author: Mayham, J.:

text:
    THE PEOPLE OF THE STATE OF NEW YORK ex rel. THE AMERICAN CONTRACTING AND DREDGING COMPANY v. EDWARD WEMPLE, Comptroller of the State of New York.

      Taxation, — assessment of corporations by the comptroller — determination of a public officer, when set aside — irregularities in practice — a corporation aggrieved by the adjustment of a tax by the comptroller ma/y proceed by certiorari — limitation of time for the application therefor.

    A domestic corporation, incorporated in tlie State of New York under the manufacturing act of 1848, as extended by chapter 365, Laws of 1875, conducted its', business principally on the Isthmus of Panama. The comptroller of the State-of New York, in assessing a tax upon its franchise and business, under chapter 542, Laws of 1880, and the acts amendatory thereof, based the sum upon dividends declared, rent paid for offices, salaries of officers and employees, and deposits in bank in the State of New York.

      Held, that this method of estimate was correct, and that to the extent of such items the corporation was “ doing business in this State ” and was subject to taxation therein.
    The determination of a public officer, charged with the duty of deciding whether property within his jurisdiction is taxable, will not be set aside unless it conclusively appears that his valuation was erroneous.
    The comptroller, a public officer representing the people, does not, and cannot, by making return to a writ of certiorari, waive any failures or omissions upon the part of the person or corporation taking the proceeding to comply with the-practice prescribed by law in such cases.
    The Code of Civil Procedure (§ 2122) provides that “a writ of certioran'i cannot be issued * * * where the determination can be adequately reviewed by an appeal to a court or some other body or officer.” Section 1 of chapter 361,. Laws of 1881, provides for a board of State officers before whom the assessment’- and statement of a tax against a corporation can be adequately reviewed. Chapter 463, Laws of 1889, provides that the comptroller may, at any time, revise and readjust such an assessment; and, further, that such readjustment may be reviewed, upon the law or the facts, upon certiora/ri by the Supreme Court at the instance of either party.
    A corporation aggrieved applied to the comptroller to readjust a tax, and the latter refused, after entertaining the application, to do so.

      Held, that the case was thereby taken out of the operation of the law of 1881, and the prohibition of section 2122 of the Code of Civil Procedure, and was brought within the act of 1889.
    That the corporation, therefore, need not prosecute the review before said board of State officers, and its procedure by certiorwi was proper.
    That the thirty days’ limit of time, prescribed by section 17 of chapter 501 of the Laws of 1885 for the application for a writ of certiorari, did not apply to the issuing of such writ under section 20 of chapter 463 of the Laws of 1889.

      Hearing upon the return to a writ of certiorari granted on the 9th day of January, 1891, and entered in the clerk’s office of Albany county, upon the relation of the American Contracting .and Dredging Company, to review an assessment of taxes made by the defendant Edward Wemple, comptroller of the State of New York, under chapter 542, Laws of 1880, and the several acts •amendatory thereof.
    The application was made by the relator to review the determination of the comptroller, made on its application for the revision and readjustment of accounts for taxes against the relator for the years 1887, 1888, 1889.
    The relator is a corporation of the State of Eew York, organized under the manufacturing act of 1848, as extended by chapter 365 of Laws of 1875, and was incoiqiorated August the 22d, 1882, with a paid-up capital of $2,000,000, divided into'20,000 shares of $100 each, and in and by the certificate of incorporation the corporators certify as follows:
    “Anri we do hereby certify that such corporation is formed for the purpose of carrying on some part of its business out of the State of New York, but that the operations of said corporation are to be conducted and carried on in and from the city, county and State of New York, which is to be the principal place of business of the said company.”
    During the three years for which the relator seeks to review the assessment by the comptroller, and the tax imposed on it, the ■company was largely engaged in dredging on the Panama canal on the Isthmus of Panama, but during all that time kept an office in the city of New York, which it kept furnished and for which it paid rent, and where officers and employees were kept in the service ■of the relator, and were paid by it in 1887, $4,500; in 1888, $7,600; in 1889, $6,693.33. During the same time the relator made annual reports, as required by the laws of New York, to the comptroller, by which it appeared that in 1887 it declared and paid dividends, on the capital stock, of forty-five per cent; in 1888 it declared and paid dividends on the capital stock at 224 per cent, and in 1889 it declared and paid dividends on the capital stock of seven per cent. The earnings and income from the relator’s business were from time to time deposited by the relator in its bank in the city of New York, and the average monthly balance kept on deposit in such bank for the year 1887 was $78,320.88, and the like average monthly balance so kept on deposit in New York banks for 1888 was $108,248.12, .and for the year 1889, $12,917.79.
    Upon the franchise of the business of the relator, based upon dividends on capital stock, the comptroller imposed a tax of one-quarter of a mill for each one per cent dividend declared in each of the years 1887, 1888, 1889, amounting in the aggregate to the sum of $7,460.01, and on the 3d of September, 1890, served upon the relator the following notice :
    STATE OF NEW YORK:
    Comptroller’s Oeeice, Corporation Tax Department, Albany, Sept. 3, 1890.

      To Eu&ene Kelly, Treasurer of American Contracting and Dredging Company, 47 Exchange Place, N. Y.: '■

    Sir.— Please take notice that the comptroller has settled an account against your company of $7,460.01 for tax on capital stock for three years ending November 1, 1890. Unless such tax is paid within thirty days from, the date of this notice, we shall draw our warrant for the same pursuant to the provisions of law.
    Yours respectfully,
    EDWARD WEMPLE,

      Comptroller.

    On the 20th day of September, 1890, the relator paid, under protest, into the treasury of the State of New York the whole amount of tax specified in the foregoing notice, and took the treasurer’s receipt- therefor under section 17 of chapter 501 of Laws of 1885.
    On the 14th day of October, 1890, the relator served upon the comptroller notice of an application to be made by the relator to him for a revision and readjustment of the accounts of $7,460.01 of tax theretofore settled by the comptroller under the provisions of chapter 485 of the Laws of 1889, and on the 28th day of November, 1890, the comptroller'made an order declining to make any revision or readjustment of the same.
    On the 9th day of January, 1891, upon the petition of the relator, a writ of certiorari was Issued out of the Supreme Court directed to the comptroller, requiring him to certify a return, in the usual form, to such writ. To this writ the comptroller made and filed Ms return on the 17th day of January, 1891. The case shows that no notice of motion of the application for this writ was served on the comptroller before the same was granted, nor were any of the jiapers upon which the writ was allowed served on him before the granting of the writ.

      A. II. Jolvne, for the relator.

      I. 3. Maynard, for the Comptroller, the respondent.
   Mayham, J.:

The defendant raises three preliminary objections to this writ, and insists that it should be quashed.

First. Because the application for it was not made within thirty days after service upon.the relator by the comptroller, of notice of settlement of the tax in question.

Second. Because the paper upon which the motion for the writ was made, and notice of motion for the writ were not served upon the comptroller eight days before the making of the motion.

Third. That the writ of certiorari should not have been issued in this case because the determination sought to be reviewed could be adequately reviewed by an appeal to a board of State officers, consisting of the secretary of State, attorney-general and State treasurer, under the provisions of section 1 of chapter 361 of Laws of 1881.

The first point made by the defendant for the quashing of this writ, because the application therefor was not made within thirty days after the notice of the assessment, is under the provisions of section 17, chapter 501 of the Laws of 1885.

'The part of that section to which our attention is directed upon this point reads as follows:

“§ 17. No writ of certiorari to review the determination and settlement of the comptroller as to the amount of capital used within the State by any corporation, joint-stock company or association, and as to the tax and penalty to be paid thereon, shall be granted, except application therefor be made within thirty days after service upon such corporation, joint-stock company or association by the comptroller of notice of such settlement.”

This statute is mandatory, and if it affirmatively appears in the case that the notice by the comptroller of the settlement of this tax had been served on the relator more than thirty days before the application of the relator for this writ, and if that difficulty is not waived, we think the objection fatal to these proceedings. The notice is set out in the case and bears date on the 3d of September, 1890. The only proof of the service of this notice is found in the petition and return wherein' it is alleged that it was served on the 3d of September, 1890. But as the allegation is positively made in the return it must be taken as establishing the time of the service of the notice. The return to the writ must be taken as conclusive and acted upon as true. (The People ex rel. Sims v. The Board of Fire Commissioners, 73 N. Y., 437.)

The relator in the brief of counsel on this argument states that, upon receiving the notice of September 3, 1890, it applied to a justice of this court for a writ of certiorari to review this assessment, and complied with the requirement of the statute by paying into the treasury the amount of tax and giving the undertaking required by section 17 of chapter 501 of Laws of 1885, and that such application was denied without prejudice under the authority of the People ex rel. Edison v. Wemple (11 N. Y. Supp., 246).

The case discloses the payment of the tax into the treasury on the 20th of September, 1890, and the execution, approval and deposit in the office of the treasurer of the bond required by statute on that day, but it contains no reference to an application for a certiorari or an order denying it without prejudice at that time.

If these facts appeared in this case, it might be said with much force that such application within the time answered this requirement of section 17 of chapter 501 of the Laws of 1885, and that the denial of the motion without prejudice on that application left that application to stand as a substantial compliance with that requirement in that action.

But the record, as we find it, shows no application for. a writ of certiora/ri until the 9th of January, 1891, a period of 121 days from the service of the notice by the comptroller of the settlement of this tax, and upon this record the court must proceed in the determination of the question raised by the defendant on this point; and unless the comptroller can and has waived this objection by his return to the writ without objection we do not see how the writ can be sustained.

The defendant raises another preliminary objection to this writ — that the papers upon which it was granted were not served on the comptroller eight days before the application therefor. The case is silent upon this subject, but the stipulation of the attorneys of the respective parties does not embrace any proof of service of such papers, and that stipulation purports to refer to all of the papers on file in the clerk’s office, “and the whole thereof.” We are, therefore, to assume that all the papers are before us, and as they contain no proof of service on the comptroller, either of a notice of the application for this writ or of the papers upon which the application is founded, that no such service was made.

