text:
    George Hill, Respondent, v. The Durham House Drainage Company of New York and Another, Appellants.

      Privileged communications — absolute and prima facie privileged —action to recover damages for libel — malice.

    There are two classes of privileged communications — those which are absolutely privileged and for the publication of which an action cannot be maintained, no matter what the motive of the author may be, and those which are prima facie privileged, which are of two kinds, those which relate to matters of public interest, and those which relate to merely private interests.
    In case a communication is prima facie privileged, the existence or non-existence of malice on the part of the defendant is a question of fact, and the plaintiff, in an action brought to recover damages for the publication of an alleged libel, before he can recover, must affirmatively establish to the satisfaction of the jury that the publication complained of was made through malice.
    There are two questions involved in the issue whether a communication is prima facie privileged, viz., was the occasion on which it was made privileged, and did the communication go beyond what the occasion justified, or did it exceed' the privilege 1

      Appeal by the defendants, The Durham House Drainage Company of New York and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 10th day of May, 1893, upon the verdict of a jury rendered after a trial at the New York Circuit, and also from an order entered in said clerk’s office on the 3d day of May, 1893, denying the defendants’ motion to set aside the verdict and for a new trial made upon the minutes.
    This action was brought to recover damages for the publication of a letter alleged to be libelous. At the date of the publication complained of the plaintiff was, and during the fifteen years preceding had been, a civil engineer, and in 1891 he was employed by Carrere & Hastings, architects, having charge of the heating, ventilating and plumbing of buildings which were being erected under their plans and specifications. In 1891 the Mail cmd Express building was being constructed by Charles T. Wills, as contractor, who sublet the plumbing to James Armstrong. Carrere & Hastings were the architects in charge of the building, and the plaintiff, under them, had personal charge of the work until shortly after June 20, 1891, when he was withdrawn from that building. The Mail and Express building was constructed, including plumbing, pursuant to plans and specifications which had been inspected by builders and plumbers, who bid for the work, which had been let sometime prior to Juno 20, 1891, on which date the defendants wrote and sent the following letter to R. C. Alexandei-, who had charge of the work for the owners:
    “ Cable Address: ‘ Irisknack.’
    “The Durham House Drainage Company of New York, “158-160 West 27th Street.
    “Trade mark — D. H. D. Co.
    “New York, Jwne 20, 1891.
    “R. C. Alexander, Esq.,
    “ Secretary ‘ Mail and Express ’ Go.:

    “Dear Sir — 'We beg to submit the following statement:
    “In the spring of 1890 we called the attention of Messrs. Carrere & Hastings, architects, to the superiority of our drainage work, and as a result of the favorable opinion formed by their engineer, Mr. Geo. Hill, the ‘ Durham System ’ of house drainage was specified to be used in tbe Pierce building at the N. W. corner of Eranklin and Hudson streets; and later the plumbing specification of the ‘ Mail & Express ’ building also was drawn to include in its entirety our wrought-iron pipe drainage.
    “ The contract for the Pierce building, including plumbing, was awarded to Mr. "Willis, who sublet the plumbing to one James Armstrong, who for several years has made a practice of imitating our system as closely as he dared without risking the consequences of infringement.
    “ When we learned that Armstrong had been selected to do the plumbing we promptly notified Mr. Hill that he (Armstrong) would probably not apply to us to furnish the drainage system as specified, but attempt to furnish his own imitation instead; and Mr. Hill promised to notify Mr. Willis to suspend his selection of Armstrong as plumber until the matter could be investigated.
    “ When the Pierce building was about ready for, the plumbing work, not having been able to secure satisfactory action from Mr. Hill, our attorneys, Messrs. Cannon & Attwater, notified Messrs. Carrere & Hastings that if Armstrong attempted to construct the drainage work as specified, their client (the owner of the building) would be liable for damages for infringement. They replied that they had changed the specifications, and should allow Mr. Armstrong to proceed.
    “We are now informed that Mr. Willis is tire contractor for the ‘ Mail & Express ’ building, and that he has selected Armstrong to do the plumbing. Under the circumstances, we should be derelict in our obligations to the other bidders if we failed to appeal to Col. Shepard to forbid any similar change in the published specifications for the purpose of favoring the contractor, and to veto the selection of Armstrong as plumber unless he should agree to furnish the work called for by the specifications.
    “ The following builders and plumbers applied to us for our price for constructing the drainage system as specified, viz.: Richard Deeves, builder; Byrn & Tucker, plumbers; John Tourney & Son, plumbers; J. N. Knight &■ Son, plumbers; W. R. Bracken, plumber; Cook & McCormack, plumbers.
    “ Mr. Armstrong did not ask us for a quotation. It is, therefore, evident that he made his price with the understanding that he would not be required to adhere to the specifications, and that the Pierce building precedent would be followed in this case. On this basis he could quote his patron a much lower price than could the first-class firms above named, who accepted the specifications literally, and the builders using their bids were correspondingly handicapped.

