text:
    THE HAMILTON NATIONAL BANK OF BOSTON and Others, Appellants and Respondents, v. RICHARD H. HALSTED, Respondent and Appellant, Impleaded with Others.

      Vra/uAutmt oendee — credited, with the payment of incumbrances on the assigned property — a beneficiary under an alleged illegal trust is a proper pa/t'ty to an action to set it aside.

    While the courts will extend no'aid or assistance to a fraudulent vendee or grantee, of property, he may still be credited, in an action brought by a creditor of the fraudulent vendor to set aside the conveyance, with what may have been paid by him to relieve the property from an incumbrance which had previously, in good faith, been created against it.
    The rule prohibiting the allowance of sums disbursed by the fraudulent vendee ■ has been generally extended no further than to deny his right to reimbursement for what he may have paid to the vendor, or to others by way of satisfying unsecured debts.
    A transfer of property to a third party by an insolvent debtor, to hold for one of his children, cannot be set aside in an action brought by a creditor, to which the daughter of the debtor, the beneficiary under such trust, is not made a party.
    Appeal by the plaintiffs from a judgment entered, at a Special Teirn held in the county of New York, in the office of the clerk of the county of New York on the 7th day of October, 1889; also an appeal by the defendant Richard H. Halsted from so much of said judgment as directed that the said Richard H. Halsted pay over and deliver to the said receiver the sum of $5,310, being the amount improperly received by the said Richard H. Halsted, by virtue of a preference contained in a general assignment made by the defendants herein, with interest thereon from the 17 th day of October, 1884, making in all the sum of $6,816.61.
    The action was brought by the plaintiffs, as judgment-creditors of the defendants, composing the firm of ITalsted, Haines & Co., to set aside as fraudulent a general assignment made by the judgment-debtors to one Lewis May, on July 12,1884, in which the defendant Richard H. Halsted was preferred for the sum of $20,346; to set aside as fraudulent a transfer of securities of the value of $77,000, made on June 11,1884, in alleged contemplation of the said general assignment; to compel Richard H. Halsted to pay over to the receiver appointed in said judgment the moneys received in pursuance of the preference, and to deliver to the receiver the securities transferred or their value.

      Oha/iex F. Hughe», for the plaintiffs.

      William Hildreth Field, for the defendant.
   Daniels, J.:

The firm of Halsted, Haines & Company became insolvent, and on the 12th of July, 1884, they executed and delivered to Lewis May an assignment of their firm and individual property for the benefit of their creditors. This assignment was found to have been fraudulent on account of preferences contained in it exceeding the indebtedness of the firm to the individuals in whose favor they were declared. And no controversy exists upon this appeal as to the justness of that conclusion, which was reached by the court upon the trial of another action in favor of judgment-creditors. But the controversy in this action relates more particularly to the disposition of property owned by oue of the firm, at or about the time when the assignment was executed and delivered. This property consisted in large part of shares of stock owned by William M. Halsted. It had been hypothecated by him with the New York Life Insurance and Trust Company to secure a loan of the sum of $65,000. The money obtained upon the loan was paid into the firm of Halsted, Haines & Company. And' on or about the 11th of July, 1884, immediately preceding the assignment, the pledgor, William M. Halsted, transferred these certificates to his son, the defendant Bichard H. Iialsted. He paid, for this transfer, the loan only which had been obtained on the pledge of the certificates, and the certificates were obtained from the Insurance and Trust Company and delivered to him. At the time the certificates were in this manner redeemed and transferred to the defendant they were worth not less than the sum of $77,000. And it was found by the court upon evidence which it must be assumed, as it has not been inserted in the case, supported the finding, that this transfer Avas made and received Avith the intent, on the part of both of the parties to it to hinder, delay and defraud the creditors of the defendant, William M. Iialsted. And upon this part of the case judgment Avas directed in favor of the plaintiffs, avIio ivere judgment-creditors of this firm, for the difference between the sum for which the certificates had been pledged and their value, being the sum, as it Avas found and adjusted by the court, of $11,500, with interest from the 11th of July, 1884. The plaintiffs excepted to the allowance made, out of the value of the securities, of this sum of $65,000, for which they had been pledged to the Life Insurance Company. And 'the position has been taken, in support of their appeal, that the defendant Richard II. Iialsted, having himself received the certificates with, the intent to hinder, delay and defraud the creditors, should have been held to account for their entire and full value, without the deduction of this sum of $65,000, which the Life Insurance Company had loaned upon their credit. But while it is true that the courts will extend no aid or assistance to a fraudulent vendee or grantee of property, it does not folloAV, from this principle, that he is not entitled to be credited Avith what may have been paid by him to relieve it from, incumbrances previously, in good faith, made upon it. Such, incumbrances are not tainted in any respect with the fraudulent designs of the vendor and jmrchaser. But so far as the transactions are included within the terms of the fraudulent disposition of property, there the courts have ordinarily denied all relief by way of indemnity to the purchaser. And he will not be relieved from complications, expenses or losses paid out or incurred by him in the promotion and success of the fraudulent arrangement. This Avas held upon a consideration of the cases by this General Term in Smith v. White (27 N Y. St. Rep., 227). But the court was not then called upon to consider whether the fraudulent vendee, should be indemnified out of the proceeds of the property, for the expenses of its redemption from preceding valid charges or incumbrances. And in the cases which have been cited as authorities supporting the position taken by the plaintiffs in this respect, the decisions have been generally extended no further than to deny to the fraudulent vendee his right to reimbursement for what he may have paid to the vendor, or to others, by way of satisfying debts unsecured upon the property. Those payments were included ordinarily within the terms of the fraudulent transfer. And the courts will not relieve the party implicated in the fraud from the consequences of the voluntary acts performed by himself within the scope and intent of the fraudulent disposition. The cases of Boyd v. Dunlap (1 Johns. Ch., 478); Sands v. Codwise (4 Johns., 536); Bean v. Smith (2 Mason, 252); Briggs v. Merrill (58 Barb., 389); Bleakley's Appeal (66 Penn., 187); Goodwin v. Hammond (13 Cal., 168); Wood v. Hunt (38 Barb., 302); Borland v. Walker (7 Ala., 269); Williamson v. Goodwyn (9 Gratt., 503); Union, etc., Bank v. Warner (12 Hun, 306) and Seivers v. Dickover (101 Ind., 495), are within this general principle, while Ferguson v. Hillman (55 Wis., 188); Wiley v. Knight (27 Ala., 336); Thompson v. Bickford (19 Minn., 18) and Railroad Co. v. Soutter (13 Wall., 517) do tend to support the position taken in behalf of the plaintiffs. But neither the case of Davis v. Leopold (87 N. Y., 620), nor any other authority sanctioned by the determination of the court of last resort in this State, supports this position.

In the case of Robinson v. Stewart (10 N. Y., 189) the court went even further than this and allowed the fraudulent vendee to stand in the place of creditors -whose debts he had paid, for reimbursement out of the proceeds of the property, on an equality with the other creditors. It was there said in the opinion that “it is entirely equitable that the defendant should be substituted in the place of the creditors whose debts he has paid. Although the conveyances were void as to creditors, they were valid between the parties ; and, according to the statement in the answer, these debts were to be paid by the defendant as a consideration in part for the conveyances. The complainants have not been injured by the payments made by the defendant, for all they could claim under the circumstances would be their proportionate share of the avails of the property.” (Id., 196.) And that extended the principle then applied beyond the application made of it in the determination of this action by the judgment from which the plaintiffs’ appeal lias been brought. In Loos v. Wilkinson (113 N. Y., 485) this subject was still further considered by the court. And it was held there, that the fraudulent grantee was -entitled to be reimbursed for what he had expended by the way of reducing or paying valid incumbrances upon the property. And that, as well as the earlier case referred to, clearly sanctioned the disposition made of this part of the controversy at the trial. And this disposition seems to be consonant to the reason and justice of the case, for the indebtedness which was paid by this defendant to obtain possession of the certificates had been legally and in good faith created. It was' in no respect the result of the fraudulent dealings between the debtor and the defendant, but it was entirely separate and distinct from all they had become implicated in, through the transfer of these certificates by the debtor to this defendant, who is his son. It was after that had become consummated that the proceedings were taken for the redemption of the certificates from the indebtedness they had been pledged to secure. That was a separate and distinct transaction of itself, in no manner within the scope or purpose of the fraud, but the fraud exclusively related to the gift of the debtor’s interest- in these certificates to his sou. And for that, the plaintiffs were entitled to such redress as would appropriate this excess in the value of the certificates to the payment of their debts. And they were neither equitably nor legally entitled under the authorities in this State, as the law has been finally announced, to any more than that.

