text:
    Siegmund T. Meyer et al. plaintiffs, vs. Harris Fiegel, et al. defendants.
    1. The practice of a defendant’s waiting, unlit the plaintiff has closed the evidence in his case, without objecting to the sufficiency of the complaint, and then doing so, disapproved. Although such objection is not waived by answering, yet if the defendant does answer and goes to trial, he should not be allowed to take the objection, after the plaintiff’s proof is in, without objection, provided such proof establishes a cause of action. Per Mo-NEM,, J.
    2. If, however, it is proper to allow such a practice, it should be subjected to Certain Well understood rules, applicable under the tiode, in determining the sufficiency of pleadings, and to the power of the court to grant amendments, If the facts proven and n'ot objected to, establish a good cause of action, the court may allow the complaint to be amended, or may conform the pleadings to the facts proved. The power to amend a pleading, or to conform it to the facts proved, is discretionary; but it ¡nay be exercised in the cases and under the limitations contained in section 173 of the Code. ■ If therefore on the trial, any defect in the complaint is allowed, without objection, to be supplied by proof, the objection may be overruled. Per Moneli, J.

    3. Where the plaintiffs, being sole agents for a certain article of commerce, received orders from third persons for such article, and then ordered the goods from the manufacturers, they obtaining and delivering them to the persons giving the orders; and their mode of doing business was, upon receiving an order from third persons, to order from the manufacturers a corresponding quantity for resale by themselves to the parties giving the order; and the defendants gave the plaintiffs an order whereby they were directed to order a specified quantity of such article, and they Were to sell the same to the defendants; Setd, that such facts created a sale by the plaintiffs to the defendants. That the mere styling themselves “ agents ” did not take from them the character of principals, if they were in fact such, in their dealing with the defendants.
    4. Held, also, that if the plaintifib had proved that upon receiving the defendant’s order they purchased the goods of the manufacturers and paid for them, and had them ready for delivery, such proof would have shown a cause of action in their favor, against the defendants.- And that it was therefore erroneous to exclude evidence tending to establish those facts.

      5. Seiit, further, that all objection, that the acceptance of the order by the plaintiffs was qualified, and that there was no averment that such qualification was agreed to by the defendants, was obviated by the fact that part of the goods were delivered to and accepted by the defendants, in part performance of such contract, after and under such qualification.
    (Before Monell, Garvin and McCunn, JJ.)
    Heard February 13, 1867 ;
    decided February —, 1867.
    This was an action brought to recover the difference between the contract price of a quantity of glazed wire, and the price such wire brought at auction, after the defendants had refused to accept a delivery.
    The complaint alleged that the plaintiffs were sole agents for a certain article of commerce known as “Washburn « & Moen’s crinoline springs.” That as such agents it was their business to receive orders for such springs, and upon such orders .to order them from the manufacturers; they, the plaintiffs, in fact, obtaining them, and delivering them to the parties giving the orders. That their mode of business was to enter upon a book, called an order book, such orders as they received, and upon the faith of such orders, to order from the manufacturers a corresponding quantity for resale to the parties giving the order. That the defendants gave to the plaintiffs an order as follows: “ Gentlemen—Please to enter for me, on your order book, twenty-five barrels of Washburn & Moen’s glazed wire, at the rate of 77 for 18, 3 per cent discount.” That the meaning of said order was, that the plaintiffs should order the wire, and sell the same to the defendants, That the plaintiffs did order the wire, and notified the defendants, and subsequently informed them that they had received the same, and had it ready to deliver to them. That afterwards the plaintiffs delivered to the defendants nine barrels of springs, parcel of said order, which the defendants accepted. The complaint then alleged an offer to deliver the residue of barrels of wire, a refusal by the defendants to receive, a subsequent sale, and a deficiency. The answer denied nearly all the allegations in the complaint.
    Upon the trial before Justice Barbour and a jury, the plaintiffs read in evidence the written order of the defendants. To one of the plaintiffs, Seigmund T. Meyer, called as a witness, their counsel propounded the following interrogatories, each of which was objected to by the defendants’ counsel, on the ground that the testimony sought to be elicited was irrelevant and inadmissible under the pleadings herein.
    Q. TJpon this order, (showing “ Exhibit A,”) what did you do, if any thing, to obtain twenty-five barrels of wire for Fiegel & Strauss ?
    Q. Did you purchase from Washburn & Moen twenty-five barrels of wire ?
    Q. Was there any time fixed between you and Messrs. Fiegel & Strauss relative to the delivery of this wire ?
    Q. Was there any agreement between you and Messrs. Fiegel & Strauss in regard, to the various prices which you were to deliver ?
    Q. What is the explanation, according to the trade, of the words “of 77 for 18, 3 per cent discount,” in the defendants’ letter of August 23, 1864, and of your saying on the basis of 77 cents per pound for Bio. 18 ?
    The objection to those questions was sustained by the court; and each of the questions overruled. To such decision in regard to each question separately the plaintiffs’ counsel excepted. The plaintiffs’ counsel then asked for leave to amend the complaint, by substituting the word “purchasing” for the word, “obtaining” in the phrase “they (the plaintiffs) in fact obtaining them;” which the court refused. To that decision the plaintiffs’ counsel excepted.
    The plaintiffs not offering any further evidence, the defendants’ counsel moved to dismiss the complaint on the grounds:
    1st. That it appeared by the complaint, that the plaintiffs had no interest in the subject matter of controversy, and therefore could not maintain this action.
    2d. That the facts stated in the complaint did not constitute a contract between the parties, nor between the defendants and Washburn & Moen.
    3d. That the complaint did not show, and the facts ■ therein stated did not constitute, a cause of action.
    Whereupon, the court granted such motion, and dismissed the complaint; to every part of which decision the plaintiffs’ counsel excepted.
    The judge thereupon, on motion of the plaintiffs’ counsel, directed the exceptions to be heard in the first instance, at the general term, and that judgment in the meantime, be suspended.

      P. J. Joachimsen, for the plaintiffs.
    I. The questions to the witness Siegmund T. Meyer were each of them relevant to show that the plaintiffs had actually obtained the wire for the defendants, and purchased the same out of their own funds; had verbally agreed to deliver the same at a certain date, and at what prices ; and to explain the apparent ambiguity of the expressions “ 77 for 18, 3 per cent discount,” and “ on the basis of 77 cents per lb. for No. 18,” and to - show that such expressions represented an agreed price for a certain merchandise. All of this evidence was pertinent to the controverted fact, as to the agreement between the plaintiffs and defendants. (Hinton v. Locke, 5 Hill, 437.)
    H. The plaintiffs have a clear interest in the subject matter of controversy, and are entitled to bring an action for the damage by breach of contract. According to the complaint, the plaintiffs themselves had obtained twenty-five barrels of wire for the defendants, for which the defendants were to pay the plaintiffs a certain price, which it is shown the defendants had neglected to do ; the wire being sold for the defendants’ account, netted a loss to the plaintiffs personally. This is certainly an injury and a damage to the plaintiffs, and gives them an interest and standing as suitors. Upon the very narrowest construction of the complaint, the plaintiffs must be considered as trustees of an express trust, within the decisions. (Grinnell v. Schmidt, 2 Sandf. 706. Minturn v. Main, 3 Seld. 224. White v. Chouteau, 10 Barb. 202.)
    III. The facts stated in the complaint constitute a cause of action. The defendants applied to the plaintiffs in writing, for a certain quantity of wire. That satisfied the ■ statute of frauds. The plaintiffs answered the proposal; a partial delivery was made; as to the balance, the defendants declined to receive the same. Credit not being stipulated for, the plaintiffs were not bound to part with the property, except upon the payment of cash. The defendants did not pay, and the property deteriorated. Such facts constitute a clear cause of action on contract.
    IV. It was the duty of the defendants to reply to the plaintiffs, if they, the defendants objected in any way to the plaintiffs’ terms, (Mactier v. Frith, 6 Wend. 111. Morse v. Bogert, 4 Denio, 108.)
    V. The learned judge erred in dismissing the complaint. The trial term was not the proper place to try a demurrer to the complaint.

