text:
    JOHN O’MAHONEY, Plaintiff, v. AUGUST BELMONT and ERNEST B. LUCKE, Defendants.
    A receiver who has been appointed in an orderly and legal way and by a court having jurisdiction, and who has in good faith entered upon his duties as such, should be protected by the court in his proper action under the order while it is in force, and be fully allowed and indemnified out of the fund entrusted to Ms guardianship for legal charges and disbursements reasonably made and incurred, although the order should be afterwards reversed for error.
    But in a case in which "the court was not empowered to appoint a receiver, and where an attempt was made, in a simple action for money had and received, to apply the provisional remedy of a receivership, and where there was neither allegation nor proof that there was the slightest danger of the fund or of the money sought to be recovered in the action being lost, or destroyed, or in any way jeopardized during the pendency of the action; the manner in which the appointment of the receiver was effected, and the part he took therein, affects seriously his position and claims.

    If he intruded into the office, and obtained it by his own seeking, in violation of the rights of the defendants and by a breach of the rules and practice of the court, and the order for his appointment was made and entered through a breach of the stipulations of the parties and their counsel with each other, and without being asked for by either, and in opposition to their wishes, and before the case was actually submitted by the parties to the judge, and tM’ough the procurement of a stranger to the suit, who proved to be the counsel for the receiver, it cannot be reasonably claimed for him, that he is entitled to that consideration and favor with which the law regards receivers who are regularly and in the orderly and ordinary method of judicial procedure constituted as such.
    This question arises upon the facts in the case. Upon whose application or urgency was this appointment ordered, or. who, taking advantage of the then condition of the proceeding, by deceit, fraud, or other bad faith obtained the order from the judge for tho receiver’s, appointments ? The inference that the counsel and attorney of the receiver obtained the same with full knowledge of all the facts and circumstances of the case, seems unavoidable. He was a stranger to the suit and proceeding and represented no interest involved therein, and had no right to take part in or. to seek to influence the proceedings in court (Attorney General n. Day, 2 Madd. 246).
    He was informed and notified immediately after he had obtained the order and before its entry, by the plaintiff’s counsel, that the order was improperly obtained, that the case had not been submitted, and that neither of the parties wanted a receiver, and that negotiations were pending for a settlement between the parties. Here was a distinct notice to the receiver, through his counsel, of the condition of the case, and the opposition of all parties interested in the action, to any receivership. If the receiver proceeded further, after this notice, he did so at his own peril and risk. This was on July 16, and the receiver promised that the order should not be entered until July 19. But in defiance of the notice and by a breach of the promise of the counsel, the order was entered next day (July 17). From the rapidity with which the receiver and his counsel moved in the matter on the 16th and 17th, it would seem that they were equally familiar with the character and condition of the suit, and were anxious to get possession of the fund in suit before the action could be settled by the parties.
    Subsequently the receiver and his counsel instituted severe and successful measures, against the wishes and protest of both parties, to obtain the possession of the fund. Although nominally taken in the action, it is apparent that they were not taken in the interest of the parties of the suit or any of them.
    It cannot be that proceedings for the appointment of a receiver, thus initiated and completed, can give the appointee any just claim of which he became thus possessed to his charges, expenses, and disbursements.
    A person cannot thus thrust himself into a receivership and obtain possession of a fund, which needs no protection, against the wishes and protests of all concerned, and afterwards fasten upon that fund the charges incident and consequent to his intrusion, for moneys paid out by himself, and for the services of the attorney and counsel, employed by him to inaugurate needless litigation, and to defend his position and acts.
    The receiver has voluntarily placed himself in the position he occupies, and the order appointing him having been reversed, as also the order directing the money to be paid to him, and the action itself terminated by a judgment in favor of defendants, who were compelled to pay him the money, or fund, whatsoever loss the fund has suffered while in his hands, he must bear, and he will not be allowed to shift it from himself to the parties.
    Before Van Vobst and Sbeib, JJ.

      Decided April 4, 1874.
    The complaint alleges substantially, that in the year 1865, the plaintiff deposited with the firm of August Belmont & Co., which firm is alleged to have been composed of the defendants, gold to the amount of nineteen ■ thousand five hundred and ninety-two dollars and forty-four cents, that the defendants drew four bills of exchange for the amount, payable in' pounds sterling. The bills were severally addressed to N. M. Rothschild & Sons, London, and were payable to the order of John O’Leary, sixty days after sight, and were delivered to the plaintiff. That the bills were drawn by Belmont & Co., at the plaintiff’s special request, and that he paid to them his money to the amount represented by said bills of exchange, and that they were delivered to him for a valuable consideration. That plaintiff endeavored to transmit the bills by mail to O’Leary, the payee, who was the mere agent of the plaintiff, that the bills were abstracted from the mail or were destroyed, and never came to the possession of O’Leary. That they had never been presented for payment, and were unpaid.
    That the defendants have withdrawn the moneys placed by them to the credit of the bills with Rothschild & Sons, and now hold the same. Plaintiff avers that he has demanded the moneys of the defendants, and has executed and tendered to them a bond with good and sufficient surety, in double the amount represented by the bills, to indemnify and save them harmless against the same, and all claim thereon in favor of any person. That the defendants refused to receive the same or pay the money represented by the bills, or receive any bond unless the sureties would justify in the sum of five hundred thousand dollars.
    The complaint contains a separate cause of action for moneys to. the amount of nineteen thousand five hundred and ninety-two dollars and forty-four cents, had and received to and for the plaintiff’s use.
    The plaintiff demanded judgment against the defendants for damages in the amount of such money in gold or its equivalent in currency. That the money might be deposited in court. That a receiver be appointed to take charge of the money. That the bills, when found, be delivered up and payment cancelled. The complaint was0verified by the plaintiff on June 30, 1869, and was upon that day presented to one of the judges of this court, together with an affidavit made by Roger J. Page, the attorney for the .plaintiff, verified on the same day. Whereupon the judge made an order as follows:
    TST. Y. SUPERIOR COURT. .
    John O’Mahoney,
    Plaintiff, agst.

    August Belmont and Ernest B. Luche,
    Defendants.
    Upon the verified complaint in this action, also on reading the affidavit of the plaintiff’s attorney therein, and also on the service of this order upon the defendants herein. On motion of H. E. Tallmadge, of counsel for the plaintiff, it is ordered, that the defendants in the said action show cause before me, at chambers of this court, court-house at the city of ISTew York, on July 2, 1869, at 10 o’clock A. m., why a receiver herein should not be appointed to take charge of, and receive the gold or moneys deposited by the plaintiff with the defendants, in consideration of the bills of exchange mentioned, such bills alleged to be lost or destroyed, with full power to discharge the defendants from the same, and the payment thereof, upon the defendants’ paying into this court, or such receiver, the amount of gold so deposited by them, or its equivalent in the currency of the United States; that such receiver be so appointed with usual powers and directions, and that the plaintiff have such other or further order and relief in the premises as may be just and proper.
    Dated June 30, 1869.
    (Signed) JOHN H. McCUIW,
    Justice Superior Court.
    A copy of the complaint and order of June 30, were served on the defendant Lucke, on July 1. The defendant Belmont was absent from the country, and could not be served. Application was made by the defendants’ attorneys to postpone the hearing, and the same was by order adjourned until July 9, on which day the defendant Lucke answered the complaint. The answer denies the copartnership of the defendants at the time when the bills were issued, and sets up substantially that the bills of exchange were sold by August Belmont, in the usual course of his business, as a banker, across his counter. That at the time he drew the bills, the defendant, August Belmont, remitted the funds in gold to the drawees for the payment of the same, and that the bills would have been accepted and paid if presented. That the money has not been withdrawn, and still remains in the hands of the drawees. That defendants have never received any notice of protest for non-acceptance or non-payment of the bills, but are informed that no demand for acceptance or payment has been, in fact, made upon the drawees.
    The defendant admits that the plaintiff proposed to give a bond of indemnity, if the money was paid to him, but alleges that he has not tendered a good and sufficient bond. The defendant says that he is not one of the drawers of the bills, and has no interest in them. He denies that the plaintiff or O’Leary ever had any money on deposit with him or the defendant Belmont, and claims that Belmont had discharged the duties imposed upon him as the drawer of the bills, and is under no liability to the plaintiff.
    The answer further alleges that the bills came into the possession of O’Leary, to whose order they were payable. That O’Leary was afterwards duly tried and convicted in the United Kingdom of Great Britain and Ireland, before one of the courts of the kingdom having jurisdiction of the crime of felony, namely, of high treason. That the kingdom of Great Britain claims to be entitled to the bills and the money as forfeited to its use, and have given notice to the drawees of such claim, and notified them not to pay the bills to any person. That the bills were negotiable, and that the same are outstanding in the possession of some person or persons unknown. That the plaintiff is not possessed of same.
    On July 9, to which time the hearing of the motion or the order to show cause had been postponed, the same came on to be heard before the judge who made the order. But when the defendants’ counsel had submitted his affidavits and papers, and made his argument in opposition, the plaintiff’s counsel, claiming to have been surprised by the facts produced by the defendants, asked that the motion might -remain open,