      “ Any departure from the intent of the drainage specification will be at the owner’s cost. Mr. Hill may have good reasons for changing his mind and preferring a botched and scamped piece of work to that which he described in his specifications, but he has selected an unfortunate time to declare the change; and in that opinion he will stand alone as an engineer. Among contractors his action could only be construed very unfavorably.

      “We beg to assure you that this protest is not dictated from any sense of loss, but from indignation that we should be made use of as a club with which to knock out honest bidders. And we trust that this appeal will have the effect of preventing the consummation of a purpose, which it is amazing should be contemplated by any person valuing his reputation.
    “ Very respectfully,
    “ DURHAM HOUSE DRAINAGE 00.,

      “ By O. W. Durham,

      “ President.”
    At the date of this letter the Durham House Drainage Company was,- and for some time had been, a domestic corporation, of which Caleb W. Durham was president.
    The defendants, by their answer, admitted the publication of the letter, and alleged that it was not composed or published maliciously, but, in the course of the business of the defendant corporation, to prevent its business from being injured by the substitution of inferior work for its work, which was called for by the specifications for the Mail and Express building. These matters were alleged as a defense aq,d in mitigation of damages. Upon the trial of the issues so joined, the plaintiff had a verdict for $2,500, on which a judgment was entered.

      A. B. Oruilcshank, for the appellants.

      J)mid Me Glure, for the respondent.
   Follett, J.:

The defense interposed by the answer is that the statements contained in the letter are true, were published without malice, and that the circumstances under which the letter was written rendered it a prima faeie privileged communication. There are two classes of privileged communications: (1) Those which are absolutely privileged, and for the publication of which an action cannot be maintained, no matter what the motive of the author may be. Within this class are accurate publications of the proceedings of courts of record and legislative bodies, the statements of judges, witnesses and jurors made on trials in courts of record. ' (2) Communications which ar oprima faeie privileged. Among this class are statements necessary to protect one’s private interests, and statements of one having an interest in the subject-matter of the communication made to another having an interest in the same matter. Prima faeie privileged communications are subdivided into two kinds: (1) Those which relate to matters of public interest, and (2) those which relate to purely private interests. The communication in this case, if it be prima faeie privileged, falls within the second subdivision of the second class.

In case a communication is prima faeie privileged, the existence or non-existence of malice on the part of the defendant is a question of fact, and the plaintiff, before he can recover, must affirmatively establish, to the satisfaction of the jury, that the publication complained of was made through malice. This may be shown by the communication, by the circumstances under which it was written, and it may be inferred from a variety of facts. There are two, questions involved in the issue, whether a communication is prima faeie privileged: One is, was the occasion on which it was made privileged ? (2) Did the communication go beyond what the occasion justified, or did it exceed the privilege ?

The communication complained of related to the introduction of a system of drainage and plumbing for two buildings, the specifications for the construction of which called for the use of the defendant’s system. In both cases other systems of drainage had been substituted to the defendant’s loss. The communication was made to the secretary of the Mail and Express Company, which was engaged in erecting one of the buildings. The occasion was privileged. Did the publication go beyond the occasion, or, in other words, was more written than the occasion, the facts, justified? This depended upon the terms of the communication and the facts outside of it, and was an issue of fact for the jury. However, the case was not submitted to the jury on that theory, but, on the contrary, the court charged : “ This letter related to Mr. Hill, the plaintiff, in his business capacity, and I charge you that the words therein contained are libelous per se, and that he is entitled to maintain this action, and, being entitled to maintain the action, the next question which arises is as to the damages which he has sustained.” To this instruction the defendants excepted. In this the court erred, for under defendant’s evidence tending in support of the letter it could not be affirmed, as a matter of law, that the question was not privileged and that the communication exceeded the privilege.

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

O’Brien and Parker, JJ., concurred.

Judgment reversed, new trial granted, costs to appellant to abide event.


source: Caselaw Access Project

author: Follett, J. :

license: Public Domain

text:
    William McCormick, Appellant, v. United Life and Accident Insurance Association, Respondent.

      “Club” insurance — ■false representations — a defense to an action brought by a dub member — evidence inadmissible under section 834 of the Code of Civil Procedure.

    An insurance company issued to certain persons, associated as members of a “ club,” ten policies of insurance by which it agreed to pay to the several individuals to whom the policies were issued and to the members of such club “ in equal proportion to those who have kept their certificates in force, if living; if not, then to the heirs at law of said member, within ninety days after due proof of the death of said member, a sum equal to the amount received from a death assessment, but not to exceed the sum of §5,000.”
    Among other conditions contained in such policy was the following:

      “Mrst. That the statements and declarations made by and on behalf of said member, in his application to become a member of said association, which are hereby referred to as the basis of this contract, and are a part thereof, and cm the faith of which this certificate is issued, are in all respects true, and that no fact has heen suppressed relating to his health or circumstances affecting the interests of said association or their inducement to accept the risk.”