Section 17 of chapter 501 of the Laws of 1885, after providing for the time within which a writ of certiorari must be apjilied for, as we have quoted, proceeds as follows: “Nor shall any such writ be granted, except the papers upon which motion therefor is to be made, including notice of motion, shall have been served upon the comptroller at least eight days before such motion.”

Unless the effect of the provision above quoted is qualified or modified by the provisions of sections 19 and 20 of chapter 463 of the Laws of 1889, then the service of the notice and papers, as prescribed by the provisions of section 17, above quoted, is a prerequisite which must be complied with to confer jurisdiction upon the judge to whom the application is made, and, without such service and proof thereof before him, he would be wholly without jurisdiction to make the order for or grant the writ.

Upon botli of the points raised by the defendant under the provisions of section 17 of’chapter 501 of the Laws of 1885, there has been a failure on the part of the relator, and unless such omission has been waived by the defendant in the steps subsequently taken by him, or the effect of section 17, aboved quoted, is so'modified by chapter 463 of the Laws of 1889 as to render a strict compliance with its provisions unnecessary, this writ cannot be sustained. Did the defendant by making return to this writ waive the objection as to the time of service, and the necessity of service, of notice of papers eight days before the application for the same as required by section 17, chapter 501 of the Laws of 1885 ? The comptroller in this proceeding represents the people of the whole State, who are presumed to be interested in the question of taxation for State purposes.

He is a statutory officer, charged with certain statutory powers and duties, and is limited in the exercise of his official functions to the discharge of his delegated authority. He cannot, like an individual, waive any of the statutory requirements, nor relieve the relator from any burden that the law casts upon it; it is. by virtue of the statute that the relator is permitted to review the action of the comptroller by certiorari / and its proceedings in making that review are regulated by and must be conducted in accordance with these statutory provisions, and not under or in virtue of any waiver, expressed or implied, by the comptroller, who is in like manner bound by the statute.

In the case of People ex rel. The Commissioners of Highways of Cohocton v. Dennis Connor et al. (46 Barb., 333) it was held that the commissioners of highways could not, on appeal from their determination in laying out a highway, waive the oath of the referees appointed by the county judge on such appeal, and the court in discussing that case uses this language : “ Besides the parties to these proceedings had no right to waive such irregularity, as this omission of the referee to be sworn. The whóle town had an interest in the proposed highway, and had a right to require that the proceedings should, in all material respects, conform to the requirements of the statute, which, in effect, declares that until the referees are sworn they are incompetent to do any other act as referees. It was an act necessary to give them jurisdiction to proceed in the discharge of their duties, the omission of which rendered all their acts cor cwn nonjudiee and void.”

This case is cited with approbation in People ex rel. Stephens v. See, Town Clerk, etc. (29 Hun, 216). In this case parties claiming to be aggrieved by the assessment of land damages, by commissioners appointed by the county judge in laying out a highway, took proceedings to have a reassessment before a jury of an adjoining town, and for that purpose served a notice on the town clerk three days before the hearing, whereas the statute required a service on the town clerk ten days before the drawing of the jury, and on the opposing party within three days after service on the town clerk.

The notice was, in fact, served on the commissioners of highways, who in that case were the opposing parties, but one day before the time fixed for drawing the jury. On the hearing before the jury the commissioners of highways appeared by counsel and were heard before the jury. The question of the sufficiency of these notices came before the court on certiorari to review the proceedings, and it was claimed that the commissioners by appearing had waived the statutory time of service.

But the court held that: “The notice is a prerequisite to the acquisition of jurisdiction over the subject-matter. Jurisdiction cannot be conferred by voluntary appearance of the commissioners of highways upon the reassessment when no proper notice has been •served upon them.” It is quite apparent that the comptroller in this case had no power to waive the time within which the writ must be applied for, or the service of notice and papers required by section l'T of the Laws of 1885 ; and if this is so, then the granting of the order for this writ, and the allowance of the writ itself, was without jurisdiction, and all the proceedings, under it to review the •act of the comptroller would be void.

The learned attorney-general raises another preliminary question which he insists is decisive of this certiorari under the provisions of chapter 361 of the Laws of 1881. By section 1 of this chapter the comptroller, if not satisfied with the valuation returned by the corporation or joint-stock company to the comptroller, “ is authorized and empowered to make a valuation thereof, and to settle an •account upon the valuation so made by him for the taxes, penalties and interest due the State thereon; and any association, corporation or joint-stoclc company dissatisfied with the account so settled, may, within ten days, appeal therefrom to a board, consisting of the secretary of State, attorney-general- and State treasurer, which board on such appeal shall affirm or correct the account so settled by the comptroller, and the decision of said board shall be final.”

This act was amended by chapter 151 of the Laws of 1882 and again by chapter 501 of the Laws of 1885. The last amendment added to the act, as amended by chapter 151 of Laws of 1882, nine sections, from eleven to nineteen, both inclusive; but the provisions of section 1 of chapter 361 above quoted are nowhere repealed. By section 2122 of the Code of Civil Procedure it is provided that: “A writ of certiorari cannot be issued * * * where the determination can be adequately reviewed by an appeal to a court or some other body or officer.” As we have seen, section 1 of chapter 361 of Laws of 1881 expressly provides a board of officers before whom the assessment and statement of tax against the corporations in this class of cases can be adequately reviewed and a final determination had thereon. By chapter 463 of the Laws of 1889 two more sections were added to chapter 501 of the Laws of 1885, being section 19 and section 20. By section 19 it is provided, among other things, that the comptroller may at any time revise and readjust an assessment made by himself or any predecessor for taxes arising under this act or any act of which this is an amendment, and upon proof resettle the same.

Section 20 provides that the action of the comptroller upon any application for a settlement or revision, may be reviewed upon the law or facts upon certiorari by the Supreme Court at the instance of either party. The relator applied to the comptroller for a readjustment of this tax, and the comptroller refused to change the assessment after entertaining the application. This, we think, brought the case within the provisions of chapter 463 of the Laws of 1889, and took the case out of the operation of section 1 of the Laws of 1881, chapter 361, and the consequent prohibition embraced in section 2122 of the Code, and that a certiorari will lie, and the relator is not compelled to prosecute the review before the board of ■State officers under the provisions of chapter 361 of the Laws of 1881. As we have seen, sections 19 and 20 of the act of 1889, added to chapter 361 of the Laws of 1881, provide that the comptroller may readjust the tax at any time, and that would authorize such readjustment after the expiration of the time limited by section 17 of the act of 1885. It would seem to follow, therefore, that the provisions of that section did not apply to the certiorari provided for in the section 20 of the act of 1889. If this construction is correct, then the relator is regular and may review this assessment in this proceeding.

This brings us to the consideration of the question upon the merits. By the statute the comptroller is authorized and empowered to ascertain, fix and determine the amount of capital employed within the State, and to settle an account for the taxes and penalties due the State thereon. This, it seems to me, he has done in this case, by aggregating the average balance kept on deposit in the State, the amount of annual rent paid for premises occupied by the petitioner in this State, and the annual amount of salaries paid to officers in the State. It is difficult to see why the capital so used and kept in this State is not employed here. It is true that the case discloses that the chief operations of the company were in Panama, but the deposit of money in a bank may be, and ordinarily is, employing it there, and so with paying it out for salaries and rents; and in the absence of an explanation, it would seem to follow that the comptroller was justified in holding that it was employed in this State. The comptroller, in the determination of this question, was called upon to ascertain, as a fact, the amount of capital so employed, and his determination upon that subject, when reviewed, stands in some'respects like the verdict of a jury, and should not be set aside except upon reasons that would justify the court in setting aside a verdict as against evidence. (Code of Civil Procedure, § 2140.)

The rule seems well settled upon authority that, upon the review of assessments, the decision of a public officer, charged with the. duty of determining the value of property, for the purpose of assessment and taxation will not be set aside, unless it clearly and conclusively appears that the valuation was erroneous. (People ex rel. Osgood v. Commissioner of Taxes, 99 N. Y., 154; People ex rel. West. F. I. Co. v. Davenport, 91 id., 574; People ex rel. Dann v. Williams, 36 id., 441; People ex rel. Central Park, etc., R. R. Co. v. Commissioner of Taxes, 21 N. Y. State Rep., 358; People ex rel. P. R. R. Co. v. Commissioner of Taxes, 104 N. Y., 240.) While most of these cases relate to the appraisement of value, yet there is no apparent reason why the same rule should not obtain where the officer is charged with the duty of determining whether or not property within his jurisdiction is or is not taxable, especially when he is charged with the duty of determining that question.

On the whole, we see. no reason upon the merits for reversing the determination of the comptroller, and the same is, therefore, affirmed, with fifty dollars costs and disbursements.

Landon, J., concurred.

Determination of the comptroller affirmed, with fifty dollars costs and disbursements.


source: Caselaw Access Project

author: Learned, P. J.:

license: Public Domain

text:
    HAMMON HERRINGTON, Respondent, v. CATHARINEWINN, as Executrix of WALTER W. WINN, Deceased, Appellant.

      Executors and administrators — personal transaction with decedent — entries in a booh — proof by an executrix, on cross-examination, of the physical condition of her testator — the claimant cannot rebut it — information necessa/ry to enable a physician to prescribe for a patient.

    Upon the reference of a claim against the executrix of one Winn, referred under the statute, the claimant was allowed to testify that, in his presence and that of the decedent, certain figures, showing the price and number of certain cords of wood in issue in the suit, were entered in a book by Winn’s son by his direction, and that the claimant himself, in the presence of Winn and his son, made the same entries on a paper, and that they agreed with figures in a book of the claimant. The book of Winn, which had been produced on notice, and the other book which belonged to the plaintiff, were then admitted as evidence.