      and not be considered as submitted, until he could prepare and submit additional affidavits in support of the motion, and thereupon the judge, with the consent of the defendants’ attorneys, ordered the motion to stand over with leave to the plaintiff’s attorney to serve additional affidavits in support of the same, which affidavits were to be served by July 12, and the defendants were to have a reasonable time after the service of said additional affidavits, and up to Wednesday, July 21, in which to reply to same. The additional affidavits on the part of the plaintiff were not served until July 14, and their points, which were directed to be served, were not served at all. The excuse made by the plaintiff’s counsel for the delay was illness. On July 14, it was stated to the judge that the plaintiff’s additional affidavits had just been served, and that some little time would be necessary for the defendant to prepare rebutting affidavits, and that negotiations were on foot for a settlement of the controversy, to which the judge assented, and stated that no further action would be taken without notice to defendants’ attorneys. It was then plainly understood between the attorneys and counsel of the respective parties that the motion was not then submitted, and should not be until the plaintiff’s attorneys should have served upon the defendants’ attorneys their points, and until the defendants’ attorneys should have time, and up to July 21,do file rebutting affidavits.
    In the meantime negotiations were pending between the attorneys of the parties for an abandonment of the motion for a receivership, and all hostile proceedings in the action. And it had been ágreeed between them that the plaintiff should furnish a satisfactory bond of ■indemnity, and that on its execution and delivery the defendants would pay to the plaintiff the money in controversy.
    On July 16, the counsel for the plaintiff received a letter from James Henderson, an attorney and counselor at law, requesting him to call forthwith at his office. On going there Henderson informed the plaintiff’s counsel that the judge had appointed Thomas J. Barr receiver in the cause, and that he, Henderson, was counsel for the receiver. Henderson presented to the plaintiff’s counsel an order to this effect, which had not yet been entered, and asked the consent of the counsel thereto. The counsel informed Henderson that arrangements were being perfected for a settlement of the controversy, and requested him not" to enter the order. Henderson promised not to do so until Monday, July 19. The plaintiff’s counsel immediately informed the plaintiff and his attorney who approved. They did not want a receivership, and were going to give a bond and get the money in that way. Henderson was informed that the plaintiff’s case had not been submitted, and he was directed by the plaintiff’s counsel to the defendants’ attorneys.
    nevertheless on July 17, an order was made and entered in the action appointing Thomas J. Barr, of the city of Hew York, counselor at law, receiver of the moneys and gold mentioned in the complaint.
    Barr immediately filed the undertaking required of him as receiver. On July 17, the receiver called with Henderson, his counsel, on the defendant, Lucke, and demanded that the moneys and gold be delivered-to-him as receiver. Talmadge, the plaintiff’s counsel, learning that they were there for the purpose, directed the defendants not to pay over the money, and told Barr and Henderson not to receive it. Page, the attorney for the plaintiff,' also told them that the money must not be paid over. Barr and Henderson were both informed that the plaintiff did not want a receiver. Talmadge had seen Barr several days before at the superior court, and he told Barr that they did not want a receiver, but were going to give a bond of indemnity, The counsel for the plaintiff testifies that he does not know when the order, appointing a receiver was made, or when it was entered. That at the time he saw Henderson on July 16, he was standing with an order in his hand, and Page, the plaintiff’s attorney, writing to the attorneys of the defendants, expresses his surprise at the decision, and says that it was made in opposition to the stipulations between the parties and the attorneys. '
    • The defendant, Lucke, did not pay over the moneys on the demand of Barr made on July 17, and on the same day the receiver made an affidavit of his demand on the defendant, Lucke, for the money, and the omission to deliver over the same, and by his counsel, Henderson, applied to the judge and obtained from him an order for the defendants to show cause on July 20, why they ahould not be punished for disobedience to the order.
    On July 20, an order was made by the judge that, upon the defendants forthwith complying with the order made on July 16, appointing a receiver by paying to said receiver the sum of sixteen thousand seven hundred and thirty-eight dollars and seventy cents in gold coin, the defendants be purged of and from all contempt. And that in default thereof, on the part of the defendants, said Ernest B. Lucke stand committed to the common jail of the county of Hew York, until the said sum be paid to said receiver, and that a warrant issue to carry the order into effect. Whereupon the defendant, Lucke, paid over to Barr, the receiver, the sum of sixteen thousand seven hundred and thirty-eight dollars and seventy cents in gold and was discharged.
    By his order of July 20, the judge directed that the receiver pay to the defendants’ attorneys two thousand five hundred dollars in currency, as and for counsel fees and disbursements incurred in the action,- and by another order, dated the same day, but not filed until July 29, he directed the receiver to pay the plaintiff’s attorney one thousand dollars for expenses and disbursements in the action, and also to pay him the further sum of. one thousand five hundred dollars as and for counsel fees, and that the same be paid out of the funds in his hands as receiver. From each and all of these orders of July 16, and July 20, and from the order of the 20th, filed on July 29, an appeal was taken by the defendants to the general term of this court, and the same were severally, by order of the general term, made on November 14, 1870, reversed, and the complaint in the action, when the case was reached at the trial term of this court, dismissed by reason of the failure of the plaintiff to prosecute his action.
    Afterwards, and on November 22, 1870, upon the application of the defendants’ attorneys, an order was made appointing a referee to take and state the accounts of said receiver. Upon said reference, the receiver presented. his account, in which he charges the funds in his hands, and seeks to be allowed, fifty dollars paid the officer detaining defendant Lucke, under the order of July 20; five thousand dollars paid the attorneys for the plaintiff and defendant, in pursuance of the order of July 20 and 29 ; the sum of four, thousand nine hundred and ninety-five dollars, for services rendered to him by James Henderson, his counsel. The receiver also claims commissions on the whole amount received by him from Lucke. By the report of the referee, the receiver was allowed ■ as disbursements the sum of fifty dollars paid to the officer who held the defendant Lucke, under the order to punish him.for the alleged contempt; the two sums of twenty-five hundred dollars each, paid the attorneys for the parties. He reduced the bill of Henderson, the receiver’s counsel, from four thousand nine hundred and ninety-five dollars, to the sum of six hundred and seventy dollars, which he allowed, and he also allowed the receiver commissions at the rate of five per cent-., amounting to the sum of one thousand one hundred and twenty-nine dollars and eighty-six cents.
    The defendants excepted to the report of the referee making these allowances, and also to charge of interest on the moneys at the rate of five per cent, per annum, claiming that he should be charged at the rate of seven per centum.
    The receiver also excepted to the referee’s report.
    The exceptions to the referee’s report were heard at a special term of this court, where an order was made allowing all the defendants’ exceptions, and the exceptions of the receiver were overruled.
    From which order this appeal is taken by the receiver. *

      Samuel Jones, of counsel.

      James Henderson, attorney for appellant.

      Wm. W. McFarland, for respondent.
   By the Court.—Van Vorst, J.

It cannot be well insisted that a receiver, who has been appointed in an orderly way by a court having jurisdiction, and who has in good faith entered upon his duties as such, should not be shielded in his proper action under the order, while it is in force, and be indemnified out of the fund entrusted to his guardianship, for legal charges and disbursements, reasonably made and incurred, although the order should be afterwards reversed for error. This action was against Belmont-and Lucke as copartners. They were charged in the complaint with having drawn the bills. Belmont was absent from the country, and not served with process. The defendant Lucke, who was served, and from whom the money was taken by the receiver, in his answer denied that he was a partner with Belmont at the time the money was paid and the bills drawn, and alleged that he had not become such until three years thereafter, He denied that he was one of the drawers of the bills, or had any interest in them, and averred that they were purchased of and were drawn by Belmont.

These considerations are referred to, however, not as conclusive upon the rights of the receiver, because it may well be claimed that the plaintiff’s complaint and affidavit disclosed facts uncontradicted, sufficient to give the court jurisdiction of the action by the service on the defendant Lucke, of the summons and complaint.

It is quite apparent, however, that the facts disclosed by the case before us, did not justify the appointment of a receiver.

The case shows that the moneys with which the bills were purchased had been forwarded to London to the persons on whom.they were drawn. But even had the moneys been returned to the drawer of the bills, as was claimed by. the plaintiff, but which was denied by the defendant Lucke, no ground appeared by the papers for interfering with the legal possession of same by the holders.

Their original and later possession. was lawful. There was no allegation or claim that the money was in danger of being lost, or would be in any jeopardy during the pendency of the action. The case, as made, was not within either class in which the court was empowered to appoint a receiver (Code, § 244.)

It was an attempt to engraft into an action for money had and received, the provisional remedy of a receivership. The manner, however, in which the appointment of the receiver was effected, and the part he took therein, affects seriously his position and claims.

If he intruded into the office by his own seeking, in violation of the rights of the defendants, and by a breach of the rules and practice of the court, and the order for his appointment was made and entered through a breach of the stipulations of the parties and their counsel with each other, without being asked for by either, and in opposition to their wishes, and before the case was submitted to the judge, and through the procurement of a stranger to the suit, it cannot be reasonably claimed for him that he is entitled to the consideration and favor with which the law regards receivers who are regularly and in the orderly method of judicial procedure constituted such.

The affidavits and papers leave no room for doubt that the order for his appointment was entered before the case had been fully submitted to the judge, and in direct opposition to the agreement and stipulation of the'attorneys for the parties.

Upon the presentation of the defendants’ papers in opposition to the motion made by plaintiff for a receiver, the plaintiff ’ s attorney, fearing that the facts disclosed by the defendants’ case would defeat the motion, asked for time to put in further affidavits. Leave was granted, but on the condition that the defendants should .have opportunity to reply to the affidavits by a day named. The case was not submitted; and before the day named, and before the defendants had an opportunity to make affidavits in rebuttal to the plaintiff’s further affidavits, the service of which had been delayed, the appointment of a receiver was made and the order entered.

The order recites that it was made after hearing H. E. Tallmadge, of counsel for plaintiff, yet Mr. Tallmadge has testified that when he handed in his additional affidavits to' the j udge, he made no application for a receiver, and the defendants’ counsel has testified that on the day the additional affidavits were served, July 14, he made known to the justice that the plaintiff’s replying affidavits had just been served, that some little time would be necessary to prepare rebutting affidavits, and that the justice stated that no further action would be taken without notice to him.