      Held, that a breach of warranty or a false representation on the part of the deceased insured was a defense to an action brought by any one of the living members of the club to enforce his rights under his policy, inasmuch as any member of the club stood in the same position as the representatives of a deceased member, and an action in his behalf was subject to the same defenses that an action would he, brought by the wife or heirs of the deceased.
    Upon the trial of an action brought upon a life insurance policy, where the defense is that the policy was vitiated by reason of a disease which the assured had at the time of the issuing of the policy of insurance to him, it is error, under section 834 of the Code of Civil Procedure, to permit the insurer to show by physicians who had professionally treated the insured that they had treated him for some time anterior to the date of the policy, and that they were specialists and competent to treat cancers and diseases of the tongue and throat, the disease which caused the death of the assured.
    When no question of fact arose upon the trial of an action in regard to an issue to which incompetent evidence, improperly admitted, was relevant, the judgment rendered in such action against the party objecting to the admission of such evidence will not he reversed on appeal by reason thereof.
    Appeal by the plaintiff, William McCormick, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 15th day of March, 1893, upon the verdict of a jury, directed hy the court, dismissing the plaintiff’s complaint after a trial at the New York Circuit, and also from the interlocutory judgment entered in said clerk’s office on the 15th day of March, 1893, and also from the order entered in said clerk’s office on the 7th day of March, 1893, denying the plaintiff’s motion for a new trial made upon the minutes.
    This action was brought by one of a club of ten members to whom policies of like tenor and effect were issued which provided that on the death of any member a certain proportion of the amount realized on an assessment should he paid to the wife or heirs at law of the deceased and to each surviving member of the club who had kept his certificate of insurance in force.
    The defendant is a corporation incorporated prior to February 8, 1886, under chapter 175 of the Laws of 1883, entitled “ An act to provide for the incorporation and regulation of co-operative or assessment life and casualty insurance associations and societies.”

      On tbe 8tli day of February, 1886, 'William H. Story applied to tbe defendant, in writing, for insurance to the amount of $10,000, $5,000 under a policy known as club insurance and $5,000 under a policy known as the regular life policy. The application contained, among others, the following inquiries to and answers given by the applicant.
    “ 8. Are you now in good health, and is your health usually good ? Ans. Yes.
    “ 9. Have you ever had any serious illness, local disease or personal injury ? If yes, state nature, date, duration and severity of attack? No.
    “ 12. Have any material facts regarding your past health or present condition been omitted ? State facts fully ? No.
    “13. Name and residence of your medical attendant? Dr. Ruppaner, Hoffman House.”
    On the 9th of February, 1886, the defendant issued a club policy on said application to William II. Story, which contains the following provision:
    “ B; this policy of insurance (defendant) agrees to pay to William II. Story and members of club No. 7, in equal proportion to those who have kept their certificates in force, if living; if not, then to the heirs at law of said member, within ninety days after due proof of the death of said member, a sum equal to the amount received from a death assessment, but not to exceed the sum of $5,000.”
    Among other’conditions contained in the policy is the following:
    “ First. That the statements and declarations made by and on behalf of said member, in his application to become a member of said association, which are hereby referred to as the basis of this contract, and are a part thereof, and on the faith of^ which this certificate is issued, are in all respects true, and that no fact has been suppressed relating to his health or circumstances affecting the interests of said association or their inducement to accept .the risk.” •The application was received, accepted and the policy issued on the 9th of February, 1886,.but the insured did not pay the premium until May 18, 1886, when the policy was delivered to him. Prior to February 27, 1886, the defendant issued nine other such policies to persons who were associated as members of club. No. 7, one of which was issued February 9, 1886, to the plaintiff for $5,000. The policies issued to the ten persons constituting club No. 7 were in all respects alike.
    It was admitted that William II. Story died November 1, 1886, due proof of which was filed with defendant March 1, 1887, and that the death assessment made on account of the policy and said death exceeded the sum of $5,000.
    It was alleged in the complaint that only six members of said club, who had kept their policies in force, one of whom was the plaintiff, survived William II. Story, and that plaintiff was entitled to recover one-seventh of $5,000, $714.28, with interest from March 1, 1887.
    This action was begun August 25, 1887, to recover a judgment, (1) that the policy be reformed so as to provide in accordance with the alleged agreement between the parties, omitted from the policy by mutual mistake, as follows: “ That upon the death of .any member of said club No. 7, there should be paid a death assessment in equal proportions to the wife of the deceased member and to the surviving members of club No. 7 who had kept their policies in force,”, a sum equal to the amount received from a death assessment, not to exceed the sum of $5,000; and (2) for $714.28, with interest from March 1, 1887.
    The issue, whether the policy should be reformed, was tried before the court without a jury, and the relief sought denied on the ground that the policy, if reformed in accordance with the prayer of the plaintiff, would be prohibited by law and void, and an interlocutory judgment was entered in accordance with the decision. At the same Circuit the issue, whether the plaintiff was entitled to recover any sum, was tried before a jury; at the close of the evidence a verdict was directed for the defendant and a motion for a new trial made on the minutes was denied, and from this order and the judgment entered on the verdict, and also from the interlocutory judgment, the plaintiff appeals.