      Held, that 'the evidence related to a personal transaction had by the witness with Winn, and was incompetent under the Code of Civil Procedure (§ 829).
    The claimant called the executrix as a witness, and examined her as to this transaction, which she denied substantially. Her own counsel, on cross-examination, inquired of her as to the physical condition of Winn at the time of this transaction. Then the plaintiff was recalled and was asked on his own behalf as to-the condition of the decedent.

      Held, that this evidence related to a fact forming part of the transaction; was- . material upon the question whether the transaction ever took place, and was objectionable under the Code of Civil Procedure (§ 829).
    That such testimony upon the defendant’s part, being brought out properly upon the cross-examination of the plaintiff’s witness, did not entitle the plaintiff to-testify afterwards as to the physical condition of Winn.
    A physician, not his family physician, attended Winn once. He was asked by defendant whether upon that day Winn was conscious or unconscious. Decision upon this question was reserved. He was recalled and asked whether the-information he obtained on that day was necessary to enable him to prescribe professionally. This question was excluded, and finally the physician’s testimony was stricken out.

      Held, that the latter question was proper within section 884 of the Code of Civil Procedure.
    That this was so whether it ultimately appeared that the witness was or was not-shown to be competent to testify to Winn’s physical condition on that day.
    Appeal by tbe defendant Catharine Winn, as executrix of Walter W. Winn, deceased, from an order confirming the report of a referee,. ■entered in the clerk’s office of Rensselaer county on the 1st day of October, 1890; and from a judgment, entered thereon in said office, in favor of the plaintiff, after a trial had before a referee in Rensselaer county.

      J. K Hoag and H. A. Parmenter, for the appellant.

      James G. Patton and Fra,nh S. HlaeJe, for the respondent.
   Learned, P. J.:

This is a claim against the estate of Walter W. Winn, referred under the statute. The referee reported in favor of the plaintiff, ■and the defendant appeals.

Two questions are raised: The first, that the referee admitted evidence inadmissible under section 829, Code of Civil Procedure; the second, that he excluded evidence under section 831 which was admissible.

The plaintiff was called on his own behalf. A memorandum-book of the decedent was produced by defendant. The plaintiff testified that he saw the 'book in Winn’s house, and that Winn and Fred Winn, the son, were present; that he saw pages 16 and 1Y, .and saw the figures put on those pages; that Fred Winn put them on, and that his father was present; that he also saw a “ blank leaf,” paged 213 and 211; that he himself put the figures on that paper in presence of Winn and his son Fred; that Fred and plaintiff at that time compared the figures on pages 16 and 1Y with those on plaintiff’s book, the number of cords of wood, and how much they came to; that Fred Winn read the figures off aloud; that Winn directed Fred to put the figures down in the book in plaintiff’s presence (that book being plaintiff’s book); that on comparing the two books, that is, plaintiff’s book, and defendant’s book and the “blank leaf,” the figures corresponded. The two books were then given in evidence by plaintiff. The referee found that these entries, specifying them, were made by Fred Winn in the presence and by the direction of the testator, and were read aloud by his said son in his presence.

The case shows that some of the evidence was taken subject to -objection, and especially the question whether Winn directed Fred to put down these figures in plaintiff’s presence, was objected to as a transaction between deceased and the witness; the objection was. overruled and defendant excepted. (Church v. Howard, 79 N. Y., 415.) The plaintiff insists that, if this testimony was objectionable, when given, the objection was overruled by subsequent testimony given by defendant. We see nothing to justify this position. The cases cited by the plaintiff do not sustain it. The plaintiff had himself called the defendant as a witness, and had examined her as to the examining of accounts above referred to. She denied that it had taken place. This did not make the plaintiff competent to testify to the transaction. And after plaintiff had so testified her denial of such a transaction could not make his testimony competent, if it had been incompetent before.

We are obliged, therefore, to inquire whether the plaintiff was competent to testify as he did. This was a personal transaction between plaintiff and the testator. The business was the examining and adjusting of accounts. That the jestator acted through his son Fred did not make the affair any the less a transaction with the plaintiff. The case of Cary v. White (59 N. Y., 336) is questioned in Matter of Eysaman (113 N. Y., 62, at 73.) But even that case does not sustain the ruling here. And more recent cases condemn it. (See, in addition to the case last cited, Holcomb v. Holcomb, 95 N. Y., 316; In Matter of Dunham, 31 N. Y. St. Rep., 858.) The object of the testimony was to show that testator stated or acknowledged the amounts as correct. And whether the plaintiff testified to this in direct words' or testified that the testator told his son to put down the figures after Fred had read them aloud, the same result is obtained and the statute is equally violated.

After the plaintiff had examined Mrs. Winn she was cross-examined by her own counsel as to the condition of the testator at the time of the alleged transaction. Then the plaintiff was recalled and was asked on his own behalf as to the condition of the testator. This was objected to under section 829, but the evidence was admitted. Now, Mrs. Winn’s testimony related to the same transaction as to which she had been called by the plaintiff. The testator’s condition on the day of the alleged transaction was material on the question whether the transaction took place. She was entitled to give the' testimony. (Nay v. Curley, 113 N. Y., 575.) The question then arises, did this permit the plaintiff to testify as to testator’s condition. We think not. Mrs. Winn had not testified voluntarily. She came ■on the stand as plaintiff’s witness. She was, therefore, at liberty, without thereby prejudicing her own position, to testify to all the facts forming a part of the transaction. She would be much prejudiced if she could not do this without making the plaintiff competent, where, by section 829, he would be incompetent. And the condition of Winn at the time of the transaction was a fact forming part of the transaction itself.

Another question arises as to the exclusion of testimony, of Dr. Garland. He was a physician and a friend of testator’s. lie was not his family physician. But he did attend him the twenty-second of December. He was called as a witness for defendant and testified as to the unconsciousness and consciousness of testator.

The plaintiff moved to strike out this testimony. The referee reserved his decision. Afterwards tlie defendant recalled the ■doctor and asked him whether the information he obtained on the twenty-second of December was necessary in order to enable him to prescribe professionally ; also whether he obtained any information that day which was necessary, etc. Defendant also offered to show by the doctor tha,t the testator’s condition was such that any person of ordinary intelligence could understand it as well as a physician. These questions were objected to and excluded. And finally the referee struck out the doctor’s testimony. It is not necessary to repeat section 834. People v. Schuyler (106 N. Y. 298, at 304) cites approvingly Edington v. Ætna Life Insurance Company (77 id., 564) and holds that to exclude the testimony of the physician the party must show, among other things, that the information acquired by the physician was such as was necessary to enable him to act in his professional capacity. Under these decisions we do not ■see why these questions were not proper. Whether it would finally appear that the physician could or could not testify as to the testator’s condition is another matter. But he should have been allowed to explain as to the nature of the information. The decisions on this section are not entirely clear. And, indeed, it is not easy to draw the line between information obtained by a physician’s professional observation and such as would be plain to every intelligent observer, as suggested in the Edíngton Case. But these questions excluded might have thrown some light on the nature of tbe information obtained by the doctor, and might, perhaps, have justified its retention.

The judgment should be reversed, referee discharged, new trial granted, costs to abide event.

Landon, J., concurred; Mayiiam, J., not acting.

Judgment reversed, new trial granted, referee discharged, costs to abide event.


text:
    ARCHIBALD A. McLAUGHLIN, Respondent, v. JOHN T. CHARLES, Appellant.

      Blandeo' — privileged, communications — evidence given by a witness, compelled by law to answer, is not a repetition of the slander.

    The charter of the city of Amsterdam (Laws of 1885, chap. 181, § 82) authorizes its common council to summon any person to appear and testify before it, and provides for the punishment of a witness refusing to answer.

      Held, that an investigation made by said common council, relative to the alleged bribery of the city engineer, was a judicial inquiry.
    That testimony there given, and confined to the matter before the tribunal, was absolutely privileged, and a witness giving it was not liable to an action for damages for having given it whether it was true or false, and whether it was given maliciously or not.
    That this rule applied to an action of slander, where the defendant’s testimony, given upon such an investigation, was charged to constitute a repetition of a former slander uttered by him, and was alleged, as showing malice, to justify an increase of the damages recoverable.
    That it was error for the court to charge that such testimony, given before the common council, was privileged only so far as it was true, and that if untrue it showed express malice.
    Appeal by tbe defendant John T. Charles from a judgment, entered in the clerk’s office of Montgomery county on the 29th day of September, It90, in favor of plaintiff; and also from an order denying a motion for a new trial made upon the minutes of the court, on the 27th day of September, 1890, after a trial at the Montgomery Circuit before the court and a jury, at which a verdict was rendered for plaintiff for $1,000.

      M. L. Stover, for the appellant.

      Z. S. Westbrook, for the respondent.
   Learned, P. J.:

This is an appeal from a judgment on verdict, and from an order denying a new trial. The action is foy slander. The complaint alleges that the defendant, about the seventh of December, spoke slanderous words of the plaintiff, setting them forth, and that on the twelfth of December he reiterated them.

The answer substantially admits the speaking of the words on December seventh; and, in regard to the reiteration on December twelfth, avers that it was made while giving testimony as'a witness in an investigation made by the common council of Amsterdam. On the trial the plaintiff relied on the admission of the answer. He was a witness on his own behalf, and proved the circumstances under which the reiteration was made, substantially as stated in the answer.

Testimony to establish the truth of the charges contained in the slanderous words was given by defendant. And this testimony was afterwards contradicted by that of the plaintiff.