The defendant has insisted that a still further credit should be made in his favor by way of reducing the difference between the indebtedness for which the certificates had been hypothecated, because of his failure to realize the full difference from a portion of the shares. But there seems to be no reason to doubt that these shares, at the time when they were received by him, were of the fair market-value at least of this difference. And for that he was equitably held liable to account to the plaintiffs.

He was also held liable to pay the sum of $6,805 on account of moneys received by him from the assignee for that sum held for the benefit of Bertha Halst-ed. She’is a daughter of the defendant William M. Halsted, who was a member of the insolvent firm making the assignment. And from his testimony, and that of the defendant Richard H. Halsted, it appears that the former transferred to the latter stock held by him in the Importers and Traders’ Fire Insurance Company for the benefit of his youngest daughter. This transfer took place some time in the year 1882. And the company subsequently went into liquidation and settled up its affairs, and paid to Richard II. Halsted the sum of $5,300 as the amount apportioned to these shares. He invested the same money by way of a loan in the firm of Halsted, Haines & Co. And when they made their assignment they preferred him in it for an amount which included this sum of $5,300. And the assignee jiaid to him, less a percentage upon the amount, this sum of money as well as the residue of that for which he had been preferred. And the court held, inasmuch as William ]VI. Halsted was insolvent at the time when this stock was given to his son for his sister, that it was a fraudulent disposition of it which the plaintiffs were entitled to impeach and to have the money appropriated to the payment of their debts.

It has been stated in the argument of the defendants’ appeal that this money had been paid over to Bertha Halsted. But there is neither evidence establishing that to be the fact, nor any finding to that effect contained in the case. The most that was said in the way of proof was by William M. Halsted, who stated that he understood that the money had been given to her. But that, obviously, was no evidence in proof of the fact. And Richard H. Halsted in his relation of the transaction said nothing supporting the existence of this payment as a matter of fact.

All the debts included in the judgments, with one exception, were contracted' by the firm subsequent to the time when this stock was delivered to the defendant Richard H. Halsted for his sister Bertha. And the only debt which may have been contracted prior to that event is that owing to the National Bank of the Commonwealth, of Boston, which is stated to have been contracted prior to the 12th of July, 1882. Whether that was before the gift of this stock for the donor’s daughter Bertha has not been made to appear in the case. And it may be an important circumstance affecting its disposition on account of what has been held in Todd v. Nelson (109 N. Y., 316) and Neuberger v. Keim (53 Hun, 60). But, without considering this question, a fundamental difficulty is presented in the case invalidating this adjudication, and that is, that Bertha Halsted was not made a party to the action. Richard H. Halsted had no interest whatever in this sum of money, but he held it for the benefit of his sister, and substantially only as her agent, liable to account for it and pay it over td her at any time when that might be demanded. She was legally as well as equitably the owner of this money, unless the transaction through which it had been acquired could be impeached against her as fraudulent. And that could not be done without making her a party to the action. And under section 452 of the Code of Civil Procedure it was necessary for the court, even if the parties did not require it, to direct her to be brought in before a complete disposition of this part of the controversy could, be made. That section has provided wheie a complete determination of the controversy cannot be had without the presence of other parties, the court must direct them to be brought in. Instead of doing that her right to this money was contested, litigated and determined without her presence, and without the presence of any person who was entitled to represent her as a defendant in the action, for even if the defendant Richard H. ITalsted should be held in a general sense to represent her as a trustee, he could only do that under section 449 of the Code of Civil Procedure where an action should be brought in her behalf by him. She could not be divested of her property without being brought into the action and afforded an opportunity of contesting the plaintiffs! right to recover it.

This part of the judgment, accordingly, cannot be sustained, but it should be reversed and a new trial ordered, with costs to abide the event, and the court should direct her to be'brought in as a party defendant in the action, and the residue of the judgment should be affirmed, without costs.

Yan Brunt, P. J., and Brady, J., concurred.

That portion of judgment affecting rights of Bertha Halsted reversed and new trial ordered, with costs to abide event, and that the court direct her to be brought in as a party defendant in the action. The residue of the judgment affirmed, without costs.


source: Caselaw Access Project

author: Van Brunt, P. J.:

license: Public Domain

text:
    In the Matter of the Petition of the THIRD AVENUE RAILROAD COMPANY for a Writ of Mandamus to Compel THOMAS F. GILROY, Commissioner of Public Works, to Issue and Deliver to it a Permit to Open Streets.

      Chapter 531 of 1889, relating to street railroads, is in conflict with section 3 of title 18 of the Constitution, which requires the consent of the local authorities — what imposes an additional burden upon the street.

    Chapter 531 of the Laws of 1889, providing that any street surface railway company may operate any portion of its railroad by cable or electricity,, or by any power other than locomotive steam power, instead of by animal or horse-power, which should be approved by the State Board of Railroad Commissioners, and be consented to by the owners of one-half in value of the property bounded on that portion of the road, as to which a change of motive power may be proposed, is in conflict with section 3 of article 18 of the Constitution of the State of New York, which provides that no law shall authorize the construction or operation of a street railroad, except upon the condition that the consent of the owners of one-half in value of the property bounded on, and the consent also of the local authorities having the control of, that portion of a street or highway upon which it is proposed to construct or operate such railroad, be first obtained.
    The authority to construct and operate a cable road is the conferring of the right to impose additional burdens upon the street, in contravention of the provision of the Constitution.
    Appeal by the Third Avenue Railroad Company, the petitioner, from an order, entered in the office of the clerk of the county of New York on the lltli day of April, 1890, denying the petition of the Third Avenue Railroad Company for a peremptory writ of mandamus to be issued and directed to Thomas F. Gilroy, commissioner of public works, commanding and directing him to.issue and deliver to the said Third Avenue Railroad Company a permit to open the streets' along its Third avenue route for the purpose of changing its motive power to cable traction under the terms of the permission granted by the State Board of Railroad Commissioners.

      George Hoadley, John E. Parsons and E. latiterhaeli, for the petitioner, appellant.

      P. J. Peam,, for the commissioner, respondent.
   Van Brunt, P. J.:

The petitioner is engaged in operating a street surface railroad in the city of New York, using animal power for the purpose of drawing its cars. By resolution of the common council, adopted in 1852, granting' the privilege of operating a street railroad by any power other than steam power, confirmed by act of the legislature in 1854, the petitioner acquired the franchise which it has hitherto enjoyed.

The conditions of that franchise conferred upon the petitioner the power to disturb the public streets as much as was necessary in order to lay its rails and tracks, leaving the surface of the street unbroken. The only disturbance of the street which was allowed by the charter ivas the tenrporary excavation required for embedding the ties and stringers which supported the tracks and rails, and when they were put in place the surface of the street was to be left unbroken, passage-way even and superstructure solid.