      J. Aspirwoall Hodge, Jr., for the appellant.

      Harry Wilber, for the respondent.
   Follett, J. :

Construing the ten policies issued to the ten persons forming club No. 7, and the club circular (Exhibit A) explanatory of the defendant’s plan of club insurance together, the legal effect of the contract of insurance is- as alleged in the complaint, and the reformation of the policy in accordance with the prayer of the plaintiff would not affect the rights of the litigants. It is not alleged in the answer that the contract set out in the complaint is a wager policy, or that it is for any cause void under the laws of the State, and on the trial the defendant expressly waived this defense.

As a defense it is alleged in the answer that the answers given to questions 8, 9 and 12 were untrue, and that William H. Story was not at the time the insurance was effected in good health, but was suffering from a disease of the throat and tongue from which lie died, which disease he concealed from the defendant. A breach of warranty or false representations on the part of the insured is a defense to an action brought by any one of the members of the club to enforce his rights under the ten policies, as a member of the club stands in the same position as the representatives of a deceased member, and an action i'n his behalf is subject to the same defenses that an action would be brought by the wife or heirs of the decedent. On the trial of this action the defendant sought to show that William H. Story died of cancer of the tongue, and that he had this disease at the date of his application for the policy. One of his partners (Mr. Hancock) testified that Story sailed for Europe May 18, 1886, and returned to New York about the middle of August of the same year, and while absent his tongue had been removed. This witness testified: “ Before he went to Europe I looked at his tongue; I presume I saw it half a dozen times; I knew for two or three years, not that lie had any disease of the tongue, but that he had a peculiar looking tongue; his tongue had a pimpular appearance; I know that it had this peculiar appearance during the period I have stated; I saw it; lie showed it to me for the purpose of having me see it; his tongue had at times an appearance of having a heavy coating, and at times it would be red; no soreness apparently about it; Mr. Story said he thought the appearance of his tongue was occasioned by disordered digestion; a disordered state of the stomach; that is all the reason he ever gave for it; in regard to his smoking habits, I think he thought that aggravated the condition of his tongue; at one time he stopped smoking, and I think that was the reason of it. Q. When you discovered this redness of the tongue, on the occasion that he showed it to you, was the entire tongue involved, or was it confined to any particular part of it ? A. I don’t know that there was any difference in any particular part of the tongue in this appearance. Q. Did you at any time before he went to Europe see his tongue, when you discovered that there was a sore upon it ? A. Tes, I do. Q. On how many different occasions ? A. Not more than twice; I don’t know as more than once; once or twice. Q. How long was that before his departure? A. I should think, a few days; I could not swear positively about it. No portion of his tongue had been eaten away by that sore before his departure for Europe.”

Upon the cross-examination the witness testified that the sore which he saw on Story’s tongue before he left was of the size of an ordinary field pea; was on the right side of and about one-half inch back of the point of the tongue, but that it had not festered. He also testified that up to the day he sailed for Europe he was a strong, powerful, robust man in excellent health, and had been peculiarly free from sickness.

Another partner of Mr. Story (Mr. Mascord) testified that the insured, prior to his sailing for Europe, appeared to be a man in vigorous health, but that just before he sailed he saw his tongue and it seemed to be inflamed, but there was no festering, no part of it gone, but it was red.

A third partner of Mr. Story (Mr. Halstead) testified that he knew Story had some trouble with his tongue prior to his sailing for Europe, and that he stated that he was going abroad in the hope of being benefited by the water of some German spring, which had- been recommended by Dr. Ruppaner. This witness testified that he knew as early as January, 1886, that Story had trouble with his tongue.

That the insured died of some disease of the tongue and throat was not denied, nor was any evidence given tending to contradict that given by his partneiu

The defendant’s surgeon, who examined Story when he applied for insurance, testified that he appeared to be a perfectly healthy man, and free from disease, though he told him he had a pimple on his tongue, which Dr. Ruppaner said was not serious. He testified that he examined the tip of Story’s tongue, and noticed a pimple like those that people have when it is said they have told a lie. Under this state of the evidence we think there was no question of fact for the jury as to whether the insured had the disease at the date of the policy.

It is urged that the court erred in permitting three physicians, Drs. Ruppaner, Keys and Dennis, who had treated Story, to testify to certain facts. Their evidence was objected to on the ground that it was inadmissible under section 834 of the Code of Civil Procedure, which provides: A person duly authorized to practice physic or surgery shall not be allowed to disclose any information which he acquired in attending a patient in a professional capacity and which was necessary to enable him to act in that caj)acity.” The objection was overruled, and an exception was taken.

Dr. Ruppaner testified that between May 28, 1885, and May 17, 1886, Story called on him for professional advice on twenty-four different occasions. The witness did not state what information he received from Story or what advice he gave him, but he did testify that all of the visits were professional, and that for twenty-six years he had made specialty of treating diseases-of the throat, chest and heart, and that he had no relations with Story except professional ones.

Dr. Edward L. Keys was permitted to testify: “ I have had experience in treating cancers; been general surgeon in the hospital for fifteen years; I have treated cancer of the tongue ; I have not had very much experience in treating those; I have had during my practice not more than half a dozen at the outside; not many; I knew William H. Story in his lifetime; I don’t know anything about where he lived. I first saw him, or made his acquaintance, in my own office; I suppose he called on me because I was a physician; he called to consult me as such; he made his first call in January, 1885, January 6th, I think it was, early in January; he made six calls in my office in all; the last call was made in March, 1885; none of those calls were of a social nature; they were all made upon me as a physician; I prescribed for him on all' the occasions, I believe, when he called at my office. I remember his case, his disease particularly, becaused it interested me.”