The learned justice in charging the jury said, in regard to the point that the communications were privileged: “ He, the defendant, had a right, and it was his duty, to go before the common council and give testimony, * * * but he was privileged only to the extent of speaking the whole truth, and nothing but the truth, in reference to those charges. So that at last the jury must come down to the question : Are the allegations that the defendant made in reference to the conduct of the plaintiff true or false ? That he reiterated them before the common council, if they are untrue, is an aggravation of the damages and shows additional malice. That he set them up in his answer, if he knew them to be untrue, was an additional aggravation that you may take into account.” To this the defendant excepted.

At defendant’s request the court charged that, as to the investigation, no damages can be given for words there spoken, unless express malice be shown. And the court added: “ If they were untrue, it shows express malice; ” to which defendant excepted.

The plaintiff was in the employ of the city of Amsterdam, but was not an officer. The chai’ter of the city (Laws of 1885, chap. 131, § 32) authorizes the common council to summon a person to appear and testify before .them, and provides for the punishment of a witness refusing to answer. The matter before the common council at that time was an investigation as to the plaintiff’s conduct in matters connected with his work and duty as city engineer. It was, therefore, a proper subject of investigation. As he was not an elective officer, formal charges were not needed. (Sec. 16.)

This investigation before the common council was, then, a judicial investigation in the sense that the common council could summon witnesses, administer an oath to them and punish them for refusing to testify. (Hosmer v. Loveland, 19 Barb., 111.) Testimony given under such circumstances is absolutely privileged. That is, so long as the testimony is confined to the matter before the tribunal, the witness is not liable for what he says, whether he utters it maliciously or not, or whether it is true or false. Of course, he may not abuse this privilege by going outside of the questions put to him, and making false and slanderous statements. But it is essential to the due administration of justice that the witness should be at liberty to testify without the peril of an action for slander if some person deems his testimony slanderous and false. (Hastings v. Lusk, 22 Wend., 410; Moore v. Man. Nat. Bk, 34 N. Y. St. Rep., 337; S. C., 123 N. Y., 425.) This principle is not denied by the plaintiff* But he urges that it must appear that the statements were relevant to the issue. In this case they clearly were. The issue was whether the plaintiff had accepted and demanded money from contractors, for performing the duty of making certificates. The testimony was directly relevant.

But the plaintiff further urges that while this principle would apply if this were an action for slander in speaking those words, yet, inasmuch as the speaking of those words is only alleged as a reiteration of the former slander and as an aggravation, the principle does not apply. The plaintiff argues that the plaintiff may show a repetition of the words for the purpose of showing malice and increasing the damages. There is no doubt of that general rule, that a repetition of the words may be shown as evidence of malice. But the question here is this: When such repetition is an absolutely privileged communication, can it then be shown in .order to prove malice? To determine this we must consider the reason why certain communications are held absolutely privileged. It is not to protect falsehood. But it is because public policy requires that when persons are witnesses on a trial they may testify freely and without danger. A witness ig often compelled to say unpleasant things. He is often obliged by his testimony to charge some person with having committed a crime. Now, if the person thus charged ■could sue the witness for slander, and the only defense of the witness should be to prove the truth of his testimony, he would be in a very bad predicament. He might have no means of proving the truth of his testimony, and at any rate it would be a great annoyance to be sued and compelled to defend on that ground. It is, then, for public policy that the rule exists.

Now, if this is the ground and reason of the rule, it applies when the testimony of a witness is offered as a reiteration to show malice. The witness testified under compulsion, and he is entitled to the protection that what he says as a witness shall not be a cause of injury to him.

Let us suppose that a witness has made a statement to one person which is slanderous in its terms. The statement is true but he has no other witness to its truth than himself. The publicity is small, and the damages recoverable might be proportionally small. But subsequently he is called as a witness on a trial and compelled to state the same matter. Thus he has been compelled to make a very public statement. What he has said is true, but he cannot prove its truth. Now, it would be highly unjust to permit this compulsory statement to be used as a reiteration of the slander, with the charge of the court that he was privileged only to the extent of •■speaking the whole truth. He would thus be deprived of that important protection given by the principle that such communications are absolutely privileged.

We think, therefore, that it was error to charge that the testimony given before the common council was privileged only as far as it was true, and that if untrue, it showed 'express malice.

We have taken the plaintiffs grounds, viz., that the allegation in the complaint in regard to the testimony before the common council was merely intended as aggravation of damages, and not as a separate Cause of action. It has not been considered necessary to set forth such aggravation iu the complaint; and we do not feel confident that the allegation does not state a separate cause of action. If it be a separate cause of action, then the views we have stated apply as the plaintiff concedes.

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

Landon and Mayham, JJ., concurred.

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


author: Lanbon, J.:

text:
    THOMAS ARMSTRONG, Appellant, v. PETER PHILLIPS, as Commissioner of Highways of the Town of Plattsburgh, Respondent.

      Pleadings — demurrer — confessedly scandalous matter, although demurrable, may be stricken out on motion — time to serve an amended pleading, after a service by mail.

    The second defense of an answer contained matter which was both scandalous and demurrable. While a motion was pending to strike it out as scandalous and irrelevant, the party making the answer served an amended answer which omitted this defense. Thereupon the court denied the motion mainly upon the ground that the remedy was by demurrer.

      Sold, error; that the plaintiff should not, in order to obtain relief, be compelled, as he would be by demurring, to admit the truth of the scandalous allegations.
    A party by serving his pleading by mail does not thereby secure twice the time, to serve an amended pleading, which he would have had had the service been a personal one.
    Appeal by the plaintiff Thomas Armstrong from an order, entered in the clerk’s office of the county of Clinton on the 13th day of October, 1890, denying his motion to strike out from the defendant’s answer certain parts of the “ second defense ” as scandalous, and certain other parts thereof as irrelevant and redundant.
    The answer was served by mail August 9,1890. Notice of this motion was served August 26, 1890, to be heard September 9,1890. September 5, 1S90, the defendant served an amended answer by mail, in which no portion of the matter sought to be stricken out was inserted. This answer was seasonably returned to defendant’s attorneys with this indorsement: “Returned for the reason that defendant’s time to answer has expired, and that a motion is pending,” signed by the plaintiff’s attorney.

      T. Armstrong, for the appellant.
    Palmer, Weed <& Kellogg, for the respondent.
   Lanbon, J.:

Part of the “second” answer was scandalous, another part of it-irrelevant, and the whole of it demurrable. Plaintiff’s motion to strike it out, in whole or in part, was denied because, first, a demurrer was the proper remedy, and that an entire count cannot be stricken out as irrelevant or redundant; second, because the defendant having amended his answer after the notice of motion was served, but witliin due time, and having omitted therefrom the whole objectionable count, the subject-matter of the motion was no longer before the court, and the motion was superseded. Goodman v. Robb (41 Hun, 605) is relied upon as authority for the first proposition. There was no scandalous matter in the pleading in that case, and the contention there was in respect to matter obviously inserted in good faith to protect the party’s supposed rights. The scandalous matter here was obviously inserted not to protect the defendant but to insult the plaintiff, and if the plaintiff had no remedy against it, except by demurring, and thereby confessing the truth .of the insulting matter, the defendant might secure a malicious triumph which the rules of pleading ought not to promote. The plaintiff ought to have a remedy fitted to relieve his grievance, and not be thrust aside because he did not ask for one which would have increased it. We think the rule laid down in Goodman v. Robb ought not to be regarded as authority for denying relief against scandalous allegations in a pleading. (See Carpenter v. West, 5 How. Pr., 53; McVey v. Cantrell, 8 Hun, 522.)

The defendant had but twenty days in which to serve his amended answer as of course. (Sec. 542.) He could not, by serving his original' answer by mail give himself double time in which to amend it. It was the adverse party, and not himself, who acquired double time. (Sec. 198 and Throop’s note.) It follows that the amended answer was properly returned and the motion was not superseded and ought to have been granted.

Order reversed, with ten dollars costs and printing disbursements, and motion granted, without costs.

Learned, P. J., and Mayham, J\, concurred.

Order reversed, with ten dollars costs and printing disbursements, and motion granted, without costs.


text:
    GEORGE B. MARTIN, Respondent, v. FRANKLIN MALLERY and Others. WILLIAM H. HOLLISTER, Appellant.

      Partnership — priority of executions on judgments against pcwtners — a parchase by one partner of the firm assets vests him with the corpus thereof, as if it had always belonged to him.

    One Martin brought an action upon a note made by Mallery and indorsed by Holland and by a third person. Mallery and Holland were partners. In entering judgment Martin entered several judgments against Mallery and Holland; the executions issued under which were returned unsatisfied.
    Subsequently one Hollister brought an action for a debt against Mallery & Holland, but entered judgment against Mallery only. Under an execution, issued under the Hollister judgment, the sheriff sold the firm property.
    Upon an application made by Martin, that the sheriff pay to him the moneys thus collected, it appeared that Mallery had bought the interest of Holland in the firm.

      Held, that by his purchase from Holland, Mallery became vested with the title to the partnership property as if it had always belonged to him, and that Martin had no claim upon the moneys realized upon the sale of the firm property.
    Appeal by William H. Hollister from an order entered in the clerk’s office of .Saratoga county on the 2d day of September, 1890, directing the sheriff of said county to pay certain executions against Franklin Mallery, and against Franklin Mallery, Rachel Mallery .and Stephen Holland, and in favor of George 33. Martin, to the extent of $286.20, upon the ground that said executions issued upon the judgment in favor of said Martin were superior in rank to an execution issued upon a judgment of said Hollister against one Franklin Mallery.

      J. W. Palmer, for William H. Hollister, appellant.

      George B. Mm'tin and Edgar T Brackett,' for the respondent.
   Learned, P. J.:

This is an appeal from an order directing the sheriff to pay, on the aforesaid judgment, moneys raised by him from a sale on execution upon a judgment in favor of William H. Hollister against Franklin Mallery.