The petitioner being desirous of constructing a cable road instead of a railway operated by horse power, in the year 18^Y applied for a mandamus directing the commissioner of public works to grant to the petitioner a permit to make the necessary excavations in the street for the purpose of laying cables between the present rails as motive power for its cars. This application having been denied, and such denial affirmed by the Court of Appeals upon the ground that the petitioner had acquired neither by the charter, nor the resolution nor the act, the right to open, excavate or use below the existing surface of the streets, save for the temporary purpose 0f laying its track and for necessary repairs thereto, in 1889, by chapter 531 of the Laws of that year it was provided that “ any street surface railway company may in any case operate any portion of its railroad by cable or electricity, or by any power other than locomotive steam power,' instead of by animal or horse-power, which may be approved by the State Board of Railroad Commissioners, and consented to by the owners of one-half, in value, of the property bounded on that portion of the railroad as to which a change of motive power is proposed.” * * * And it was further provided that “it shall be lawful for any such railroad company to make any changes in the construction of its road or road-bed at any time rendered necessary by a change in its motive power.”

The railroad commissioners and a majority of the property owners having approved of such change, the petitioners now renew' their application to compel the commissioner of public works to grant them the necessary permit to build their cable road.

It is claimed, upon the part of the commissioner of public works, that chapter 531 of the Laws of 1889 is in conflict with section 18 of article 3 of the Constitution of the State of New York. Section 18 provides that “ the legislature shall not pass a private or local bill in any of the following cases,” and after enumerating several classes of cases it proceeds: “ Granting to any corporation, association or individual the right-to lay down railroad tracks.” It provides that the legislature shall pass general laws providing for the cases named in the section, and for all other cases which, in its judgment, might be provided for by general laws. “But no law shall authorize the construction or operation of a street railroad except upon the condition that the consent of the owners of one-half in value of the property bounded on, and the - consent also of the local authorities having the control of that portion of a street or highway upon which it is proposed to construct or operate such railroad, be first obtained.”

The question presented in the case is whether this claim of the commissioner of public works is well founded. It is to be observed that, by the provisions of the Constitution, the prohibition of the granting of franchises to private corporations for the purpose of building street railways, which power had been greatly abused prior to the adoption of this amendment to the Constitution, was intended to protect two interests which were necessarily affected by such grants, namely, that of the abutting owners upon the street in which the road was to be operated, and, secondly, the city itself, whose duty it was to see that the street was kept in condition for the use and passage of the general public. It therefore provided that the legislative power to make such grants should depend upon the consent oi the property owners and the consent of the city authorities. In the case at bar the consent of the property owners had been obtained to the construction of this cable road, but the consent of the city authorities has not been secured, and the question presented is whether, under the act of 1889 referred to, the consent of the city authorities can be dispensed with.

In view of the decision of the Court of Appeals upon the previous application of the petitioner for a mandamus (People ex rel. Third Ave. R. R. Co. v. Newton, 112 N. Y., 401), we think that but one answer can be given to this question. It is claimed, upon the part of the petitioner, that it did not seek to construct or operate a new road, but simply to change the motive power in the operation of a road whicli.it had already the right to maintain and operate. It was held, however, in the previous case, that the proposed construction or change of the present street railroad to a cable road ivas the building of an absolutely new road, subjecting the streets of the city to new burdens which, under its original franchise, the petitioner had no right to impose.

It was further held that the previous application made in order to carry forward its scheme, as disclosed by the papers in that case, was for a permit to make immediate excavations in and at frequent intervals of space across the public streets of the city throughout its entire route, and that no license or word of permission to do so could be found in its charter; that the road was completed, and, as the learned justice said who delivered the opinion in that case : “ The yelator had, then, -no right to again disturb the surface of the streets, except for necessary repairs and replacing of its ties and rails, as occasion might require, for the proper maintenance of its road. That power it had; no more. It now, however, asserts a legal right to make excavations, not for any of the purposes of its track or road-way, or the foundation of either, but for the purpose of laying a cable in each track between the present rails, as motive power for its cars, by the agency of steam from stationary engines. A mere statement of the proposition should be a sufficient answer to the claim. To open a city street for the construction of a surface railroad track, or its reparation, and to open that street for the introduction of a power to operate the road, would seem to be separate and distinct things. In the first, the excavation ends with the construction, the material of the street is replaced, or, in lieu of it, some other substance which restores the surface to its original, unbroken condition and usefulness, and leaves all below the surface to such uses as the municipality may require.

In the other case, as- the record discloses, the cable requires a conduit of mason work, the necessary excavation for which, on a straight road without curves, is six feet wide and from four to five feet deep. Where there is a double track there must be two of these trenches, and at intervals of thirty-five feet along the whole distance they must go still deeper for drainage; and where there are curves the width of the excavation must be at least from twelve to fifteen feet. At a corner the pit will be thirty feet in width, and at the engine-houses, whence the cable extends to the conduit in the street, it will be necessary to excavate the entire street from the engine-room out to and beyond the track furthest from it. None of these things are required for the construction of a street-surface railroad, none of them affect even its operation. They relate to some act or thing to be done below the surface.”

It was, therefore, held that the petitioner had exhausted its power under its charter; that there could be found within its charter nothing which authorized it to impose the additional burdens upon the street which was sought to be done by a change from the ordinary street surface railroad to a cable road ; and that, therefore, the commissioner of public works was justified in refusing a permit to the petitioner to construct this new railway and subject the streets to the additional burden sought to be imposed upon them. This being the condition of the law, it seems to be difficult to understand how it can be claimed that the granting of the authority for the building of this new road is not in contravention of the article of the Constitution which has been quoted, which says that no law shall authorize the construction or operation of a street railroad except upon the conditions therein stated. Bearing in mind, as already stated, that one of the objects of requiring the consent of the city authorities was to prevent the public streets from being burdened by these franchises to the detriment of the public use, how can it be claimed that a road already in existence, having the right to do one thing, the legislature have the power to grant it the right to do anything and everything else along its original route. It is the granting of authority to construct and operate a new road which the petitioner has not the slightest authority either to construct or operate under its present charter. We are unable to see, in view of the exposition of the law which was given upon the previous appeal, to which attention has been called, that there can be any question but what the Constitution prohibits the imposing of additional servitudes upon the streets without the consent of the local authorities; and that there cannot be any question but that this authority to construct and operate this cable road is the conferring of the right to impose such additional burdens upon the streets in contravention of the provisions of the Constitution. The right to operate a street surface railroad is one thing; the right to operate a cable road is another. And as the Court of Appeals have decided that the powers of the petitioner to construct a street railroad have been exhausted, it is difficult to see how another and different right — a new and independent right — can be conferred in view of the prohibition of the Constitution. There is no provision authorizing the conferring of additional powers upon an old corporation which the legislature may not confer upon a new.

The prohibition is general — ■ But no law shall authorize the construction or operation of a street railroad,” etc. The attempt to authorize the construction of a cable road in the place of a street railroad, which is already in existence, created under a charter which gave the petitioner no right to build a cable road, was clearly the conferring of an additional power, an additional franchise in violation of the prohibition of the Constitution.

It is urged upon the part of the petitioner that it having the right to construct a street railroad, no additional authority is conferred, that the cable road is a street railroad, and that it will simply operate a street surface road the same as before. But the difficulty is that the petitioner has no right, under its present charter, either to construct or operate a cable road. The construction and operation of a cable road places additional burdens upon the public streets, and the Constitution has said that such burdens shall not be imposed except with the consent of the city authorities, and it does not seem that there can be any difference between the conferring of such authority upon an old corporation and the conferring of such authority upon a new.

We think, therefore, that the act of 1889 attempts to authorize the construction and operation of a’Street railroad under circumstances expressly prohibited by the Constitution.

The order appealed from should be affirmed, with costs.

Bkady and Daniels, JJ., concurred.

Order affirmed, with costs.


author: Van Brunt, P. J. :

text:
    EDWARD MITCHELL, HAMILTON L. HOPPIN and SAMUEL H. HOPPIN, as Trustees for LOUISA H. HOPPIN, Respondents, v. THE METROPOLITAN ELEVATED RAILWAY COMPANY and THE MANHATTAN RAILWAY COMPANY, Appellants.

      Damages recovered in full compensation for a continuing trespass upon real property by the executors of a testator by whom the action was begun before his death — not binding upon the heirs in whom the title to the land is subsequently adjudged to be.