Tallmadge, who testifies that he drew almost all' of the papers for the plaintiff in the action, says that he does not know when the order appointing a receiver was made, or when it was entered. Roger J. Page, the attorney for the plaintiff, in a letter written to the defendants’ attorneys, under date of July 17, expressed surprise, and states facts showing that the order was made in" opposition to the stipulations of the parties, and offered to aid in reinstating the case according to the stipulations and understanding of the attorneys for both parties.

The question then occurs, upon whose application or urgency was the appointment ordered, or who, taking advantage of the condition of the proceeding, by deceit, fraud, or other bad faith, applied for, and obtained the order from the judge.

On July 16, James Henderson addressed a note to Tallmadge, the plaintiff’s counsel, requesting him' to call “forthwith,” at his, Henderson’s office.

Upon calling, he found Mr. Henderson standing with the order in Ms hands; it had not been entered. This was on July 16.

Henderson has given no explanation of the manner in which he became possessed of this original order, and the inference that he obtained it from the judge, under the facts and circumstances of the case seems unavoidable.

Henderson was a stranger in the suit and proceeding. He represented no interest involved. A receiver can only be asked for, or nominated by a party interested. As a stranger, he had no right to take part in, or influence the proceedings in court. In Attorney General v. Day, 2 Madd. 246, it is asked by the vice chancellor, “ Is it according to the regular course of the court for a person not interested to propose a receiver ? If so, persons from all quarters would besiege the court, great struggles and competitions would ensue. There is no color for saying that strangers can in such case come in before the master ; it would lead to indefinite importunities.” If not before the master, a stranger could not appear before the judge. But on July 16, when he had the order in his hands, Henderson was distinctly apprised by the plaintiff’s counsel of the facts which showed that the order was impropérly obtained, and made. If he did not know before, he was then informed that the case had not been submitted; that the parties did not want a receiver, and that negotiations were pending for a settlement of the controversy between all concerned.

Had the receiver himself been acting in good faith up to this moment, and before the order was actually entered, or filed, here was a distinct notice to him through his counsel, of the condition of the case, and the opposition of the parties to a receivership. If he proceeded further, he did so at his own peril and risk.

Henderson agreed that the order should not be entered until Monday, July 19. In defiance of the notice, and by a breach of his promise, the order was entered the next day. As the order was last seen in his hands, it could not have been entered without his knowledge and consent, and in the absence of any explanation from him, he must be deemed the procuring cause.

Henderson drew the receiver’s bond, which was filed before the demand was made upon the defendant Lucke for the money. From the rapidity with which they moved in the matter, on July 16 and 17, it would seem that both he and the receiver were familiar with the character and condition of the suit. It seemed a race to get possession of the fund, before the action could be settled by the only parties in interest. Tallmadge, the counsel for the plaintiff, testifies that he had seen Barr several days before' at court, and had told him that they did not want a receiver, but were going to give a bond of indemnity.

The first charge in the account produced by Mr. Henderson, before the referee, is for a retainer in the action as counsel, examining the pleadings and proceedings, and making copies of same. This is followed by a charge for drawing the receiver’s bond, and attending to its execution ; and the obtaining a certified copy of the order of the appointment, and serving same on the defendant Lucke. If the chronological order of the items in the account shows the times the services were rendered, it would seem thaj; the examination of the pleadings and proceedings by Henderson, was the service he first rendered. For this service he has charged five hundred dollars, which would indicate that the examination was a careful one. Such examination might have well disclosed to him, and the receiver, who is a counselor at law, that the case was not one for a receiver. In addition, as has already been observed, he had notice on July 16, that the parties did not want one, and also that the case had not been submitted. But besides all this, on July 17, when Mr. Henderson and the receiver called upon the defendant Lucke, and demanded the money, they were both distinctly notified of facts which showed the appointment to be improper, irregular, and to the prejudice of the parties ; a bond of indemnity satisfactory to the parties had been prepared, and the defendant was forbidden in the presence of the receiver, by the plaintiff’s counsel and attorney, to pay oyer the money to him. The reason assigned, being that they did not want a receiver. This direct notification, with what had previously occurred, might have reasonably caused the receiver to pause before taking the extreme measures, through his own counsel, Mr. Henderson, to punish the defendant Lucke for a contempt in not responding to his demand, which resulted in an order, and warrant, commiting him to the common jail of the county of New York, until the money should be paid,, and to escape which imprisonment, the defendant was obliged to pay to him the sum of money in question. Although purporting to be taken in this action, such proceeding was not taken in the interest of the parties to the. suit.

It cannot be that proceedings for the appointment of a receiver so initiated and completed can well give the appointee any just claim to subject the fund, of which he has so possessed himself, with the charges which he preferred on the accounting before the referee. They are wholly unreasonable and unnecessary. A person cannot thus thrust himself into a receivership, and get possession of a fund which is in no danger, is already in safe hands and needs no protection, and in opposition to the wishes and protests of all concerned, and then fasten upon the fund the charges incident to his intrusion, and for moneys paid thereout by himself, and for services to attorneys and counsel employed by him to initiate needless litigation and to defend his position.

The receiver has voluntarily placed himself in the position he occupies. The order appointing him has been reversed by the general term, as well as the order directing the payment of the moneys to him, and the action itself was ended when the case was reached at the trial term, -by a judgment in favor of the defendants for a failure of the plaintiff to prosecute the same.

Whatever loss the fund has suffered while in his hands the receiver should bear. He should not be allowed to shift it from himself to the parties.

It is no conclusive reason for allowance of these claims that the appointment was made by the order of the court. There is an underlying vice, which is shown in the manner in which.the order was obtained and entered, for which the apppintee must be held to be responsible. It would not answer to allow one to hold up for his defense, and urge as an indemnity for moneys paid, and as a ground for claims for services rendered and liabilities incurred, and which must be • considered unreasonable and unnecessary, an order so obtained. 1 ‘ JSfullus commodum cópese potest de injuria a sua propria.'1'1

And a judgment may be questioned if pronounced through fraud, contrivance or covin of any description ' (Broom Leg. Max. 335).

Of the disbursements claimed by the receiver two thousand • five hundred dollars was made to Mr. Page, the attorney, upon an order filed after the defendant had been made a party to the suit on his own motion, and was founded upon no distinct affidavit showing the services rendered or the reasons for this large demand, and this order has also been reversed by the general term. The claims interposed by Mr. Henderson, for services as attorney and counsel for the receiver, amount to the sum of four thousand nine hundred and ninety-five dollars. We think the judge at special term decided correctly when he disallowed all these claims, and held that the receiver was not entitled to compensation out of the fund in question. The learned judge says the fund was subjected to the order and to the moneys paid by the receiver himself, by an act wrongful against the defendants. “ If this wrongful act had not been done the fund would not have suffered depletion, from an order which should not have been made against the defendant.”

The order appealed from is affirmed, with costs.

Speib, J., concurred.


source: Caselaw Access Project

author: By the Coubt.—Vah Vobst, J.

license: Public Domain

text:
    ANN CATHERINE KAMP, Plaintiff and Respondent, v. HEINRICH KAMP, known as HERMAN KRULL, Defendant and Appellant.
    A common, although not necessary attendant upon an action for divorce, is a provision for alimony. In some States it is the subject of an independent suit or proceeding, but in the State of New York, it is a proceeding auxiliary to the action for divorce.
    The power of the court to decree an allowance as alimony does not appear to be a subject of original equity jurisdiction, but is derived from and rests upon the statute.
    The statute provides in cases where the wife is complainant, and a decree of divorce is granted in her favor, the court may make a “further ” decree or order against the defendant, compelling him to provide such suitable allowance (as alimony) as the court may deem just, having regard to the circumstances of the parties respectively (2 Bev. Stat. 146, § 58 [§ 45]).
    In the case at bar, no provision was made for alimony in the judgment or decree of divorce, nor any further order or decree made at the time on the subject, and the application for alimony was delayed for a period of years.

      Held, by the court, that the delay of the plaintiff in her application for alimony was unusual, and open to observation, and, together with other facts and legal points, existing in favor of defendant, were proper to be urged'upon, and considered by the court, and were so urged and considered as reasons for the denial of the plaintiff’s application for alimony at a time so distant from the entry of the original decree for a divorce.
    The remedy for the defendant was clearly by an appeal from the order or decree of the court, granting alimony, and not by a motion to vacate and set aside the same.
    The validity of such an order cannot be tried before another judge on the same facts and grounds. If there was error, it must be corrected by the regular method of review, provided by law (Fisher v. Hepburn, 48 N. 7. 41, 53).
    The. court had full and unquestioned jurisdiction of the subject matter and of the parties, at the time this order was made.
    The allowance of alimony being within the jurisdiction of the court, whether the same shall be made at the time of the final judgment or afterwards, is within the power of the court to determine.
    It is a question of practice, and a subject for the determination of the court at the time of the application for the same, at the time of the entry of the decree for divorce or afterwards. .

    Before Sedgwick, Yak Yobst, and Speik, JJ.

