author: Daniels, J.:

text:
    JENNY NELSON, Plaintiff, v. JAMES RUSSELL and Others, Defendants.

      JJemainder given by a will — when it vests — when the death intended is a death after, and not before, the testator’s decease.

    Upon the submission of a controversy witliout action it appeared that the right of the defendants to convey certain premises depended upon a devise contained in a will, by which the testator gave to his two daughters, for life, two houses, and from and after their death, and the death of each, he gave one house to one James Russell, and the other to James and Ellen Barry, equally. One daughter having died subsequent to the date of the testator’s death, the remaindermen and the living daughter contracted to sell the houses to one Nelson, who, however, refused to accept their conveyance.

      Held, that the remaindermen and surviving daughter could pot give a good title to the premises.
    That, in the absence of any language in the will indicating the purpose of the testator that said remainders should vest at his decease, the language used must be taken literally, i. e., to mean that the remainders should vest only upon the death of both of said daughters, whenever the same should occur, and must not he taken to mean their death during the testator’s lifetime.
    The rule of construction that where a present devise is unqualifiedly made depending upon the decease of the devisee, the decease contemplated is to take place in the lifetime of the testator, is not favored in the law, and courts will lay hold of slight circumstances to avoid it.

      Submission of a controversy upon an agreed state of facts, under section 1279 of the Code of Civil Procedure, between Jenny Nelson, plaintiff, and James Russell, Bridget Russell, James Barry and Ellen Barry, defendants.
    The question presented related to the title to certain real estate which was devised by the will of David Barry, who died May 22, 1883, seized thereof. Catharine Barry) one of the devisees, to whom a life estate in said real property was left by the will, died in September, 1890.

      Drachman ds Nelson, for the plaintiff.

      Thomas F. Magner, for the defendants.
   Daniels, J.:

The defendants on the 7th of March, 1890, entered into an agreement with the plaintiff, by which they agreed to convey to her two parcels of land, with the buildings and improvements thereon, situated on the north side of Cherry street, known as Nos. 356 and 358, in the city of New York, for the contract-price of $15,250. They tendered to the plaintiff a deed in form conveying the premises, which she refused to accept for the reason that the title was regarded as defective. By the terms of the contract she became bound to pay the sum of $500 in cash on its execution, and that sum was, in fact, paid. She also paid the sum of $100 for commissions on the purchase and examination of the title to the property. And the claim on her part is that she is entitled to recover these sums of money from the vendors in the contract, together with the interest thereon.

They have derived whatever title they may have in the juoperty proposed to be conveyed, under the will of David Barry. And whether this will has vested them with the title to these two parcels of land, is the point upon which the rights of the parties have been made to depend. By this will the testator, after having provided for the payment of his debts and a legacy of $500, gave and devised unto his daughter Ellen Magner all his property situated in the city of Brooklyn for and during the term of her natural life. And afteiher decease he gave and bequeathed the property to her surviving children, to be divided equally between them and their heirs, share ánd sliare alike, the child or children of the deceased child taking the share which his, her or their parents would have taken if living. This devise was followed by the devise of the property whose title is now in controversy. It was made by the third subdivision of the testator’s will. And this subdivision is in the following language :

“ I give and devise unto my beloved daughters, Catharine Barry and Bridget Russell, all my real property in the city of New York, and known as Nos. 356 and 358 Cherry street, and the rents, issues and profits thereof for and during the term of their natural lives, and from and after the decease of my said daughters, Catherine Barry and Bridget Russell, and each of them, I give and bequeath the said premises No. 356 Cherry street, to James Russell, the son of my said daughter Bridget Russell, and upon the like events I give and bequeath the said premises No. 358 Cherry street to James Barry and Ellen Barry, the children of my son, Michael Barry, now deceased, to be divided equally between them and their heirs, sliare and share alike, the child or children of a deceased child taking the share which his, her or their parent would have taken if living.”

By the next paragraph of the will he gave the rest, residue and remainder of his estate to his daughter Catherine, subject to the payment of the legacy mentioned of $500. There is no provision, therefore, in the will affecting the title to this real estate except the directions contained in the third paragraph, which has already been extracted. And the question arises whether, under that paragraph of the will, the defendants in this case were in a position in which they could convey to the plaintiff the title to these lots. Catherine Barry, one of the devisees for life, is deceased. But Bridget Russell, the other of the testator’s daughters, is still living. And so are James Barry and Ellen Barry, the children of the son of the testator, Michael Barry. If the remainder created by this part of the will vested in James Russell and James and Ellen Barry at the time of the decease of the testator, then a legal title to the property was capable of being conveyed by the deed tendered to the plaintiff. But if the remainders in these parcels of land will not vest until the ■decease of the life tenants, then it is conceded that such a title would not be conveyed by the deed as the plaintiff was entitled to receive under the contract.

There was no devise of these remainders by the will expressly or impliedly required to take effect upon the decease of the testator. But the devise which was made was from and after the decease of the testator’s two daughters, Catherine Barry and Bridget Bussell, who were made the life tenants of the property. Then, for the first time, was any interest or estate given to these persons in remainder in these parcels of land. But it has been insisted on behalf of the defendants, notwithstanding this language creating the estates in remainder only from and after the decease of the testator’s daughters, that these remainders vested in their children at the decease of the testator. And the case of Livingston v. Greene (52 N. Y., 118) is relied upon as requiring that construction to be given to this portion of the testator’s wall. And to a certain extent, at least, it sustains this position. But there the will contained other provisions indicating the purpose of the testator to be that the estate created, and then in controversy, should vest at the time of the decease of the testator. But' the present case contains no other or further provision than the devise from and after the decease of the daughters, the life tenants. That is the event upon which the devise was made, and intended to take effect. In this respect a very clear distinction also exists between this devise and the will which was in controversy in Freeman v. Coit (96 N. Y., 63). And this distinguishing circumstance appears to require a different construction to be placed upon the will from that which is supported by these two authorities. The rule undoubtedly is, where a present devise is unqualifiedly made by the testator depending upon the decease of the devisee, that the decease contemplated is to take place in the lifetime of the testator. But in Vanderzee v. Slingerland (103 N. Y., 47), it was said that this rule “ applies only where the context of the will is silent, and affords no indication of intention other than that disclosed by words of absolute gift, followed by a gift over in case of death, or of death without issue, or other specified event.” (Id., 55, 56.)

The present case is not within this rule, for no gift or devise of the property has been made in remainder other than from and after the decease of the testator’s daughters. And, in the case just referred to, it was added, that “ The tendency is to lay hold of slight circumstances in the will to vary the construction, and to give effect to the language according to its natural import.” (Id., 56.) And the manner in winch this devise has been made is a circumstance excluding this case from the general principle which has already been mentioned. Similar language was considered and construed in Delafield v. Shipman (103 N. Y., 463). There the testator directed, upon the depease of his wife, that his executors and trustees should make an equal division of his whole estate, not specifically otherwise disposed of, among his children then living. And this was held to be sufficient to exclude the case from the application of the principle already stated, which would otherwise have been accepted as controlling. The same conclusions substantially were maintained in Matter of New York, Lackawanna and Western Railway Company (105 N. Y., 89), where the language was still broader than that contained in this paragraph of the .testator’s will. And in Shipman v. Rollins (98 N. Y., 311), the vesting of the remainder contingently given was held to be postponed to the time of the decease of the life tenant. The language there, in its import and effect, was very similar - to that contained in this will. It was “ then,” upon the decease of the life tenant, that the testator directed the division of his property to be made, while here the remainder is to take effect from and after the decease of the daughters. And Nellis v. Nellis (99 N. Y., 505), and Buel v. Southwick (70 id., 581), are authorities proceeding in the same direction. And so, also, is the case of Matter of Maben (32 N. Y. St. Rep., 790). Still more similar language was considered in Plymouth Society, etc., v. Hepburn (57 Hun, 161), where it was concluded that a bequest made in this manner did not vest until the time of the decease of the persons upon whose lives its disposition depended. And Camp v. Cronkright (13 N. Y. Supp., 307), is directly to the same effect.

A large number of other authorities have been cited in the case which are not required to be considered, for these are decisive of the question at issue between these parties; and they require this paragraph of the testator’s will to be so construed as to withhold the vesting of the remainder in these parcels of land to the time of the decease of the testator’s daughters, to whom the life estates were given, and then only to become vested in the sun and daughters .of the life tenants by their surviving those individualsand in case either shall then be deceased the remainder will vest in the children of tlie deceased child; or if there be no such child or children, then, by the residuary clause of the will, the estate must pass to the testator’s daughter therein mentioned; and the result, therefore, is that the deed which was tendered to the plaintiff would not convey to'her such a title as she was entitled to receive by way of performing the contract.

Judgment should accordingly be directed in her favor for the recovery of the sum of $500 paid by her upon the contract, with interest thereon, and the additional sum of $ 100 paid for commissions, with interest from the 7th of March, 1891, and for the costs of this proceeding.

Lambert, J., concurred.

Judgment for plaintiff as directed in opinion, with costs of this proceeding.


source: Caselaw Access Project

license: Public Domain

text:
    HENRY KARST, Respondent, v. GEORGE A. GANE, THOMAS F. GANE and ROBERT DINWIDDIE, Appellants, Impleaded with Others.