    In an action brought'to procure an injunction restraining tlie operation of an elevated railway by tlie defendants, it appeared that the predecessor in title of the plaintiffs had died after having brought an action for damages against the railway company, which was continued by his executors, in whose favor a verdict was rendered against the railway company for the total amount of the damage and loss, and not for the mere loss of rents, under an instruction from the court that the verdict would be full compensation and a bar to another suit.
    It was subsequently adjudged that the will was not a valid disposition of the real estate of the testator, as it unduly suspended the absolute power of alienation, and in an action for partition, to which the widow and child of the testator were parties, the property was sold and purchased by the plaintiffs in the present action.

      Held, that although the executors, in the action brought by them, had recovered the entire damage resulting to .the property from the construction and use of the elevated railway, such recovery was not a bar to this action brought by the present plaintiff's, as such recovery could not in any way affect the interests in the real estate, which, after the death of the testator,' were not vested in the executors, but in the heirs and widow of the testator.
    Appeal by the defendants from a judgment, entered in the office of the clerk of the county of New York on the 21st day of June, 1889, after a trial before the court at Special Term.

      Srairtercl Tolies, for the appellants.

      Mitchell c6 Mitchell, for the respondents.
   Van Brunt, P. J. :

The plaintiffs commenced this action in May. 1887, for the purpose of procuring an injunction to restrain the operation of the defendants’ road in front of the premises Nos. 72 and 76 West Third street.

It appears that the defendants’ railroad was completed and put in operation in April, 1878. In March, 1880, Daniel Sclmarr, who was the owner of the premises in question, brought an action against the Metropolitan Elevated Railway Company in the Court of Common Pleas for the damages sustained to the premises N os. 72 and 76 West Third street, by the erection and operation of this road. The action was brought to recover damages for the permanent depreciation in the value of the premises in question, caused by the construction, maintenance and operation of the elevated railway of the defendant in front of such premises.

On the 10th of December, 1880, Daniel Sclmarr died, leaving him surviving his widow, Mary Sclmarr, and his daughters, Mary Magdalena Sclmarr and Adelaide TIedding. He also left a last will and testament, duly executed, by which he attempted to dispose of all his real and personal estate in accordance with a certain scheme of disposition, wherein his widow and his two daughters and the children of his daughter, Adelaide TIedding, were the beneficiaries.

Letters testamentary were issued to the executors therein named, and the action was revived and continued by said executors. It was tried in June, 1884, and a verdict was rendered in favor of the plaintiffs, which recovery was for the whole value of the loss and not for the mere loss of rents, and under an instruction from the court that the verdict would be full compensation to the plaintiffs and a bar to another suit, which instruction it appeal’s was excepted to upon the part of the Metropolitan Elevated Railway Company. Subsequent to the probate of the will of said Daniel Sclmarr an action was begun in the Supreme Court by his widow and his daughter Mary Magdalena Schnarr against TIedding and others, for a partition of the real estate whereof Daniel Sclmarr died seized, and by the judgment entered it was adjudged and decreed that the said will was not a valid will for the disposition of real estate, for the reason that it unduly suspended the absolute power of alienation, and further adjudged and decreed that the premises in question, amongst others, be sold at public auction by the referee designated in said judgment. The premises were accordingly sold at public auction by the referee in December, 1884, and were purchased by the plaintiff Edward Mitchell, who received a de“ed of the same from the said referee on or about the 10th of January, 1885, The defendants subsequently paid the Sclmarr judgment in full, and the only question which it is necessary to discuss in the disposition of this ajapeal (as all the other questions raised have been passed upon in other cases by the General Term), is whether, by the payment of the'judgment obtained in the action of Schnarr v. The Metropolitan Elevated Railway Company, said company had acquired these easements which formed the subject-matter of the action at bar.

Upon the trial in the court below, one of the grounds upon which it would appear that the learned court disposed of the question before it was, that the plaintiff, the purchaser at the auction sale, had no notice of the Sclmarr judgment or of its scope. If that judgment had been obtained by Daniel Sclmarr and had been paid under the circumstances disclosed in this ease, it seems to us that the' law would presume that the purchaser had notice of all the rights which the Metropolitan Elevated Railway Company had acquired by reason of the judgment, because it Avas in possession of the easement.

It is a familiar principle of laAv that, where a party is in possession of property, whether real or personal, it is notice to all the Avorld of all the rights Avhicli he claims in respect to such property. A party in possession of real estate under an unrecorded deed is protected by Ids possession, as that is notice to the world that he has some claim and puts the purchaser of that property upon inquiry; and he is held not to be a purchaser in good faith until he exhausts the means of ascertaining the nature of the claim of the person in possession. Therefore, the defendant in this action, being in possession of these easements, Avas giving notice to all the world of a claim in respect thereto, and a judgment obtained by the owner of the premises against them for jiermanent damages, and precluding him and all persons claiming under him from maintaining another action therefor, established in them that right.

The plaintiff's in this action took no means AAdiatever of ascertaining upon Avliat claim the eleAated railway company based its right of possession, and unless such means Avere used they cannot possibly be considered as not having notice of Avliatever claim the defendants might be able to assert. But it seems to us, that under the decision of the Court of Appeals in Pond v. Metropolitan Elevated Railway Company (112 N. Y., 106) it is plainly intimated, that where a plaintiff recovers permanent damages in an action at law, because of a trespass of the kind committed by the defendant on the premises in question, a new action cannot be maintained because of the continuance of the trespass. It seems to us that there can be no distinction as to the rights of the owners of abutting premises, between a case where, against the objection of the defendant, such a recovery is had, and that in which such a recovery is had by and with the consent of the parties. Therefore, if Daniel Schnarr had obtained this judgment against the Metropolitan Elevated Railway Company, it would have been a bar against the maintenance of a subsequent action, because of a continuance of the trespass. But the .difficulty with the defendants’ case is that Daniel Schnarr died before the entry of the judgment and the suit was continued by his executors, who, it has been decided, had no title whatever to the real estate. Therefore, the obtaining of a judgment by them for permanent injury, and the payment'of such judgment to them, could in no way affect the real estate in respect to which they had no title.

It clearly would have been other-wise had the title been vested in the executors, so that they could have been said to have been the representatives of the heirs of the real estate in the maintenance of that action.

The judgment appealed from should be affirmed, with costs.

Brady and Daniels, JJ., concurred.

Judgment affirmed, with costs.


text:
    JUNIUS E. KINGSLEY, Respondent, v. JOHN L. MELCHER and CHARLES G. STEVENS, as Executors, and MARIETTA R. STEVENS, as Executrix of the Last Will and Testament of PARAN STEVENS, Deceased, Appellants.

      Partnership —account stated, forming the basis fos a subsequent settlement — when the settlement cannot be set aside because of error in the account slated.

    Under a written agreement of copartnership certain parties were engaged from 1863 to 1875 in the business of conducting a hotel. Annual statements were made out and received by the partners showing in separate'items, among other things, the annual expenses for repairs to the furniture and the hotel and the profits, which latter were from time to time drawn out by the parties in proportion to their respective interests. The interest of one of the partners was subsequently sold to his copartner, in consideration of which six promissory notes, representing in the aggregate the purchase-price of this interest, were given to the outgoing- partner on February 1, 1875.
    In an action brought by the maker of the notes on July 1, 1883, to open the settlement made on the 1st of February, 1875, it was alleged that in December, 1878, he for the first time discovered errors or imperfections in the account prior to 1871; that the notes were given under a mutual mistake of all the parties that the statement of account which formed the basis for the payments was just and correct, whereas, in fact, such settlement was not correct nor true by reason of errors in the allowance made in respect to repairs.
    In this claim the plaintiff was sustained by the trial court.