      Decided April 4, 1874.
    Appeal from an order of special term.
    This was an action by the wife against her husband for a divorce from the bonds of matrimony. On August 3, 1852, a judgment was entered in. the action in favor of the plaintiff, dissolving the marriage, on the ground of the adultery of the husband. The judgment made no provision for the allowance of alimony to the plaintiff.
    In December, 1854, a motion was made on behalf of the plaintiff, to open the judgment" so as to provide therein for alimony to the plaintiff, which motion was denied. In September, 1871, the plaintiff again made an application .to the court for support and maintenance, which application was opposed by the defendant. An order was then made at special term on this application, referring it to John W. Doty, to take proof and ascertain and report to the court what would be a suitable allowance to the plaintiff, for her support, and in what manner the same should be paid by the defendant. The parties appeared before the referee, and proof was offered" by them respectively on the subject matter of the reference, which was reported to the court with the opinion of the referee, upon which, such proceedings were had, that an order was made at special term on March 30, 1872, after hearing counsel for both parties, plaintiff and defendant, that it be referred to Hon. James C. Spencer, to take proof on the same subject, and to report what in his opinion would be-a suitable allowance to the plaintiff, for her support and maintenance. The referee made his report, and after-wards, and on May 23, 1872, after hearing counsel for both parties, plaintiff and defendant, the report of the referee was confirmed, and it was also ordered and adjudged that the defendant pay to the plaintiff, or to her order, during her natural life, or until the further order of the court to the contrary, the annual sum of one thousand dollars, payable quarterly in advance, the same being deemed a suitable allowance for the future support of the plaintiff, having regard to the circumstances of the parties respectively. The order to be enrolled and to stand as the final judgment of the court in this behalf, with leave to the plaintiff to issue execution thereon, or other process according to the usual course of practice of the court. This order was afterward enrolled as a decree and docketed ; execution was issued thereon, and returned unsatisfied, whereupon an action was commenced against the defendant and others, to set aside certain conveyances made by defendant, of his property. In October, 1872, the defendant made a motion to set aside the report of the referee, under the order of reference of March 30, 1872, which was by order, at special term, made and entered on October 25, 1872, denied.
    On December 17, 1873, the defendant moved this court for an order setting aside the orders made in this action, and entered on November 11, 1871, March 30, 1872, and May 23, 1872, and the enrollment and docketing of said last mentioned order, for irregularity and as void, on the ground that the court had no jurisdiction to make said order or either of them.
    The motion was heard at special term, counsel for both parties taking part in the argument.
    On December 18, 1873, an order was made at special term denying the motion with costs, from which last mentioned order this appeal is taken to the general term of this court.

      H. Q. Snébly, attorney for appellant.

      John Townshend, of counsel.

      Hatch & Van Allen, attorneys for respondent.

      H. F. Hatch, of counsel.
   By the Coubt.—Vah Vobst, J.

A common, though not necessary attendant upon an action for divorce, is a provision for alimony. In some States it is obtained by an independent suit or proceeding. But under our statute, it is an ancillary proceeding to the action for divorce.

The power of the court to make such allowance does not appear to be a subject of original equity jurisdiction. but is derived from the statute.

It is provided by statute, that if the wife be the - complainant, and a decree dissolving the marriage be pronounced, the court may make a “further” decree or order against the defendant, compelling him to provide such suitable allowance to the complainant for her support, as the court may deem just, having regard to the circumstances of the parties respectively (2 Rev. Stat. 146, §58 [-§45]).

In this case no provision was made for alimony in the judgment dissolving the marriage relation, nor was any order made at the time the judgment was rendered on the subject.

Weight, .J., in Forrest v. Forrest, 25 N. Y., 505, in speaking of the judgment in that case, says: “ The judgment for a divorce was a final and perfect one, and the further order or decree for alimony not any part of it, or necessary consequence of such judgment, but resting in the discretion of the court.”

In the case of Cook v. Cook, 1 Barb. Ch., 644, the action was terminated by a final decree making no provision for alimony, nor as to the custody of the children, yet, after the deceree, the complainant filed her petition in the original suit, asking for the care and custody of her children. The petition was upheld, on the ground that it was a collateral proceeding, to be exercised before or after decree. It should be added, however, that there is a statutory provision, authorizing the court at the final hearing, or “ afterwards,” as occasion might require', to make such order, as between the parties, for the custody, care, and education of the children, as might be necessary '(2 Rev. StaT. 148, § 73 [§ 59]).

It is claimed by the counsel for the appellant, that this provision does not extend to the allowance of orders for alimony, after the final judgment is entered, and that unless the judgment of divorce makes a “further ” decree or order for such allowance, it may not be made “afterwards,” and that the order of which complaint is made, is an alteration of the substance of the judgment.

With regard to the matters adjudicated under, the issues in the action, a final judgment may not be enlarged on the motion. The matters so determined, do not rest in discretion. The power to correct a final decree, or judgment, by motion, being limited to accidental omissions or errors, not affecting the substance of the adjudication.

But, as has been observed above, the proceeding for alimony is collateral to the action, which is for the dissolution of the marriage relation, and the provision in regard to it is not a necessary part of the judgment, and whether allowed or not," rests within the discretion of the court, under the facts and circumstances of the case.

Even had provision for alimony been made by “further” order or decree at the time the judgment was rendered, its amount as,then fixed would not have been unalterable, but could have been afterwards increased or diminished by subsequent order, as the real exigencies of the case might actually require (Bishop on Marriage and Divorce, vol. 3, § 439, § 430 ; Halsted v. Halsted, 5 Duer, 659; Forrest v. Forrest, 3 Bosw. 661).

The allowance of alimony is within the jurisdiction of the court, and whether it shall be made at the time of the final judgment, or afterwards, is within the power of the court to determine. It is a question of practice ; ■ good reasons may be assigned for limiting a demand for alimony and inquiry on the subject, to the period before and ending with the final judgment, and not to be initiated in consequence of the changed condition of the parties thereafter, as the parties are thenceforward finally separated. The successful complainant, if a wife, being" at liberty to marry again, and acquire means and property of her own. Another reason is found in the fact that the amount of alimony is commonly adjusted by the circumstances of the case as then existing, such as the means of the defendant, and the condition and want of the plaintiff (Forrest v. Forrest, 3 Bosw. supra). But this • is a subject for the determination of the court, at the time the application is, made. There is nothing in the case which shows that any application or demand for alimony was made at the time of the judgment, or that the subject was then passed upon by the court.

But it does appear by the affidavits in the case before us, that on the day on which the judgment was entered, the defendant gave the plaintiff three hundred dollars, which he claims was in full for alimony and costs of the action.

The plaintiff, on the other hand, claims that the defendant then agreed to pay her three hundred dollars per annum for her support and maintenance during her natural life, and that the three hundred dollars paid on August 3, 1852, was the first installment, and that he has not made any subsequent payment. But whatever its nature, it was an outside arrangement. The delay of the plaintiff in making her application to the court thereafter was unusual, and open to observation, and that, together with such evidence as the defendant possessed of the release by the plaintiff of claim for alimony, and all other legal grounds or matters which existed in his favor, were proper to be urged by the defendant upon the consideration of the court, as reasons for the denial of the plaintiff’s application for alimony.

The defendant appears to have so understood his rights,- and did appear by counsel, and opposed the application, and after the order of reference was made, he appeared before the referee, and evidence was offered by both parties, and the defendant was sworn as a witness (Kamp v. Kamp, 46 How. 143.)

The defendant also appeared in court by counsel and opposed the confirmation of the referee’s report, and also the final order granting and determining alimony, and fixing its amount. Such final order was made May 23, 1872.

Tinder such circumstances, it was the duty of the defendant, if for any reason he would seek further to resist or question that, or any previous order made, to enforce his remedy by appeal.

Instead of appealing from the orders, he has remained quiet, other proceedings in the mean time having been taken by the plaintiff, on the basis of the order of May 23, 1872, to enforce the payment of the alimony thereby ordered, and then, after the expiration of more than eighteen months, he moved this court to set aside the order, with the enrollment and docketing thereof, on the ground that it was irregular aud void, together with the previous orders of reference.

An appeal would have tested the validity of either ground of objection, and that under the circumstances was the appropriate remedy. The validity of an order cannot be tried on a motion before another judge on the same facts or grounds. If there was any error in the judgment and determination of this matter at special term, the error must be corrected by the regular method of review provided by law (Foster v. Hepburn, 48 N. Y. 41, 53).

Of the subject matter of the inquiry, the court had jurisdiction by statute ; of the person of the defendant, it acquired jurisdiction by his appearance and entry upon the investigation.

If there was any want of regularity in the proceedings, or any advantage was gained by him- by delay in the plaintiff’s application, or otherwise, on those grounds he should have objected. He doubtless hoped to defeat the application on the merits, by the evidence adduced before the referee, under the order of November 11, 1871. Failing in that, he now seeks to set aside the proceedings as void. As before stated, his remedy, if any, was by appeal.

The order appealed from is affirmed, with costs.

Sedgwick and Speib, JJ., concurred.


author: By the Court.—Van Vorst, J.

text:
    JOHN COURTNEY, Plaintiff and Respondent, v. FREDERICK BAKER, Defendant and Appellant.
    The principle upon which a master is held liable for accidents resulting from the negligence of his servant, while such servant was engaged in the performance of his service and duty as such, and within the scope of his employment, and of the acts for which that servant was authorized to perform by his master, expressly, or be-because of the nature of the employment, is based upon the assumption, that in such cases, the act of the servant is the act of the master, and the master is held responsible for the same.
    But when the servant acts outside of the duties of his employment, and not within the scope or nature of the same, and without express directions from the master, the act ceases to be that of the master, and the latter is not responsible for the consequences.
    In the case at bar, it did not appear that the act of the servant was within the scope, or the nature of the duties, or the employment of the servant, but the contrary appeared conclusively.

      Held, that the master was not liable.
    Before Sedgwick, Van Vorst, and Speir, JJ.