Dr. Frederick S. Dennis was called, and testified that he was a physician, and that he saw Story professionally twice in April, 1886, and also after he returned from Europe. This witness was allowed to testify that on the occasion of his first interview with Story he examined his tongue and throat, and that for fifteen years the witness had been engaged in treating diseases of the tongue and throat.

It is urged that these physicians disclosed no information derived from Story while they were treating him in a professional capacity. While this may be technically true, we think that by permitting the defendant to show, by these witnesses, that they have treated him for some disease for a long time anterior to the date of the policy, and that they were specialists, and accustomed to treat cancers and diseases of the tongue and throat, that the spirit of the section was violated, and an error was committed in admitting this evidence over the objection of the plaintiff. But, under the state of the record, we do not think this error calls for a reversal of the judgment, for, if all of the testimony given by the physicians be stricken from the record, there remains the uncontradicted evidence of the three partners of Story, that for some months before he sailed for Europe he had been suffering from some disease of the tongue, and that after his return from Europe they saw that his tongue had been removed, and that November first he died from the effects of the disease.

The evidence not presenting a question of fact for the jury, and no question of fact arising over the issue to which the incompetent evidence was relevant, we are not called on to reverse the judgment^ which should be affirmed, with costs.

Van Brunt, P. J., and Parker, J., concurred.

Judgment affirmed, with costs.


author: Parker, J.:

text:
    William A. Hardt and Others, Respondents, v. Moses S. Levy, Appellant, Impleaded with Others. Henry Winthrop Gray, Receiver, etc., Respondent.

      Action by the general creditors of a firm for the appointment of a receiver — maintainable against a limited, but not against a general partnership —objection to the acts of a receiver erroneously appointed — when too late.

    Wliile an action by the general creditors of a firm for the appointment of a receiver, and the disposition of its assets, is maintainable against a limited partnership, it is not against a general partnership.
    A receiver, appointed of the assets of a general partnership, in an action brought by its general creditors, without opposition on the part of the members of such firm, took possession of the estate and performed services m relation thereto which the members of such firm well knew entailed upon him, as an officer of the court, much labor and expense.

      Held, that it was too late for them, after the facts had been within their knowledge for over two years and a half, to strip the receiver of all the money in his possession, treat him as a trespasser, and leave him to personally bear the burden of expenses necessarily and in good faith incurred by him while attempting to carry out the orders of the court;
    That the receiver should be permitted to render an account of his proceedings and make such disposition of the money in his possession as to the court might seem to be in accordance with law and justice.
    Appeal by the defendant, Moses S. Levy, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of * the clerk of the county of New York on the 30th day of March, 1893, upon the decision of the court rendered after a trial at the New York Special Term, and also from an order made at the New York Special Term and entered in said clerk’s office on the 12th day of April, 1894, denying the defendant’s motion to vacate an order appointing a receiver and continuing an injunction.
    This case has already been before the General Term (27 Hun, 225), where it was held that the limited partnership of Levy Bros. & Co., formed April, 1884, had become a general partnership; and that, consequently, an- action could not be maintained by a' general creditor for the appointment of a receiver thereof. (See, also, Gray v. Levy, 75 Hun, 96.)

      Benjamin 2L. Gardozo, for the appellant.

      George Zdbriskie, for the receiver, Llenry Winthrop Gray.
   Parker, J.:

We held at the October term of 1893, that while an action by the general creditors of a firm for the appointment of a receiver and the disposition of its assets is maintainable against a limited partnership,, it is not against a general partnership; that the record disclosed the existence of a general and not a limited partnership by and between these defendants, and reversed the judgment which the Special Term had granted to the plaintiffs. The suit was commenced May 18, 1891, by the service of summons and complaint on the defendant Augustus H. Levy. On the same day an order to show cause, accompanied by affidavits, was served upon him directing that the' defendants show cause at Chambers May 21, 1891, why a receiver of the property and assets of the said limited partnership should not be appointed and a temporary injunction granted.

There was no appearance in opposition to the motion, which resulted in plaintiffs’ favor, Henry Winthrop Gray being appointed receiver of all the property, assets and effects of defendant’s firm, Levy Bros. & Co.