      A. Boardman, for the defendants.
    I. The complaint shows that no contract was entered into between the plaintiffs and the defendants, (conceding that the plaintiffs were the true parties in interest.) No contract exists until the parties have agreed upon the same thing in the same sense. If a party accepts a proposition, only on condition, or with a change' of its terms not altogether immaterial, it is no contract. (Parsons’ Mercantile Law, pp. 14, 17. Hutchison v. Bowker, 5 M. & W. 535. Suydam v. Clark, 2 Sandf. 133.)
    I. In this case the order was given for twenty-five barrels of Washburn & Moen’s glazed wire, at the rate of 77 cents for that known as No. 18, less three per cent discount. The order was accepted, with four modifications: 1st, it was to be at seventy-seven cents per pound, without allowing discount; 2d, it was to be dependent on the defendants furnishing a memorandum of the assortment of wire required ; 3d, it was to be subject to the defendants stipulating as to the time in which they would agree to receive the wire; and, 4th, it was to be accepted subject to the government tax. The proposition of the defendants not being accepted as tendered, there was no contract.
    II. The plaintiffs rely on a partial acceptance of the goods. This is not the case of a verbal contract and of a part delivery, taking it out of the provisions of the statute of frauds. The complaint conclusively shows that there never was any contract, either verbal or written.
    NI. The complaint shows that the plaintiffs were not the true parties in interest, but were the agents for Wash-burn & Moen, and that “ as such agents ” they received orders and transmitted them to Washburn & Moen; and on receiving the goods, deliverd them to the parties giving orders therefor. Their principals, and not themselves, should have brought the suit.
    TV. The allegations of the complaint were denied by the answer; and the questions overruled by the court were either not pertinent to any issue formed by the pleadings, ' or were incompetent on the ground that they contradicted the record. There being no evidence in support of the plaintiffs’ case, the complaint was properly dismissed, irrespective of the grounds of dismissal set forth in the case.
   Monell, J.

No question arises in this case upon the exceptions of the plaintiffs to the dismissal of their complaint. If the ruling of the learned justice in excluding the evidence offered in support of the plaintiffs’ claim was correct, then there, was no error in dismissing the complaint, for there was no evidence to support the cause of action. Hor can we now consider the question of the sufficiency of the facts stated in the complaint as constituting a cause of action. "When the plaintiffs’ evidence was excluded, a motion had not been made to dismiss the complaint on the ground that there was not a cause of action stated, nor upon any ground; and if the. complaint was open to objection, the deficiency in the statement might have been supplied by proof. ■ I cannot subscribe to the propriety of the practice, of allowing a defendant to wait until the plaintiff has closed his case without objecting to the sufficiency of the complaint, and then objecting. Such objection, it is true, is not waived by answering; but if the defendant does answer, and goes to trial, he should not be allowed to take the objection after the plaintiffs’ proof is in, provided such proof establishes a cause of action. The Court of Appeals, in Smith v. Countryman, (30 N. Y. Rep. 655, 668,) discourages such practice, and holds that if new matter be inserted in an answer not constituting a defense it should be demurred to; and that the practice resorted to in that case to correct the pleadings by motion at the trial, was not warranted by the Code, “ and should not be encouraged.” So it has been frequently held that such objection to the complaint cannot, be first taken on appeal. (Pope v. Dinsmore, 8 Abb. 429. Winterson v. Eighth Avenue Railroad Co., 2 Hilt. 389.) If, however, it is proper to allow such practice, it should be subjected to certain well understood rules, made applicable by the Code, in determining the sufficiency of pleadings, and to the power of the court to grant amendments.

First. If the facts proven establish a cause of action, the court may allow the complaint to be amended. (Code, § 173.)

Second. In the like case the court may conform the pleadings to the facts proved. (Id.) The power to amend a pleading or to conform it to the facts, is discretionary; but it may be exercised in the cases and. under the limitations contained in the section I have referred to. If, therefore, on the trial, the defect in the complaint is supplied by proof, the objection may be overruled. (Lounsbury v. Purdy, 18 N. Y. Rep. 521. Emery v. Pease, 20 id. 64.)

"When the questions were propounded to the witness Meyer, a motion to dismiss the complaint had not been made, and the answers to such questions might have overcome the objections to the complaint, by proving a contract of sale from the plaintiffs to the defendants, rendering it proper, in the discretion of the court, to allow an amendment, or to conform the pleadings to the facts. Besides, it does not follow that an objection of variance would have been taken, inasmuch as to make such objection available, it must be proved that the party objecting has been misled. (Code, § 169.)

It seems to me, as the case stood when the evidence was sought to be given, it was error to exclude it. Such evidence it was doubtless expected would show a right to recover a judgment; and if it had proved sufficient to have enabled the court to give judgment according to the facts stated and proved, such a judgment might have been rendered, “ without reference to the form used, or the legal conclusions adopted by the pleader.” (Wright v. Hooker, 10 N. Y. Rep. 59.)

But I also think the complaint contained a statement of facts sufficient to constitute a cause of action. The pleading was inartistically drawn, redundant, and in parts irrelevant. It, however, alleged that the plaintiffs were sole agents “ for a certain article of commerce known,” &c.; that it was their business to receive orders, and to order the goods from the manufacturers; they, in fact, obtaining them and delivering them to the persons giving the orders. Their mode of business was, upon receiving an order, to order from the manufacturers a corresponding quantity for resale to the partiés giving the order; and that the meaning of the defendants’ order was, that the plaintiffs should order the wire and sell the same to the defendants.

These allegations, if proved, would, I think, establish a sale by the plaintiffs to the defendants. The mere styling themselves agents ” did not take from them the character of principals, if they were such in their dealing with the defendants. Persons who have exclusive right to' make sales of particular manufactures within certain limits, frequently style themselves “ agents,” and receive orders, which orders are filled by the manufacturers. But there is no such relation of-principal and agent as would authorize the manufacturer to sell in his own name. Such persons stand in the relation of principals to their customers, and can enforce their contracts in their own names. Hence, in this case, if the plaintiffs had been permitted, they might have proved, that upon receiving the defendants’ order, they purchased the goods of the manufacturers and paid for them, and had them ready for delivery. Such proof, it seems to me, would have shown a cause of action in their favor against the defendants.

The objection that the acceptance of the order by the plaintiffs was qualified, and that there is no averment that such qualification was agreed to by the defendants, is obviated by the allegation that part of the wire was delivered and accepted by the defendants, after and under such qualification.

But, I think, without pursuing the argument further, that I have shown that the exclusion of the evidence wp.s improper; and for-that reason, even assuming that the complaint was defective, the order dismissing the complaint should be reversed, and a new trial ordered, with costs to abide the event.


source: Caselaw Access Project

author: Jones, J.

license: Public Domain

text:
    William Moses, plaintiff, vs. George W. Banker, defendant.
    1. To authorize the granting of an order under section 401 of the Code, the judge who grants it must he satisfied hy competent and sufficient proof, at least: 1. That the party applying for it intends to make or oppose a motion; and 2. That it is necessary for him, in making or opposing such motion, to have the deposition of some person who refuses to make a voluntary affidavit.
    2. It is usual to take the affidavit of the attorney applying for the order, as competent and sufficient proof of these matters. But if on the face of such affidavit it appears either that there is no intention of making or opposing a motion; or that the deposition desired is not necessary; or that the court has no power to order the party, whose deposition is desired, to make it, the court should refuse the order. .
    3. Thus, if such affidavit shows, that the motion intended is merely one to make an answer more definite and certain, no deposition of a witness is necessary, as such motion is to he determined on the pleadings alone; or if it appears hy such affidavit that the person whose deposition is required is incompetent, the court has no authority, under such section (401,) to author- . ize his examination; or if, although the attorney, in such affidavit, swears, generally, that he intends to make a motion, and that he desires the deposition of a particular person for such motion, it appears, from other facts set forth in his affidavit, that his real object is, under the pretense of making a motion, to obtain an examination to which he is otherwise not entitled; in all these 'cases the court would be bound to refuse the order. Per Joses, J.
    4. The motions to vacate orders made under section 401 of the Code are not to be encouraged, qnd should be granted only in cases where it clearly appears either that the order is unauthorized, or that a legitimate use of the process of the court is. not the object for which the order was obtained.

