintiff enjoy the exclusive privilege of issuing through bills of lading for merchandise to be transported upon the railroad of the defendant in respect to business as between* the ports of Panama and Acapulco and intermediate ports ?

It is claimed upon the part of the plaintiff that at the time of the execution of the contract in 1872, by which the defendant company conveyed to the plaintiff the vessels, business, service and good will of the Central American line, the custom and agreement as to through bills of lading were well established, as was also the right to make through rates upon a divisional basis; and it is urged that by the agreement of 1872 the plaintiff bought this right of the defendant and is the owner thereof. Upon the other hand, the defendant claims that no such construction can be placed upon the agreement of 1872, and, if it could, that that agreement had been abrogated by the subsequent agreements between the parties and the course of business which they entered into seemingly regardless of the provisions of that agreement.

It seems to us, however, upon an examination of the dealings between the plaintiff and the defendant, and the other agreements entered into between the parties, that it cannot be found as a matter of fact that the agreement of 1872 was ever abrogated, but that it was, and is, a binding and subsisting agreement. As has been already observed, if we considered only the language of the agreement of August 25, 1875, it might be held that the agreement in question was abrogated. But when we consider the nature of the agreement of 1875 and the purposes to be attained by it, it is manifest that it was not the intention to interfere with the substantial provisions of the agreement of 1872. And when we take into account the language of the agreement of 1878 there seems to be no further doubt on this subject, because the existence of the agreement of 1872 is expressly recognized, in the agreement of 1878, and the right is reserved by the defendant to terminate the former agreement under certain contingencies. If the agreement of 1872 had already been abrogated and was of no effect, such a provision would certainly not have been inserted in the agreement of 1878. From 1878 to the present time nothing has transpired which would indicate an intention upon the part of the parties to the agreement of 1872 to terminate the same.

We must thus' determine the rights of the parties to this litigation by the provisions of the contract of 1872; and the question is, whether, by the transfer of the good will of the business referred to in that agreement, the railroad company undertook to give exclusive privileges to the plaintiff in reference to the issuing of through bills of lading.

As has already been intimated, it is claimed upon the part of the plaintiff that because the defendant, at the time of the entering into of the agreement of 1872, had arrangements with other companies for the issuing of through bills of lading, that under such agreement it has succeeded to all the privileges of those other companies. We have been unable to find any provision in the agreement in question which bears out any such claim. It would seem that at this time companies other than the Central American line were issuing through bills of lading under arrangements of a temporary character, revocable by notice given by either party, and all that the defendant company agreed to transfer to the plaintiff were the privileges which were being enjoyed by the Central American line, and certainly nothing beyond that. It was the good will of that business which was transferred and nothing more. What the defendant’s arrangements with other companies were at this time was of no concern to the plaintiff, and no contract was made in respect thereto. In fact, when we come to consider the second paragraph of the agreement of 1872, it might well be claimed that all that the Panama railroad covenanted not to do was that it should not at any time or times thereafter, directly or indirectly, in any manner concern itself in carrying on or conducting any service whatsoever by vessel in whatsoever manner propelled, from any of such ports to any one or more of the others thereof, lying between said ports of Panama and Acapulco.

It seems to us, therefore, that it would be' a stretching of the terms of this arrangement to hold that exclusive privileges in reference to the transaction of business with the Panama Railroad Company were intended thereby to be given to the plaintiff. It would certainly be extending the meaning of the words “ good will ” to an extent which has never heretofore been done, by giving the words in this contract the broad and comprehensive construction which is claimed upon the part of the plaintiff.

Undoubtedly the attempt on the part of the defendant to confer exclusive privileges upon the Chilian Company was a violation of its sale of the good will of this business to the plaintiff. Simply because the Panama Railroad Company might have fears in regard to the solvency of the Pacific Mail Steamship Company, it cannot be relieved from its agreement, the consideration of which it has received and the performance of which upon its part must, therefore, necessarily continue.

It seems to us that the true construction of the agreement of 1872 between these parties is that no exclusive privileges in reference to the business which was there the subject-matter of agreement should be given to other parties; that at least the plaintiff should be upon an equal footing with any other corporation operating connecting lines, and that the railroad company should refrain from making any arrangement with any other company conducting steamship service between Panama or Acapulco, or any intermediate port, for the purpose of diverting the business between Panama and Acapulco from the plaintiff’s Central American line; but that it was never intended to give the plaintiff the privilege of fixing the rates of transportation over the defendant’s road, which would be the result of the construction contended for.

We think that the injunction contained in the judgment was too broad, and that it should be modified in accordance with this opinion and as modified affirmed, without costs to either party.

Parker, J., concurred.

Judgment modified as directed in opinion and affirmed as modified, without costs to either party.