      Decided April 4, 1874.
    This action was brought to recover damages for a personal injury, alleged to have been sustained by the plaintiff, in consequence of the negligence of one of the defendant’s servants, while engaged in removing cotton from the defendants’ pier, No. 12 East River. The evidence shows that the defendants were the proprietors of the Merchants’ Steamship Line, and were engaged in carrying merchandise between New Orleans and New York. They had unloaded on the dock at pier No. 12, a large number of bales of cotton, consigned to Dennis Perkins, and others. The cotton of Perkins had been separated by the stevedores in defendants’ employment from the other cotton, by its marks, and was standing by itself on the pier.- Mr. Wooley, the carman of Perkins, was removing the cotton for the. consignee and owner, and plaintiff was in the employment of, and aiding the carman. Before the injury complained of, the carman of Perkins had removed a portion of his cotton, but had left a-single row of ten or twelve bales standing alone on their ends, with nothing on either side to support them. There was other of Perkins’ cotton lying near, still to be removed.
    ■S. W. Hand was at the time in defendants’ employment, as delivery clerk. He had an office on the pier,, and his business was to take receipts from the carmen, of the freight removed from the pier. He was provided with a book containing printed receipts for the purpose ; when a party wanted cotton, he presented his schedule containing marks to Hand, who was to attend to the delivery of the cotton mentioned in the order.
    It was his duty to see that the proper goods were taken by the party presenting the schedules and marks ; when the carman had loaded and tied up, it was Hand’s duty to take care that the carman did not get away without signing for what he had on his truck. His proper position was on the pier and bulkhead, so that he might see the cotton removed, and count the bales-. He had nothing to do with handling the cotton, or to aid in the manual work of its removal or delivery. Stevedores assorted the lots, and piled them together-according to their marks, as they were taken from the ships, and the labor of their removal was performed by the carmen and servants of the consignees. On July 27,1869, the plaintiff* was aiding the carmen of Perkins in loading cotton on the truck, behind the row of ten or twelve bales, which they had left stan ding.
    Hand was at the end of the wharf where the cotton was being removed, the cotton of Perkins as well as that of others. He had his book and was taking receipts.
    He left his position, and approached the tier or row of bales, and as the plaintiff, who was wi th the carmen engaged in their work of loading a truck, was stooping down in the effort of aiding to lift a bale, his right leg and foot extended and planted so as to support him, Hand pushed over one of the bales, which standing in the row, and it fell upon the plaintiff’s right leg and foot, breaking it at the ankle.
    For the damages resulting from the injury thus sustained, this action is brought.
    The action was tried before one of the judges of this court and a jury, at the December trial term, 1873, and a verdict was rendered for the plaintiff, for the sum of fifteen hundred dollars damages. A motion was made on the minutes of the judge, before whom the trial was had, for a new trial, which motion was denied.
    The defendant appeals from the judgment entered upon the verdict, and also from the order denying a new trial, to the general term of this court. The grounds for the appeal, and the defendants’ exceptions, appear in the opinion.

      James K. Hill, attorney for appellant.

      H. H. Bewi, of counsel.

      Samuel II. Handall, for respondent.
   By the Court.—Van Vorst, J.

This case has been twice tried. On the first trial, the plaintiff was non-suited at the close of his evidence, on the ground that he had failed to connect the defendants with the occurrence through which his injury was sustained. That there was nothing to show that Hand was acting in the course or within the scope of his employment when the injury was done.

On an appeal to the general term, the judgment was reversed, and a new trial ordered. The general term holding, Barbour, Oh. J., delivering the opinion of the court, that ‘ ‘ upon the evidence, which was wholly uncontradicted, the jury might have properly arrived at the conclusion, that the handling of the standing bale by the clerk, in such a manner as to cause it to fall upon the plaintiff, was an act of negligence for which the defendants were responsible.”

The evidence on the second trial discloses the true relation in which Hand stood to the defendants, and the specific duties growing out of his employment, and its scope.

And if the act was done by Hand in the business of the defendants, and within the scope of his employment, the defendants would be liable for the injury the plaintiff sustained, by the pushing of the bale of cotton upon him, if the act was the result of a negligent or reckless performance of • duty on the part of Hand (Isaacs v. Third Avenue R. R., 47 N. Y. 122 ; Higgins a. Watervliet Turnpike Co., 44 N. Y. 23).

Hand’s duty, under his employment, was to take receipts for the cotton delivered. He had nothing whatever to do with the handling of the cotton, or its disposition on the pier. When cotton was taken from the vessel by the stevedores and laborers, it was separated into lots- by them for the different consignees, and owners, according to their marks. The cotton of each owner was placed by itself. And when the car-men of the owners came to remove the cotton, they took it from the pile as arranged by the stevedores. The delivery clerk had nothing to do with examining marks, nor in arranging the cotton in piles to be carted away, except in cases of missing bales, or bales left over, or when a question as to marks arose, when bales were dimly marked. His duty was to take receipts from the carmen after the cotton had been taken by them from the piles set apart for their employers, and was loaded on the carts. If any examination of marks was necessary, it was to be made by him when the cotton was on the carts.

The cotton of Perkins, when taken from the vessel, had been separated from other cotton, and was piled by itself. This had been done by others charged with such duty, and with which Hand had no concern.

The carmen of Perkins commenced to draw his cotton on July 36, and on that day took away a considerable portion. They returned to their work on July 37. In removing their cotton, they had left a row of gome ten bales standing. They were at work removing the bales lying near the row, when one of the bales was pushed over by Hand, and plaintiff sustained the injury of which complaint is made. Hand has testified, and his evidence is corroborated by the testimony of others, and of which there is no dispute, that he had no occasion, within the scope of his duty, to examine this bale, or its marks. There was no question about this bale, or the row in which it was standing ; it was in the lot set apart to Perkins, and would in the end have been taken away by his carman. Examined as a witness for the defendants, Hand has given his reasons for pushing this bale over. I state them shortly. The day before, some loose' cotton was supposed to have been stolen, which led to inquiry.

His “natural curiosity,” so he states it, led him to look at these men in their performance on the pier, from the fact of cotton taken from them the day before. In walking around, he saw this row of bales standing. The cotton was theirs; the proper way would have been to have taken it away clear. He pushed over one of the bales, because he wanted to see beyond it, audio pass through; when he pushed it, losing the support of the bales standing beside it, it fell towards the plaintiff, in a direction unexpected by him. In another portion of his testimony, he says that the allowing of a tier or row of bales to stand in this way was an old trick, and he wished to break it, and see beyond, as a matter of personal curiosity.

How, the evidence clearly shows that Hand was charged with no duty under his employment, or arising from its scope, to interfere with these bales. The handling and disposal of the cotton on the pier preparatory to its removal by the carman, was a duty cast upon the stevedores, in the defendant’s service, of which there were several in attendance.

Hand had no general oversight of the pier. Bodfish,. in the employment of the defendants, as general superintendent, to handle the cargoes of cotton, was on the pier, and had himself seen this tier of bales standing, and had not interfered.

As it was not within the duties of his regular employment as delivery clerk, Hand had been charged with no service in this direction. The pushing over the . bale required some effort. He “ stooped enough to get his weight on the bale to push it over.”. He knew at the time that the carman and his assistant were at work behind this row of bales. There was nothing in the circumstances which justified or called for any such act. It was as reckless as it was gratuitous. It was his own unauthorized act.

It would be a violent construction of the term duty,' to hold that such reckless act, the offspring of his personal curiosity, was within the scope of Hand’s employment, as disclosed by the evidence, or that the master should be visited with its consequences. The principle upon which a master is in general held liable for the accidents resulting from the negligence of his servant, is that the act of the servant is the master’s act.

But that can be predicated only of the acts the servant was authorized to perform, either expressly? or by the nature of Ms employment, and when the servant acts outside of the duties of his employment, and without express directions, his act ceases to be that of the master, and the servant, and not the master, is liable for the consequences (Mali v. Lord, 39 N. Y. 381; Vanderbilt v. Richmond Turnpike Co., 2 N. Y. 479 ; McKensie v. Leod, 10 Bing. 385).

The charge of the learned judge on the trial contained a true exposition of the law on the subject.

But the motion of the defendant, for a dismissal of the complaint, made at the termination of the plaintiff’s evidence, and renewed at the close of the case, should have been granted, for under the views above expressed, and upon the evidence, there was no fact for submission to the jury, tending to connect the defendants with the commission of the injury.

Judgment reversed, new trial ordered, with costs to the appellant to abide the result. *

Sedgwick and Speir, JJ., concurred.


author: Yan Yorst, J.

text:
    DANIEL E. DONOVAN, Plaintiff, v. TERENCE SHERIDAN, THOMAS J. SHERIDAN and MARY SHERIDAN, Defendants.

      Trusts in favor of creditors.—Creditors' suit.—Pleadings.—Husband and wife.

    Where the consideration on the purchase of land is paid by one person, and the deed is taken by and in the name of another, the person paying the consideration has no such interest in the premises, as can be impressed with the lien of a judgment, or be sold under execution against him.
    Where one person advances the consideration, and takes a contract for the conveyance to him of land, and afterwards assigns the contract, without consideration, to a third person, and the deed of conveyance is subsequently made to such third person, the equitable interest of the person paying the consideration under the contract passes to the grantee, who becomes vested with the legal estate.
    Under the circumstances above stated, the grantee holds the land impressed with a trust in favor of the creditors of the person paying the consideration, and where such grantee afterwards con-' veys the land to the wife of the person advancing the consideration, in pursuance of an arrangement between them when the deed was made, the wife also takes the land, impressed with the same trust in favor of the creditors of her husband.

      a: The husband is not the beneficial owner, nor does the wife hold the land in trust for him.
    The remedy by a judgment creditor’s action, under the revised statutes, against land held under contract for purchase, does not apply to a case where the equitable rights of the person paying the consideration under the contract becomes merged in the estate of another, who becomes fully vested with the legal title by deed of conveyance.
    The remedy of a creditor under such conditions, is to subject the land to the payment of his debt, through the trusts created in favor of creditors, on his establishing the relation of trustee and cestui que trust, under the provisions of the statute of “uses and trusts.”
    Although a plaintiff asks other relief, and seeks as a judgment creditor to reach the supposed interest of the judgment debtor in land, yet he is entitled to such judgment, when all the parties are before the court, as the law pronounces, upon the facts pleaded and proved, although such other relief may not be specially aslred for.