      Held, that as there was no pretense that any fraud was perpetrated in the statement of the account, that it could not be attacked after the expiration of ten years from the date (1871) at which it was stated.
    That although this action was brought not to open these accounts, but to open the subsequent settlement made in 1875, such statement of account vras conclusive in this action upon the questions covered by the accounts.
    Appeal by tlie defendants from a judgment, entered in tlie office of the clerk of tlie county of New York on the 22d day of October, 1888, upon the decision of a referee before whom the action was tried.
    Tlie action was brought to open a settlement alleged to have been made February 1, 1875, in respect to tlie transfer of the interest of Paran Stevens, and of the defendants, as liis executors, in the partnership of J. E. Kingsley & Co., proprietors of the Continental Hotel, Philadelphia.

      John E. Eurrill, for the appellants.

      Joseph H. Ghoate, for the respondent.
   Van Brunt, P. J.:

Many points were suggested upon the argument and in the points of counsel submitted upon this appeal which it is not necessary now to consider. The facts of the case as they appear from the record, so far as they relate to the point upon which the decision of this appeal is based, seem to be about as follows: In March, 1863, the copartnership of Junius E. Kingsley & Co. was organized for the purpose of conducting the business of the Continental Hotel at Philadelphia. The term of the partnership was to end on the 1st of February, 1872. The plaintiff and one Paran Stevens, the defendant’s testator, were members of the firm. There were two other partners whose interests it is not necessary now to notice. By a written agreement made in January, 1871, between the plaintiff and Paran Stevens, provision was made concerning the purchase by the plaintiff from Stevens of three of the ten sixteenths then held by the latter, and for a continuance of the business from the 1st of February, 1871, until the 1st of February, 1875, and for the purchase in February, 1875, of the remaining seven sixteenths, being the entire interest retained by Stevens. This purchase was to be made at the cost valuation on that day to be ascertained and made according to the inventory of said property, and in the same manner as has been heretofore followed or adopted by the said firm. It was further provided, that the annual expenses for repairs to the furniture and the hotel during the four years succeeding the 1st of February, 1871, should not exceed the average of the same expense for the years prior thereto. Stevens died in April, 1872, leaving a last will and testament of which the defendants were the executors, but the business was continued throughout the residue of the prescribed term. The plaintiff was the resident manager and had personal charge of the house and its business, including the supervision of all purchases, receipts and disbursements. The books were kept by bookkeepers acceptable to both parties. Monthly and annual statements were regularly made out and forwarded to Mr. Stevens in his lifetime and to the defendants after his decease. These statements showed, by separate items, the annual expenses for repairs to the furniture and the hotel. The profits shown by these statements were from time to time drawn by the parties or settled for between them in the proportion of their respective interests.

On or about February 1, 1875, the defendants Melcher and Stevens went to the hotel at Philadelphia and there consummated the transfer to the plaintiff of the seven-sixteenths theretofore held by the defendants, and which, by the agreement, were to be then purchased by the plaintiff. The plaintiff gave to the defendants six notes, each for $22,047.33, bearing interest, and aggregating for principal $132,283.98. All of these notes, at the time of the commencement of this action, had been paid except the last, which matured on the 1st of February, 1876, and on which there remains an unpaid principal sum of $7,047.33. The plaintiff claimed that in December, 1878, he for the first time discovered errors or imperfections in the account, and this action was commenced on the 1st of July, 1882, upon the ground that the six notes given for the interest of Stevens in the property assets and business of the partnerships, and the payments .thereon were made under a mutual mistake of all parties that the settlement of accounts which formed the basis for the payments were just, correct and true, whereas it was not just, correct and true.

It appeared upon the trial that there was allowed to the defendants under the agreement, in respect to repairs, the sum of $24,000 for seven-sixteenths of the excessive expenses for repairs to the furniture and hotel for the four years succeeding 1871, over the same expenses for the years 1867 to 1871; and it was claimed that the accounts for the four years prior to 1871 were erroneous, in that charges for repairs were not included which should have been included therein. This claim the referee held to be well founded, and his ruling in this respect presents the only question which it is proposed to discuss.

The defendants urged that inaccuracies in the accounts for the four years ending 1st of February, 1871, could not be gone into in an action commenced ten years and more after these accounts had been rendered, after the parties had settled their interests thereunder, and long after the death of one of the parties thereto. The referee, however, held that it was not the accounts rendered prior to February, 1871, which were being opened, but that the settlement which was entered into in 1875 was the subject of investigation.

It was further claimed, upon the part of the defendants, that it was the intention of the parties that the accounts, as rendered for the four years prior to 1871, were to be the basis upon which the question of repairs was to be determined. The referee, however, held that this claim was not well taken, but that the parties intended not to be governed by the accounts in respect to the repairs for the four years prior to 1871, but by the actual facts, and that, therefore, the plaintiff had a right to show that in the accounts for the four years prior to 1871, items of expense for repairs were not entered which should have been entered, and which, if they had been entered, would have shown that the amount allowed for repairs for the four succeeding years was not greater than that which had been actually expended for the four years prior to 1871.

If it were necessary in the disposition of this case to determine this question, it seems to be very doubtful whether the position of the referee in this respect can be upheld. By the terms of the agreement the purchase was to be at the cost of the valuation on the 1st of February, 1875, to be ascertained and made according to the inventory of said property, and in the same manner as has heretofore been followed or adopted, showing conclusively that the parties had in mind, at the time of entering into this agreement, the practice which had been previously pursued and the condition of the books and accounts as they had previously existed. It then goes on to say that the annual expenses during the four years succeeding the 1st of February, 1871, shall not exceed the average of the same expenses for the years prior thereto. And the parties knew from the accounts which were rendered precisely what the amount of those repairs were as charged in those accounts.

It seems to us that the probability is strongly in favor of the view that they intended to be governed by the books in the entering into that agreement, and the amounts charged in those accounts were to be the basis upon which the excess of expenses for the succeeding four years was to be determined. The point, however, raised, that the accounts rendered between these parties prior to ] 871, upon which they had settled their rights and interests for the business conducted during that period having become stated accounts, could not be inquired into in this action, seems to us to be well taken.

It is true that it is claimed upon the part of the plaintiff, that there is no inquiry into these accounts or opening of these accounts, so as to affect their character as an account stated, because all that is attacked is the validity of the settlement made in 1875. We think, however, that this claim overlooks one of the important features of an account stated. An account stated is an admission made by one party to'another that the accounts between them, consisting of the various items which enter into that account, are as there stated, and from the necessities of the law merchant it has become a part of the law that after a lapse of time such an account and such an admission shall be conclusive between the parties, unless impeached because of fraud or mistake in reference to some of the items contained in the account; and by the statute of limitations such an' admission becomes absolute between the parties after the lapse of ten years unless tainted by fraud, and even then it becomes conclusive unless attacked within a certain period after the discovery of the fraud.

Now, in the case at bar, there is no pretense that any fraud was perpetrated by Stevens in reference to the accounts from 1867 to 1871. ' It appears from the evidence in this case that monthly and annual statements were rendered by the plaintiff or his bookkeepers, and that plaintiff and Stevens settled upon the basis of these accounts, and that they contained in detail the items which went to make up the balance, upon the faith of which they settled. And it is a well-established principle that an account stated becomes stated as to all matters properly included in it. It becomes a stated admission in writing to the effect that the account correctly states all the items of account between the parties, and hence it is not only stated as to the balance, but stated as to the items.

Now, when this account became so stated that it could not be impeached upon any other ground except that of fraud, then it attained the same dignity as a judicial decree in respect to that account. If there had been a controversy between Kingsley and Stevens as to the amount of expenses for repairs for the four years prior to 1.871, and it had been determined judicially that this admission, contained in these accounts, correctly stated the amount of the repairs, could it for a moment be said that in another proceeding between Kingsley and Stevens, or his representatives, in which the question of these expenditures during this period became a necessary subject of investigation, that such judicial determination would not be conclusive evidence upon that point. Now, if a judicial decree would be conclusive, it is difficult to say wby a stated account, which these parties had no power to impeach or alter or attack, has not attained the same dignity.

This being the position of the parties and these accounts being an admission by the plaintiff to Stevens, which he could not attack as to the amount of these repairs, it seems to us that it was an admission which affected and controlled every negotiation had between Stevens and the plaintiff, which depended upon the amount which had been expended during the four years prior to 1871.