In due course the receiver gave his bond, which was approved, and entered upon the discharge of the duties of the office. At the outset he found the sheriff in possession of the store occupied by the defendants, and of certain merchandise and other property therein. One of the coroners was also in possession of merchandise of considerable value. One Benjamin Croner, claiming to be a receiver appointed in proceedings supplementary to execution issued on a judgment entered in the county of Kings, also claimed possession of the merchandise and property of which Gray was appointed receiver. Understanding it to be his duty to take all necessary proceedings to get possession of the property, he promptly took the necessary steps in that direction, and in the end was successful. He also took proceedings to collect the accounts and turn the assets of the property into cash, in the doing of which he was obliged to employ counsel, clerks and assistants, necessitating the expenditure of considerable sums of money. During all this period of time this defendant knew that the receiver was in possession as an officer of the court, performing services and expending money for the benefit of the estate, but neither he nor his co-defendants took any steps to have him discharged as receiver. Nearly two years later the plaintiffs obtained a judgment against the defendants in accordance with the prayer of their complaint, which, as we have already remarked, was reversed at the end of the following October term. After that this appellant made a motion to dissolve the injunction and to vacate the order appointing the receiver, and he insists upon this appeal from the order denying his motion that such a result logically and necessarily followed from the prior decision of, this court. Were it not for the conduct of the appellant for over two years and a half, during which time the receiver was employing his skill and expending money for the benefit of the estate, we should feel constrained to recognize the correctness of his contention. But the defendant made no motion to dissolve the injunction and discharge the receiver, although he knew at almost the hour of the original appointment of the facts upon which the motion was based. Certain of the affidavits referred to on this motion were made May 25, 1891, four days after the temporary receiver was appointed. September 12, 1891, Moses S. Levy verified his amended answer to the complaint, so that he must have appeared at least some days before September twelfth, and in his auswer he denied that the defendants’ firm was a limited partnership.

Without more of detail it should be said that the defendants had full knowledge of all the facts upon which this motion was founded, and that, having it, they did not appear to oppose the appointment of the receiver. And having it, they saw him take possession of the estate of the partnership, witnessed his struggle with the sheriff, coroner and the receiver in proceedings supplementary to execution for the possession of portions of the property, all of which they well knew entailed upon him as an officer of the court much of labor and expense. Now, after all this lapse of time, they seek to strip this officer of the court of all the moneys in his possession, treat him as a trespasser and leave him to personally bear the burden of expense necessarily and in good faith incurred by him while attempting to carry out the orders of the court. They were silent when they should have spoken, and now will not be heard to insist that the receiver shall not be permitted to render an account of his proceedings and make such disposition of the money in his possession as to the court shall seem- in accordance with law and justice.

The order should be affirmed, with ten dollars costs and printing disbursements.

Follett, J., concurred.

Order affirmed, witli ten dollars costs and disbursements.


text:
    William A. Hardt and Others, Plaintiffs, v. Julius Levy and Others, Defendants. Kings County Trust Company, as Receiver of Levy Bros. & Co., Appellant. Henry Winthrop Gray, Individually and Claiming to be Receiver of Levy Bros. & Co., and Others, Respondents.

      Order permitting an action to be brought against a receiver — when it will not be granted.

    A court will not permit its officer, while proceeding in the discharge of a duty-imposed upon him by the court and in the manner directed by it, to be subjected to the annoyance and vexation of an action, charging that he is a trespasser while performing the commands of the court.
    Appeal by the Kings County Trust Company and D. H. Joy and others, judgment creditors of Levy Bros. & Co., from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 19th day of April, 1894, vacating an order of the Supreme Court, entered in the Kings county clerk’s, office on the 22d day of August, 1891, and an order entered in the New York county clerk’s office on the 16th day of February, 1894, which granted the said trust company leave to sue, and enjoining the action of the Kings County Trust Company against Cray and others.

      Jlenjamin JJ. (Jardozo, Jr., for the appellants.

      George Zctbriskie, for Henry Winthrop Cray, receiver, ■respondent.
   Parker, J.:

W e have already decided at this term of the court that the Special Term properly refused to vacate the order of May 21, 1891, which, among other things, appointed Henry "Winthrop Gray receiver, and rightly directed that the receiver should account before a referee appointed for that purpose, and take the usual action in such cases, upon full compliance with which the order directs that he shall be discharged.

If our position in that case be well taken, it follows that the court should not give consent that its officer, while proceeding in the discharge of a duty imposed upon him by the court and in the manner directed by it, should at the same time be subjected to the annoyance and vexation of an action charging that he is a trespasser while performing the commands of the court.

The order should be affirmed, with ten dollars costs and printing disbursements.

Follett, J\, concurred.

Order affirmed, with ten dollars costs and disbursements.


text:
    Francis Charles Le Marchant and Others, Plaintiffs, v. John G. Moore and Others, Defendants.

      Stock pledged by the agent of the owner — right to the surplus arising on the sale thereof — payment of the same by the pledgee, after notice of the owners rights, to the assignee of the agent.

    It was shown, on the submission of a controversy, by the agreed statement of facts, that the plaintiffs, in September, 1891, ordered Evans & Co. to buy and forward to them certain stock, and that Evans & Co. ordered the defendants to buy it for them, which the defendants did, charging the price paid in their general account with Evans & Co., and retaining such stock, with others, as collateral security for such general account. A portion of such stock still remained in the possession of the defendants on October twenty-fourth, when Evans & Co. made a general assignment for the benefit of creditors.
    Shortly afterwards the plaintiffs ascertained that this stock was in the hands of the defendants, and thereupon notified them that they were its owners; requested that delivery thereof be made to them, and information with regard to any charges or claims which the defendants might have against the stock, and further requested that on any gale of collateral which the defendants might make for account of Evans & Co. that they should sell such stock last, and give the plaintiffs notice of the time and place of sale, and account to them for the proceeds thereof. This was the first information received by the defendants that the stock had been purchased for the plaintiffs.