      Chattel mortgages — chapter 279, Zorns of 1833, requiring them to be filed — the statute applies to all creditors of the mortgagor who became such before the filing — an indorser who has not been charged is not a “ creditor.”

    ■Chapter 279 of the Laws of 1883 provides that a chattel mortgage not accompanied by an immediate delivery, and followed by an actual and continued change of possession of the things mortgaged, shall be absolutely void, as against the creditors of the mortgagor, unless the mortgage, or a true copy thereof, shall be filed as required by said act.

      ZIeld, that the intent of the statute was to include in its benefits the existing creditors of the mortgagor generally, and all who were such when the mortgage was filed.
    'That it included any person whose debt was created either before or after the chattel mortgage was given, but before it was filed.
    That an indorser, whose liability had not become fixed by the maturity and dishonor of the note to which he was a party, was not a “creditor” of the mortgagor within the meaning of said act.
    Appeals by the defendants, George A. Gane and Thomas E. Gane, and by the defendant Robert Dinwiddie, from a judgment, entered in the office of the clerk of the city and county of New York on the 6th day of January, 1891, after a trial by the court at the New York Special Term, adjudging certain chattel mortgages to be void to the extent of the plaintiff’s judgments; that the liens of said mortgages be deferred to the execution liens obtained under said judgments; that the defendants be restrained from enforcing their mortgages until the plaintiff’s judgments were satisfied, and that the property levied upon under said executions was subject to the executions issued upon said judgments, should be applied thereon and be sold thereunder.
    On September 25, 1889, Barr and Miller gave to the defendant Dinwiddie a chattel mortgage for $3,000, payable on demand, covering the property levied on, and on the same day they gave a similar mortgage to the defendants Gane for $2,500, subject to the mortgage to Dinwiddie. Barr and Miller retained possession of the property, and were in possession when the levy in question was made.
    The debts for which the eight promissory notes made by Barr and Miller, payable to the order of H. Miller, and by him assigned to the plaintiff, were given were all in existence prior to September 25,1889.
    The notes made by Belford, Clark & Co., to the order of Barr and Miller, five in number, were for value, and before their maturity, and before said chattel mortgages were executed, were assigned to one John Karst, and by him were transferred to the plaintiff. Two of said notes became due before and three after said chattel mortgages were filed..
    The remaining facts are stated in the opinion.

      Samuel J. Crooks, for the appellants.

      Fred W. JEEinriehs, for the respondent.
   Daniels, J.:

The appeal has been brought upon the judgment-roll alone. By the judgment, executions, which had been issued upon judgments in favor of the-plaintiff and levied upon the personal property of the debtors, were secured a preference over two chattel mortgages executed by the judgment-debtors. These mortgages were made on the 25th of September, 1889, but were not filed until the seventh day of the following month of November. Prior to the execution of the chattel mortgages, Edward Barr and Herman C. Miller, the mortgagors, made eight promissory notes, payable to the order of H. Miller, who assigned and transferred them to the jfiaintiff. Five of these notes matured' prior to the filing of either of the chattel mortgages, one matured on the same day, and the other two after the filing of the mortgages. And these notes were included in two judgments recovered by the plaintiff, upon which executions were issued and levied on the property described in the chattel mortgages. The plaintiff also recovered three judgments upon notes made, prior to the execution of the mortgages, by Belford, Clark & Co., payable to the order of the defendants, Edward Barr and Herman C. Miller, and by them indorsed to John Karst, and by him assigned and transferred to the plaintiff. Two of these indorsed notes became due before the filing of the mortgages, and three of them afterwards. And executions were issued also upon these judgments and levied upon the property described in and incumbered by the mortgages.

The court held at the trial that these mortgages were void as against all the executions, because of the failure of the mortgagees to file them, as that has been required by the statute. Upon this subject it has been provided that every mortgage, or conveyance intended to operate as a mortgage, of goods and chattels, which shall not be accompanied by an immediate delivery and followed by an actual and continued change of possession of the things mortgaged, shall be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers and mortgagees in good faith, unless the mortgage, or a true copy thereof, shall be filed as directed in the succeeding section of the act. (3 B. S. [6th ed.], 143, § 9.) But it was objected, on behalf of the mortgagees, that this section of the statute was designed only for the protection of persons who became creditors of the mortgagors after the execution of the mortgages and prior to the time when they were filed. But the statute clearly has proceeded upon no such distinction, for it has declared the mortgage withheld from the files to be absolutely void as against the creditors of the mortgagor. Not the creditors' who should become such between the time of the execution and the filing of the mortgage, but the creditors generally, including all persons sustaining that relation to the mortgagor during the time the mortgage is withheld from the files. If it had been intended to restrict it to those persons who should become creditors after the execution and before the filing of the mortgage, language to that effect might reasonably be expected to be found in the section. And its entire absence is a decisive circumstance against the construction which the objection taken requires to be given to the section. The legislature were actuated by no such design, as the intention appears in the law. But the design and intent was to render the mortgage or mortgages absolutely void as against all persons who should be ■creditors of the mortgagor during the time, whether their debts were created before the execution of the mortgage or after-.wards. And that is the effect which has been given to the statute when this view of it has been brought before the courts for consideration. Thompson v. Van Vechten (27 N. Y., 568) contains .a concession that this construction should be given to the statute. And it was acted upon and followed in that form in Fraser v. Gilbert (11 Hun, 634), and very decidedly in Clark v. Gilbert (10 Daly, 316). There the mortgage was made on the 1st of April, 1880, and the debt included in the judgment upon which the creditor’s action was brought, was for meats sirpplied the mortgagor from the 31st of May, 1877, to the 30th of April, 1880, and the judgment was recovered for the balance the 21st of December, 1880) while the mortgage was not filed until March 17, 1881, and it was .held that this mortgage was void as against this creditor. The decision in this manner made, is a direct authority in favor of the plaintiff in the present action so far as the judgments of the creditor were recovered upon notes made by the mortgagors, or upon indorsements which matured prior to the time of the filing of the mortgages. And the principle appears to have generally secured the approval of the court in Keller v. Paine (107 N. Y., 83). There it was declared in very general terms that the omission to file the mortgage would render it void as against existing creditors. These cases conform to and carry out the language of the statute, and so far sustain the judgment from which the appeal has been taken as it proceeds upon notes made by the mortgagors, or indorsements upon which their liability was fixed prior to the time when the mortgages were filed on the 7th of November, 1889. And the plaintiffs, having issued executions upon such judgments, under which levies were made upon the property incumbered by the mortgages, were entitled to ■commence and maintain this action to remove them as obstructions from tlie executions as they to that extent stood in their way. (Steffin v. Steffin, 4 Civil Pro. Rep., 179; McElwain v. Willis, 9 Wend., 549.)

But as to the indorsements upon which the liability of the judgment-debtors had not become fixed at the time when the mortgages were filed, a different principle is required to be applied. The case is not one where an actual intent to defraud existed in the disposition of property, which might very well be held to include the indorsee of commercial paper before an absolute liability became fixed, but it is that of a legislative principle applied to declare and define the effect of the omission to file the mortgages, as that was provided for and required by another section of the statute. The neglect to file would not necessarily involve bad faith, or a fraudulent intent, but it was an omission to comply with the directions contained in the statute. And for that omission the law declared the property included in the mortgage to be liable to the outstanding demands of other creditors. But an indorsee of commercial paper, where the liability of the indorsers has not become fixed, is not, in the sense in which this term “creditor” has been used in this statute, a creditor of the mortgagor. Por until the maker of the paper is in default no obligation is created by it against the indorser. The utmost effect of his contract is, that he will pay the debt mentioned in the paper in case the maker fails to pay when it shall mature, and a proper demand shall be made upon him for payment, and notice of such demand and failure shall be given to the indorser. And it is only from the time when the paper shall become dishonored, and the liability of the indorser fixed in this manner, that he can, within the significance of this term as it is -contained in this section of the statute, be held to be a creditor of the mortgagor. As to this term “ creditor ” it was, by the Supreme Court, considered to include the case of a guarantor prior to the time of a default under its terms in Jackson v. Seward (5 Cowen, 67). That was a case where the judgment debtor had conveyed his property by what was alleged to have been a voluntary conveyance. Prior to the conveyance the grantor had entered into a guarantee that a certain judgment by him assigned was collectible. But after the conveyance executions were issued upon the judgment, which failed to realize the amount recovered by it. And for that reason a judgment for the deficiency was finally recovered against the grantor in the conveyance, and an action brought by the creditor to set aside the deed as a voluntary conveyance. In the Supreme Court it was considered that this guarantee invested the party in whose favor it was created with the rights of a creditor prior to the delivery of the deed. And, in the course of the opinion in that court, it was said by the judge delivering it, that “ the question of creditor, or not, cannot turn on the ground of contingent liability when considering this act. If it should, all indorsers- and sureties would be deprived of its protection.” (Id., 71.) This-proceeded very much upon the authority of the case of Jackson v. Myers (18 Johns., 425.) But the judgment in that case was recovered for a wrong, and by its recovery established the existence of the claim made by the plaintiff at the time when the wrong itself was perpetrated. While no such retroactive effect can result from the dishonored indorsement of commercial paper, but the liability of the indorser is created then, and not prior to that time. ' The case already referred to was appealed, after the decision made by the Supreme Court, to the Court of Errors. And it was there held, as one of the grounds for the reversal of the judgment, that the party to -whom the guarantee was delivered was not a creditor of the grantor in the deed at the time when it was made and delivered, but that he first became so when it turned out that the judgment could not be wholly collected by the executions and the sales of property made to-satisfy it. (Seward v. Jackson, 8 Cowen, 406.)