      Husband and wife; Circumstances under which moneys coming to the wife, or earned by her during coverture, are to be considered her individual property, and how moneys received by a wife, although proceeds of property of her husband, may be upheld as a gift from him to her.
    Before Van Yorst, J., at special term,
    March, 1874.

      W. McDermot, for plaintiff.
    Fullerton, Knox <& Grosby, for defendants.
   Yan Yorst, J.

The plaintiff, on June 18, 1873, recovered a judgment against the defendant Terence Sheridan, in this court, for the sum of thirteen hundred and twelve dollars and sixty-three cents, upon a promissory note made by him, payable to plaintiff, dated January 13, 1873. s

An execution was issued upon the judgment to the sheriff of the city and county of New York, being the county in which the judgment debtor resided, and which has been returned unsatisfied.

Before the recovery of the judgment, the defendant, Terence Sheridan, had entered into a contract with two persons named Thorp, to furnish them blue stone to the value of five thousand five hundred dollars, and the Thorps had agreed in writing to convey to him a house and lot of ground in the city of New York, particularly described in the agreement, in payment for the blue stone.

The defendant, Terence Sheridan, delivered the' blue stone to the Thorps, to the value of five thousand five hundred dollars, in pursuance of the agreement, and on March 13,1873, he became entitled to receive a deed of conveyance of the lot of land and premises from the Thorps.

On March 13, 1873, and before the recovery of the plaintiff’s judgment against him, the defendant, Terence Sheridan, by an instrument in writing, assigned and transferred to the defendant Thomas J. Sheridan, all his right, title and interest in and to the agreement for the purchase and conveyance of the house and lot, and all claim which he had against the Thorps for the blue stone, and conveyed to Thomas J. Sheridan all the right, title and interest which he had in and to the house and lot.

Afterwards, and" before the recovery of the plaintiff’s judgment, and on March 22, 1873, in pursuance of said assignment, and at the request of Terence Sheridan, the Thorps executed and delivered to the defendant, Thomas J. Sheridan, a deed of conveyance of the house and lot, and on or about May 15, 1873, and before the recovery of the plaintiff’s judgment, at the like request of Terence, Thomas J. Sheridan, executed and delivered to the defendant, Mary Sheridan, who is ihe wife of Terence Sheridan, a deed of conveyance of said house and lot.

It is claimed by the plaintiff in his complaint, that the assignment of the contract by Terence, to Thomas J. Sheridan, was without consideration, and was so made in fraud of the creditors of Terence, and to prevent the property being applied to the payment of his debts, and that the deed from the Thorps to Thomas J. Sheridan, and from him to Mary Sheridan, were made with the like purpose and intent.

The plaintiff claims that Terence Sheridan is the beneficial owner of said house and lot, and that his wife Mary holds the same in trust for him.

Plaintiff demands judgment, that the assignment of the contract from defendant Terence to Thomas J. Sheridan, and the deeds of conveyance to Thomas J. and Mary Sheridan, may be adjudged fraudulent and void against the plaintiff, and that the property may be adjudged to belong to the said Terence Sheridan, and that the judgment, with interest thereon in plaintiff’s favor, may be adjudged to be a lien upon said real estate, to the same extent, and in the same manner as if the conveyance from the Thorps had been made to the defendant Terence Sheridan.

Upon the pleadings and evidénce, it appears that the defendant Terence Sheridan never had any legal estate in the house and lot in question. He had, it is true, paid the consideration by the delivery of the blue stone to the Thorps, and by such payment, he had an equitable interest in the premises to the extent of the consideration paid (Mayor v. Hinman, 17 Barb. 139).

But the defendant, Terence Sheridan, never had any such interest as could be impressed with the lien of the plaintiffts judgment, or be sold under execution (N. Y. Stat, at L. vol. 1, p. 696, § 4).

By the assignment of his contract to Thomas J. Sheridan, on March 13, 1873, when he was entitled to a deed, his equitable interest in the land passed to the latter, and the conveyance to Thomas J. Sheridan, by the Thorps, vested in him the legal estate.

There is little room to question, but that the assignment to Thomas J. Sheridan of the contract was made without any actual bona fide consideration paid by him, and for the. purpose of placing, the property beyond the reach of the plaintiff’ s demand, and with the design that the same should be ultimately conveyed to the defendant Mary Sheridan.

The giving by Thomas J. Sheridan, an irresponsible person, of his own unsecured note for five thousand five hundred dollars, payable in one year, was a mere subterfuge to give an appearance of a consideration. The real intention of the parties at the time, as understood, was that the property was to be afterwards conveyed to Mary Sheridan, the wife of Terence.

The conveyance of the Thorps to Thomas J. Sheridan, and by him afterwards to the wife, was in pursuance of such arrangement and original understanding, and when the deed was executed to Mary Sheridan by Thomas J. the note of the latter for five thousand five hundred dollars was delivered up.

The reason assigned for the transfer to Thomas J. Sheridan, of the contract, and the execution of the deed to him afterwards, was that defendant wished to secure his wife.

If she had loaned moneys to him as is claimed, this he had a right to do. But to have carried out this arrangement, it was not necessary to have imported Thomas J. Sheridan into the transaction. A conveyance to her by the Thorps of the property would have accomplished the end without a resort to the useless contrivance of a conveyance to Thomas J. Sheridan, and the giving by him of a valueless note. Thomas J. Sheridan held the property impressed with a trust in favor of the creditors of Terence, and with the title finally vesting in the wife of the defendant, it amounted to a grant to her, and the consideration paid by her husband. The surrender of the worthless note of Thomas J. Sheridan was no valid consideration. But this consideration does not give rise to the consequences claimed by the plaintiff’s counsel, that defendant Terence Sheridan is the beneficial owner of the land, and that Mary Sheridan holds the same in trust for him, nor does the remedy by a judgment creditor’s bill against lands held under contract for purchase, created by the revised statutes, apply, as is urged by the plaintiff’s counsel (1 Stat. at L. 696, §§ 4, 5), for the reason that the equitable rights of the defendant Terencé Sheridan, under his contract for a deed with the Thorps, became merged in the legal estate which became vested in Thomas J. Sheridan, through the conveyance executed to him by the Thorps, by the direction of the defendant Terence Sheridan, and which legal estate afterwards became vested in his wife.

The remedy of the plaintiff, if any, is under other provisions of the revised statutes, by which it is provided that where a grant for a valuable consideration shall be made to one person, and the consideration therefor shall be paid by another, no use or trust shall result in favor of the person by whom such payment shall be made, but the title shall vest in the person named as the alienee in such conveyance. Such conveyance, however, is presumed to be fraudulent, as against the creditors at the time, of the person paying the consideration, and where a fraudulent intent is not. disproved, a trust shall result in favor of such creditor, to the extent that may be necessary to satisfy their just demands (1 N. Y. Stat, at L. 677, §§ 51 and 53; Garfield v. Hatmaker, 15 N. Y. 475; Wood Robinson, 33 N. Y. 564).

And the plaintiff’s remedy as a creditor of Terence Sheridan, at the time of paying the consideration by him, is to subject the land to the payment of the debt which he is entitled to, on his establishing the relation of trustee and cestuis que trust, under the provisions oí the statute of uses and trusts. It is quite clear that the plaintiff would be entititled to enforce the trust resulting in his favor, by the conveyance of the house and lot in question, and to have the same applied in pay ment of his claim, unless it be that the wife had, before the conveyance to her, loaned moneys to her husband, which the conveyance was designed to secure; or unless she incurred liabilities for him in consideration of such conveyance, both of which conditions are claimed by the defendants to exist in this case.

How, although the plaintiff has claimed specifically other relief, and seeks as a judgment creditor to reach the supposed interest of the judgment debtor in the lands,.yet, he is entitled to such,a judgment as the law pronounces upon the facts pleaded and proved, whether specifically asked for or not (Eldridge v. Adams, 54 Barb. 417; Hale v. Omaha Bank, 49 N. Y. 636 ; Springer v. Dwyer, 50 N. Y. 19).

But it is claimed on the part of the defendants, that the conveyance to the defendant Mary Sheridan,- by Thomas J. Sheridan, was made to secure her for moneys loaned to, and liabilities assumed by the-wife for her husband. The evidence shows they were married in the year 1854, and that shortly after her marriage, she loaned her husband seven hundred dollars, and that from August, 1854, to February, 1864, she loaned in all the sum of four thousand six hundred and forty dollars ; of this money, a portion belonged to her before her marriage, the possession and control of which she maintained until she loaned it to her husband ; the remainder of the moneys she claims to have earned and saved in a millinery store and saloon kept by her subsequent to her marriage, with'which her husband had no concern, and in which lie had no interest.

The evidence is satisfactory with respect to her title and ownership of a considerable portion of these moneys, and of the loan .to her husband, and his promise t<? repay. But such as was the result of her savings- from the sale of milk and butter from cows which belonged to or were hired by her husband, is not so clear.

But yet, as the evidence is, that her husband had stated that such earnings received by her should, belong to her, her title to the same by gift may be upheld. The gift was followed by her actual receipt of the moneys, and their reduction to her actual use.

In July, 1873, the defendant caused to be conveyed to his wife certain premises on Eighty-second-street, in the city of Hew York, in payment of these loans made to him by his wife. The conveyance having been made and received for such purposé, the indebtedness from her husband to her for all such loans was canceled. The honesty of that transaction is not brought in question in the pleadings, and cannot properly be made a subject of inquiry in the determination of this action. It must be assumed to be fair and valid.

But conceding it to be so, it disposes of the claim of any existing indebtedness from the husband to the wife, in March, 1873, the time of the execution and delivery of the assignment of the contract, and deed of the premises to Thomas J. Sheridan.