      Tbe defendants declined to deliver the stock to the plaintiffs or to recognize their claim in any way, and thereafter sold the stock in question and other collaterals without notice to the plaintiffs and without their knowledge and consent, realizing therefrom §3,324.66 over and above the indebtedness of Evans & Co. to them, and turned over such amount to the assignee of Evans & Co.

      Held, that had the plaintiffs known of the sale of such stock by the defendants, and of the surplus arising therefrom before the money was turned over to the assignee of Evans & Co., they could have successfully prosecuted a suit for its recovery;
    That the defendants, having knowledge of the plaintiffs’ ownership of the stock, and presumably of their legal right to recover of them the surplus, could not deprive the plaintiffs of that right by selling the stock without their knowledge, and promptly turning over tile proceeds to one who, as against them, was not entitled to the same.
    Submission of a controversy upon an agreed statement of facts, under section 1279 of tbe Code of Civil Procedure.

      Charles W. Pierson, for the plaintiffs.

      Ceorge PLoadly, for the defendants.
   Parker, J.:

Plaintiffs, in September, 1891, ordered Evans & Co. of Boston, with whom plaintiffs had on deposit the money with which to pay for it, to buy and forward to them 200 shares of St. Paul, Minneapolis and Manitoba stock.

Evans & Co. ordered defendants to buy it for them, which they did, charging the price paid in their general account with Evans & Co., retaining the stock, together with other stocks and bonds, as collateral security for such general account.

October twenty-second, following, defendants, pursuant to the directions of Evans & Co., delivered 100 shares of the stock to the Bank of British North America for the credit of these plaintiffs. The remaining 100 shares, which are the subject of this controversy, continued in defendants’ possession.

Two days later Evans & Co. made a general assignment for the benefit of creditors. Shortly thereafter plaintiffs ascertained that this stock was in defendants’ hands, and thereupon notified them that they were its owners, requested delivery thereof to them and information with regard to any charges or claims which defendants might have against the stock, and further requested that on any sale of collateral which defendants might make for account of Evans & Oo. that they should sell this stock last and give plaintiffs notice of the time and place of sale, and account to them for the proceeds thereof. This was the first information received by defendants that the stock had been purchased for plaintiffs.

Defendants declined to deliver the stock to the plaintiffs, to impart any information upon the subject or to recognize plaintiffs’ claim in any way. At ail times after the purchase by defendants of such stock the market value of the securities held by them as collateral to Evans & Co.’s account exceeded the amount of their indebtedness to them. Thereafter, and before January 20,1892, in pursuance of instructions given by the assignee of Evans & Oo., defendants sold all of said securities, except twenty-five shares of Ensley land of uncertain value, 1,100 shares'of Boston Air Line, worth $1,100, and the 100 shares of the stock in controversy, the proceeds being applied upon the general account of Evans & Oo., leaving a balance still due the defendants of a little less than $6,000. On the date last named defendants sold said 100 shares of stock, and, with the proceeds, canceled the remaining indebtedness of Evans & Co. to them, and turned over the balance, amounting to $5,321.66, together with the Ensley land and Boston Air Line stock, to the assignee of Evans & Oo. All this was done without notice to plaintiffs, and without their knowledge or consent.

Plaintiffs not having received their stock, or anything upon account thereof, claim that they were at least entitled to have received the sum which defendants turned over to the assignee of Evans & Go., it being a part of the moneys received by defendants diregtly from the sale of stock purchased by Evans & Oo. for them.

To this contention the defendants in effect reply, true, you were the real owner of the stock, the undisclosed principal of Evans & Go., but we did not know it at the time the stock was purchased, and, therefore, we were not bound to recognize your claim when the fact did come to our knowledge.

It was our right if we chose to turn the proceeds of your stock over to the assignee of your wrongdoing agents. Whether you should ever come to your own was no concern of ours, for, as we knew you not in the beginning, the fact that you should afterwards come to our attention, bearing the evidence of ownership to the stock then held by us in pledge, imposed upon us no legal duty towards you.

It is true that the Legislature has provided a way by which the courts can require two hostile claimants for money, or chattels in the hands of a third person, to contest the matter as between themselves without expense to the third person willing to deliver the property or pay over the money. And we might have availed ourselves of this provision of the statute, or brought an action in equity against the assignee of Evans & Co. and these plaintiffs, and had the rights of the parties established and justice fully done without injury to ourselves. But, for some reason which we do not disclose, we preferred to pay it to one who, in good conscience, ought not to have had it, because it was the proceeds of property belonging to his assignor’s principals who were not disclosed when the purchase was made. We claim that the law supports our position, because there were no contractual relations existing between us. There was no privity of contract or of estate.

It would be unfortunate, indeed, if the law was not modeled on a broader plan than defendants’ conception of it.