The plaintiff Martin commenced an action on ■ a promissory note made by Franklin Mallery and indorsed by Stephen Holland and Rachel Mallery. In that action he recovered judgment against Franklin Mallery May 13, 1890, and against Stephen Holland and Rachel Mallery June 10, 1890. An execution on the judgment against Franklin Mallery was issued June 23, 1890, and returned nulla l>ona August 21, 1890. An execution upon the judgment against the other two defendants was issued June 23, 1890, and returned nulla Iona August 23, 1890. This execution is in form against each and all of the defendants.

William B. Hollister commenced an action against Franklin Mallery and Stephen Holland and recovered a judgment against Franklin Mallery June 20, 1890, on which he issued an execution that day, by virtue of which execution the plaintiff levied on the interest of Franklin Mallery in “ the Panama store.” This execution was satisfied by sale July 8,1890. Martin, the above named plaintiff, moved upon notice, dated the eighteenth of July, on an affidavit and on the judgment-rolls and executions in his action, to require the plaintiff to pay his execution before that of Hollister, which motion was granted July twenty-ninth, and Hollister appeals.

The affidavit of Martin avers that his judgment was for a debt owing by the firm of Mallery & Holland, composed of Franklin Mallery and Stephen Holland, and that the judgment of Hollister was against Franklin .Mallery alone. The answering affidavit of Hollister denies that Martin’s judgment was on a firm debt and refers to the complaint in Martin’s action. He avers that his own debt was for goods sold to Franklin Mallery and Stej>hen Holland as partners prior to their dissolution; that they dissolved partnership about May 27,1890, and that Franklin Mallery succeeded to all the interests of the firm.

It is plain that the judgment-roll in Martin’s action does not show a partnership debt. It is on a note of Franklin Mallery indorsed successively by Stephen Holland and Rachel Mallery. All of the defendants were served the same day, but the plaintiff severed his judgments instead of taking a judgment against them as joint-debtors. He even severed as against Franklin Mallery and Stephen Holland.

Martin, however, relies on the doctrine of Saunders v. Reilly (105 N. Y., 12), and of Davis v. Delaware and Hudson Canal Company (109 id., 47). He urges that even if his debt was not a. partnership debt, yet, as it was a debt owing by all the partners, his. execution had priority over an execution previously levied against, one partner. ¥e think that those cases do not sustain his position, and, indeed, are rather contrary to it. In the latter case the General Term had given priority to a partnership debt owing by the partners individually. But the Court of Appeals reversed that decision, and held that a prior judgment against the several partners had priority over a later judgment on a prior debt. The other case is similar. Hnder these cases Martin’s execution against both partners individually, if first levied, would have taken the firm property (assuming that the property still belonged to the firm), in preference to a subsequent execution against the firm. But that is not this case. Martin’s is the subsequent, and Hollister’s the prior execution. Martin, therefore, attempts to assert that benefit, of being a creditor of the firm over individual creditors, which was denied in those eases.

But there is another view which may make it unnecessary to decide this last point. Hollister alleges that about May twenty-seventh Franklin Mallery bought out Stephen Holland and succeeded to all the interests of the firm. There is nothing to contradict this. Now, in Saunders v. Reilly (ut supra, 18), this subject is discussed, and it was held, on the authority of Stanton v. Westover (101 N. Y., 265), that such a purchase vests the purchasing partner with the absolute title to the corpus of the partnership property, as if it had always belonged to him. How this rule may be qualified in case of fraud, we need not inquire. Hnder that rule the purchase from Holland by Mallery gave him the absolute title. And necessarily the executions against him, being first levied, must be first paid.

So far as the equity of the case goes, Hollister’s affidavit shows that his judgment was for a firm debt. So that he is committing no injustice when he levies on property formerly belonging to the .firm and now, since Mallery’s purchase, belonging to him.

We think the order should be reversed, with ten dollars costs and printing disbursements, and motion denied, with ten dollars costs.

Landon and Mayham, JJ., concurred.

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


author: Mayham, J.: Learned, P. J.

text:
    JAMES CHAMBERS (Limited), Appellant, v. E. LE ROY SMITH, Assignee of BURR W. UPHAM, Respondent, Impleaded, etc.

      <General assignments —■preferences under chapter 503, Laws of 1887 — the individual notes of a former partner used in the firm business cannot be preferred — gift by the assignor in contemplation of the assignment.

    An assignment for tlie benefit of creditors gave preferences which were directed to be paid in full “only in case one-third the value of the assigned estate shall be sufficient for that purpose, and the said preferences shall, in every particular, be made in accordance with the law of the State of New York in regulation of preferential assignments.”
    This provision was attacked upon the ground that under it the assignee was directed to pay said claims in full, if one-third of the assigned estate, without deduction for the expenses of the trust and claims for labor, as required by chapter 503, Laws of 18S7, was sufficient for that purpose.

      Held, that it was not the intention of the assignor to violate the statute of 1887, and that this provision of the assignment was valid.
    The assignor, who had been the partner and was the heir-at-law and next of kin of one J. M. Upham, preferred in said assignment certain notes of said J. M. Upham, given to a third person, and upon the trial of an action brought to set aside said assignment as fraudulent, the assignor testified that the proceeds of said notes went into the firm business; that he, after his father’s death, had paid the interest upon them, and that he honestly believed them to be a claim against the firm property. It did not appear that the assignor had ever made a valid personal agreement to pay the notes.

      Held, that the debt was that of J. M. Upham, and the preference fraudulent as to the creditors of the assignor.
    (Learned, P. J., dissenting.)

      Upon the day of the assignment the assignor made a gift to his wife of $200.

      It seems, that such an act done in contemplation of the assignment, and with the intention of putting any considerable sum beyond the reach of creditors, is fraudulent and will avoid the assignment.
    Appeal by tlie plaintiff James Chambers (Limited) from a judgment, entered in the clerk’s office of Warren county on the 12th day of December, 1890, in favor of the defendants, dismissing the complaint after a trial had before a referee.
    The action was brought by a judgment creditor to set aside a general assignment of Burr W. Upham to E. Leroy Smith for the benefit of creditors on the ground of fraud. The case shows that prior to October 14, 1888, J. M. Upham and Burr W. Upham were partners in business under the firm name of J. W. Upham & Son.
    That on that day J. TVL Upham died intestate, leaving no widow, and that the defendant, Burr W. Upham, was his only heir and next of kin, and that no letters of administration were ever granted on his ■estate. After his death Burr W. Upham continued the business in his own name, and on the 18th day of December, 1889, the defendant, Burr W. Upham, was indebted to the plaintiff, for which indebtedness the plaintiff on the 8th day of January, 1890, recovered a judgment for the sum of $1,183.16, which was duly docketed in the proper county, on which an execution was issued to the sheriff, and before the commencement of this action the execution was returned wholly unsatisfied.
    On the 13th day of Eebruary, 1890, the plaintiff, upon an indebtedness which accrued from the defendant to him before December 18, 1889, recovered another judgment against the defendant, Burr W. Upham, for the sum of $487.81, which was duly docketed, and on which an execution was in like manner issued to the sheriff and before the commencement of this action returned wholly unsatisfied. On the 18th day of December, 1887, the defendant Burr W. Upham executed, acknowledged and delivered to the defendant E. Leroy Smith a general assignment for the benefits of creditors, in and by which, after providing for the costs and expenses of executing the assignment and the commissions of the assignee and the payment of labor claims preferred by law, he directed the assignee to pay in full three notes made by J. M. Upham to Clark White, one for $ 1,000 and two of $500 each, and one note for $500 made by J. M. Upham & Son, also payable to Clark White. The assignment also directed the assignee, after the payment in full of the claims above specified, to pay in full twelve other creditors whose names and the amount of whose claim are respectively set out in the assignment, amounting in the aggregate to about $1,G00.
    The assignment then provided that the preferred claims shall be paid in full “ only in case one-third the value of the assigned estate shall be sufficient for that purpose, and the said preferences shall, in every particular, be made in accordance with the law of the State of New York, in regulation of preferential assignments.” The assignment then jnovided for the payment of all the creditors of the assignor in full, if (the assigned estate is sufficient for that purpose, and if not sufficient, ratably; and if a surplus remained after the payment of all debts and expenses, then the assignee was directed to return that surplus to the assignor.
    On the day of the execution of this assignment, the assignor, Burr W. Upham, in contemplation of the assignment, gave to his wife, without any consideration, two hundred dollars. The referee before whom the action was tried ordered judgment for the defendants.

      A. II. Gleason, for the appellant.

      R. O. Basoom, for the respondent.
   Mayham, J.:

The plaintiff attacks this assignment on the ground that, upon its face, it does not conform to the provisions of chapter 503 of the Laws of 1887.

By this act, chapter 466 of the Laws of 1877, as the same had been amended, was again amended by adding another section as section 30, which provides that, “ in all general assignments of the estates of debtors for the benefit of creditors, hereafter made, any preference created therein * * * shall not be valid except to the amount of one-third in value of the assigned estate left after deducting such wages or salaries and the cost and expenses of executing such trust.”

The assignment in this case does not follow the wording of the statute, and it is insisted by the appellant that the assignment directs the payment of the preferred, claims in full only in case one-tliird of the entire estate shall be sufficient for that purpose.

The language of the proviso in the assignment is as follows : “ Provided, nevertheless, that all the claims above preferred to be paid shall be by the party of the second part paid in full only in case one-third of the value of the assigned estate shall be sufficient for that purpose; and the said preferences shall in every particular be made in accordance with the laws of the State of New York in regulation of preferential assignments.”

It is quite obvious that this language is broad enough to require the assignee to pay the preferred claims in full, if one-tliird of the bulk of the estate assigned, before any deduction for expenses or payment to labor was made, were sufficient for that purpose.

But it is insisted on the part of the respondent that, as the same paragraph of the assignment provided that “the said preferences, shall in every particular be made in accordance with the laws of the State of New York in regulation of preferential assignments,” that any misdirection in the assignment was cured by that provision, and that the assignee was required to follow the statute, and not the precise wording of the assignment.