And that certainly is an authority directly supporting the position that an indorsee under a statute of this description does not become a creditor of the indorsers until the paper indorsed is dishonored by the maker. It was conceded there, as it has already been suggested,, that where an actual intent to defraud existed, a different principle could well be applied. But neither in that case nor in the present was that intent proved to be present as an element in the transaction. So far, therefore, as this judgment has proceeded upon the notes indorsed by the judgment-debtors, one of which became due on the twentieth of November, another on the 17th of December, 1889, and another on the 20th of December, 1889, it has been erroneously directed. But as to the residue of the judgments the right of the plaintiff to maintain this action is well sustained by the statute and the authorities which have already been referred to.

The judgment, consequently, should be reversed and a new trial, ordered, with costs to the defendants to abide the event, unless, within twenty days after notice of this decision, the plaintiff stipulates to deduct the amount of these notes, with the interest upon them, from the judgment which has been recovered. And in case of the service of such a stipulation, then the judgment, as modified, should be affirmed, without costs to either party.

Lambert, J., concurred.

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


text:
    WILLIAM SPERB, Jr., Respondent, v. THE METROPOLITAN ELEVATED RAILWAY COMPANY and Another, Appellants.

      Basement — elevated railways in New Yoi'k— light and air — when prospective-damages for smoke, cinders and gases are not allowable — rights of action reserved’ by a grantor of the premises.

    An owner of premised in the city of New V ork brought an action against th e elevated railway companies of that city asking for an injunction to restrain their operation, for the recovery of damages for past trespasses and for prospective- damages.
    A referee, before whom the action was tried, awarded to the plaintiff, among other things, for his easement of light and air a fixed sum, and included therein, as an element of compensation, the loss to result from the future passage of trains with the smoke, cinders and obnoxious gases to be discharged by their engines, and refused to hold that the defendants were required to pay no more in this regard than for the obstruction occasioned by the structure of said elevated railways

      Held, that such refusal was erroneous.
    That such smoke, cinders and obnoxious gases were incidental injuries, produced by the running of the trains, and were not proper items in determining the compensation to be made for the obstruction of light and air.
    The deed to the plaintiff reserved to his grantor all rights arising out of any and all injury done to said premises up to the time of the delivery of said deed, and all damages for such injury, and the referee found as a fact that all damages-to the fee by reason of past trespasses were incurred prior to plaintiff’s purchase.

      Held, that if any compensation was due under this head it was due to his grantor,, and not the plaintiff.

      Appeal by the defendants, the Metropolitan Elevated Railway ■Company and the Manhattan Railway Company, from a judgment, •entered, after a trial before a referee, in the office of the clerk of the •city and county of New York on the 12th day of February, 1891, awarding the plaintiff $3,000 as damages, and also granting an injunction restraining the operation of the defendants’ railway in front of the plaintiff’s premises, unless the defendants should pay the plaintiff $G,000 and take a conveyance of his easement of light and air in, .and access to, said premises.
    The action was brought by an owner of' certain premises in the •city of New York to recover damages, and for an injunction to restrain the' operation of an elevated railroad.

      JuUen T. Davies and Samuel Blythe Rogers, for the appellants.

      Edwin M. Felt, for the respondent.
   Daniels, J.:

The plaintiff became the owner of premises situated upon the northerly side of Fifty-third street, 300 feet easterly from the northeasterly corner of Seventh avenue, on the 22d of October, 1884. The elevated railway of the Metropolitan Company had been erected and was in operation in front of these premises in Fifty-third street I .at and prior, to the time of his purchase. And it continued to be I maintained and operated until the 18th of Juné, 1887, when this m action for damages, and for an injunction restraining the operation 1 and maintenance of the railway, was commenced by the plaintiff. 9 Upon the trial before the referee evidence was given tending to prove the facts to be that the basement and first story of the premises were injuriously affected by the elevated railway structure and the passage of the trains upon it, and by the smoke, cinders, dust and noise occasioned by those trains. And for that the referee concluded the plaintiff to be entitled to recover the sum of $3,000. And there seems to be no substantial ground for holding that the referee erred in adopting this conclusion.

But he further found that the premises had been reduced in value by the sum of $6,000 by the taking and appropriation of the easement of light and air by the defendants’ structure, and its use and operation as a railway for the passage of railway trains propelled by •steam locomotives. And that this amount should be paid by the defendants to the plaintiff upon the execution of a conveyance-by him conveying to the defendants the right to use, appropriate- and obstruct these easements in that manner.

The referee did not decide that, for the payment to be made as-the consideration of the acquirement of the title, the plaintiff was entitled to be remunerated for the noise created by the trains'. That was restricted to the damages which it was held the plaintiff was entitled to recover. And under the authorities defining the rights of adjacent owners against these elevated railway structures, that appears to have been a proper item of damages. But the referee was requested to hold and decide that, for the acquisition of the right to use and appropriate these easements in the street in front of the plaintiff’s premises, the defendants were required to pay no more than for the obstruction occasioned by the structure itself upon which the railway was maintained, and that all other incidental injuries to the value of the premises should be excluded. ' The referee overruled this position, and the defendants excepted to the decision to that extent made. A nd he finally decided that the plaintiff was entitled to recover for the conveyance of these easements, so far as they were used, appropriated and affected by the structure and the trains, the sum fixed by him as the compensation. And he included, as a part of the subjects to be compensated by this sum of money, the future passage of the trains with the smoke, cinders and obnoxious gases found to be produced and discharged by the engines used upon the railway. And to that conclusion exception was taken on the part of the defendants.

Whether these items should enter into the amount to be paid by the railway company for the easements in this manner interfered with and obstructed has not been decided or determined by any finally controlling authority. But it has been held in the case of Fobes v. Rome, Watertown and Ogdensburg Railroad Company (121 N. Y., 505), upon a full consideration of the decisions affecting these elevated railway structures and their use in the city of New York, that the adjacent owner of property fronting upon a street, who has no title to the land appropriated to the street, has no right of action against a railway company whose railway has been legally authorized and operated over the surface of the street itself. The effect of the decision, substantially, is that where the adjacent owner has no title to the land over which the railway is constructed, he can recover no damages for the effect produced upon the light or air in the operation of the trains passing along the railway structure on the surface .of the street, or for its contamination by means of the smoke, cinders •or gases discharged by the locomotive. This subject was also considered by this court in Matter of New York Elevated Railroad Company (36 Hun, 427). And it was there held that inasmuch as .a railway through a public street was a lawful structure when it was •constructed, maintained and operated under legal authority, that the •owner of adjacent premises, having no title whatever to the land in the street, could recover no compensation for the incidental injury ■occasioned to his premises by that use of the street. That was con.sidered to be the effect of the decision of the Court of Appeals in-the case of Story, and of the other decisions made by that and other ■tribunals concerning the maintenance and operation of steam railways upon the surface of public streets. In Lahr v. Metropolitan, etc.,Company (104 N. Y., 268), the rights and liabilities of the .parties were considered, under the decision in the Story case, so far .as the items of damages proper to be allowed, had been compensated for by the recovery, leaving, however, this other question entirely -open for further consideration. And the same is true of the decision made in Drucker v. Manhattan Railroad Company (106 N. Y., 157). And Abendroth v Manhattan Railroad Company (122 id., 1), proceeded upon the adjustment of the same subject of damages. And so, also, did the case of Kane v. New York Elevated Railroad Company (125 id., 164). But in the decision of this last case it was said, in the course of the opinion of Andrews, J., that: The court allowed the jury to consider the noise created by the trains of the defendants as an element of damage. If the defendant liad the lawful right to operate its trains in the street, such inconvenience as might result to the plaintiff -in the enjoyment of his property from the ordinary and usual operation of the defendant’s road would not, in the absence of negligence on its part, furnish a •ground of action.” (Id., 186.) Which seems to confirm the view that in acquiring the right to maintain the structure in the street the railway companies will not be bound to make compensation for ■the incidental injuries produced by the mere running of the trains ■upon the elevated railway structure. And that compensation for the future discharge of smoke, cinders and noxious gases cannot be included as items for compensation to be made for the obstruction of light and air, in the acquisition of the right to maintain the elevated structure and the operation of railway trains upon it. And that the referee, therefore, errred in including these subjects as objects of compensation to be paid for in the acquirement of the title to the obstruction of these easements of light and air.