      5. The order should be vacated where it appears by affidavits or other proper evidence, that it was not designed for the purpose of obtaining depositions to be used on a motion, but for some other purpose, such as enabling the applicant to ascertain either what course of opposing evidence it would be necessary for him to prepare to meet, on the trial; or whether it would be safe for Mm, to call as witnesses on the trial the persons whose depositions are proposed to be taken.
    (Before Jones, J. at special term,
    February —, 1867.)
    This was an application to set aside an order obtained ex parte compelling certain persons who had refused to give their affidavits to be examined before a referee under ’ section 401 of the Code of Procedure.
    The complaint alleged that the defendants were co-partners ; that the plaintiff sold and delivered to them, as such copartners, certain goods of a certain value ($1127.51,) and that the defendants had not paid such sum; and demanded judgment for that sum. The answer denied the sale and delivery; also that the plaintiff, at the time of the alleged sale and delivery was the owner of such goods, and averred that at that time the goods were the property of one Wm. H. Van Bokkelin, for whose benefit the answer alleged the suit was prosecuted.
    The issue was joined in August, 1866. The cause was reached for trial in January, 1867, (18th,) and neither party being ready, it was set down for a subsequent day in that month, (24th.) On that day it was again called for trial, and neither being yet ready it went off for the term. On the last day of January, 1867, the plaintiff procured an ex parte order appointing a referee to take the depositions of various persons, and among them one of the defendants, to be used on a motion the nature of which was not specified. This order was made upon án affidavit sworn to by the plaintiff’s attorney, which was merely stated that the action was brought to recover for goods sold and delivered by the plaintiff to the defendánts; that the deponent intended to make a motion to strike out the answer as sham, or to compel the defendants to make the answer more specific and definite ; that he deemed it necessary to have the affidavits of certain persons therein named, to use on such motion, and that he had applied to them to make affidavits for the purpose, but they had refused.
    The defendants’ attorney now moved to set aside this ex parte order of January 31st, upon the pleadings in the action, and his affidavit, (by which the issues joined and the various proceedings in the action, as above set forth were for the first timé presented to the notice of the court. In opposition to such motion, the plaintiff’s attorney read an affidavit of his own, setting forth that since the cause was reached on the calendar, facts had come to his knowledge which led him to believe that the answer was sham, and was put in with intent to delay and ultimately defeat the collection of, the plaintiff’s claim.
   Jones, J.

Section 401 of the Code provides that when any party intends to make or 'oppose a motion, in any court of record, and it shall be necessary for him to have the affidavit of any person who shall have refused to make the same, such court may by order appoint a referee to take the affidavit or deposition of such person.” The order of January 31st was obtained under this section. To authorize the granting of an order under this section the judge who grants it must be satisfied by competent and sufficient proof, first: That the party applying for it intends to make or oppose a motion; and second: That it is necessary for him in making or opposing such motion, to have the deposition of some person who refuses to make a voluntary affidavit.

It is usual to take the affidavit of the attorney applying for the order, as competent and sufficient proof of these matters. But if on the face of such affidavit it appears either that there is no intention of making or opposing a motion; or that the deposition desired is not necessary ; or that the court has no power to order the party, whose deposition is desired, to make it, then, without doubt, the court will be bound to refuse the order. Thus if such affidavit shows that the motion intended is merely to make an answer more definite and certain, as such motion is to be determined on the pleadings alone, on deposition of a witness can possibly be necessary; or if it appears by such affidavit, that the person whose deposition is required is incompetent, the court will have on authority, under section 401, to authorize his examination ; or if, although the attorney, in such affidavit, swears generally that he intends to make a motion, and that he desires the deposition of a particular person for .such motion, it yet appears from other facts set forth in his affidavit; that his real object is, under the guise of a motion, to obtain an examination which he otherwise could not get; in all these cases, and perhaps others, which do not now occur to me, the court would be bound to refuse the order.

It may be urged, that the order does not affect any right of the opposite party, and that therefore after it is made, the opposite party has no right to move to vacate it on the ground that it appears on the face of the papers on which it is founded that it should not have been granted; and much less on'the ground that on facts which do not appear on the face of the papers, it should not have been granted.

I think the order does affect aright of the opposite party. He has a right to attend on the éxamination, with his counsel, and to cross-examine, as has been recently held by the, general term of this court. Such attendance subjeets him to trouble and expense, and this gives him a sufficient interest to entitle him to move to vacate the order. Such motions, however, are not to be encouraged, and should be granted only in cases where it clearly appears either that the order is unauthorized, or that a legitimate use of the process of the court is not the object for which the order was obtained.

In this case it seems to me, speaking from the papers, that this order is not intended for the legitimate purpose of obtaining depositions to be used on a motion, but for some other purpose; such, perhaps, as enabling the plaintiff to ascertain what line of proof it will be necessary for him to prepare to meet, on the trial; or perhaps to ascertain whether it would be safe for him to call those persons as witnesses, on the trial.

The issues raised by the answer are, whether the plaintiff sold and delivered the goods in question to the defendants ; whether he owned the goods or not; and whether the action is brought for his benefit. Surely the plaintiff, when this action was commenced, must have known whether he owned the goods or not, and whether the action was brought for his benefit or not; and must have been possessed of the requisite proof to sustain these facts. When the answer was served, if in these particulars it was false, he must have known it. It could not have been necessary for him to wait five months to find out whether it was false in those particulars nor to ascertain whether he had proof enough to establish his own ownership and right to commence the action for his own benefit. Although, however, he might be able to show the falsity of the answer in those respects, he could not succeed in a motion to strike out the answer as false, unless he could show that the issue raised as to whether the goods were sold and delivered to the defendant, was also false.

If this sale and delivery had been conducted in the manner in which sales and deliveries of goods ordinarily are, and no serious question had been involved, the plaintiff, immediately on the coming in of the answer, would have known its falsity, and could have taken measures immediately to procure a judgment on the ground of its falsity, and need not have waited five months, allowing two chances for trying his case to pass by unheeded, and then for the first time, only six days after he had neglected one opportunity to try his case, endeavoring to obtain a judgment on motion.

There is a class of cases in which, upon all the facts and the law applicable thereto, there is grave doubt as to whom a sale is made. In that class of cases, a motion to strike out an answer as false is manifestly improper, and it cannot be conceived that counsel could seriously entertain an idea of making such a motion. The facts that appear before me indicate that this action falls within this class of cases. On no other supposition can the plaintiff’s delay in making the motion, and his neglect to take advantage of two opportunities to try his case be accounted for.

But there is another ground which seems to me to be conculsive against the plaintiff. The object of a motion to strike out an answer as false is to obtain a speedy judgment without being subjected to the delay of waiting for the same to be reached for trial. It is incredible that that motive should actuate a plaintiff, who had waited until his cause had been twice called for trial before making a motion which belongs to a class of motions, success in which is always very difficult to attain ; and especially is it incredible when, as in this case, the action could have been tried on its merits as soon, if not sooner, than the motion could have been determined.

For these reasons, I am clearly of opinion that the order in question was not obtained for the legitimate purpose' of procuring testimony to be used on a motion, and that consequently the order should be vacated.