It is true that the action was not brought to open these accounts, but was brought to open this settlement of 1875. But the presentation of this conclusive admission of the plaintiff that, during the four years prior to 1871, the expenses for repairs had been a certain amount, established the case upon the part of the defendant in such a manner that the plaintiff could, not attack the same. ~We think, therefore, that the referee erred in condng to the conclusion that the inaccuracies in this account from 1867 to 1871 could be shown upon this question of repairs. And, in view of the conclusion at which we have arrived as to this, point, it is not deemed necessary to consider the other questions which were presented. But it seems to us that the referee having erred in the view which he took of the rights of the parties upon the proofs offered before him, the judgment appealed from must be reversed and a new trial ordered, with costs to the appellant to abide the event.

Brady and Daniels, JJ., concurred.

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


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

text:
    In the Matter of the Judicial Settlement of the Accounts of ABNER MELLEN, Jr., and WILLIAM C. BANNING, as Executors of the Will of ABNER MELLEN, Deceased. ABNER MELLEN, Jr., Appellant, v. ABNER M. WILCOX and WILLIAM C. BANNING, Contestants, Respondents.

      lief eree appointed in a Surrogate?s Court — bound to pass upon requests to find— presumption of prejudice, from, the improper rejection of evidence — impeaching a mtness.

    Where, upon an accounting in the Surrogate's Court, a reference is ordered by the surrogate to a referee “ to inquire into the necessary jurisdictional facts, to examine said account and objections, to hear and determine all questions arising upon the settlement of said account which the surrogate has power to determine, and to make report to the court with all convenient speed,” it is the duty of the referee to pass upon requests made to him to find any matters.of fact claimed to have been established by the evidence.
    This is so, although the determination of the referee is subject to the approval or disapproval of the surrogate; and it is the duty of the surrogate, upon an application made to him, to require-the referee to pass upon the requests submitted to him, and a refusal of the surrogate so to do would be sufficient ground for setting aside a decree made by him upon the report.
    Where material and competent evidence is improperly excluded by the surrogate, it will be presumed, on appeal, that the ruling rejecting it was prejudicial to the appellant.
    A party producing a witness is not entitled to give evidence tending to establish a bias on the part of the witness against the party calling him, and thus tending to impeach him.
    Appeal by Abner Mellen, Jr., from a decree of the surrogate of the county of New York, filed in the office of the said surrogate on the 16th day of July, 1889, confirming the report of a referee and overruling exceptions filed with reference to the form of the findings of the' said referee, as well as all the other exceptions filed, on objection of said Abner Mellen, Jr.

      Frederick M. Hvarts, for Abner Mellen, Jr., appellant.

      George Hill, for Abner M. Wilcox and William 0, Banning, contestants, respondents.
   Daniels, J.:

The appellant, Abner Mellen, Jr., together with William C. Banning, were, at the time of the proceedings before the surrogate, the executors of the will of Abner Mellen, deceased. A petition was presented to the surrogate for the settlement of the accounts of himself and the other executor of this estate. In his account he acknowledged himself to be indebted to the testator in the sum of $53,116.67, with interest from January 1, 1887. And this indebtedness was directed to be divided and distributed in the decree made by the surrogate. But it was objected, on behalf of the other executor and a legatee under the will, that the appellant was indebted to the estate in the further sum of $77,000, and that this amount should be charged against him in the settlement of his accounts. He contested the existence of this indebtedness, and an order was made by the surrogate referring the dispute to a referee “to inquire into the necessary jurisdictional facts, to examine said account and objections, to hear and determine all questions arising upon the settlement of said account which the surrogate has power to determine, and to make report to the court with all convenient speed.” No objection on the part of either party seems to have been taken to this direction of the reference, which was made under the authority of section 2739 of the Code of Civil Procedure. And the referee afterwards heard the evidence produced by the parties, and finally determined and concluded that the appellant was indebted to the estate in the sum of $77,000 upon promissory notes not at that time due. These notes Were nine in number. The first was to mature and become payable in five years after its date, which was the 28th of January, 1885. And each of the others was to mature, from time to time, after that, the last to become due in thirteen years from its date. The surrogate confirmed the report of the referee in this and the other repects included in it, and this appeal has been taken mainly from that part of the report and decree charging the appellant with this sum of $77,000.

Requests were presented in his favor to the referee, for the finding by him of certain matters of fact deemed to have been established by the evidence, but the referee refused to take any action upon either one of these requests. This was an irregularity certainly on his part. For by section 2546 of the Code of Civil Procedure, the provisions of that act, applicable to a reference in the Supreme Court, apply to a reference of this description directed by the surrogate. And by section 1023 of the same Code, either party upon a reference in the Supreme Court is entitled to submit in writing a statement of facts which he deems established by the evidence, and of the rulings upon questions of law which he desires the referee to make. And at or before the time when the decision or report is rendered the referee has been directed to note in the margin of the statement the manner in which each proposition has been disposed of. This direction is mandatory, and should have been complied with by the referee, for the dispute concerning the accounts was referred to him to be heard and determined by him. It is true that his determination was still subject to the approval or disapproval of the surrogate, but that did not exonerate the rgferee from complying with these sections of the Code of Civil Procedure. His decision when it was confirmed became the decision of the surrogate also, who was not required to go beyond the confirmation, or modification, or disaffirmance of the report. The findings of fact and law were to be made by the referee himself. (Matter of Niles, 47 Hun, 348.) And if an application had been made to the surrogate to require the referee to pass upoH the requests submitted to him, and that had been refused, the appeal from the decree and order made would have required the decree to be set aside and an order made requiring the referee to comply with these directions of the law. (Boughton v. Flint, 74 N. Y., 476.) But that was not done, but the report was brought, before him, together with the evidence, to be disposed of as in his judgment would appear to be justified. And by the decree that disposition was made of it. And this was a substantial waiver of the irregularity of the referee in refusing to pass upon the requests presented to him by the counsel for the appellant. In this respect the practice has not been changed, but it remains to be observed and enforced as was 'sanctioned in the authority already mentioned.

Upon the hearing before the referee it appeared that a demand note was first given by the appellant to the testator for the amount owing to him, and that afterwards this was changed and the notes already mentioned payable at future periods of time were taken for the indebtedness, thereby dividing it into installments. These notes were stated to have been deposited in one of the safes at the place of business carried on by the deceased, together with the appellant and another person, up to the 1st of May, 1885, when the testator retired from the business. "With these notes was also a memorandum or statement of eacli of them showing the aggregate amount to be the sum of $77,000. The testator died on the 27th of May, 1887. And it was insisted on behalf of the other executor and the legatee objecting to the accounts of the appellant, that he had taken these notes, together with this statement, from the safe and had canceled the notes by drawing a line through his own name subscribed to each of them. Upon his part this was disputed. And, to answer the case made against him, evidence was given for the purpose of showing, and having a tendency to show, that the notes had probably been surrendered to him by the testator in his lifetime. And it was upon this alleged gift of the notes that the hearing proceeded and was determined by the referee, and finally by the surrogate. To sustain the objection made against the accounts of the appellant, evidence was given to prove the fact to be that he had access to the safe in which the notes and the statement had been deposited. There was some diversity in the evidence as to the particular safe in which the deposit of these papers was made^' But the general evidence given on behalf of the contestants tended to prove that the appellant did have access to this deposit, and probably in the manner alleged removed the notes and the statement after the decease of the testator. On his part evidence was obtained from the witness Campbell that the notes and statements were contained in the safe designated by him as No. 1. And he was asked whether the appellant knew the combination of that safe. This was objected to on the part of the contestants as incompetent and immaterial. And the referee sustained the objection and excluded the evidence, to which the counsel for the appellant excepted. This offer upon his part was entirely competent. For if he did not know the combination of the safe, then that fact would tend to produce the conclusion that he might not himself have taken the notes and the statement from the safe. The evidence proposed to be given would have directly affected the substantial part of the controversy concerning these notes, and it clearly should have been received as it was offered by the referee.