Another difficulty, not apparently reconcilable with the conclusions of the referee, arises under his twenty-fifth finding of fact, by which he found that “ No damages have been caused to the fee value of the premises in question from October 22,1884, to the present time by the existence and operation of said railroad, but all of such damages were incurred prior to the plaintiff’s purchase.” And that indicates that the plaintiff himself sustained no depreciation whatever in the value of the premises themselves after he had acquired his title. And if he did not, then there seems to have been no ground upon .which he could claim compensation for even this obstruction of the light and air from his premises. For by the deed which was made to and accepted by him, there was a clause saving and reserving from the hereby granted premises all rights, claims, actions, causes of action and dioses in action for any and all injury done to said property, up to the time of delivery of those presents, and for any and all damages therefor, suffered by their owner,” which, as there had been no other cause of in jury or damage to these premises made to appear, must have been intended to include those resulting from the erection and operation of this elevated railway. And if, as the referee has found by this finding, that no -damages have been caused to the fee value of the premises after the execution and delivery of this deed to the plaintiff, the right to claim compensation for the reduction of their value by means of the railway and the trains passing over it appears to have been reserved to the grantor in the deed.

For these reasons the judgment seems to have been erroneously recovered, and it should be reversed and a new trial ordered before another referee, with costs to the defendants to abide the result.

Lambert, J., concurred.

Judgment reversed and new trial ordered before another referee, with costs to the defendants to abide the result.


author: Yan Brunt, P. J.:

text:
    In the Matter of the Estate of CORNELIA M. STEWART. (Appeal of CHARLES J. CLINCH.)

      Collateral inheritance tax — chap. 713, LawsofV&Sl— an appraisal must be as of the death of the testator — mere possibilities a/re not subject to tax — interest upon the tax after eighteen months— a contest as to the probate of a will reduces the rate of interest to six per cent.

    In 1886 Cornelia M. Stewart died, leaving a will, which was duly proved and admitted to probate. By a codicil thereto she gave certain property to one of her executors with power to him, as trustee, in his discretion, to endow a seminary, and also certain other buildings and institutions connected with a cathedral. It was further provided that said trustee might distribute so much of the fund in question as in his judgment was not necessary for such purposes, among certain legatees, nineteen in number, named in the will, and in such proportions as he saw fit.
    In April, 1887, an appraiser was appointed to fix, for the purposes of the collateral inheritance tax, the clear market-value of the property which passed by said residuary clause. In October, 1887, one of the next of kin began a proceeding to contest the will, which proceeding was not dismissed until January 16, 1890, upon which day the said trustee executed his power of appointment in favor of ton only of said legatees.
    In February, 1890, the appraiser reported that the shares of the said ten legatees were subject to said tax as prescribed by chapter 713, Laws of 1887.

      Held, that such report was erroneous.
    That the language of said statute, as shown by the second, fourth and thirteenth sections thereof, clearly indicated that such appraisal should take place immediately after the death of the decedent, and be based upon the market-value of the property at that time.
    That the tax thereon should be levied and become payable immediately, and that there was no authority under the statute to postpone such appraisal until a contingency happened by which the value of the property or estate might be ascertained.
    That, as by the will of the testatrix the property passed first to the trustee, and as it depended on his action whether anything should ever come to the persons now sought to be taxed, and as, until his exercise of the power of appointment, it could not be ascertained rvliether any portion of said property would ever come within the scope of said act, there was, at the time of the death of the testatrix, no sufficient basis for the tax.
    That subsequent events by which uncertainties became certain could not be appealed to in order to determine the question.
    That the executors were not, by reason of the pendency of proceedings for a revocation of the probate of a will, relieved from paying interest upon the amount of the collateral inheritance tax.

      That interest upon said tax began to run at the end of eighteen months after the death of the testatrix, the only effect of the contest as to the revocation of probate being, under section 5 of said act, to reduce the rate of interest from ten per cent to six per cent.
    Appeal by Henry Hilton and Charles J. Clinch, as executors, etc.,, of Cornelia M. Stewart, deceased, and by Charles J. Clinch, individually, from an order, entered in the office of the surrogate of the-county of New York on the 23d day of July, 1890, adjudging that a tax of $74,914.42, imposed upon said Charles J. Clinch, for property received directly under the will of Cornelia M. Stewart, should bear interest from April 25, 1888; and further adjudging that the interest which the said Clinch received by transfer from the trustee, under a power of appointment contained in the will of said Cornelia M. Stewart, deceased, was liable to a tax of $12,427; and also affirming so much of an order, entered in said office on the 7th day of May, 1890, which assessed and fixed said tax, as was appealed from by the said executors and the said Clinch.
    Also an appeal by James C. Smith, the executor of the last will and testament of Sarah N. Smith, deceased, from an order, entered in the office of the surrogate of the county of New York July 23, 1890, adjudging that the interest of Sarah N. Smith was liable to a tax of $12,427, and affirming so much of the order of May 7, 1890, as is appealed from by said James C. Smith, executor,, as aforesaid.

      P. H. Bussell and Jabish Holmes, Jr., for Henry Hilton and Charles J. Clinch, appellants.

      I. H. Maynard, for the Comptroller of the City of New York, respondent.
   Yan Brunt, P. J.:

Cornelia M. Stewart died on the 25th of October, 1886, leaving a will and four codicils, which were duly admitted to probate by the surrogate of the county of New York on the 13th of November,. 1886, upon which day Henry Hilton and Charles J. Clinch qualified as executors.

The questions arising upon this appeal are presented by the last codicil to the will. By this codicil, which revoked certain of the trust powers which had been conferred upon the executor Hilton by the previous codicils, the said trustee was given the power to endow a seminary of learning for women in connection with the Cathedral of the Incarnation of the Diocese of Long Island, theretofore mentioned in said will and codicils, and also to endow such •other buildings and institutions connected with said cathedral as he ■should deem necessary or proper.

The codicil then provided, as to the property not necessary in the judgment of the trustees for any of these purposes, that he should have the power to distribute the same among such of the legatees mentioned m the will, and in such proportions as he saw fit. The legatees amongst whom this discretionary power of appointment might be exercised were nineteen in number, consisting of half-sisters, nephews and nieces, and grand-nephews and nieces. On the 25th of April, 1887, the surrogate, upon motion of the executors, assessed and fixed the collateral inheritance tax upon the legacies given by the will; and on like motion appointed an appraiser to appraise, for the purposes of said tax, the clear market-value at the death of the decedent of the property which passed by the residuary clause of the will; and further provided that he report the amount of said residuary estáte of said deceased subject to the said tax; the names of the different parties whose shares were subject thereto; the amount of their respective shares and the amount of the tax for which they were respectively liable. On the 28th of October, 1887, one of the next of kin and heirs-at-law filed her petition to revoke the probate of said will and codicils, and it was not until January 16,1890, that a decree was entered dismissing said proceeding On the 16th of January, 1890, Hilton executed'the trust and power of appointment imposed on him by the will. After endowing the cathedral with the sum of $500,000 and certain lands at Garden City, he exercised the discretionary power of appointment by transferring to ten of the nineteen legatees the remainder of the estate in the following proportions: One-tenth to Charles J. Clinch, the nephew of the deceased; one-tenth to Sarah N. Smith, a niece of the deceased; three-fifths to Anna and Emma Clinch, half-sisters, and one-thirtieth to each of six nephews and nieces.

On the 19tli of February, 1890, the appraiser filed his report, by ■which he found that the value of the one-tenth received by Charles J. Clinch under the power of appointment was $248,540.16, and that it was subject to a. tax of $12,427. The appraiser also reported that the one-fourth received by Clinch directly under the will was subject to a tax of $74,942.14, and interest was charged upon this latter amount after the expiration of the eighteen months allowed by the statute of 1887 for the payment of the tax without interest. The questions presented on this appeal are:

First. Whether the amount received by Charles J. Clinch under the power of appointment is subject to the collateral inheritance tax; and,

Second. The executors being prevented by the contest in respect of the will from paying the tax upon the legacies given by the will, whether interest should be charged, such contest having been initiated prior to the expiration of the eighteen months allowed by statute.

Upon an examination of the statute we are of opinion that the amount received by Charles J. Clinch under the power of appointment is not subject to the collateral tax, and this conclusion, it seems to us, necessarily arises from a consideration of the language of the statute.

It should be borne in mind that it is the established law of this State .that this tax being a special, and not a general, tax, a citizen cannot be subjected to it without the clear warrant of law. (Matter of Enston, 113 N. Y., 174.)

The substance of the first section of the statute, as applicable to this case, is, that all property which shall pass by will from any person who may die seized or possessed of the same while a resident of this State to any person in trust or otherwise, or by reason whereof any person shall become beneficially entitled in possession or expectancy to any property or to the income thereof, other than to and for the use of mothers, fathers, brothers or sisters, etc., shall be and is subject to a tax upon the clear mai'lcet-value of such property. The statute, however, exempts estates which may be valued at less than $500 from the payment of such tax. The second section sets forth the method by which the amount of the tax is to be ascertained, and provides as follows: “ When any grant, gift, legacy, or succession upon which a tax is imposed by section first of this act, shall be an estate, income or interest for a term of years or for life, or determinable upon any future or contingent event, or shall be a remainder, reversion or other expectancy, real or personal, the entire property or fund by which such estate, income or interest is supported, or of which it is a part, shall be appraised immediately after the death of the decedent, at what was the fair and clear market-value thereof at the time of the death of the decedent in the manner thereinafter provided, and the surrogate shall thereupon assess and determine the value of the estate, income or interest subject to said tax in the manner recorded in section thirteen of this act, and the tax prescribed by this act shall be immediately due and payable to the treasurer of the proper county, and in the city and county of New York to the comptroller thereof, and together with the interest thereon shall be and remain a lien upon said property until the same is paid.