Motion granted, without costs.


author: By the Court, Monell, J.

text:
    Rufus K. McHarg, plaintiff and respondent, vs. Albert L. Eastman, defendant and appellant.
    1. An error, in a reference in a complaint, to the section of a statute under which an action is brought, and plainly a mistake of the draftsman or copyist of the pleading, may be disregarded as clerical.
    2. A public statute need not be recited, or- even referred to, in a pleading. It is sufficient if the case is brought within it.
    3. A reference, in a complaint, to one section of a public statute, instead of another, is mere surplusage, and the error will be disregarded; more especially where all question as to the section intended, is removed by a subsequent averment in the complaint, that the defendant has failed to perform a specified duty, as required by “ said law,” which is one mentioned in the latter section of the statute only.
    4. The liability imposed by the general manufacturing law upon trustees of manufacturing companies, for neglecting to file an annual report, is in the nature of a penalty for misconduct in office, and the amount of the penalty imposed is debts, during such neglect, contracted by the corporation.
    6. Although, the recovery of a judgment against á manufacturing corporation, in such case, extinguishes the debt as to it, such recovery does not affect the liability of a trustee, for the prescribed penalty. A judgment continues a debt; and although it extinguishes the simple contract debt as regards the company, and merges it in the debt of a higher order thus created, it does not expressly or by implication, discharge the liability of the trustee. It may operate as a bar to another action against the corporation, but it lays no foundation for an action against a trustee. Such latter action is not for the recovery of the debt, but to recover a penalty, the measure of the extent of which is regulated by the debt. ,
    6. While the statute does not require a judgment to be obtained against such corporation, as a condition precedent to charging a trustee, which is required in order to fix the liability of stockholders, in certain cases, it does not make the recovery of such a judgment a discharge of such trustee. The liability, of the corporation is for a debt contracted by it, but the judgment is neither evidence of such debt, nor is the amount of it the measure of damages against a trustee.
    7. No trustees can be made liable for the default or misconduct of their predecessors or successors in office. They are only liable for their own, and the action to recover any penalty incurred by them for such misconduct, must be brought within three years after the cause of action shall have accrued. Hence it must appear that the penalty was incurred while they were in office.
    8. The debt, therefore, must exist at the time of the default, arid be contracted by the corporation, while the trustees sought to be made liable are in office. The statute has reference to such debts, and no others.
    9. The “ debt ” mentioned in the statute, for which a -trustee may become liable, is only the original debt contracted by the corporation; not the judgment which the creditor may have recovered thereon against the corporation. The recovery of such judgment is, therefore, wholly useless in enabling a creditor of the corporation to maintain an action against a trustee thereof.
    10. A complaint, in such an action, which does not aver that the debt was-existing at the time the default was made by the trustees, or show that it was contracted afterwards, is defective.
    11. A complaint is also defective which merely alleges the recovery of a judgment and the return of an execution thereon unsatisfied, without alleging the judgment, or the debt against the corporation to be unpaid, or that it was unpaid when the trustees failed to make the report required by the - statute, within the time therein specified. An averment that both the judgment and the debt have been assigned to the plaintiff, and that “there-is now due to the plaintiff from the defendant ” a certain specified sum, without saying whether such amount is due upon the judgment, or for the debt, or upon the defendant’s liability as a trustee, or otherwise, is insufficient.
    12. Although the president of a corporation must be chosen from the trustees, and therefore necessarily a trustee, yet he must be sued as trustee, and not as president. Hence a complaint which does not ayer the defendant was a trustee, at the time of the default, but merely that he has at all times been president of the corporation, is defective.
    (Before Monell, Garvin and McCunn, JJ.)
    Heard February 11, 1867;
    decided April —, 1867.
    This was an appeal from an order overruling a demurrer" to the complaint.
    The complaint alleged that the defendant was one of the trustees of the “Washington Medallion Pen Company,” organized under the general incorporating act of this state. That the certificate of incorporation was filed February 10, 1857. That said company purchased machinery and gave their promissory note for the price thereof; upon which note an action was brought against the company, judgment recovered, and an execution thereon returned unsatisfied. That the said debt and judgment were afterwards duly assigned to the plaintiff. That said company had not annually, within twenty days from the first day of January of any year since its organization, made and published a report as required by the eleventh section of the said act. That the business of the company was carried on in the city of blew York. The complaint demanded judgment for the amount of the judgment against the company, with interest.
    The defendant demurred to the complaint because it did not state facts sufficient to constitute a cause of action. The demurrer was overruled, and the defendant appealed.

      Mr. Fuller, for the appellant.

      Mr. Sawyer, for the respondent.
   By the Court, Monell, J.

The reference in the complaint to the “ eleventh ” section of the general manufacturing law, instead of the twelfth, which prescribes the duties of corporations in respect to making annual reports, was apparently a mere error of the draftsman or copyist of the pleading. It is wholly immaterial. Public statutes need not be recited, or even referred to, in a pleading. It is sufficient, if the case is brought within the statute. (Bayard v. Smith, 17 Wend. 88. Cole v. Jessup, 10 How. Pr. 524.) In pleading a private statute, or a right derived therefrom, it is sufficient to refer to such statute by its title, &c. (Code, § 163.) The reference, therefore, to the eleventh section was mere surplusage, and the error must he disregarded; more especially, as all question is removed by a subsequent averment in the complaint, that such company has not published and filed any such report as is required by “ said law.”

The liability imposed by the act upon trustees of manufacturing companies for neglecting to file an annual report, is in the nature of a penalty for misconduct in office. (Bird v. Hayden, 2 Abb. Pr. N. S. 61.) The penalty imposed is the debt contracted by the corporation. Although the recovery of a judgment against the corporation extinguishes the debt" as to it, I do not think that such recovery affects the penal liability of a trustee. A judgment is a debt, and the extinguishment of a simple contract debt, and its merger into the higher debt, does not in terms, nor by implication, discharge the liability of a trustee. It may operate as a bar to another action against the corporation, but it lays no foundation for an action against a trustee. Such latter action is not for the recovery of the debt, but to recover a penalty, the measure of which is regulated by the debt.

While the statute does not require a judgment against the corporation, as preliminary to charging a trustee, as is required to fix the liability of stockholders, in certain cases, it does not forbid such a judgment. The liability is for a debt contracted by the corporation, but the judgment is not evidence of such debt, nor is the amount of the judgment, the measure of damages against a trustee. Trustees are only liable for their own default or misconduct, and not for the default or misconduct of their .predecessors or successors in office. (Boughton v. Otis, 21 N. Y. Rep. 261. Shaler v. Hall Quarry Company, 27 id. 297.) Hence, it must appear that the penalty was incurred while they held office. So, an action to recover such a penalty must be brought within three years after the cause of action shall have accrued. (Code, § 92, sub. 2. Merchants’ Bank v. Bliss, 13 Abb. Pr. 225. S. C. 21 How. Pr. 365.) The debt, therefore, must exist at the time of the default, and be contracted by the corporation while the trustees sought to be made liable are in office; and the statute has reference to such debts and no others. (Boughton v. Otis, supra.) A different construction would render the three years limitation nugatory. A creditor could delay suing the corporation upon its contract until the day immediately before that on which the statute of limitations would attach, then, having obtained his judgment, wait nearly three years longer before attempting to charge the trustees, and. then claim the judgment to be the debt, and that the statute began to run only from its recovery.

Upon the construction I have given the statute, the . “ debt ” for which the trustee may become liable, is the original debt contracted by the corporation; not the judgment which the creditor may have recovered against the corporation. The recovery of such judgment was therefore, unnecessary; and the allegations in the complaint in respect to it entirely immaterial. It did not extinguish the debt, in the sense that the trustee would not be liable for his default; nor does it become any material fact, in the statement of the plaintiff’s cause of action.

But the complaint is defective, I think, in not averring that the debt was existing at the time the default was made, or was contracted afterwards. The debt was contracted in April, 1863. For such debt, the trustees in office at the time, became liable by omitting to file a report within twenty days from the first of January, 1864. The complaint does not allege that such debt existed at the time default was made by the trustees. The judgment was recovered in October 1863, and it is alleged that an execution was at the same time issued, which has been returned unsatisfied. It is not alleged that the judgment or the debt against the corporation is unpaid, or that it was unpaid when the trustees failed to make their report; the only, averment being, that the judgment and the debt have been assigned to the plaintiff and “ there is now due to the plaintiff from 'the defendant a certain sum ($399.04.) ” Whether such amount is due upon the judgment, or for the debt, or upon the defendant’s liability as a trustee, or otherwise, does not appear. This criticism of the complaint is justified by Chambers v. Lewis, (28 N. Y. Rep. 454.)