It is apparent, if we read the assignment in connection with the statute, that the assignor intended that the preferences should be measured by its provisions and paid in full only out of one-third of the net assets, after paying the expenses of the execution of the trust and the statutory preference to laborers. This was the construction given to the assignment by the learned referee, and, in that construction, we think he is sustained by the case of Richardson v. Thurber (104 N. Y., 606).

The next point raised on this appeal by the appellant is that the-assignment is void for the reason that it creates fraudulent preferences. Three of the notes held by Clark White, amounting in the aggregate to $2,000 and interest, were given by J. M. ITpham, to which the assignor, upon the notes themselves, does not appear to be a party; and the only evidence upon this subject is that of the defendant Upliam, who says the money was borrowed by his father; that it went into the business, and that after his father’s death he paid the interest on the notes. Did that act amount to such a valid assumption of the notes on his part as to bind him for the payment? We tliinlc not. Assuming that J. M. Upham borrowed that money of White and. put it directly in the firm business, Upham, and not White, would thereby become the creditor of the firm, and White would be compelled to look, in the first instance, to J. M. Upham for payment. He would have no claim against the firm as such. The most he could do would be to procure a judgment against Upham, .and then in default of payment enforce it against J. M. Upliam’s interest in the firm property. But it is said that on the death of J. M. Upham the defendant succeeded to all of his interest as his • only next of kin and heir-at-law, and that he took the estate of his deceased father subject to his debts. While that is so, the father’s debts in no just sense became the debt of the son. He may, as administrator de son tort, have made himself liable to the personal representative of his father’s estate for the property or money of his father’s estate, which,' as against the personal representative or the "creditors of such estate, he wrongfully converted to his own use with- ■ out clue administration of that estate; but such liability, if it existed, could not be the subject of a preference in an assignment made by him for the benefit of his own creditors.

The debts of J. M. Upham must be paid out of his estate; and if that estate is insufficient for that purpose, this defendant, Upham, could not make good that deficit by a preference in favor of the creditors of his father as against his own creditors.

The error into which the learned referee seems to have fallen on this branch of the case is that of treating’ Burr W. Upham as primarily liable for his father’s debts, because of the devolution of his father’s estate to him as the next of kin of his father, J". M. Upham, and his taking and appropriating the same to his own use, or that by some valid act he had assumed and made himself personally liable to pay the Clark White notes. As we have seen, he did not become personally charged with the payment of his father’s debts by reason of his relation as next of kin or heir-at-law.

Hid he make such a valid personal agreement with Clark White or the holder of the Clark White notes as to bind him personally for their payment 1 Clark White was an uncle of the defendant Burr WUpham, and the only evidence in the case of Upham’s assumption of the White notes is in his testimony, and in the receipt for payment of interest, and his letter to his uncle after the death of his father.

In Ms testimony he says : “ I wrote to Mr. White, my uncle, in relation to the matter; Clark White is dead; I never saw Clark White after my father died; I received a reply from Clark White.. Q. What, if anything, did you do in relation to those Clark White: notes in July, 1889, or about that time? A. Paid the interest on them up to the 1st of July, 1889. Q. At the time you executed this, assignment did you believe that you were liable for the payment of the Clark White notes? A. Yes, sir, I did believe so; I told. Mr. Gleason that the money on these Clark White notes was borrowed by my father.”

The referee received in evidence upon this question, under the-plaintiff’s objection, a letter written by the assignor to Clark White,, as follows:

Glens Falls, N. Y. Oct. 24, 1884.

Clark White, Esq.:

Dear Uncle. — In reply to yours I would say I will take up one: note of $500 on November fifteenth or twentieth; cannot do it before. And will you kindly send me a receipt for interest paid on all notes July last, and oblige,

Your nephew,

B. W. UPIIAM.

As bearing upon the question of the assignor’s liability upon these-notes, the referee received in evidence, under the plaintiff’s objection, a letter from Clark White to the assignor, dated October 25, 1889, containing a receipt in the following form :

“Received, N. York, July, 1889, $187^-5- of B. W. Upham, the amount of interest due on four notes given by J. M. Upham and. J. M. Upiham & Son, dated as follows :

“ April 12th, 1887, one of one thousand dollars.

“Nov. 19th, 1887, one of ($500) five hundred dollars.

“ Feb. 10th, 1888, one of five hundred dollars.

“ Sept. 11th, 1888, one of five hundred dollars.

“CLARK WHITE.”

We find no other evidence in the case which, either directly1 or indirectly, bears upon the liability of the assignor to pay the Clark White notes made by J. M. Upham.

The only agreement in writing by the assignor is in his letter of ■October 24,1889, in which he agrees to “ take up one note of $500,” without designating any particular $500 note

There were three $500 notes held by White, one given by J. M. Upham & Son, and two by J. M. Upham alone.

As the surviving partner of J. M. Upham & Son, he was liable on the note given by the firm, and his promise in this letter would, in the absence of any evidence to the contrary, be deemed to refer to the note on which he was liable. Nor do we see how it can bind the assignee if applied to any other note. If applied to the J. M. Upham individual notes, it would be but a collateral promise to answer for the debt of another without any consideration expressed in it, and would be void within the statute of frauds ; as these notes were not made by the assignor, as appears upon their face, and as is found by the referee, and as they did not represent a firm debt, the assignor could not assume them as surviving partner, and thus create a liability against the partnership; nor did his payment of the interest thereon amount to any valid legal assumption, which would bind him as an individual to pay the amount due on these notes.

In no aspect of this case upon the evidence can these Clark White notes be held to be valid claims against the assignor individually oías surviving partner at- the time of making this assignment.

But it is insisted, on the part of the defendant, that at the time of making this assignment the assignor believed he was liable to pay all of the Clark White notes, and that the same were preferred therein in good faith, and without intent to defraud his creditors or to create any illegal preferences.

But even if the assignor believed himself liable to pay the notes given by his father to White, and to which he was in no way a party, that belief would not authorize him, in his voluntary assignment for the benefit of his creditors, to withdraw from his assets, assets which legally and justly belonged to his creditors, and direct the application of the same upon the debts of his father, which he was not bound to pay.

In First National Bank of Port Chester v. Halsted (20 Abb. N. C., 155), it was held that an assignment by a firm is invalidated by a preference of an individual debt of a partner out of the proceeds of the partnership property.

In Wilson v. Robertson (21 N. Y., 587), it was held that the appropriation by an insolvent firm of partnership property to the payment of the individual debt of one partner is not simply void, but is fraudulent, and avoids the deed of assignment.

In National Bank of Granville v. Jacob Cohn (42 Hun, 381), it was held that a general assignment transferring the property of a firm for the purpose of paying an individual debt of the partners, as well as the firm debts, is wholly void as to the firm creditors and must be set aside.

All of these cases, and many others of a kindred character, proceed upon the theory that such a transfer tends to hinder, delay and defraud the creditors of the assignor.

l'n the case at bar, the direct effect of preferring the debts of J. M. Upham out of assets assigned is to divert some of the assigned property to a purpose other than the payment of the assignor’s debts, and thus to hinder, delay and defraud his creditors.

As was said in National Bank of Granville v. Cohn (supra), “ the effect being known, the intent to accomplish it is just as plain as if it had been confessed in the assignment itself.” And in whatever form such intent is sought to be accomplished the law condemns it. (Billings v. Russell, 101 N. Y., 226.)

It is true that the statute (2 R. S., 137, § 4), provides that the question of fraudulent intent “ shall be deemed a question of fact, and not of law; ” and it is insisted that as the referee has found that this assignment was “ made and executed by the defendant Burr W. Upham to the defendant Smith, honestly and without attempt to hinder, delay or defraud creditors ” of the assignor, that that finding is conclusive, and cannot be reviewed.

But the referee in finding that the three White notes preferred were made by J. M. Upham, and not by the defendant Burr W. Upham, has found a state of facts inconsistent with the liability of the assignor upon such notes and with his right or power to legally prefer the same, from which facts the inference of a fraudulent preference is inevitable.

In discussing the effect of the provisions of the statute above quoted, Earl, J., in Coleman v. Burr (93 N. Y., 31), uses this language: The statute provides that the question of fraudulent intent, in cases of this character, shall be deemed a question of fact, and not of law ; and the claim is made that here there is no finding by the referee of a fraudulent intent; but that, on the contrary, he has found the whole transaction to be fair and honest. Tie has, however, found facts from which the inference of fraud is inevitable, and although he has characterized the transactions as honest and fair, that does not make them innocent nor change their essential character in the eye of the law. Mr. Burr must be deemed to have intended the natural and inevitable consequences of his act, and that was to hinder, delay and defraud his creditors.” (See, also, Well v. Daggett, 2 Barb., 9; Kavanagh v. Beckwith, 44 id., 192.)

The application of this rule to the facts proved in this case and the findings of the learned referee upon the subject of these three notes would lead to the legal conclusion that they were iinproperly preferred in this assignment, and that that instrument was for that' reason fraudulent and void as against the creditors of the assignor.

If we are right in this conclusion, it is unnecessary for the disposition of this ajipeal to determine the other questions raised by the appellant; that the payment by the assignor to his wife on the day of the assignment, in contemplation of that event, and without any valid pecuniary consideration, rendered the assignment fraudulent and void, but as that question is presented and discussed by both parties to this action it may aid in the future determination of this case to examine it.

The evidence is undisputed that the assignor gave $200 to his wife, in contemplation of the assignment, and for a purpose creditable to his nature, unless in doing so he violated the legal right of his creditors, in which case the law requires him to be just rather than generous. The assignment purported to transfer to the assignee the assignor’s entire property not exempt from levy and sale on execution. If, therefore, in contemplation of the assignment, the assignor intentionally and for the purpose of putting any considerable portion of his assets beyond the reach of the assignment, gave this money to his wife, it would be such a fraud as to taint the whole assignment and tend to show it fraudulent as against the creditors affected by the withdrawal of the assets from the assigned estate.