The evidence was not only competent, but it was decidedly material proof on the part of the party offering to produce it. It has been urged, however, on behalf of the respondents, that the decree and report should not be set aside on account of the exclusion of this evidence, for the reason that section 2545 of the Code of Civil Procedure lias declared, that the decree of the surrogate shall not be reversed for any error in admitting or excluding evidence, unless it appears to the appellate court that the exceptant was necessarily prejudiced thereby. But this enactment cannot have the effect of obviating this objection. For it is to be presumed, as the evidence was both material and competent, that the ruling rejecting it was prejudicial to the appellant. There was no such preponderance in the evidence received as would necessarily support the conclusion that the notes and statement had been abstracted from the safe by the appellant after the decease of the testator. The fact, on the contrary, was closely contested. And this evidence could not have failed to have afforded at least some assistance to the appellant in resisting the objections which were made. And where that appears to be the condition of the case, the evidence should be received. For it is to be presumed in the disposition of the exception that the evidence proposed to be given would have been obtained from the witness. The construction required to be placed upon this part of the section was considered in Matter of Smith (95 N. Y., 516), where it was said, in the course of the opinion, that if the evidence “ rejected was important and material, and the court cannot say that notwithstanding the error the judgment is right, or if it entertains a reasonable doubt upon the subject, then we conceive a case is presented where the party excepting was necessarily prejudiced within this section. He was deprived of the opportunity of having his case decided upon the competent and material facts, and it is not a just answer to say that on a retrial the same conclusion may possibly be reached.” (Id., 527, 528.)

A witness was produced and examined on behalf of the objection made to the appellant’s account, who gave material testimony tending to support the objection, and also evidence not entirely favorable to the theory on which the account of the appellant was assailed. When the appellant, who was sworn and examined as a witness in his own behalf, was cross-examined, he was asked whether lie did not transfer his interest in his father’s real estate devised to him by the will, and in his mother’s share of that real estate, to Lawrence E. Ellis, the witness already mentioned, and whether he had not after-wards transferred the same to the wife of the appellant. This was objected to on the ground that it was not material and not addressed to any issue in the case. And the counsel for the respondents replied that it was evidence bearing upon the relation of the appellant with the witness Ellis, and the bias or interest of that witness in his favor. And the objection was then overruled and the evidence received, to which an exception was taken. The object of this evidence, from the announcement made by the counsel, was, in part, to discredit the evidence of the witness Ellis. And that the respondents were not entitled to do. For he had been placed upon the stand and examined cpiite at large as their witness. And when a witness has been produced and examined in this manner, the party producing him is not afterwards entitled to give evidence tending to impeach him. Evidence may be given to prove the facts to be different from that obtained from the witness. And his mistakes or misstatements may be corrected by other proof. But the party producing the witness cannot go so far as to introduce evidence tending to impeach him. (Pollock v. Pollock, 71 N. Y., 137, 152; Coulter v. American, etc., Ex. Co., 56 id., 585; Tice v. Dromgoole, 33 Hun, 365.) And evidence tending to establish a bias on the part of the witness against the party calling him is testimony tending to impeach him. For hostile or prejudicial feelings may, in a proper case, be proved for this object. (Schultz v. Third Ave. R. R. Co., 89 N. Y., 242, 248, 249; Miles v. Sackett, 30 Hun, 68.)

Such evidence may always be given by the party against whom the witness is sworn and examined, to discredit his testimony either wholly or partially, but that cannot be done by the party in whose favor the witness has been produced, sworn and examined. The transactions to which reference was made, and concerning which the answers of the witness were obtained, were in no respect relevant or pertinent to the issue in the proceeding, and their only object or effect in the case would be to prejudice the appellant by diminishing the effect of the testimony of the witness so far as it was in his favor. How far it may have operated adversely to him there is no means from the case of ascertaining; but, inasmuch as the disposition to be made of it required a critical consideration of the evidence, it may be presumed that the appellant was prejudiced by the introduction of this testimony.

Ordinarily a party securing erroneous rulings in his favor is not entitled to favorable consideration upon the position afterwards taken that the case might very well have been disposed of, even if the evidence rejected had been received, or that which should have been rejected was not allowed to be introduced, for the adverse party is entitled to have all the admissible proof obtainable by him given upon the hearing, and to have that rejected which may appear not to be admissible; and where that course has not been pursued the case must be reasonably clear at least to warrant the conclusion that the party against whom improper rulings have been made has not been injured or prejudiced.

These exceptions are sufficient to require another hearing of this contested proceeding, and the decree of the surrogate should be reversed, and the report of the referee set aside, and a further hearing of the case directed in the Surrogate’s court, together with costs to the appellant to abide the final event of the proceeding.

Brady, J., concurred.

Van Brunt, P. J.

(dissenting):

I cannot concur in the conclusion arrived at by Mr. Justice Daniels in this case. The refusal to find the evidence, called conclusion of facts, was not error. Most of the requests were to find evidence, and such as did not call for the finding of evidence do not appear to have been material; neither a court or referee is bound to find the evidence leading up to a conclusion of fact. It is the conclusion which he may be required to find, not the evidence establishing it. The exceptions to the exclusions of evidence by the referee cannot be considered, because it does not appear that these questions have been presented to the surrogate in a manner calling upon him to pass upon the same.

There was no exception filed upon the ground that the referee refused to hear testimony which was material, and consequently no such question was before the surrogate; and if this is so, it cannot be considered here. (Boughton v. Flint, 74 N. Y., 484.)

The decree should be affirmed, with costs.

Decree of the surrogate reversed, and the report of the referee set aside, and a further hearing of the case directed in the Surrogate’s Court, together with costs to the appellant-to abide the final event of the proceeding.


author: Daniels, J.:

text:
    WILLIAM WALTHER, as Executor of the Last Will and Testament of HENRIETTA WALTHER, Deceased, Appellant, v. CHARLES REGNAULT, PHILIP J. REGNAULT, Respondents, and MARY RIEDERER, Appellant.

      Oolleation of rents, through mistake of fact, in a wrong capacity — the party so collecting them is liable individually to account to the parties entitled thereto — right to partition, a leasehold estate — •damages recoser able after the term has expired— administrator taking a renewal thereof in his own name.

    A testator, one John B. Kegnault, left a will by which he gave and. bequeathed to his widow, Henrietta Regnault, all his property, both real and personal, in such a manner (hat she should have the free use of the income of the same, and especially of all leases of real estate which might be drawn in his name, and further directed that the estate left by her at the time of her decease should pass to his children in equal shares.
    The widow qualified, as administratrix with the will annexed, and on her death letters of administration upon her estate were issued to Charles R. Regnault, a son, who collected the rent of the leasehold premises, supposing the leasehold estate to have been the property of the widow. The leasehold estate, in fact, constituted part of the estate of John B. Regnault, the testator.

      Held, that, upon the decease of the widow, the children of John B. Regnault • became entitled to the leasehold estate, as tenants in common, and that they were entitled to an accounting from Charles R. Regnault for the rents received by him, although they were collected under the erroneous supposition that he was entitled to collect them as the administrator of his mother’s estate.
    That such children were also entitled to maintain an action for the partition of this leasehold estate under section 1533 of the Code of Civil Procedure.
    While a leasehold estate lias been designated by the statute as assets to be administered by the executor or administrator, the statute has not provided for any division or distribution of such an estate by the action of the surrogate, although it may be sold where that becomes necessary for thepayment of debts. Where there are no debts it vests in the parties entitled thereto as tenants in common, who are entitled to bring an action for the partition thereof, and by section 1589 of the Code of Civil Procedure are entitled to an accounting for the rents received.
    That the fact that there could be no actual partition of the leasehold estate, or any sale thereof, for the reason that at the time of the trial of the action the leasehold term had ended, did not prevent the court from decreeing an accounting of the rents and income received therefrom.