Again, the statute makes the trustees liable; but it is not averred in the complaint, that the defendant was a trustee at the time of default, unless the allegation, that he has at all times been president of the corporation, is to be regarded as sufficient. The president, it is true, must be selected from the trustees, and is necessarily a trustee; but, I think, he must be sued as trustee and not as president.

For the reasons assigned, I am of opinion, that the facts • stated in the complaint are not sufficient to constitute a cause of action, and therefore the demurrer should have been sustained.

The order overruling the demurrer must be reversed, and judgment .rendered for the defendant thereon, with costs; with leave to the plaintiff to amend his complaint, on payment of such costs.

hfo costs to either party on the appeal.


text:
    William A. Coursen, plaintiff and respondent, vs. David B. Dearborn, impleaded, &c. defendant and appellant.
    1. The validity of a defendant’s discharge from his debts under the insolvent act of this state cannot be attacked in proceedings supplementary to execution. The Code of Procedure does not provide for submitting questions of fact arising under such proceedings to a jury; and hence now, as well as formerly, the creditor is compelled to have recourse to an action, to test the validity of such discharge.
    2. Hence, when the discharge is set up, all further proceedings upon the examination of the defendant should be suspended, or postponed until the determination of an action upon the judgment. Per Monele, J.
    3. But if the defendant fails to appear and produce his discharge, on the day named in the order for his examination, but puts himself in hostility to such order, he may be adjudged to be in contempt. His discharge will not purge the contempt; and the justice who hears the motion for an attachment has the right to punish the defendant, or to excuse him, absolutely or conditionally.
    4. If an order made upon such motion relieves the defendant from the attachment on condition that he' appear and “ submit to an examination,” and the defendant, by appearing at chambers, and being sworn in the usual manner, complies with the condition named in the order, he is entitled, upon presenting his discharge, to obtain a suspension of the proceedings, so as to compel the plaintiff to sue upon the judgment, or otherwise test the validity of the discharge.
    (Before Robertson Ch. J., and Barbour and Monell, JJ.)
    Heard April —, 1867;
    decided May —, 1867.
    Appeal by the defendant Dearborn from an order made at a special term, directing the- issuing of an attachment against him, unless he submit to an examination in proceedings supplementary to execution, and pay the costs.
    Beebe, Dean Donohue, for the defendant, appellant.
    The validity of an insolvent’s discharge is not to be tried on affidavits, but the plaintiff must resort to his action, (Baker v. Taylor, 1 Cowen, 165. Noble v. Johnson, 9 John. 259. Russell v. Packard, 9 Wend. 431. Bangs v. Olcott, 1 How. Pr. 181. Dresser v. Shufeldt, 7 id. 85.) The court will not try the good faith or regularity of an insolvent’s discharge upon the debtor’s motion to be relieved from arrest, but. will grant his motion. (Reed v. Gordon, 1 Cowen, 50.)
    The provisions of the Code in relation to supplementary proceedings do not in any way alter the rule as laid down by the decisions above cited.
    Section 292 of the Code provides for the examination of a judgment debtor as to his property. Section 294 provides for the examination of parties indebted to or having property belonging to the judgment debtor. Section 295 provides that witnesses may be required to appear and testify in these proceedings in the same manner as upon the trial of an issue. That is, they may be subpoenaed and sworn in the same manner as on the trial of an issue. They may be examined as to any property the debtor may have. The Code goes no further, and never intended that parties, after the return of an execution, might do that which they could not do while the execution was in force, to wit, assail an insolvent’s discharge without action for that purpose.
    The interposition of the discharge in these proceedings must be. as effectual as upon a motion to set aside an execution. There can be no reason for a different rule.
    The case of Stanton v. Ellis, (2 Kern. 575,) was an action commenced in 1852, (after the adoption of the Code,) on a judgment, and the discharge interposed, and the question was raised as to whether the recitals in the discharge were conclusive as to the jurisdictional facts. That case can have no bearing on this, except to show that an action on the judgment is the proper mode of proceeding, and that a discharge cannot be attacked collaterally.

      Wm. A. Coursen, plaintiff, respondent, in person.
    I. The defendant was relieved from the issuing of an attachment against him only upon the condition that he submit to an examination. He did not appeal from the order imposing that condition, and it must be considered finally binding.
    II. The court will not, in the summary manner suggested by the appellant, decide that the debt upon which the proceedings are founded, is discharged. The insolvent’s discharge might warrant a discharge from arrest of the person, but that question is not now presented. (Baker v. Taylor, 1 Cowen, 165. Reed v. Gordon, Id. 50. Noble v. Johnson, 9 John. 259. Russell v. Packard, 9 Wend. 431.)
   By the Court, Monell, J.

The defendant Dearborn was very properly adjudged to be in contempt. He had disobeyed a regular order of one of the justices of this court, by refusing or neglecting to appear and be examined in proceedings supplemental to an execution in the action.

Upon the motion for an attachment to punish such party, he produced a discharge from his debts, including the judgment in this action, granted under the insolvent act of this state. It was however ordered, that the attachment issue, unless the defendant appeared at chambers and submitted to an examination in such supplementary procedings.

I think the appellant correct in his view, that the validity of his discharge cannot be disposed of in this proceeding. There is no provision in the Code for submitting any question of fact arising thereon to a jury, and I think now, as formerly, the creditor must resort to his action. Therefore when the discharge is produced all further proceedings upon the examination should be suspended, until the determination of an actipn to be brought upon the judgment.

In this case, however, the defendant did not appear on the day named in the order, when he might have produced his discharge and procured a suspension of the proceedings, but put himself in hostility to the order, and was subsequently, and very properly, adjudged to be in contempt. His discharge did not' purge this contempt, and the justice who heard the motion for an attachment, had the right to punish the defendant o.r to excuse him absolutely or conditionally. He saw fit to excuse him conditionally, by merely requiring him to appear in the proceeding for the purpose of being examined. The defend.ant ought not to have complained. The order was most lenient.

The order entered upon the motion required the defendant to appear and “submit to an examination.” The intention however as now understood, was merely to require a substantial .personal appearance in the proceeding, for the purpose of restoring jurisdiction in the justice who made the original order, which jurisdiction, failure to appear by the defendant, may have been lost. It was not intended to compel him to undergo an examination at all hazards. Therefore, upon the defendant’s appearing at chambers, and being sworn in the usual manner, he would have complied with the condition named in the order appealed from; and then upon presenting his discharge he might obtain a suspension of the proceedings and compel the plaintiff to sue upon the judgment, if he desired to dispute its validity.

With these explanations of the meaning of the order, there is no necessity for a modification of it.

Order affirmed.

Robertson, Ch. J. concurred,


author: Barbour, J.