Section 13 provides that in order to fix the value of the property of persons whose estate shall be subject to the payment of said tax, the surrogate on the application of any interested party, or upon his own motion, shall appoint some competent person as appraiser, whose duty it shall be forthwith to give certain notices and appraise the property, and make a report to the surrogate, who is thereupon required forthwith to assess and fix the then cash value of all the assets, etc. It further provides that the value of every future or limited estate, income or interest shall for the purposes of this act be determined by the rule, methods and standards of value which are applied by the superintendent of the insurance department in ascertaining the value of policies of life insurance and annuities, save that the rate of interest to be assessed in computing the present value of all future interests and contingencies shall be five per cent per annum.

It will thus be seen that, by the provisions of the statute referred to, it is evidently intended that the appraisement for the purposes of taxation shall take place immediately after the death of the decedent, and that the tax shall be levied and become immediately due and payable.

If there was any doubt upon this proposition section 4 is explicit upon this point, which provides that all taxes imposed by this act, unless otherwise provided for, shall be due and payable at the death of the decedent; and if the same are paid within eighteen months, no interest shall be charged and collected' thereon, but if not, interest at the rate of ten per cent per annum shall be charged and collected from the time said tax accrued. Then follows a curious provision giving a premium to an executor for violating the law.

It thus clearly appears that the whole theory of the act is that the question of taxation is to be determined by the condition of things which arises immediately after the death of' the decedent. It is true that the learned surrogate suggests that in certain cases the assessment of the tax may be postponed until contingencies happen by which the value of the estate may be ascertained. But there seems to be no warrant whatever in the law for such postponement.

We have, then, in the ease at bar, a power of appointment over a fund which may be appointed to persons who are not subject to the tax. Therefore, the appraisement for purposes of taxation cannot be had until the exercise of the power of appointment, because it is only then that it is ascertained whether or not any portion of the estate could by any possibility come within the terms of the act.

Now, there being no authority conferred in the act for a postponement of the appraisement until the determination of this question, it seems to us clear that the appraisement must speak as of the time of the death of the decedent, and subsequent events by the happening of which uncertainties have become certainties cannot be appealed to in determining whether a tax should be imposed or not.

The case of the Matter of Cager (111 N. Y., 343) seems to be in entire harmony with this view. The question in that case arose under the act of 1885, which, in the respects affecting the tax under consideration, is the same as the -act of 1887. The will of Gager gave his residuary estate to his wife, to be used and enjoyed and at her disposal during the term of her natural life. One-third of the estate that might remain at the decease of his wife the testator gave to an adopted daughter during her life, and the other two-thirds and the remainder of the one-tiiird he gave to four persons named, who are described as the heirs of said adopted daughter. Held, that upon the death of Gager his wife took a life estate with a limited power of disposition during her life for her use and enjoyment, and any interest in the other beneficiaries was dependent upon the exercise by her of this power of disposition, and that while said gifts were sustained as valid executory devises, and the beneficiaries might eventually take a valuable estate, yet as this contingency rendered! the present value of such interest incapable of any correct or reasonably approximate valuation, there was no basis for the imposition of the tax; and it is expressly held that where the question as to-whether any property will pass under the limitation Over depends, upon the will of the first taker, there is no rule by which its value can be determined. It is true that the court held that they were-not called upon to determine whether the apjiraisal of the value of the devises for the purposes of taxation might not be made when-they eventually came to the possession of the devisees; but the intimation is reasonably clear that such was not the then opinion of the court. The idea of postponement of appraisal and payment is entirely opposed to the precise language of the statute. As has already been intimated, the tax becomes due and payable immediately after the death of the decedent; and if paid within eighteen months after the death no interest is charged; and if not, interest at the rate of ten per cent shall be charged from the time such tax accrued,, namely, from the death of the decedent. And it is further expressly provided that in all cases where executors, administrators or trustees do not pay such tax within eighteen months, they shall be required to give a bond in the form prescribed in another section of the act, for the payment of the tax, together with interest. Thus the whole-scope of the statute looks to the payment of this tax under severe penalties within the time ordinarily allowed for payment of claims against the estate. The running of interest from the time of the death of the decedent, in case the payment is not made within eighteen months, is not predicated upon the fact of an appraisement having been made. The party is liable for the tax, and if it is not paid he is liable to the penalty.

We aré of opinion, therefore, that, as whatever expectancy the-appellant had it was of such a character that it had no market-value, and could not be appraised at the time of the death of the decedent, being dependent upon the exercise of a power of appointment by the trustee which he might execute in his favor and might not, there was no basis' upon which the tax could be assessed; as has already been stated, the happening of subsequent events not bringing that within the scope of the law, which,, at the death of the decedent, was not within its terms.

Upon the question of interest, we think the learned surrogate was clearly right. The statute is explicit that if the tax is paid within eighteen months no interest shall be charged; and if it is not paid within that time interest at the rate of ten per cent per annum shall be charged and collected from the time said tax accrued. The next section, however, provides a partial saving clause. The penalty of ten per cent, imposed by section 4 for the non-payment of such tax,, it is provided, shall not be charged where, in' cases by reason of claims made upon the estate, necessary litigation or other unavoidable causes of delay the estate of any decedent, or a part thereof, cannot be settled at the end of eighteen months from the death of the decedent, and in such cases only six per cent per annum shall be charged upon said tax from the expiration of said eighteen months until the cause of such delay is removed.

The proceedings for the revocation of the probate of the will came within this excepting clause, but it did not exempt entirely from the payment of interest; only reducing the penalty from ten per cent to six per cent, and postponing the running of interest until the expiration of eighteen months from the death of the decedent.

The order of the surrogate should, therefore, be reversed as to the tax upon the amount appointed to the appellant, and affirmed upon the question of interest, without costs.

Daniels and Ingraham, JJ., concurred.

Order of surrogate reversed as to the tax upon the amount appointed to the appellant, and affirmed upon the question of interest, without costs.


author: Yan Brunt, P J.:

text:
    In the Matter of CORNELIA M. STEWART, Deceased. (Appeal of SMITH.)

      W. W. Devme, for James 0. Smith, executor of Sarah N. Smith, appellant.

      I. H. Maynard, deputy attorney-general, for the comptroller of the city of New York, respondent.
   Yan Brunt, P J.:

The same questions are involved upon this appeal as were involved in the Matter of Clinch decided herewith.; and for the reasons stated in the opinion-in that case the order appealed from is modi.fied in the same manner, without costs.

Daniels and Ingraham, JJ., concurred.

Order modified as stated in opinion, and as modified affirmed, without costs.


text:
    EMPLOYERS’ LIABILITY ASSURANCE CORPORATION (Limited), Appellant, v. EMPLOYERS’ LIABILITY INSURANCE COMPANY, of the United States, and Others, Respondents.

      ’Trade-mandcs and normes — a party not entitled to the exclusive use of the term “Employers' Liability”■ — a corporation doing business in this State without a license, and using a title likely to confuse, will be enjoined from doing business here — what is doing biosiness in this State.

    A foreign corporation, known as Employers’ Liability Assurance Corporation (Limited), incorporated in Great Britain in 1880, and doing business in tlie State of New York in compliance with its laws, brought an action to restrain the use of the term “ Employers’Liability ” by a corporation, known as Employers’ Liability Insurance Company, of the United States, incorporated in the State of New Jersey in 1890, engaged in the same business, that of insuring employers against liability for accidents to employees, not licensed to do business in tlie State of New York, and which had been refused such license by the superintendent of the insurance department upon the ground that the similarity of its name with that of the plaintiff would create confusion.

      I-Ield, that the name in each case was descriptive generally of a well-known branch of the insurance business.
    That the plaintiff was not entitled to its exclusive use, and that the court would not interfere upon that ground, although such use might deceive or mislead customers of the plaintiff.
    That as it appeared, however, that the defendant had, without authority, done business in the State of New York, and that this had led to some confusion and consequent slight damage to the pláintiff, the court would restrain the defendant from doing business in this State.
    That where the defendant’s agent sought applications for insurance in New York, a policy was thereafter executed by the officers of the defendant in New Jersey, and the policy was subsequently delivered to the applicant in New York, it must be deemed that the defendant was doing business in the State of New York.

      Appeal by tbe plaintiff, the Employers’ Liability Assurance Corporation (Limited), from a judgment, entered in the office of the clerk of the city and county of New York on the 5th day of February, 1891, dismissing its complaint upon the merits after a trial at the New York Special Term by the court.