The testimony of Thomas J. Sheridan, on the subject, was as follows:

“ Q. Did he (Terence Sheridan) say to you why he wanted you to buy it (the contract) %
“A. Yes, sir.
“ Q. What did he say ?
“A. He said the party had got an illegal judgment against him.
<|. What else ? '
“ A. And that he wished,—that his wife had given him some money, and he wished to secure her.
“ Q. For that reason he wanted you to buy ?
“A. Yes, sir.”

And yet Mary Sheridan, the wife, testifies that the conveyance of the Eighty second-street property in July, 1872, was made in payment for the loans she had made her husband, the items of which she gave in evidence. It appears, however, by the evidence, that the plaintiff, with James Sweeny, his then partner, heretofore commenced an action to set aside the conveyance of the Eighty-second-street property to the defendant Mary Sheridan, and that said action was discontinued, upon the understanding that the defendant, Mary Sheridan, should execute and deliver to the plaintiffs in that action, a mortgage for the sum of three thousand eight hundred dollars, on the Eighty-second-street property, to secure their claim, and that she made and delivered to them such mortgage.

But the evidence also shows that Mary Sheridan , agreed to execute such mortgage only on the condition that a conveyance should be made to her by Thomas J. Sheridan, of the premises described in the complaint, and herein sought to be reached. And that such conveyance was made to her by Thomas J. Sheridan to secure her on account of her charging her own premises with a mortgage for her husband’s debt.

Under such a state of facts, the defendant Mary Sheridan is entitled to be indemnified against such mortgage, and to have the same paid and satisfied out of the property so conveyed to her by Thomas J. Sheridan.

But the plaintiff is entitled to have the premises described in the complaint sold in pursuance of the judgment of this court, and the residue of the proceeds arising on such sale over and above the amount of the mortgage for three thousand eight hundred dollars on the Eighty-second-street property, to be applied to the satisfaction of the plaintiff’s judgment.

Thomas J. Sheridan was a necessary party to this action. His connection with the facts out of which the .cause of action arises renders his presence as a party proper.

Findings of fact and conclusions of law in accordance with the views herein expressed, to be prepared by the plaintiff’s attorney, and served on defendant’s attorney with a notice of settlement before me of five days.


text:
    BENJAMIN F. BROWN, Plaintiff, v. JAMES S. MERCER, Defendant.

      Trademark.—fraudulent imitation.—Remedies Iry statute.

    When a person, by a combination of elements and symbols, has produced a wrapper to enclose and designate an article manufactured by him, under which it has gone into use, he cannot be interfered with or despoiled of his lawful business, by the imitation of his label by another, who seeks by such imitation to introduce a similar article. Such practices are deceptive, and promote dishonorable competition.
    In order to justify the intervention of a court of equity, it is sufficient that the imitation is so close, that a crafty vendor may palm off on the buyer the article manufactured by the latter, as that of the former.
    It is no answer to an application for an injunction, that in certain particulars, the label of the defendant differs from that of the plaintiff, so long as the imitation in other respects is so close, that the general appearance is the same, and purchasers have been and are likely to be deceived.
    The counterfeiting or imitation of the stamp, wrapper or label of a mechanic or merchant, is punishable by fine and imprisonment, and the offending party is liable to a civil action for damages (New York Stats, at Large, vol. 3, pp. 663, 672; vol. 6, p. 90).
    Before Van Yorst, J., at special term,
    March, 1874.

      Robert II. Pollock, for plaintiff.

      James Clark, for defendant.
   Yan Yorst, J.

The defendant has adopted as a wrapper for his preparation, paper in color similar to that used by the plaintiff for his article. That portion of the wrapper which covers the face of bottle is enclosed in a red border, with a peculiar configuration on its inner edge, and tracery on the surface, similar in all respects to the plaintiff’s wrapper. The defendant has also adopted the circle, which is used by ■ the plaintiff, and which is the conspicuous symbol within the upper part of the border. The printing on the front of the defendant’s wrapper, designating the persons by whom his article may be used, and the object upon which it is to be applied, is the same as is to be found on the plaintiff’s label, and arranged within the same space, and made in the same colored ink. The general effect of the two labels produced on the eye when presented at a short distance, is about the same. A close examination, however, discloses distinct differences.

But the defendant, by the adoption of a label similar in color, size, border, ornamentation, circular symbol, and red colored ink, has so closely imitated the plaintiff’s wrapper, that the careless, or unobservant purchaser may be readily misled. A crafty vendor might readily palm off on an inattentive buyer the defendant’s for the plaintiff’s article.

The evidence shows that persons dealing in the article for sale have been themselves innocently misled. The plaintiff adopted his label in 1869. He is a large manufacturer of the article contained in bottles .enclosed within his wrapper. The article is well known as a preparation for shoe and leather dressing, is largely in use, and its sale increasing. .

The defendant’s preparation is for the same purpose, and put up in bottles of the same size as plaintiff’ s. In 1873, he changed his label, and adopted the one in question, which, in the particulars above men-' tioned, is an imitation of the plaintiff’s wrapper.

A simple inspection and comparison instantly discloses the points of close resemblance. It cannot but be that the designer who prepared' the model or die for the defendant’s label, had before him as a pattern the plaintiff’s label. In no other manner could the similitude have been so accurately produced. One of the plaintiff’s witnesses, a dealer in a similar article, testifies that in a conversation between the defendant and himself, he charged the defendant in substance, with having imitated the plaintiff’s label, which defendant does not appear to have denied. And that, influenced by the defendant’s success, he himself made a similar imitation, and under the new label, the sale of his article was increased. But that he discontinued the use of such label when he learned from others that the plaintiff complained of his conduct. The defendant would have done well, when notified, to have followed the example of the witness. The defendant makes no explanation of the similarity between his and the plaintiff’s label, and assigns no reason therefor. He produces no evidence on the trial. The plaintiff having, by a combination of elements and symbols, produced a wrapper to enclose and designate his article, under which it has gone into use, and is known, should not be interfered with, or despoiled of his lawful business and gains by the imitation of his label by another; who seeks by such imitation to. introduce á similar article. Such practices are deceptive, and have their-origin in,' and promote dishonorable competition.

The plaintiff’s article is largely used in families, is purchased by the old as well as the young. Persons of the former class, by dimness of sight, and thosé of the, latter, through ignorance or-inexperience, are likely to be deceived.

The conduct.of the defendant, by his imitation of the plaintiff’s label, leads to this result, and purchasers have been deceived. The defendant was under no restraint to adopt a label or trade mark in imitation of the plaintiff’s wrapper. The variety of form, design, color, figure, or symbol is endless. And if his article be meritorious, although it may be more expeditious to success to sail under the plaintiff’s colors, yet, in the-end it would be safer and more profitable to adopt his own distinctive marks and symbols.

An inspection of the labels used by the defendant,, before the adoption of the one complained of, shows a gradual but designed approach to the plaintiff’s wrapper, until it has reached the condition of exactness, in the particulars above specified, in the wrapper now in use by him.

It is no answer, that in certain particulars, defendant’s label differs from the plaintiff’s, as long as the imitation in other respects is so apparent, that purchasers have been and are likely to be deceived. Many cases in regard to the law of trademarks have been cited by the counsel on both sides, which have been ■ considered. It is difficult to lay down any general rule by which every case shall be certainly well decided.

The propriety of a decision, in any case, depends • upon its peculiar facts.

But wherever there has been a clear imitation of the trademark, or label of any one, by which he is injured, and the public deceived, equity will give relief. The case of Cook v. Starkweather, 18 Abb. Pr. N. Y. 400, is a case in point. While there was a clear difference in some particulars, the imitation in other respects was close, and the defendant was restrained. Under the laws of Hew York, the counterfeiting or imitation of the stamp, wrapper, or label of a mechanic or merchant is made punishable by fine and imprisonment (Stat. at L. vol. 3, p. 663, 673); and the offending party is also liable to a civil action (vol. 6, p. 90)

There should be judgment for the plaintiff.


author: By the Court.—Speir, J.

text:
    CHARLES C. REED, et al., Plaintiffs and Respondents, v. SAMUEL F. KEESE, et al., Defendants and Appellants.
    Section 13 of the act for the organization of manufacturing and mining corporations (Laws of 1848, p. 54), provides that for the omission to make and file the annual report, the trustees shall be jointly and severally liable for all the debts of the company then existing and, such as shall be contracted before such, report shall be made, <6c. Section 4 of the same act provides that “ all acts of trustees shall be valid and binding as against the company until their successors shall be elected.”

      Held, that trustees of such corporations continue in office after the expiration of their terms, and until their successors are elected, so far at least as to make their acts binding upon the company, and may, therefore, be regarded as trustees, so as to render them liable as such, if,' after the expiration of their term (no successors being elected), they continue to act, but if, at the expiration of his term, a trustee retires from the company, and afterwards performs no official act, and assumes no official authority, he cannot be held liable as trustee under .the act for the omission to make and file a report (Doming Puleston, 33 Supr. Ot. 331; 1 Jones & Spencer).

    A person thus holding over and acting as trustee during and after, the default or omission of the trustees to make and file the required report, is liable for a debt contracted at any time before such report shall be made and filed as provided in the act.
    It seems by the decision of the court of appeals (Miller «.■ White, 50 H. T. 137), that a judgment against the corporation will not be received as evidence of a debt against the corporation in an action brought against the trustees to enforce their personal liability for the debt, included in the judgment.
    Before Sedgwick, Van Vobst, and Speir, J.J.