text:
    J. Varnum Graham et al. plaintiffs, vs. Eugene A. Pinckney, defendant.
    1. An extensión of the time to answer a complaint, by order, procured without any affidavit of merits, or other affidavit of an attorney or counsel, as required by the 22d rule of court, is irregular; and the plaintiff may avail himself of
    ' such irregularity, where the service of such order is substituted and not personal, although he would not be at liberty to disregard the order, if actually and personally served.
    2. Questions as to the regularity of a judgment, because of the insertion therein of costs without notice of taxation, or the omission to insert in the record the appointment of a guardian ad litem, can not be considered on a motion to set aside the judgment, where no such irregularities are specified in the order to show cause.
    3. Where a guardian ad litem for an infant defendant has been actually appointed before the expiration of the time to answer, an attorney’s notice of appearance for him will be deemed to have been authorized by such guardian; and the judgment will not be rendered void by the omission to insert in the record the appointment of such guardian ad litem. .
    4. Where a defendant has, by his laches, deprived himself of any legal right to set up the defense of infancy to avoid his contract, the court will not aid him by setting aside a judgment for the purpose, regularly entered against him by default.
    (Before Barbour, J. at special term,
    June 1, 1867.)
    This was a motion on the part of the defendant to set aside a judgment which has been entered up against him by default, for • want of an answer; open such default; and to permit him to plead.
    . The action was brought to recover $1900, alleged in the complaint to be due to the plaintiff from the defendant on the purchase of certain stocks, and the answer sought to be interposed by the defendant, through his father and guardian ad litem, (James M. Pinckney,) simply avers that the defendant is a minor, within the age of twenty-one years.
    The motion was made upon the proposed answer, (which contains seventeen lines,) an affidavit of the managing clerk of the defendant’s attorneys, stating that on the twentieth day after the service of the summons and complaint, he obtained the appointment of a guardian ad litem, and served a notice of appearance on the plaintiffs’ attorney, and requested him to extend the time to answer, which he declined to do; that, on the evening of the same day, he applied to one of the justices of this court on an affidavit stating that the defendant’s attorneys had been unable, owing to professional engagements, to prepare an answer, and that he désigned to set up the defense of infancy, and obtained an order extending the time 'to answer for ten days. He was, however, unable to find the plaintiffs’ attorney, or to serve such order upon him until after the entry of the judgment. The order so extending the time showed that it was granted upon the affidavit above referred to, and without any affidavit of merits. A paper was read by the defendant purporting to be an affidavit of merits made by the guardian ad litem, which stated that “he,” (not the defendant,) had a good defense, &c. as “ he ” is advised, &e.
    Affidavits in opposition were read on the part of the plaintiffs, showing that the defendant and his father were bill and specie brokers, occupying an office in Wall street, having the defendant’s sign at the door; that the defendant was, in appearance, of the full age, and so represented himself to be to the plaintiffs’ broker in the transaction complained of, prior thereto, and that he had long transacted business in his own name. Other facts appeár in the opinion of the court.
   Barbour, J.

As the affidavit used on the application for an extension shows that the attorneys for the defendant had then determined to plead infancy, a plea which would have been not only short and simple, but, if true, a perfect defense, I am unable to perceive why they did not then put in that answer, instead of applying for an extension of time. It would have required no more time to draw such an answer, than it probably did to make a draft of the order, and the affidavit on which it was founded. Indeed, the proposed answer, with its verification, is no longer than the affidavit and order, and required but little, if any, more skill. .

If the order extending the defendant’s time to answer had been regularly obtained, it may be that the earnest efforts of his attorneys to serve it before the entry of the judgment ought to be deemed equivalent to service. But the order was procured without any affidavit of merits, or any such affidavit of an attorney or counsel as is required by the 22d rule of court, and was, therefore, irregular; and the plaintiffs may well avail themselves of such irregularity on a question of substituted service, although they might not be permitted to disregard the order if served personally.

The question, raised by the defendant’s counsel, as to the alleged irregularity of the judgment because of the insertion therein of costs without notice of taxation, cannot be considered on this motion, inasmuch as no such irregularity is specified in the order to show cause. (See Rule 39, subd. 4.) The same remark also applies to the objection to the regularity of the judgment because of the omission to insert in the record the appointment of 'the guardian ad litem.

For can the claim of the defendant’s counsel, that the judgment is void by reason of the omission last referred to, be sustained. For, prior to the entry of such judgment, and before the time to answer had expired, a guardian ad litem had actually been appointed, and the attorney’s notice of appearance must be deemed to have been authorized by such guardian. The case is, therefore, unlike that of Kellog v. Klock, ( 2 Code R. 28,) where a judgment was entered against an infant for whom no guardian ad litem had been appointed, and which was, for that reason, set aide as irregular.

• The motion, therefore, cannot he granted upon any of the objections to the judgment specified in the order to show cause; and the only question remaining for consideration, is, whether the court ought to, or, equitably, can, open the judgment aqd let the defendant in to make such an answer, as I am satisfied from the evidence before me must defeat the claim of the plaintiff.

It appears from the affidavits before me that the defendant, whose personal appearance indicates that he' has attained his majority, has, with the concurrence and assent of his father and natural guardian, kept an office bearing his sign, carried on a regular business in his own name, and held himself out to persons dealing with him as a man of full age who is responsible for his obligations, and com-' petent to transact business as such. ' It cannot be doubted that if the arrangement between him and the plaintiff had resulted in a loss to the latter and a profit to himself, he would gladly have pocketed his gains; and it seems equally clear that he is bound in honor and equity, if not" by the strict rules of law, to pay his losses in the business so carried on by him. Because he was yet a minor by a few months when the contract was made, he was entitled, within the time limited by statute, to interpose a plea of infancy, and thus defeat the plaintiffs’ claim; but he has deprived himself of that legal right by his laches. The effect of granting the motion in this case would, therefore, he, to allow defense for the defendant; which, though valid and conclusive under the strict rules of law, would, manifestly, be inequitable and unjust. I cannot aid him. The judgment must stand.

Motion denied, with $10 costs.


text:
    Mary Catharine Reed, plaintiff, vs. Abraham Harris, defendant.
    1. Under an assignment by a husband of certain chattels (household furniture,) to a third person in trust for the sole use and benefit of the assignor’s wife, although it is to be exclusively, possessed and enjoyed by her, if it is to be disposable of by the trustee, for her benefit, in such manner, and at such times, as she may direct, the wife is a mere cestui que trust. The legal ownership, as against every one except the wife, the legal right to the possession of the property, is in the trustee, and he may sustain an action, in a proper case, in his own name, against any one who shall, under color of law, wrongfully and inequitably attempt to disturb him, or his cestui que trust, in such possession.
    2. The cestui que trust cannot maintain such an action in her own name alone, and without joining the trustee with her.
    (Before Barbour, J. at special term,
    June 1, 1867.)
    Motion to dissolve injunction pendente lite.

      John B. Fogerty, for the motion.

      James Clark, opposed.
   Barbour, J.

This action is brought by a married woman, living apart from her husband, to obtain a perpetual injunction, by judgment, restraining the defendant from removing or meddling with certain household furniture; in the actual possession of the plaintiff, and claimed by her as owner, which the defendant threatens to remove and sell under and by virtue of a chattel mortgage thereon alleged by him to have been executed by the plaintiff’s husband. A preliminary injunction having been obtained by the plaintiff, ex parte, the defendant now moves, on the original papers and additional affidavits, to dissolve it.

The complaint avers that the property in question was given to the plaintiff by her husband, while they were living together; that subsequently, a separation was agreed upon between them, and, thereupon, and in consideration thereof and of certain things done and covenants to be thereafter performed by the plaintiff and her trustee, the husband assigned and transferred the said property to Albert A. bTunoz, in trust for the sole use and benefit of the plaintiff, to be exclusively possessed and enjoyed by her, and to be disposed of by the trustee, for her benefit, in such manner, and at such times, as she might direct. The alleged gift was anterior to the date of the mortgage, which latter preceded the trust deed; but I am convinced by the evidence that when that deed was executed, neither the plaintiff nor the trustee had any notice, constructive or otherwise, of the existence of the mortgage.

2sTo legal title could have been vested in the wife by the alleged gift from her husband, and I am not satisfied from the affidavits before me, taking all the facts and circumstances therein detailed into consideration, that any equitable interest therein was conveyed, which was not subsequently revoked, with the assent of the wife at the time of, and in and by, the execution by all the parties, of the trust deed. If, therefore, the plaintiff is entitled to sustain this action, it must be by virtue of some legal or equitable ownership or right of possession vested in her by the trust deed.