      W. A. Butler, for the appellant.

      BE. Wallis, for the respondents.
   Yan Brunt, P J.:

The plaintiff in this action was and is a corporation duly incorporated and existing under and by virtue of the laws of the Kingdom of Great Britain and Ireland, having and exercising the power of carrying on the business of insurance. The said corporation has been in existence ever since the year 1880, and has carried on its business not only in London, England, where its principal office is established, but also in other parts of the above-named kingdom and other kingdoms of Europe and Australia and in the United States since 1886.

The business of the plaintiff is the insurance of employers against liability for accidents to persons in their employ, which business it originated in 1880; and it has become greatly extended and is carried on by a large number of agents or managers of the various branches of the plaintiff’s corporations in foreign countries. The authorized capital of the plaintiff is £500,000, of which £100,000 has been paid in in cash, and the available assets of the corporation amount to about three hundred thousand pounds.

The plaintiff has on deposit with the insurance departments of the States of New York and Massachusetts for the payment of policyholders in tbe United States, $650,000. It has fully complied with the laws of the State of New York entitling it to do business therein, and also with the laws of the other States of the United States in which it does business, and employs capital and assets on such business in the United States amounting to upwards of eight hundred and forty thousand dollars,

In the year 1890 the defendant was duly incorporated in the State of New Jersey under the name of the Employers’ Liability Insuranee Company of the United States, and prior to the commencement of this action op>ened an office at No. 9 Pine street, in the city of New York, for the purpose of the transaction of business, and issued to persons and firms in New York forty or more policies-upon applications, some of which, at least, if not all, were received at their office in Pine street. The defendant corporation made an application to the department of insurance of New York for a license to do business in the State of New York under the name of the Employers’ Liability Insurance Company of the United States, which was refused upon the ground of the similarity of name between that of the defendant and that of the plaintiff, who had already been licensed to do business within this State. The plaintiff thereupon commenced this action claiming an exclusive right to the use of file-name Employers’ Liability ” in connection with the insurance business, and asking that the defendants be restrained from using the said name or title.

The defendants answered admitting most of the foregoing facts, but denying the right of the plaintiff to the exclusive use of the term “Employers’ Liability.” Upon the trial the complaint was-dismissed, and, from the judgment thereupon entered this appeal is taken.

We are of the opinion that the court below was correct in refusing a general injunction against the defendant in this action, proliibitingit from the use of the term Employers’ Liability ” upon the ground that this term is a descriptive term used generally to designate a certain well-known branch of the insurance business. Put it is claimed that, wholly irrespective of any question of exclusive property in the name, the plaintiff was entitled to protection against any such appropriation as would interfere with its business by inducing-the public to suppose that a new company trading under the same was the original plaintiff corporation ; that it was not necessary that fraud or evil practice should be shown if the fact is made to appear that the use of a trade-mark or corporate name lawfully possessed and enjoyed by a trading company is so- used by a competitor as to-deceive or mislead dealers to the. prejudice of the corporation lawfully using the name, equity will protect by injunction. And our attention is called to certain cases, among which are McLean v. Fleming (96 U. S., 245), and Goodyear Company v. Goodyear Rubber Company (128 id., 598). But we think that an examination of those cases is fatal to this claim. The rule is there expressly recognized that exclusive right to use a term descriptive of a character of business cannot be acquired, and the evidence in this case shows that the term “ Employers’ Liability ” was in common use in respect to this class of insurance.

But the attention of the court was called, by the requests to find,, upon the part of the plaintiff, to another branch of the case, and that was that the defendant was doing business in defiance of the prohibition of the law of the State of New York. No foreign insurance company can, nor can an agent of any such company, lawfully dobusinéss within this State until either it or he has been duly licensed to do so by the superintendent of the insurance department. Such superintendent is authorized, for certain causes, to refuse permission to any company or association applying to be permitted to transact the business of insurance in this State, and for other causes he is-required to refuse such permission. He is required to refuse such permission when a foreign company or association, proposes to do-business under a name which, in his judgment, is so nearly similar' to the one already in use as to lead to confusion or uncertainty on the part of the public. The defendant applied to the superintendent of the insurance department for permission to do business-within the State of New York; and it is apparent, from the evidence of the witness McRae (although he did at first swear that there had been no refusal, and that the superintendent did not issue-the permission only because he was too busy), that such permission had been refused upon the ground of similarity of names; because-as soon as he saw that there was a chance of his being confronted with the superintendent in person, he admitted that the superintendent had raised the point that the defendant must alter its name, which it did subsequent to the commencement of this action.

The making out of policies in Jersey City upon applications-received in New York, and the delivery of such policies to the-assured in New York, was a clear violation of the laws of this State. The place where the policies are written out and signed was not the-place where the business was done. The business is certainly done-where the policy is delivered and becomes operative, and some part of it may also be done where applications are made and accepted-

Notwithstanding the subterfuges resorted to by the defendant, its methods were so plain a violation of our laws that it has ceased even •attempting to resort to them upon the mere recommendation (as it is termed by the witness McRae) of the superintendent of the insurance department.

The defendant thus being, at the time of the commencement of this action, in the transaction of business in this State in defiance •of our laws, any person or corporation who was in any manner injured by these unlawful acts had a right to apply to the court to prevent a continuance of the injury. It is true that the evidence •on the subject of special injury in the case at bar was slight. But the facts proven show that the defendant had issued forty or more policies in New York, and that the plaintiff and the defendant were the only companies using similar names; that confusion had arisen and might arise; and that the superintendent of the insurance •department, because he believed that such would be the case, had refused a license to the defendant.

Under such circumstances the court will, upon slight evidence of special injury, protect a party who has complied with our laws, •enacted for the protection of the public, from an injury which has arisen from the acts of a party done in direct violation of those laws.

It is true that the counsel for the respondent criticises with great severity the testimony offered upon the part of the plaintiff to show that parties had been misled by the similarity of the names of these •companies. But we think, upon a reading of that testimony, it shows that there was an evident mistake in one case; and how many other of the persons insured by the forty policies issued in this State (wo say issued in this State, because they were delivered to parties in this State) were misled, we do not know, and it is not in the power of the plaintiff to show.

The testimony of the witness McRae is, so far as it tended to sus-tain any claim made upon the part °of the defendant whose agent .and servant he was, entirely unreliable, because he evidently was willing to swear to whatever was necessary in order to protect the ■defendant. The witness, for instance, is asked: “Were you not .•aware of the provision of law prohibiting the doing of business in New York State by a company that has not been admitted in New York State ? He answers: I don’t know the law exactly. Q. Had’nt you been informed of that law? A. No.”

And yet he is the man who immediately afterwards swears that he signed the necessary papers making the application to the insurance department for permission to do business in the State of New York.

We think that, under all these facts, the plaintiff was entitled to some relief, namely, to an injunction restraining the defendant from attempting to do any business within the State of New York.

This conclusion necessarily leads to a reversal of the judgment appealed from and the ordering of a new trial, with costs to the appellant to abide the event.

Daniels, J., concurred.

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


text:
    THE COLUMBUS WATCH COMPANY and Others, Appellants, v. ANTHONY J. G. HODENPYL and Others, Respondents.

      Partnership — claim against the general estate of a partner who dies and directs the business tobe continued — only the fund invested is at risk — attachment — leave to issue execution — offer of judgment —fraud.

    Two partners, named Simon Stern and Joseph Stern, were carrying on business under the firm name oí Stern & Stern. Joseph Stern died, leaving a will which authorized his executors to continue the business, which they did, with Simon Stern the surviving partner. Subsequently judgments, upon offers of judgment, were recovered against the firm as continued, and levies were made thereunder.
    An action was thereupon brought by certain creditors of "the firm as continued, who procured attachments to he issued against the property of the said firm, in which action judgment was demanded that the judgments entered upon the offers of judgment he declared fraudulent, and the executions issued thereon void.
    No leave to issue execution upon such judgments had ever been obtained in the Surrogate’s Court.

      &eld, that it was not necessary to obtain such leave because the plaintiffs in the executions were not seeking to enforce a claim against the estate of Joseph Stern, and that, as creditors of the firm, they had no claim against said estate.

      'That the words in said execution describing the defendants as “Simon Stern, as executor, and Dinah Stern, as executrix,” were merely words of description, and that the executors, as such, were in no manner interested in said firm.
    'That only the fund placed by Joseph Stern in the business before his death was at risk.
    'That no attachment could issue against an executor, generally, upon a claim due from a firm in which his testator had invested a certain portion of his estate.
    That an offer of a judgment by persons in the position of the executors of Joseph Stern, was not a preference given by their estate, and, therefore, void for the reason that the creditors in question were not creditors of said estate.
    'That a judgment by confession, or upon an offer of judgment, is necessarily collusive, but is not objectionable if made to secure a just debt.
    That the burden of proving fraud is upon the person alleging fraud.
    'That the fact that Joseph Stern, who was indebted to his niece, made out a note for her representing said debt, told her that she could draw interest upon it whenever she wished, but never, in fact, delivered the note to her, did not necessarily make fraudulent a judgment recovered by her against the firm for said .debt, she having allowed the money to remain with the firm in the meantime.
    Appeal by the plaintiff the Columbus Watch Company, and many •other attaching creditors of the firm of Stern & Stern, from a decree dismissing the complaint upon the merits and vacating an injunction heretofore granted and continued, after a trial by the court at the New York Circuit, entered in the office of the clerk of the city and ■county of New York on the 17th day of February, 1891, and also from a judgment entered on said decree in the same clerk’s office, upon the same day dismissing the complaint.