The assignment and schedules purport to embrace the assignor’s entire estate, and, as was said by Finch, J., in Shultz v. Hoagland (85 N. Y., 469): “ If, now, that representation was false to a. material extent, and consciously and purposely so, tlie inference of a fraudulent intent could hardly be avoided.”

The intentional omission calculated to deceive and to lull into slumber and inactivity the interest and diligence of the creditors would plainly argue a fraudulent purpose. In the case of Rothschild v. Salomon (52 Hun, 486) the assignment was made on the twenty-third of January, and on the twentieth of January, three days before, tlie assignor gave his wife a check for $402, which was charged to household expenses ; other checks were drawn about'the same time which appeared to have been intended for household expenses, and the court, in commenting upon these transactions, says (Yan Brunt, J.): “ In the case at bar this money was abstracted in anticipation of and in preparation for the assignment. It was intended to reserve it from the ojieration of the assignment for the-future benefit of the assignors; and the assignment was only a part, and parcel of the scheme, and, therefore, the fraudulent intent in withholding this money permeated the making of the assignment, which was simply a culmination of the whole scheme and renders, the whole proceeding void.”

It is true that the amount extracted from the assets in that case is much larger than in the case at bar, but in other respects the cases are quite similar in character. It is true that it has been held in the case of a withdrawal of a small per cent of the assigned estate before making the assignment, for the assignor and family to subsist upon, and its-return to the assignee after assignment, that the question of fraudulent intent is for the jury. (Fay v. Grant 5 N. Y. Supp., 910.)

In the case at bar the referee refuses to find upon this subject upon a request of the plaintiff that the assignor gave his wife the $200, and makes no special finding in reference thereto, but finds generally that the assignment was not fraudulent.

In Vietor v. Nichols (13 N. Y. St. Rep., 461) it was held that, the withdrawal of funds just before an assignment did not necessarily vitiate the same, unless it was so connected with the assignment as to show that it was a part of it, or done in contemplation of withdrawing assets from the operation of the assignment. In the case at bar the withdrawal of the money paid by the assignor to his wife is aa act of great significance, and it is difficult to distinguish it on principle from the cases above cited, in which such withdrawal was regarded as evidence of fraud for which assignments were set aside. For the reasons above stated, we think the learned referee erred and that the judgment should be reversed.

Judgment reversed, referee discharged and a new trial ordered, costs to abide event.

Landon, J., concurred.

Learned, P. J.

(dissenting):

I should think the reasoning of my Brother Hayham’s opinion ■conclusive, if it were-not for the recent decision of Durant v. Pierson in the Second Division of the Court of Appeals (36 N. Y. St. Rep., 463).

. In that case a surviving partner of an insolvent firm had borrowed money after the death of his partner. It was admitted that this did not create a debt of the firm, and that the note which he gave was only a debt of the survivor. Inasmuch, however, as he had used a part of the money thus borrowed to pay the debts of the insolvent firm, it was held that he might prefer this individual debt in his assignment, and might direct its payment out of the partnership assets before partnership debts.

Now, in the present case, the deceased partner borrowed the money and gave his own notes for it, and the money went into the business. The surviving partner, who (as in the Pierson Case) was the son of the deceased partner and succeeded to the business and to his father’s property, treated this as a liability which he ought to pay, ■ and he did pay the interest. He made an assignment and preferred •.these notes. If, then, a surviving partner can prefer his own note <over debts of the firm in respect to firm assets, for the reason that ¡part of the money was used to pay firm debts, I see no reason why such surviving partner may not prefer in like manner his deceased partner’s note when the money borrowed thereon has been used in the firm business. As said in the Pierson Case: “ The creditors have not been harmed or prejudiced, * * * for the assets were increased in value to the amount of the loan.” So in this case the assets of the firm wore increased in value by the money loaned to the deceased partner, and, therefore, the creditors of the firm are not prejudiced by the preference. It may be added that, as between tbe partners, or more accurately, as between the surviving partner and the estate of the deceased, this assignment is more equitable than that m the Pierson Case. That preferred the assignee’s own debt. This prefers a debt of this deceased partner.

It seems to me that the principle established in the Pierson Case sustains the finding below; although, if it were not for that case, I should think the reason of my Brother Máyham’s opinion unanswerable.

Respect for that decision, therefore, compels me to dissent.

Judgment reversed, new trial granted, referee discharged, costs to abide event.


text:
    JOHN ROUSSEAU, as Administrator of MARY ROUSSEAU, Deceased, Respondent, v. JENNIE BLEAU, Appellant, Impleaded with Others.

      Executors and administrators — actions by them under chapter 314, Laws of 1858 — receiver — an attorney, a subscribing witness to a deed, cannot, as against the grantor, disclose confidential information — res gestee — delivery essential to a deed.

    An administrator may, under chapter 314, Laws of 1858, as a representative of creditors, bring an action to set aside a deed of land made by his intestate on the ground that it is fraudulent as to said creditors; and in such an action a receiver may he appointed with power to sell the land when recovered and pay the claims of said creditors. (Learned, P. J., dissenting.)
    One Mary Rousseau executed a deed, which remained in the possession of her attorney until her death, when the latter, who was the subscribing witness thereto, handed it to one Jennie Bleau, the grantee named therein.

      Held, that the fact that the attorney was a subscribing witness to the deed was not a waiver by the grantor of her right to prevent him from testifying as to occurrences taking place at the time of its execution, and that his evidence was incompetent as against the administrator of the grantor.
    The grantee offered to show by a physician that the grantor, subsequent to the execution of the deed, had stated to him that she was largely indebted to the grantee.

      Held, that the statement was not a part of the res gestee, and that such evidence was incompetent as against the administrator suing for and in the stead of creditors.

      There was no evidence that the grantor ever directed the deed to be delivered.

      Held, that delivery in some form was essential to its validity.
    That if it should be assumed that it was delivered to the attorney in escrow, to be delivered to the grantee upon the death of the grantor, the deed would not take effect until such death, and, not being for value, the property conveyed would be subject to the debts of the intestate.
    Appeal by the defendant Jennie Bleau from a judgment, entered in tlie Rensselaer county clerk’s office on the 15tli day of September, 1890, in favor of the plaintiff, adjudging a certain deed made by Mary Rousseau in her lifetime to said Jennie Bleau fraudulent, as against the creditors of said Mary Rousseau, and particularly as-against the claim of Elizabeth Rousseau, and directing a sale of said property, after a trial at the Rensselaer Circuit before the court and a jury, at which the jury found as follows in answer to the following questions:

      First. “ What sum, if any, did Mary Rousseau, at the time of her death, owe to Alice Rousseau, wife of John? ” (Answer.) “No.”

      Sécond. “ What sum did Mary Rousseau, at the time of her death, owe to Elizabeth Rousseau ? ” (Answer.) “Yes, $200.”

      Thi/rd. “Is the deed from Mary Rousseau to Jennie Bleau substantially without consideration ? ” (Answer.) “ Yes.”

      Fourth. “Was sjach deed substantially intended as a gift to Jennie Bleau of the property described in it?” (Answer.) “ Yes.”
    The plaintiff, as administrator, recognized the validity of certain claims made against the estate of his intestate ; alleged the inadequacy of personal assets to ¡nay the same, and that unless the real estate conveyed by the deceased in her lifetime could be reached that the estate was insolvent; and charged in his complaint the fraudulent transfer of the real estate by his intestate, and asked in his own behalf, as administrator, and in behalf of the creditors of the estate, that the conveyance be declared fraudulent and void as to him as such administrator, and as to the creditors whom he, as such administrator, claimed to represent; and that such conveyance or transfer' be set aside, and said real estate be sold by the order of this court, or by proceedings in the Surrogate’s Court, and the proceeds applied in due course of administration to the payment of the debts of the-deceased.
    The defendant, Jennie Bleau, the grantee under such conveyanee, by her answer denied the allegations of fraud; alleged the validity of her deed, and denied the validity of some of the claims allowed by the administrator as valid debts against the estate of the intestate.-
    The action was tried at the Rensselaer Circuit, and no issue having been settled in the case, the trial judge propounded certain questions of fact to the jury, which they answered by their special verdict. Upon the evidence given, the jury, among other things, found some of the claims against the estate valid, and that the deed of conveyance of the land in question was substantially without consideration. That it was substantially intended as a gift to the defendant, Jennie Bleau.
    The learned trial judge adopted the findings of the jury, and in addition thereto found that the personal estate of the deceased was at the time of her death insufficient to pay her debts, and that the deed was executed by Mary Rousseau with intent to defraud her creditors out of claims then existing and thereafter to be incurred. And, as conclusion of law, found that the deed was fraudulent, null and void, as against the creditors of the estate of Mary Rousseau, and that the property therein described belonged to her estate, and was applicable to the payment of her debts, and directed judgment, setting aside the deed and canceling the record thereof and directing the sale of the real estate, and the application of so much of the proceeds thereof as were necessary to pay the claims established against the estate of the deceased.
    The deed executed by Mary Rousseau remained in the possession of her attorney until her death, when the attorney, who was the subscribing witness thereto, handed it to the grantee.
    The defendant offered evidence tending to show that Mary Rousseau had stated to the witness, subsequent to the execution of the deed, that she was largely indebted to the grantee.

      John T. Norton, for the appellant.

      II. D. Bailey, for the respondent.
   Mayham, J.:

The evidence offered by the plaintiff in this case is substantially like that on a former trial, upon which this court held, in setting aside a nonsuit and ordering a new trial, “ That the evidence was-sufficient to put the defendant upon her defense.” (29 N. Y. State Rep., 337.)

That decision establishes the right of the plaintiff to recover in this form of action, and relieves this court from the consideration of that question at this time, and makes it only necessary to inquire whether the defendant, by her proof, established a valid defense and, also, whether the trial court erred in its rulings upon the questions raised by the defendant on the trial.