By the terms of the deed, undoubtedly, the plaintiff is equitably entitled to the exclusive possession and use of the goods so long as they shall remain otherwise undisposed of by the trustee, with ber assent. But she is a mere cestui que trust; the legal ownership, and, therefore, as against every one except the plaintiff herself, the legal right to the possession, is in the trustee, and he may, no doubt, sustain an action, in a proper case, against any one who shall, under color of law, wrongfully and inequitably attempt to disturb him or his cestui que trust, in such possession. Indeed, it would be his duty so to protect the trust property, if necessary, on being furnished with sufficient funds for that purpose by his cestui que trust. But I know of no instance, in which a cestui que trust has successfully prosecuted to judgment or final decree a suit of this character, without joining the trustee; and the able counsel for the plaintiff has found himself unable to cite any. I am of opinion that the trustee is a necessary party in an action like this, (see Barbour on Parties, 439 et seq.) and, therefore, that the injunction order must be set aside with $10 costs, unless the plaintiff shall, within ten days after the entry of the order hereon, apply for and obtain leave, and serve an amended summons and complaint, making the trustee a party plaintiff, and pay to the defendant $10 costs of this motion. On complying with these conditions, the motion to be deemed denied.


text:
    Mary E. Monk, plaintiff, vs. George Monk, defendant.
    1. Where, in an action by a wife against her husband for a divorce, on tho ground of adultery, the charges are all made on information and belief, without any affidavits being tendered in support thereof, an order for alimony Will not be granted, if the defendant positively denies the charges.
    2. An affidavit of the plaintiff, showing general admissions made to her by the defendant, coupled with a denial of the specific act charged in the complaint, will not supply the defect. She can only sustain her action upon the specific charges contained in the complaint.
    S. Such general admissions are insufficient to show that there is any reasonable expectation of the plaintiff’s succeeding upon.the specific charges of adultery made by her.
    (Before Jones, J. at special term,
    July —, 1867.)

      Motion by the plaintiff for alimony, and an allowance for expenses, in an action for a divorce.
   Jones, J.

So far as this motion is based on the charge of adultery, it cannot be granted. The charges are all made on information and belief, and the defendant positively denies them. ISTo affidavits are tendered in support of them. The case then falls directly within the principle of Osgood v. Osgood, (2 Paige, 621.) The affidavit of the plaintiff respecting general admissions of the defendant to her, does not help her case. The plaintiff must sustain, her action upon the specific charges contained in the complaint. The admission in question, even supposing it does not contravene the rule prohibiting the wife from divulging private communications made to her by her husband, being coupled with a denial of the specific act charged, is insufficient to show that there is any reasonable expectation of the plaintiff’s succeeding, upon the charges of adultery made by her.

If she has any grounds for believing in the truth of the specific charges made by her, it is not unreasonable to require her to lay the grounds, or some of them, before the court.

So far as the motion is based on the charge of abandonment, it cannot be granted on the papers before me." The allegations on the part of the plaintiff, and those on the part of the defendant, bring the case directly within Hollerman v. Hollerman, (1 Barb. 64.)

The motion must be denied, so far as the ground' of adultery is concerned. As an opportunity was given the plaintiff to produce further affidavits in support of the charge of adultery, which opportunity she availed herself of by furnishing her own affidavit in support of the charge of adultery, leave should not be granted her to renew the motion on that ground. But as she may have a cause of action, on the ground of abandonment, which she may reasonably expect to sustain, and as she was not accorded an opportunity to meet the defendant’s allegation on that subject, she may renew her motion, on that ground, upon additional affidavits.


text:
    George Ruppert, et al. executors, &c. plaintiffs, vs. The Union Mutual Insurance Company, defendants.
    Where a testator had caused his life to be insured by an insurance company, whose charter contained a clause permitting them to “issue policies of insurance upon the life of any person, expressed to be for the benefit of any woman, minor or minors,” which should “ enure to the benefit of such person or persons so expressed, * * independently of the one whose life maybe thus insured, as well as his or her creditorsand the policy of insurance declared the same to be “ for the sole and separate use and benefit of his three children," naming them, the said sum “ to’the said assured, their executors, administrators or assigns;” and he afterwards, by his will, gave and devised the policy to his executors, in trust for certain different purposes;

      Held, 1. That the children of the person insured, so named, were vested, upon the delivery of the policy, with the entire beneficial interest in the sum insured.
    2. That such children, and not. the executors, were entitled to the sum insured by the policy.
    3. That it was the intention of the legislature to remedy a defect in the common law, by the charter of the company, so as to permit a man, while prosperous, to make a certain and absolute provision for his family in case of adversity, and one that should not be liable to any contingency arising from his acts or debts.
    (Before Barbour, J. at special term,
    November —, 1867.)
    This was an action upon a policy of life insurance.

      Stallknect & Hall, for the plaintiffs.

      Paddock & Cannon, for the defendants.
   Barbour, J.

The pleadings and evidence in this case show, that Valentine Ruppert, the plaintiffs’ testator, procured from the defendants an insurance of $2000 upon his own life, “ for the sole and separate use and benefit of his three children,” naming them; the said Sum to be paid “to the said assured, their executors, administrators or assigns.” After that, V. Ruppert, by his last will and testament, gave and devised the policy of insurance in question to his executors, in trust for certain purposes; and they now bring this action thereon.

The single question in the case is, whether the children named in the policy did, or did not, take a vested estate. or interest in the sum insured, upon and by the delivery of the policy to their father ?

The charter of the defendants contains a clause as follows : “ The said company may issue policies of insurance upon the life of any person, expressed to be for the benefit of any woman, minor or minors; and the same shall enure to the benefit of such person or persons-so expressed as aforesaid, independently of the one whose life may be thus insured, as well as his or her creditors.”

What rule of law was' this act intended to remedy ? Or, in other words, what object.did the legislature design to accomplish by it ? (Dwarr. on Stat. 562. Donaldson v. Wood, 22 Wend. 395.)

Under the common law, an insurance could not be effected for the benefit of a person having no pecuniary interest in the subject matter insured, at the time of the execution of the policy. The only manner in which a father could provide for his wife or minor children, by way of a life policy upon himself, was to insure his life for his own benefit. But, in that case, the provision would not be certain to reach them; for the insurance moneys would be subject to his acts and debts. Was it not the intention of the legislature' to so remedy that evil, by the statute in question, as to permit a man, while in prosperity, to make a certain and absolute provision for his family ?, one that would not be liable to any contingency ? I am unable to see any other object in the clause in question.

Assuming, then, as I think we may, that such was the object, and such the effect of the act, it must be held that both of the parties to the transaction so understood the contract of insurance entered into by them; and it follows, as a necessary sequence—independent of, and over and beyond the strong language of the act, as well as of the policy itself—that both the testator and the company intended and designed that the persons named as the beneficiaries therein, should be, and were, vested with the entire beneficial interest in the sum insured, upon and by the delivery of such policy.

The children, therefore, and not the executors, are entitled to the fund in question; and, of course, judgment must go for the defendants.


text:
    Quinn, adm’r, &c. plaintiff vs. Lloyd, defendant.
    An irregularity in the appointment of a referee will he waived by the appearance of a party before him and proceeding with the reference, for several days, without making any objection.
    (Before Barbour, J. at special term,
    November —, 1867.)
    Motion for the removal of a referee.
    This was a motion on the part of the defendant for the removal of the referee in this action, upon the ground that he was irregularly appointed.
    After issue joined, the attorneys for the parties respectively entered into a stipulation, which provided that the action be referred to a referee, named in such stipulation, to hear and determine. Such stipulation was taken by the plaintiff’s attorney- and an application made by him, ex parte, thereupon, for an order, in accordance with its provisions; the court, on such ex parte application, and without the consent of the attorney of the defendant, granted an order referring the cause, not to the referee so agreed upon, but' to another person; the defendant’s attorney, haying notice of such order of reference, attended before the referee named • therein, and proceeded with such reference without any objection on his part, for several days. He now moved that the order of reference be set aside for irregularity.
   Barbour, J.

The acquiescence of the attorney of the defendant in the order, as exhibited by the proceedings before the referee,for several days, without objection on the defendant’s part, must be held to constitute a waiver of the irregularity.

The motion is denied, with $10 costs.


text:
    Dora Kelly and James Kelly, plaintiffs, vs. John P. Jeroloman, defendant.
    1. When an order absolutely enjoins a defendant to refrain from doing certain acts, until the further order of the court, although it also requires him to . show cause, at special term, why such injunction should not be continued until the final determination of the action, there is no necessity for making an additional order to continue the injunction.
    2. Upon hearing such motion merely to continue the injunction, the court cannot relieve the defendant from the restriction placed upon him by the previous order; which can only be'done upon an original motion by him, made on notice, or an order directing the plaintiffs to show cause why the same should not be vacated or modified.
    (Before Barbour, J. at special term,
    November —, 1867.)