      Qumre, whether an administrator, with the will annexed, of an estate in which is included a leasehold interest, the lease of which contains a provision for a renewal thereof for a further term, can legally take a renewal of such lease in his capacity as administrator with the will annexed.

      Appeal by the plaintiff William Walther, as executor, etc., from a judgment, entered in the office of the clerk of the county of New York on the 4th day of December, 1889, in favor of the defendants, Charles Regnault aud Philip J. Regnault, dismissing the plaintiff’s complaint upon the merits, with costs; and also from an order, entered in said clerk’s office on December 3, 1889, granting to said defendants an extra allowance; and also an appeal by the defendant Mary Riederer from said judgment, in favor of the defendants, Charles Regnault and Philip J. Regnault, and also dismissing her answer herein upon the merits as to said two defendants so far as the same demands any judgment whatever against them, with costs in their favor against her.
    The action was brought for an accounting for rents, issues and profits collected and received from certain leasehold premises; and also for a partition of the said lands and premises, or of the estate or interest therein acquired under and by virtue of said lease, or in case an actual partition could not be made for a sale thereof.

      Henry F. Lippold, for the appellants.

      Fmil 8. Arnold, for the resjiondents.
   Daniels, J.:

The action was commenced on the 8th day of October, 1888, for the partition of a leasehold estate. The estate was owned by John P. Regnault, who died on or about the 3d of February, 1880.' He left a will by which, after the payment of his debts, he gave and bequeathed to his widow, Henrietta Regnault, all his property, both real and personal, in such a manner that she should have the free use of the income of the same, and especially of all leases of real estate which might be drawn in his name. And he further directed that the estate left by her at the time of her decease should accrue to his children in equal shares. The person nominated as executor in the will died prior to the decease of the testator, and letters of administration with the will annexed were thereupon issued to the testator’s widow. And she continued in the use and occupation of the property until the time of her own decease, which was on the 19th of April, 188J. And on the thirty-first of May of the same year letters of administration upon her estate were issued to Charles R. Regnault, a son of' these parties. And he immediately took possession of the premises in controversy and collected the rents, supposing' and believing, as the other children did, that the leasehold estate was the property of the widow at the time of her decease. And they continued in this belief until near the time of the commencement of this action, after which letters of administration with the will annexed upon the estate of John B. Regnault were issued by the surrogate of the county of New York to the same person. On the 5th of February, 1888, Henrietta W. Regnault, who was also one of the children of the testator, died, leaving a will in which she nominated the plaintiff, her husband, as her executor. And letters testamentary were issued to him on the 28th of April, 1888. There were no debts owing by the testator at the time when letters of administration upon the estate of his widow were issued, and the estate, which the action was brought to partition, consisted of a term of years created by a lease made on the 6th of May, 1869, and extending for the period of twenty years. It appeared upon the trial that, after the decease of the widow, and up to the time of the decease of the daughter of herself and the testator, the defendant Charles Regnault collected the rents and income of the leasehold estate, and that this was done under the supposition that he was entitled to do so as the administrator of the widow’s estate. In fact, he was not so entitled, as the case was determined at the trial.

And while he ostensibly acted in the capacity of the administrator of the widow’s estate, his only right or title to collect and receive the rents of the leasehold estate was that which vested in him as a tenant in common with the other children of the testator John B. Regnault. That resulted from the language of the testator’s will, by which he evidently intended to give his estate to his widow for her life, or until she should many again. And after the occurrence of either of these events, that the estate should then be divided equally among his children. This was a valid disposition of his estate. And as it was intended by him that his children should take the property in equal shares after the decease or remarriage of the widow, that intention is required to be supported and carried into effect by the law. (Wager v. Wager, 96 N. Y., 164.) The remainder, after the decease of the widow, as she did not marry again, became tlie property of tlie testator’s children as tenants in common. It vested in them certainly at the decease of the widow, if not from the time of the decease of the testator. And they took their title to the property not by descent but as purchasers under the language of the will

There was no ouster of the other children of the testator by the defendant Charles Begnault, nor was there any adverse possession of the property, but the rents were collected and received under the erroneous supposition merely that he was entitled to collect them as the administrator of his mother’s estate. But after this was found to be an erroneous view of his relation to the property, and after the commencement of this suit, he took out letters of administration upon the estate of his father, the testator. He was, therefore, in judgment of law, in the possession of this property solely as a tenant in common. And his possession was constructively that also of the other tenants in common interested equally with him in the property. And that vested the daughter of the testatrix and the wife of the plaintiff with an equal right to the rents and profits of the property with the other children of the testator, including Charles Begnault, who was in receipt of such rents. And for those rents they were entitled to an accounting from him for their shares in this manner received by him. They were also entitled, under the language of section 1532 of the Code of Civil Procedure, to maintain an action for the partition of this leasehold estate. For that has provided, where two or more persons hold and are in possession of real estate as joint tenants or as tenants in common, in which either of them has an estate of inheritance or for life, or for years, that one or more of them may maintain an action for the partition of the property. And this possession has not been required to be the actual, but it may be the constructive, possession of the property. And the plaintiff’s testatrix was in such possession from the time of the cessation of the life estate provided by the testator’s will for his widow, from the period of her decease until she herself departed this life. And her share of the rents and income of this leasehold estate vested in and was owing to her at the time of her decease. And after that event had taken place they were payable to and collectible by the plaintiff as her executor. And it was a substantial part of the action prosecuted by him that this accounting for these rents and income should take place, and that the defendant Charles Regnault, who liad received them, should pay over to the plaintiff the proportion of those moneys owing to his wife at the time of her decease. And that liability, under the circumstances, appears to be sustained by the law relating to this case.

It is true that the leasehold estate has been designated by the statute as assets to be administered by the executor or administrator, but the statute has provided for no division or distribution of an estate of this description by the action of the surrogate. It may be sold, where that becomes necessary, for the payment of debts, but that necessity did not exist in this case, for there were no debts of the testator remaining unpaid; and in that event the ¡^revisions of the statute, which have been referred to, vesting each tenant in common with the right to maintain an action for the partition of the estate,.and by section 1589 to an accounting of the rents received, became controlling and effectual over this property, securing to each one of the tenants in common the right to maintain the action of partition and for an accounting. (Brevoort v. Brevoort, 70 N. Y., 136, 139.) And to that extent this action should have been sustained instead of dismissing the complaint as that was done at the trial.

But the further relief which it was the object of the action to attain was not then within the ¡sower of the court. There could be no actual partition of the leasehold estate, neither could a sale be directed. For, at the time of the trial, this leasehold term had ended, and the tenancy in common by that event in this term of years had ceased. But the cessation of that term in no manner prevented the plaintiff from obtaining an accounting of the sh'are of the rents and income received up to the time of the decease of his wife.

By the terms of the lease the lessee became entitled to a renewal of it for another term of twenty years at a rent to be fixed according to the appraised value of the land, or to payment of the value of the building erected and being upon the property. And such a lease was taken by the defendant Charles Regnault in his capacity of administrator with the will annexed of the estate of John B. Regnault, deceased. Whether he could legally take the renewal lease in that manner it is not necessary to consider or decide. For, if he could not, the disposition of any controversy relating to that subject must necessarily be made in another action, unless it shall be satisfactorily arranged by the parties between themselves.

But the plaintiff, as the executor of the estate of his wife, was entitled to an accounting for her share of the rents and income of this leasehold property. And so was the defendant Mary Riederer entitled to a similar accounting. And all the parties who may be interested in that accounting have been made defendants in this action.

The final judgment should be reversed, with costs to the appellants to abide the event, and an accounting ordered concerning these rents and income before a referee to be appointed by the court, and the right of the parties to costs in the action reserved until the confirmation of that report.

Yan Brunt, P. J., and Brady, J., concurred.

Final judgment reversed, with costs to the appellants to abide event, and ordering an accounting concerning the rents and income before a referee to be appointed by the court. The right of the parties to costs in the action reserved until the confirmation of that report.