      F. Bien, for the appellants.

      Hays <& G'i'eeribaum, for the respondents.
   Yan Brunt, P. J.:

The defendant Simon Stern and one Joseph Stern were, prior to May, 1886, carrying on business in the city of New York as copartners under the firm name of Stern & Stern.

On the 20th of May, 1886, said Joseph Stern died leaving a will and codicil thereto, which were duly admitted to probate by the surrogate of the city and county of New York in June, 1886, and letters testamentary were issued thereon to the defendants Dinah Stern and Simon Stern. Among other provisions contained in said will was a clause whereby he authorized his executrix to continue his interest in the business then carried on by him under the firm name of Stern & Stern, m conjunction witli his brother, the defendant Simon Stern, i'n such manner as they should deem proper, and for such time as they should deem for the best interest of his estate. Thereafter, the said business of Stern & Stern was 1 carried on by said defendant Simon Stern, and by the defendants Dinah Stern .and Simon Stern, executrix and executor of the last will and testament of Joseph Stern, deceased, down to the 29th of November, 1890. On said 29th of November, 1890, certain judgments were recovered against the firm of Stern & Stern by various persons claiming to be creditors of said firm upon offers to allow judgment. Executions, on the same day, were issued to the sheriff upon said judgments, and levies made upon all the tangible property of said firm.

The plaintiffs herein, having brought actions against said firm of Stern & Stern upon debts owing by said firm to them, procured attachments against said firm upon the ground that the defendants liad disposed of their property with intent to cheat and defraud creditors, and said attachments were levied upon the same property levied upon by the sheriff by virtue of the executions issued upon the judgments hereinbefore referred to.

This action was thereupon commenced to set aside the said judgments upon the ground that they were fraudulent and collusive, and the executions issued thereon null and void.

It is claimed that the executions are null and void because they are issued against Simon Stern, as executor, and Dinah Stern, as executrix, and no leave of the surrogate was obtained.

It is to be observed, in considering this proposition, that no executions were issued against Simon Stern, and Simon Stern, as executor, and Dinah Stern, as executrix. That Simon Stern, and Simon Stern, executor, and Dinah Stern, executrix, were the parties who were carrying on this business represented by the firm of Stern & Stern, and the debts to secure which the judgments were obtained were not debts of the estate of Joseph Stern, but of the firm of Stern & Stern, of which his executor and executrix were members.

It is undoubtedly true that a creditor of the estate of a deceased party cannot issue an execution without leave of the surrogate, but as the plaintiffs in these executions were not seeking to enforce any claim against the estate, the provisions of the Code in respect thereto ■are entirely inapplicable. This is the view which appears to have been taken-by the surrogate upon the application to revoke the letters testamentary issued under the will of Joseph Stern, deceased, upon which application it was held that the petitioners being only creditors of this firm were not creditors or persons interested in the estate of the decedent, and, consequently, had no standing in court. This view seems to be established (as is shown by the opinion of the justice who tried the case in the court below) by the case of Willis v. Sharp (113 N. Y., 586), in which the court say: “A power, simplieiter, to carry on the testator’s trade or to continue his business in a firm .of which he was a partner without anything more, will be construed as an authority simply to carry on the trade or business with the fund already invested in it at the time of the testator’s death, and to subject that fund only to the hazards of the trade, and not the general assets of the estate. The property already embarked in the business is the trade fund, unless it appears from the will that the executors were authorized to use the general assets in the business.”

It would seem, therefore, that the creditors of a firm constituted as the one under consideration was, have the ordinary rights of creditors, and are not subjected to the restrictions applicable to the creditors of the estate of a deceased, which restrictions are intended to promote equality of distribution. But if this were not so, the very defects which it is claimed by the appellants render the executions issued null and void, affect equally the attachment under which the plaintiff seeks its recovery. The defendants Stern are described exactly in the same way; and when motions were made to set aside the attachment on this ground, it was held very properly by the court that these words were mere words of description, and that the executors, as representing the general estate, were in no way interested in this firm. It was only as they represented this particular fund, which was placed at the hazards of this business, that they were interested therein. ”

The claim upon the part of the appellants that an attachment can issue against an executor, although an execution cannot, is clearly unfounded. In the Matter of Hurd (9 Wend., 465), referred to, it is held that an attachment against an executor does not lie for a demand against his testator, but lies against him for a debt contracted by him in his representative capacity, and this is because of the individual responsibility of the executor for debts contracted in the administration of tlie estate. Certainly an attachment against an executor for claims against the estate would be as great an anomaly as the issuing of an execution, whereby priority of lien would be given to a creditor.

The criticism passed by the appellants’ counsel upon the applies tion of the case of Willis v. Sharp is entirely unfounded. All that part of the case which is referred to holds, is, that creditors having unsatisfied claims against an estate are not required to allow any portion of the estate to be used in the carrying on of the business, but have the right to have the estate applied as soon as the forms of law will permit upon their debts; and, unless they have in some way consented to the carrying on of the business by the executors, they have the right to insist that the estate, as it existed at death, shall be used for the payment of their debts and of the expenses of administration to the exclusion of debts subsequently created by the executors.

The case of Hooley v. Gieve (9 Daly, 104; affirmed 73 N. Y., 599), illustrates in a marked manner the enforcement of this right. But the plaintiffs in this action were not creditors of the estate. They are creditors of the firm in which a portion of this estate had been left, and consequently have no interest whatever in 'the estate, as such, or in the payment of claims against the estate.

The suggestion that some of the judgment-creditors whose judgments are sought to be set aside were creditors of this firm in the lifetime of Joseph Stern, deceased, and that they at the time of the death of Stern had a right to insist upon the payment of their debts, from the executor or executrix, and, therefore, could not pursue the firm, cannot prevail. They were creditors of the firm all the time, and as such creditors of the firm they had a right to pursue the-assets of the firm in the manner prescribed by law, and it may be-that by their assent to the carrying on of the firm as empowered by the will they had lost their rights against the estate. They certainly stand in as good a position to collect their debts as the plaintiffs who are also merely creditors of the firm.

The claim that it is well settled that executors have no power to confess judgment, and that knowing this the defendants resorted to offers and acceptances to evade the law relative to confessions of judgment, and that, therefore, the judgments in question should be set aside, has no application to the case at bar This rule applies only to those cases' where an executor attempts to give a preference against an estate. As the counsel states in his points: “ An estate can give no preferences.” But the Court of Appeals has held that creditors of a firm, composed as this was, are not creditors of the estate of the deceased partner. Therefore, the estate gives no preferences.

The next question presented is the claim that the evidence in this case shows that the judgments were fraudulent and collusive, and not founded upon bona, fide debts. It seems to be claimed that, because some of the judgment-creditors were relatives of the members composing the firm of Stern & Stern, therefore, any judgment allowed to be taken by them must necessarily be fraudulent and collusive. We do not understand how a judgment entered by confession or upon -offer can be otherwise than collusive. If a man owes a debt, his creditor has the right to sue him, and he has the right to offer to allow judgment, even for the purpose of giving this creditor a preference, and even though the creditor may be a relative. All judgments by confession or upon offers are necessarily collusive; each of the parties does all he can in order to have that judgment entered, and he has a right so to do, provided the debt is honest, arid provided that the object is to secure the payment of that debt, and that only. If, however, the judgment is obtained for any purpose other than securing the payment of the debt, whether such purpose is that of the debtor or creditor, then the judgment becomes fraudulent as against the creditors of the firm.

It is claimed in the case at bar that there is no sufficient proof that the debts, upon which these judgments were obtained, were imiafide debts of the firm of Stern & Stern. The learned counsel for the appellants, in the consideration of the evidence in this case, all of which was produced by himself, fails to recognize upon which ■side lies the burden of proof. There is never any presumption of fraud, exeept in some special cases arising out of relations of trust. Tt must always be proved, and if the plaintiffs in this action desire -to sueceed upon the ground that these judgments were entered fraudulently, because there was no bona fide indebtedness, the iburden lies upon the plaintiffs to prove that proposition. It does not lie upon the defendants to prove that the indebtedness existed. Tbe plaintiffs have wholly failed to establish the proposition that the debts sought to be preferred by the entry of these judgments were not bona fide and owing. Whatever evidence there has been upon that subject tends to establish the existence of those debts. They call attention to the testimony and ask why the firm did not produce its books for the purpose of establishing the existence of this indebtedness. It might well have been asked, upon the other side, why did not the plaintiffs cause the books of the firm to be produced and show that the indebtedness did not exist. It is no part of the defendant’s duty to establish the existence of the indebtedness until it had been impeached on the part of the plaintiffs.

The case of Bernheimer v. Rindskopff (116 N. Y., 428) illustrates .this principle m respect to the burden of proof.

But it is said, in respect to the judgment of Sophia Stern, that the evidence shows that the note upon which the alleged judgment was obtained had never been delivered, and, consequently, the judgment was fraudulent.