      This is a motion by the plaintiff, to continue an injunction. It is based upon an order of a judge enjoining the defendant to refrain from collecting or attempting to collect from the plaintiffs certain rents, or from taking any proceedings to dispossess or remove such plaintiffs from certain premises, until the further order of the court; and also requiring the defendant to show cause, at special term, why the said injunction should not be continued until the final determination of the action.

      Gleason & Babcock, for the plaintiffs.

      Charles N. Black, for the defendant.
   Barbour, J.

As the plaintiffs have already obtained an order enjoining the defendant until the further order of ihe court, I see no necessity for an additional order to the same effect.' The order already made will continue in force until the final determination of the action, unless the defendant shall obtain another dissolving it, and the order already made by the justice at chambers is quite as effective without, as it would be with, the ratification thereof by another judge sitting at special term, to say nothing of the indelicacy of such an unnecessary proceeding.

35Tor, on the other hand, am I able to perceive how the court can relieve the defendant upon this motion from the restriction placed upon him by the order which has been made; inasmuch as it cannot, properly, be set aside, vacated or modified, except upon his motion, on notice, or an order directing the plaintiffs to show cause why the same should not be vacated or modified.

It is not like the case provided for in the 223d section of the Code, where,- in case the judge shall deem it proper that the defendant be heard before granting the injunction, he may make an order requiring cause to be shown why such injunction should not be granted, and may, in the meantime, restrain the defendants; for, here, the injunction order, and all the order, it must be assumed, that the ■plaintiffs were entitled to, has already been granted.

The motion must be denied, but without costs, as none of these objections, which are jurisdictional, were taken by the counsel at the hearing.


author: Monell, J.

text:
    Shuttleworth vs. Bruce.
    1. An order or draft drawn upon a particular or specified fund, or which, in terms, or by necessary implication, appropriates a particular fund to its payment, -operates as an equitable assignment of such fund, after notice to the party holding it.
    2. In such a case an acceptance is not necessary; and the drawee, upon notice of the draft, is bound to keep the fund as a special deposit to meet the draft.
    3. Where an order or draft upon factors was to pay “ all moneys" the entire proceeds of a single consignment, of goods pointed out and designated as the goods shipped to Havana, and consigned to a person named; Seld that this was not only a draft upon a particular and specified fund, but also a clear appropriation of the fund itself, for the payment of the draft; and the appropriation and transfer were made in a way that authorized the drawees to pay the proceeds of the goods to the payees without further intervention of the drawer.
    4. Seld, also, that under the circumstances, the payees, after presentment of . the draft and refusal to accept, had a right to an account from the drawees, of the proceeds of the goods shipped to Havana; and were entitled to judgment against them, for the balance in their hands, after deducting any advances made by them upon such shipment, prior to receiving, notice of such draft, and their lawful commisssions and charges.
    (Before Monell, J. at special term,
    -1868.)
    This was an action for an account from the defendants, who were the factors of one Norton, of the proceeds of sales of certain goods consigned by Norton to the defendants for sale. Subsequently to the shipment of the goods, Norton delivered to the plaintiffs an order on the defendants, which is as follows:
    “New York, Oct. 4th, 1866.
    Messrs. Bruce & McAuliff, No. 2 Bowling Green, New York.
    Gentlemen: Pay to the order of Messrs. Shuttleworth & Co. all moneys due me after you receive the proceeds of sales of brooms, tubs and wrapping paper, shipped by myself to Havana, prior to this date and consigned through your house to I. R. Marquette, and oblige,
    Yours, &e. P. Lay Norton.”
    The plaintiffs presented the order to the defendants on the day of its date and demanded an acceptance of it, which was not given. Subsequently the plaintiffs demanded an account, which was refused.

      A. Kursheedt, for the plaintiffs.

      George Barrett, for the defendants.
   Monell, J.

An examination of some of the recent and leading cases in this state, will establish, I think, beyond all reasonable doubt, that the order of Norton upon the defendants operated as an equitable assignment to the plaintiffs of the proceeds of the goods consigned to Marquette at Havana.

In Lowery v. Steward, (25 N. Y. Rep. 239, affirming S. C. 3 Bosw. 505,) a draft was drawn by the consignor upon the consignee of cotton, to pay the plaintiffs five hundred dollars “ on account of twenty-four bales cotton shipped to you as per bill of lading, by steamer Colorado, inclosed to you in letter.” The bill of lading was accompanied by a letter advising the defendants (consignees) of the draft. The court say, that was a clear and specific appropriation of $500 of the proceeds of the cotton, when sold, to the use of the plaintiffs, (payees of the draft,) payable on presentation of the draft; and that the defendants were bound to keep $500 of the proceeds to meet the draft, and not to appropriate the fund to their use, or to any other use, after notice of the draft.

In Parker v. City of Syracuse, (31 N. Y. Rep. 376,) a street contractor drew upon the comptroller of the city, a draft to pay $1420, “on plank road and sidewalk accounts,” which on the same day was left by the payee with the comptroller. Such order, the court say, was a valid equita-. ble assignment of. the demand which the drawer had against the city; and that the delivery of the order to the comptroller was sufficient notice of the assignment, to charge the city..

In neither of the cases cited, was there an acceptance of the draft, although there was some evidence of a promise to pay, or of some assurance that the draft would be paid. But the court did not regard an acceptance necessary, and Judge Denio, in the last case cited, says: “ Had there been nothing to qualify it,” the city was bound.

The earlier cases, many of which are collected in Cowperthwaite v. Sheffield, (3 N. Y. Rep. 243,) in distinguishing between bills of exchange and equitable assignments, state the difference to be in the intention of the drawer. If from the nature of the transaction it was his design to make a specific appropriation of the fund to the payee, or if he intended to transfer his whole interest in the goods, or their proceeds in the hands of the drawee, it was an assignment and not a bill of exchange. And the design which is thus resorted to, to give effect to the draft, either as a bill of exchange or as an assignment, is in most cases determinable from the draft itself. If it is manifest that the drawer 'intended to appropriate a particular fund in the hands of the drawee, to the payment of the draft, it operates as an assignment, and notice without acceptance is all that is necessary, to hind the fund pro tanto, in the hands of the drawee. And the same effect is given to an order to pay all the moneys in the drawee’s hands, belonging to the drawer; (Harris v. Clark, 3 N. Y. Rep. 93, 115,) or to pay out of a particular fund. (Phillips v. Stagg, 2 Edw. R. 108. Winter v. Drury, 5 N. Y. Rep. 530. Chapman v. White, 6 id. 416.)

The result of all the cases is, that an order or draft drawn upon a particular or specified fund, or which in terms, or by necessary implication, appropriates a particular fund to its payment, operates as an equitable assignment of such fund, after notice. In such case an acceptance is not necessary, and the drawee, upon notice of the draft, is bound to keep the fund, (as is said in Lowery v. Steward, ubi sup.) as a special deposit to meet the draft.

In the case before me the order or draft was to pay “ all moneys,” the entire proceeds of a single consignment, of goods, pointed out and designated as the goods shipped to Havana, and consigned to Marquette. Here was pot only a draft upon a particular and specified fund, but also a clear appropriation of the fund itself for the payment of the draft; and the appropriation and transfer was made in a way that authorized the defendants to pay the proceeds of the goods to the plaintiffs without further intervention of Horton, the drawer. (Hoyt v. Story, 3 Barb. 262.)

Under these circumstances the plaintiffs have a right to an account from the defendants, of the proceeds of the goods shipped to Havana; and are entitled to judgment against the defendants, for the balance in their hands, after deducting any advances made by them upon such shipment, prior to receiving notice of such draft, and their lawful commissions and charges, to ascertain all which there must be a reference.

The defendants must also pay the plaintiffs’ costs of this action, to be taxed,