The defense of the defendant upon the merits of this controversy rests solely upon the question whether or not she held the premises in dispute under a valid conveyance as against the plaintiff, as administrator of the estate of Mary Rousseau, and in that character-representing the creditors of the estate of said deceased.

¥e think the evidence fully justifies the finding and conclusion of the jury and learned court that the personal estate of the deceased was, at the time of her death, insufficient to pay her debts, and that recourse could, therefore, properly be had by her administrator to any real estate, or any interest in the same, belonging to the deceased, which ípiglit be available to a creditor for the collection of a debt against her.

If, therefore, the deed to the defendant was a voluntary conveyance without consideration, it was void as against the creditors of the grantee; or if made with intent to hinder, delay or defraud the creditors of the grantor, it was in like manner void.

But it is insisted, on the part of the defendant, that it was given upon a sufficient consideration of a pre-existing indebtedness from the grantor to the grantee, and that indebtedness is sought to be-established by proof that the grantee held the notes of the grantor,, and also other claims against the grantor, which, together with the incumbrance upon the real estate, subject to which it was conveyed, constituted a full and adequate consideration for the deed.

The difficulty with that contention is, that the notes were excluded by the trial judge as incompetent evidence. The ground for the exclusion does not fully appear, but we think they were properly excluded, as it nowhere appears that they constituted any part of the consideration of the deed; are nowhere referred to or shown to have been considered as such; and, as it now appears, that they are still in the possession of the grantee, and have not been canceled or surrendered to the maker, and they are in no way connected with the consideration expressed in the deed.

It is also urged by the learned counsel for the appellant that there-was error committed on the trial in the testimony given by Myers,, the draftsman of the deed, offered by the defendant, as to what occurred between him and the grantor at the time of the execution of the deed and its deposit with him.

It appeared at the commencement of his examination as a witness, that he was an attorney. ¥e think, under the circumstance, his. testimony as to the personal communication between him and the-deceased, who at that time sustained, at least, the implied relation of' client and attorney, was properly excluded, and it appears from the evidence of the witness himself that he so regarded it, for on being interrogated by Elizabeth Rousseau, who claims some interest in the property before the death of Mary, he refused to communicate any information to her as to Mary’s disposition of the property, and put his refusal upon the ground that “ it would be improper and unprofessional for me to disclose any business given in my charge.”

But it is insisted by the appellant that as the witness subscribed the deed as a witness, and took the acknowledgment of the same, that the grantor thereby waived her privilege, and that the disability was thereby removed, and cites in support of that contention In re McCarthy (28 N. Y. St. Rep., 342), anck,several other cases.

In the case above cited the attorney was the subscribing witness, to a will which, being an attorney, he had drawn for the testator,, and the court, in substance, holds, that by making the attorney one-of the subscribing witnesses she had waived the privilege and made him a competent witness to testify to what occurred at the time of its execution. The other cases cited upon this point by the learned counsel for appellants are of a similar character, or where fraud was. charged in the execution of the papers. But we think those cases clearly distinguishable from the one at bar.

In the case of a witness to a will the testator is presumed to know, that by having the attorney subscribe the will as a witness, he necessarily becomes a witness on its presentation for proof, and that the will cannot be admitted to probate and become operative without tlie testimony of the witness as to the transactions and communica'tions between the testator and witness at the time of its execution ; whereas, in the case of a deed the official certificate or acknowledgment proves it without production or examination of the subscribing witness; and on its acknowledgment the necessity for the production of the subscribing witness ceases, and the presumption of the necessity for the examination of the witness no longer exists, and no waiver of the privilege can, therefore, be presumed. In the case of Rosenburg v. Rosenburg (40 Hun, 91), the communication to the attorney was in the presence of both parties, and, therefore, was not privileged.

Nor do we see how the declaration of the grantor to Hr. Prefontain after she signed the deed are competent in behalf of the grantee, when her title is attacked by the creditors, or the administrator representing the creditors, of the grantor. Such statements were not a part of the res gestee.

The law seems well settled that when an executor or administrator claims a right or interest solely by virtue of his character as such, evidence of the declarations and admissions made by the deceased and his wife in his lifetime is competent against the representative. (Abb. Trial Ev., 59, and cases there cited.) Can this rule be extended to a case where the administrator, solely as trustee of the creditors of the estate of the deceased, seeks to disaffirm the act of the intestate, on the ground of the fraudulent alienation of property by the intestate in his lifetime for the purpose of defrauding her creditors? If that be so, then the declarations of a party to a fraud could be resorted to not only to uphold the fraudulent transaction, but would estop the administrator from disaffirming the fraudulent acts ,of the intestate.

The theory upon which the declarations of the deceased have been received against the administrator is, that there is a privity of estate between the deceased and 'his administrator or personal representative, and that the interest of the deceased while living, and the recipients of the estate after his death, are in harmony with the interest of the personal representative or administrator of the estate. But, by chapter 314 of the Laws of 1858, the administrator was authorized, on behalf of the creditors of the estate, to disaffirm the act of the intestate, and, as the representative of the creditors of an insolvent estate, to seek to recover property which the intestate had transferred in fraud of their rights.

By tiie act above referred to, the relation of the administrator to the deceased seems to have been changed, and he becomes the trustee for the creditors, and, in that position, may disaffirm and commence and prosecute proceedings to set aside a transfer made by the intestate. He is thus placed in hostility to the acts of the intestate and to the fraudulent grantee; the estate which he seeks to reach for the creditors of the estate, he seeks in hostility to the acts of the deceased grantor, and also in hostility to the interest of the intestate’s grantee, whose acts and interests are in harmony with each other, and in hostility to the interest of the creditors and of the trustee seeking to set aside the transfer as fraudulent.

In Harvey v. McDonnell (113 N. Y., 530), the court say: “ They (the administrators), stand as trustees of creditors (Laws of 1858, chap. 314, § 1), and for their benefit may disaffirm and treat as void any transfer or agreement made in fraud of the rights of any ■creditor interested in any property or right belonging to the estate ■they represent.” Under such circumstances we do not see upon ■wliat principle the declaration of the person whose conveyance is sought to be set aside as fraudulent can be received in evidence to ■support such conveyance.

The plaintiff stands in the place of the creditor who might have maintained this action, and it could not be maintained, nor would it be contended that if the action had been prosecuted by the creditors instead of the administrator this evidence would have been proper. The evidence was, therefore, properly excluded.

Excluding the evidence of the draftsman and that of Ur. Prefontain as to the declarations of the deceased, we find no proof of consideration in this case sufficient to uphold the validity of this deed as against the claims of creditors established in this action. But we think that there is another and serious objection in this case as to the validity of this deed, as against the creditors of this grantor.

It is conceded that the deed was never delivered to the grantee by the grantor, and that the grantee had no knowledge of its existence until after the death of the grantor.

It is true that a deed may be delivered as an escrow to a third person to be delivered by him to the grantee on the happening of some future event. But in this case there was no actual delivery by the grantor to the. grantee named in it, nor is there any. evidence that the grantor ever gave any direction as to the time of its delivery, or that it should be ever delivered.

Delivery in some form was absolutely essential to its validity. (Stillwell v. Hubbard, 20 Wend., 44.) Delivery includes surrender and acceptance, and both are necessary to its completion. This must he the result of a contract, the meeting of two minds, the accord of two wills.

The grantor must be willing and agree to deliver, and the grantee must be willing and consent to receive, and this accord of wills must be evidenced in some way to show the unequivocal intention of both parties that the instrument shall take effect according to its purport and tenor. (Best v. Brown, 25 Hun, 224; Fisher v. Hall, 41 N. Y., 416.)

But, if we assume in this case that this delivery of the deed by the grantor to the draftsman, Myers, was valid as an escrow, to be delivered to the grantee on the death of the grantor, it would not, in that event, be operative until delivery (Hinman v. Booth, 21 Wend., 267), and not being upon a valuable consideration, would be subject to the debts of the deceased, existing at the time of her death, so that in either event the deed would, as to the creditors of the grantor, be inoperative and void.

We have carefully examined all the exceptions taken by the learned counsel for the appellant, many of which have not been discussed here, but we find no error in the rulings of the learned trial judge for which this judgment should be reversed.

The judgment should be affirmed, with costs.

Landon, J., concurred.

Learned, P. J.

(dissenting):

The judgment in this action sets aside the deed from the deceased to defendant and declares the property to belong to the estate of the deceased. It appoints a receiver, with power to sell the property and pay the debts of deceased, directing him first to pay the damages of Elizabeth Rousseau, then to pay to plaintiff the amount of any other debts of deceased.

I had occasion to suggest in a former case the inconsistency of permitting an administrator to bring an action to set aside a deed of land, and remarked that chapter 314, Laws of 1858, speaks of “ estate or property held by or of right belonging to any such trustee or estate.” And that the property of the deceased does not belong to the executor or administrator.

But there are expressions in some cases indicating that the executor or administrator may bring the action io set aside a deed of real estate of the deceased alleged to be fraudulent. I cannot think, however, that in such an action the court has the right to change the whole system of enforcing debts of deceased persons against their real estate. The statute (Code, § 2749) has provided a settled course to be pursued when real estate is to be made liable to debts o± a deceased person. 1

If this deed is fraudulent as to creditors, then I think the creditors must seek their remedy under the section above cited of the Code. I do not think there is any right to give preference to one creditor over another. Nor do I think there should be a receiver appointed. Furthermore, if the deed was never delivered, so that it never took effect, then it is void, not only as to creditors, but as to the heirs of the deceased. And there is no ground for returning any of the avails to the grantee as the decree provides. These difficulties would not arise if the decree merely set aside the deed and left the creditors to enforce their rights in the mode provided by statute.

Judgment affirmed, with costs.