Even if the proposition was true that the note, never having been delivered, it, therefore, never existed as an instrument to be enforced against the firm, and, consequently, the judgment had no foundation in fact; that of itself does not necessarily render fraudulent either the judgment rendered m that case or in the others. The evidence shows that the debt was due. The witness says that her uncle, Simon Stern, showed her the note and told her she could draw the interest on it whenever she wished. There was a note made out for her, but it was never handed to her It was to pay the amount which became due from the estate when she became of age. Now, Sophia Stern had a claim against the estate for this $2,000, and if she chose to allow it to remain with this firm she became a creditor of the firm, and the question as to whether there had been an accounting of the estate or not was entirely immaterial.

It is claimed that it was not shown that the estate was solvent or in a condition to pay this legacy. But, in order to show a fraudulent intent upon the part of these parties, it was the duty of the plaintiffs to show that the estate was insolvent, and that Sophia Stern had no claim, therefore, upon it. A mere mistake in regard to the legal effect of a note made out and not delivered does not by any means show a fraudulent intent.

But it is by no means to be admitted, if Sophia Stern’s statement of the transaction is true,- that the note was not a valid obligation which belonged to her, and which she had a right to enforce. And this testimony evidently the court below believed.

The whole case of the appellants, as was said by the learned judge who tried the case below, rests upon suspicion argumentatively founded in the main upon the absence of explicit proof to support the judgments. More than this is requisite to impeach their validity.

The point made in reference to the refusal of the motion to adjourn the trial of the case until the plaintiffs in this action might procure judgments is certainly novel, but does not address itself with much force to our judgment. The trial of causes is not postponed in order that, by lapse of time, a right to maintain an action may arise at some subsequent time.

The judgment should he affirmed, with costs.

Daniels and Ingraham, JJ., concurred.

Judgment affirmed, with costs.


author: In&raham, J.:

text:
    JULES BREUCHAUD and Others, Appellants, v. THE MAYOR, ALDERMEN AND COMMONALTY OF THE CITY OF NEW YORK, Respondent, Impleaded with Others.

      Complaint to enforce a lien under sections 1824, 1825 of the New York consolidation act, chapter 410, Laws o/1882 — what it must allege.

    Where an action is brought, pursuant to sections 1824, 1825 of the consolidation, act, relative to the city of New York (chap. 410, Laws of 1882), by a subcontractor to enforce a lien upon moneys alleged tobe due by said city to the principal contractor, the complaint must set forth the terms of the contract between, the city and the principal contractor in such a form as would be necessary were the suit between him and the city, and must clearly show that, under his contract, an indebtedness exists to him by the city, upon which the sub-contractor has acquired a lion.
    Appeal by the plaintiffs, Jules Breuchaud, Joseph B. Pennell and Hernán Clark, Jr., from an interlocutory judgment, entered in the office of the clerk of the city and county of New York on the 4th day of May, 1891, sustaining a demurrer to the complaint interposed by the defendants; and also from an order, entered in said •clerk’s office, directing the entry of such interlocutory judgment.

      Laflin Kellogg, for the appellants.

      James O. Garter, for the respondent.
   In&raham, J.:

To entitle plaintiffs to recover in this action they must allege the making of the contract between defendant and the original contractors; that the plaintiffs, as laborers, mechanics, merchants or traders, in pursuance of or in conformity with the terms of such contract, performed labor or furnished materials towards the performance or completion of such contract, and that they have duly filed the notice prescribed by section 1825 of the consolidation act. {Chap. 410, Laws of 1882; see, also, section 1824.)

Where such a contract is made, such services performed or mateTials furnished and such notice filed, plaintiffs may commence an action to enforce their claim against the amount in the hands of the city department due to the original contractors, and, in that action, the court must determine the validity of the lien, the amount due from the debtor to the contractors under their contract, and from the contractors to the respective claimants.

The fact of the making of the contract, and the fact of the performances of the terms of the contract by the contractor, must be .alleged and proved before the court can determine how much is due to the contractors from the city.

The provision that where money is to grow due, a lien upon such money attaches upon the filing of the notice before it is dtie, does ■not justify an action to recover that money before, according to the terms of the contract, it is actually due and payable by the city to the contractors.

Considered in connection with the statute creating this lien, we think the complaint is fatally defective in that it does not allege the terms of the contract between the contractors and the city so that it can be seen that any amount was, at the time of the commencement •of the action, due from the city to the original contractors. The •contract itself is not set forth in the complaint, nor is its substance alleged in the complaint; all that the complaint alleges is that there was a contract made between O’Brien & Clark and the city to build section eight of the new aqueduct, and that thereupon O’Brien & Clark did enter upon the performance of said work, and that the same is now in process of completion or completed.

From this allegation it is impossible to say that there is any money due from the city to O’Brien & Clark, or that there ever will be any money due from the city to O’Brien & Clark. We think, to sustain this action, the complaint should set forth the contract as it would be required to be set forth in an action brought by the original contractors against the city. In other words,, the complaint must show that a cause of action existed at the time of the commencement of this action, in favor of the contractors and against the city, to recover a sum of money due under the contract, upon which sum of money the plaintiff acquired a lien by complying with these provisions of the consolidation act.

The plaintiff has no cause of action against the city until he alleges and proves the existence of the indebtedness by the city to the original contractors upon which he has a lien; and the complaint-in this action fails to allege any facts from which the existence of such indebtedness of the city to O’Brien & Clark could be inferred-

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

Judgment affirmed, with costs.


author: Per Curiam :

text:
    FRANK WORK and Others, Respondents, v. DUDLEY TIBBITS, Appellant, Impleaded with GEORGE PARISH OGDEN and Others.

      Amending pleadings on the trial without notice —not proper where the defendant answers and, does not appear on the trial — motion to set aside the judgment.

    An action was brought to foreclose the rights of the owners in certain stocks, which had been pledged to a firm, of brokers. Tibbits, one of the defendants, appeared and answered. His counsel, who had advised Tibbits that he had no defense, had, nevertheless, intended to appear at the trial, but failed to do so. Upon the motion of the plaintiffs the complaint was amended on the trial so as to allow a recovery for counsel fees incurred by the plaintiffs in other actions -which, had resulted from the dealings between the plaintiffs and the defendants, other than Tibbits, and which had been paid by the plaintiffs since this action was begun.

      Held, that the failure of the defendant Tibbits to appear at the trial did not authorize the court to increase his liability by amending- the complaint without notice to him, and that such amendment was void as to him.
    That as he was in default, and, therefore, not entitled to appeal from the judgment., his remedy was by motion to set aside the judgment.
    Appeal by tlie defendant Dudley Tibbits from an order, entered in tbe office of tlie clerk of tlie city and county of New York on. tlie 8tb day of June, 1891, denying bis motion to vacate a judgment, entered herein in said clerk’s office on tbe 8th day of May, 1891, or to amend and modify said judgment by striking out tlie sum of $4,538.75 allowed tbe plaintiffs for counsel, fees in certain litigations, or to open said judgment as to tbe defendant Tibbits, and allow said defendant to come in and defend said action as to said allowance of counsel fees, as tbe said order was resettled by an order entered in said clerk’s office on tbe 25th day of June, 1891.

      Eseh Oowen, for tbe appellant.

      F. F. Ma/rbury, for tbe respondents.
   Per Curiam :

We think tbe amendment of tbe complaint whereby the plaintiffs were allowed to charge tbe defendants’ property with tbe counsel fees was unauthorized so far as it affected tbe appellant.

Tbe defendant bad appeared in tlie action and interposed an answer. His counsel bad advised him that be bad no defense to tbe plaintiffs’ claim as alleged in the complaint, and although his counsel bad intended to be present at tbe trial; in consequence-of a mistake be was not present, and tbe case was tried and judgment entered as against this defendant by default.

No amendment to the complaint that increased tbe burden upon defendant could be made without notice to the defendants who bad appeared in tbe action, and tbe amendment in question was ordered by tbe court in tbe absence of this defendant, and without notice to him. His absence from tbe trial was, of course, a waiver of the right to object to tbe testimony or to tbe granting of tbe relief asked for in tbe complaint, but was not a waiver of notice of a motion to so amend the complaint^ that charges not set up in the complaint, and which, were for money paid by plaintiffs after the complaint was served, were added to the amount which plaintiffs sought to have the court adjudge to be a lien upon the defendant’s property.

When the complaint was thus amended, this defendant had the right to plead to it, and that right could not be taken from him and & judgment entered against him on the amended complaint not served -on him and which he had no opportunity to answer.

As the defendant was in default on the trial he cannot appeal from the judgment and so have the question as to the propriety of the charge for legal services determined, and his only remedy was to make the motion to set aside the judgment.

The order appealed from must be reversed and the motion granted, and judgment vacated, with costs as to the appellant, unless the plaintiffs stipulate to deduct from the amount of the recovery the amount allowed for counsel fees, in which case the order is affirmed, without costs.

Present — Yan Brunt, P. J., Daniels and Ingraham, JJ.

Order modified as expressed in opinion, and, as modified, affirmed, without costs.