      Decided April 4, 1874.
    The Bartlett Reversible Sewing Machine Company was organized as a corporation, in March, 1869, under the act of the legislature of this State, entitled “ An act to authorize the formation of corporations for manufacturing, mining, mechanical, or chemical purposes.” The original corporators were Peter V. Husted, Samuel F. Keese and Alexander Studwell, and were named as trustees of the company for the first year. On August 20, 1870, an agreement was made between the corporation and Oscar T. Earle and E. H. Van Dyke, by which the two last named parties became interested in the stock and concerns of the company, and were empowered to carry on its business. On August 81, 1870, the number of trustees was increased to five under the statute, and the said Earle and Van Dyke were added as the new trustees.
    The plaintiffs, as copartners, in August, 1871, sold to the Bartlett Reversible Sewing Machine Co., certain varnishes, japans, &c., to the value of one thousand one hundred and sixty-five dollars and thirteen cents, on a credit of four months, and for which a note was given, signed by Van Dyke for the company, which was not paid at maturity. The company had not, on December 11, when this note became due, filed and published any annual report, as required by law. hior was any such report filed until January 20, 1872, when a report was filed, signed by the defendants Studwell and Keese, as trustees, and duly verified—more than five months after the debt was contracted, and more than one month after the note had become due and payable. On December 16, 1871, a suit was brought against the company by the plaintiffs, to recover the value of the goods, and judgment was recovered for the sum of one thousand three hundred and eighteen dollars.
    The plaintiffs, failing to obtain payment from the company, on July 26, 1872, within one year after the debt was contracted, brought this action against the trustees, to enforce their liability under the statute. The defendants offered no testimony in their behalf. The court dismissed the complaint as to defendant Husted—it appearing he did not continue to act as trustee—but directed a verdict against the defendants Keese and Stud well, against whom judgment was entered, and they appealed.

      Dailey c& Perry, for appellants,—I.
    The complaint makes the basis of the action against the defendants, t-hat a debt was contracted in August, 1871, and became due in December, 1871, and that a report was not filed and published in January, 1871. All the testimony offered was to sustain those allegations, which, if admitted, would not make these defendants liable. On this ground then, with the evidence showing no other laches on the part of the company, the complaint should have been dismissed (See opinion, Comstock, Ch. J., in Boughton v. Otis, 31 N. Y. 361).
    II. The evidence does not show that tlley were trustees during January, 187Í, so that no default ap-' pears against them for failure. The debt herein was contracted in 1871, and for' that year as under the statute a report was filed. No cause of action could accrue against them on this debt until the twenty days after January 1, 1873, and then only on failure to file report, even though they were shown to be trustees when the debt was contracted (Miller v. White, 50 N. Y. 137.) Again, if the defendants, under the testimony, were held to be trustees by having acted as such in signing the certificate of increase, and that held them during the successive year from March, 1870, to March 1871, their time then expired, and the act being voluntary for that purpose only, they cannot be held for a failure to file a report in January, 1871. If a trustee fails to do an official act after the expiration of the term for which he was elected, he cannot be held liable for debts thereafter contracted (See MSS. opinion, Common Pleas, Stevens v. Hastings, Sp. T., and Deming v.
      Puleston, 33 Supr. Ct. 231; 1 Jones & Speneer, citing many cases; Boughton v. Otis, 21 N. Y. 261; The Shaler & Hall Quarry Company v. Bliss, 34 Barb. 309; Oviatt v. Hughes, 41 Id. 541).
    III. There was no attempt made to show that defendants were trustees when the debt was contracted. It was shown that in August, 1870, they acted as such, but from that time to January, 1872, nothing of their connection is shown, nor whether a re-election, if any, was had before or after the contracting of this debt. An implication of a continued act in law does not adjnit of eighteen months vacancy, more especially under a statute requiring yearly elections (General Act, 1848, ch. 40).

      Charles S. Winfield, for respondents.—I.
    The filing of an annual report by this company, in January, 1872 —default having been made in the several years preceding—did not discharge nor affect'the liability of the trustees for ah indebtedness created in 1871, during the existence of such- default. The purpose and wisdom of requiring an annual report is apparent at a glánce. It is to enable a party who is asked to extend credit to the corporation, to refer to the report on file to ascertain he condition of the company, and so judge of the safety and propriety of such dealing. Of course, this purpose would be entirely subverted if a subsequent filing should be held good and effectual (Garrison v. Howe, 17 N. Y. 458). The language of the statute seems to be too clear, to admit of any question or doubt: “If any of said companies shall fail so to do, all the trustees of the company shall be jointly and severally liable for all the debts of the company then existing, and for all that shall be contracted before such report shall be filed.” The Bartlett Reversible Sewing Machine Company made default by not filing an annual report within twenty days after January 1, 1871. The indebtedness to the plaintiffs was contracted in August, 1871, and matured in December of that year. During the whole of that period the default continued. The trustees became thereby liable. “ The liability, when it has once attached, and upon whomsoever it has attached, remains fixed and unalterable. This is plain.” (Comstock, Ch. J., in Boughton v. Otis, 21 N. Y. 363.) A trustee in office at the time a corporation fails to make its annual report, is liable for all the existing debts of the company, and such as may thereafter be contracted until the report is filed (Nimmons v. Tappan, 3 Sweeney, 653). “The meaning of the statute is, that the trustees of a corporation which shall omit to make its annual report, who are in office at the time of such omission, shall be liable for all debts existing at that time, whenever contracted, and shall also be further liable for all debts which may be contracted after such time and until such report is filed. That is the plain letter and intent of- the statute, and is recognized in the following cases : Garrison v. Howe (ubi supra), Shaler & Hall Quarry Co. v. Bliss (ub. sup.), Boughton v. Otis (ub. sup.), and McHarg n. Eastman, 7 Rob. 137” (Nimmons v. Hennion, 3 Sweeney, 663).
   By the Court.—Speir, J.

The suit is brought on the original transaction with the company creating the indebtedness, the failure to pay, the trusteeship of the defendants, default in filing the annual report, and the existence of such default at the time of contracting the indebtedness, as well as at the maturity of the note. In Shaler & Hall Quarry Company v. Bliss, 27 N. Y. 397, Seldem, J., says : “ The true interpretation of the statute, I think, is that three circumstances must concur in point of time to render a trustee liable, viz : the existence of the debt, the existence of the default in making the report, and the trusteeship. Where these concur, the trustee is liable for all debts, if he, was such trustee at the time when the default occurred.

The complaint alleges both the original indebtedness and the recovery of the judgment. ■ Prior to the decision in Miller v. White, 50 N. Y. 137, which was published after the commencement of this action, the question whether an intermediate judgment against the corporation could be used as evidence, and with what effect, was unsettled both in this court and other courts of the State.

The above case has settled for the first time, I believe, that such a judgment was neither prima facie nor conclusive evidence of a debt in an action against trustees, to enforce their individual liability; and hence, evidence of the judgment against the corporation seems to have been excluded on the trial of this case.

I cannot discover, after an attentive examination, that there was any error in the numerous rulings of the learned justice upon the trial, as to the admission and exclusion of the testimony. The sale and delivery of the goods by the plaintiffs to the defendants, were not only clearly shown, but it was proven that the goods were used in the business of the company.

The defendants, moved to dismiss the complaint, on the ground that no proof had been offered that the defendants Studwell, Keese and Husted ever acted as trustees outside of the particular contract presented by the plaintiffs, claiming that it was an acfiqn of the trustees, as such ; and on the ground that it dAd not appear that they ever were re-elected after the yOar expiring March, 1870 ; or that they ever assumed any authority as trustees after that year. The motion was granted, as to Husted—the evidence failing to show that he continued to act as trustee ; and denied, as to Studwell and Keese, on which denial an exception was taken.

The appointment of all the defendants as trustees, in 1869, appears by the filing of the original certificate, and of the continued action on the part of Studwell and Keese, as trustees, during the whole period between the year 1869 and January 20, 1872,' when they filed their report.

By the fourth section of the act, under which the company was incorporated, the office of trustee does not cease with the end of the year for which he was chosen ; but the trustee continues until his successor is elected.

In Deming v. Puleston, 33 Supr. Ct. Rep. 231 (1 Jones & Spencer), this court held that trustees holding over, after the expiration of their terms, (no successors being elected) may be regarded as trustees, so as to render them liable, if after the expiration of their term they continue to act as trustees.

The evidence showing the appointment of all the defendants as trustees, and the continued action, as "such, of the defendants Studwell and Keese, up to January, 1872, was therefore competent for the purpose, and was not contradicted. In Gramson v. Howe, 17 N. Y. 458, Judge Denio clearly states the purpose and wisdom of requiring the annual report. The general object of the law was, beside enforcing the duty of making reports for the benefit of all concerned, to enable parties proposing to deal with the corporation ; to see whether they could do so with safety. If a: subsequent filing should be held good and effectual in discharging the indebtedness, this purpose would be entirely subverted, and the learned judge decides that the debt must have been contracted during a default, or have existed at a time of a subsequent default.

The statute is clear: “If any of said companies shall fail so to do, all the trustees of the company shall be jointly and severally liable for all the debts of the company then existing, and for all that shall be contracted before such report shall be filed.” The liability, when it has once attached, and upon whomsoever it has attached, remains fixed and unalterable.

It was objected that it had not been shown that the defendant, Van Dyke, was authorized by the corporation to purchase goods on credit, and give notes, making the company liable to pay for them. The answer to this is, that it was expressly stipulated by the corporation and trustees, that he and Earle should have the sole control and management of the business; and Van Dyke consulted and advised with them in relation to it. Even if he had no such express authority, the proof is clear that the company had, and used the identical goods. Besides, the note was not paid, and the action proceeds upon the ground of the original transaction of indebtedness, and failure to discharge it. I cannot see that the making of the note, which proved to be valueless in the hands of the plaintiffs,.has .anything’ to do with the question of authority.

The judgment must be affirmed, with costs.

Sedgwick and Van Vorst, JJ., concurred.