Before referring to the cases which we think establish the legal unsoundness of defendants’ position, we call attention specially to the fact that plaintiffs’ stock was sold in order that defendants might obtain so much of the proceeds as was necessary to liquidate the remaining indebtedness of Evans & Co. to them. This action on their part is not open to criticism, because, while the stock really belonged to the plaintiffs, that fact was not known to the defendants until after the failure of Evans & Co., and there had then arisen 'such equities in their behalf as entitled them as pledgees to sell the stock for the purpose of paying the balance of the indebtedness on general account, for which they held the stock in pledge. But, after such indebtedness was fully satisfied, there remained in their hands $5,324.66, money of right belonging to the plaintiffs, so far as this record discloses, because the direct proceeds of stock of which they were the general owners. And of that fact defendants had due notice before paying it over to the assignee of Evans & Co., who, as defendants’ agents, omitted to disclose their principal, and otherwise neglected to perform their duty.

In 1884 E. K., Willard & Co., a firm of stockbrokers, found themselves in precisely the same position as were these defendants, but the action taken by them was quite different.

Westcott & Co., of Syracuse, had been in the habit of receiving orders from local customers, and then giving orders to E. K. Willard & Co. to purchase the stocks, without informing them of the names of the purchasers, and they were made for account of Westcott & Go.

One Everson, in October, 1884, ordered Westcott & Co. to purchase for him 100 shares of Chicago, R. I. & P. R. stock, and they in turn directed Willard & Co. to buy it, which they did, crediting Westcott & Co. with it on their books, and debiting them with the price paid. About two months later Westcott & Co. failed, owing Willard & Co. a substantial sum.

After the failure Everson demanded of Willard & Co. the amount advanced by him on his purchase, which, being ref used, he demanded the stock, at the same time tendering the amount of the purchase price unpaid, which was also refused, Willard & Co. disclaiming any knowledge of Everson in the transaction, and claiming Westcott & Co. as their principals.

But after selling the stocks about which there was no controversy in relation to the ownei’ship, and applying the proceeds on the general account of Westcott & Co., there still remained a substantial sum due them, but one much less than the value of stocks the ownership of which was claimed by Everson and others. Willard & Co. then commenced a suit.in equity, making the assignee of Westcott &. Co. and other claimants of the stock parties. Upon the report of the referee to whom the suit was referred to hear and determine, judgment was entered decreeing, among other things, that the stock should be sold; that plaintiffs should repay themselves out of the proceeds the sum still due them from Westcott & Co., and after the payment of certain fees and disbursements the , plaintiffs should pay over to the assignee of Westcott & Co. the residue of the moneys resulting from the sale.

On appeal this court held that so much of the judgment as directed payment of the surplus moneys to the assignee of Westcott & Co. was error. Presiding Justice Yan Brunt, speaking for a unanimous court, said: It seems to us to be entirely clear that the referee erred in holding that the surplus of these sales should be paid to the assignee. He was not a purchaser for value and he had no right to take any more than ’Westcott & Co. could themselves have taken if they had not made the assignment. These parties having traced their security or securities, which had been bought upon their account, into the hands of the plaintiffs, were at least entitled to receive from the plaintiffs whatever balance might remain after paying the indebtedness for which they were pledged.” (Willard v. White, 56 Hun, 581, 587.)

It will be observed that a judgment, which in that case adjudged the assignee to be entitled to receive a surplus such as defendants of their own motion determined Evans & Co.’s assignee to be entitled to receive, was reversed on the ground that the real owner of the stock was entitled to have the surplus paid to him.

It seeing to follow from that decision that, had plaintiffs known of the sale of their stock by the defendants and of the surplus arising, before the money was turned over to the assignee of Evans & Co., they could have successfully prosecuted a suit for its recovery.

But they were not informed of the time and place of sale, although they requested that they should be, and the defendants, having knowledge of their ownership of the stock, and presumably of their legal right to recover of them the surplus, could not deprive them of that right by selling the stock without their knowledge, and promptly turning over the proceeds to one who, as against them, was not entitled to the same.

In Wright v. Cabot (15 J. & S. 229) the plaintiffs consigned 329 bales of esparto grass to E. & C. Stokes, their factors, for sale. The latter firm in their own name employed Cabot & Co. as brokers to sell the property. Before the proceeds were turned over E. & C. Stokes failed, after which plaintiffs’ firm notified Cabot & Co, that they were the owners of the merchandise, E. & C. Stokes being only their factors. Cabot & Co. replied that they had no knowledge of such a firm, or that they were interested in any merchandise sold by them for E. & O. Stokes. Thereafter Stephen Cabot was examined in proceedings supplementary to execution, and testified that his firm held for the account of E. & C. Stokes the sum of $628.36. Thereupon an order was made that Cabot & Co. pay over such sum to the plaintiffs on the judgment, which was done. Nevertheless, it was held that the owners of the merchandise should, receive such sum from Cabot & Co., because that firm had received notice that the plaintiffs owned the goods, and that they were the principals of their agent, the factor. From that time the plaintiffs proceeded to deal with the proceeds at their own risk.”

As this case comes within the rule established by the cases cited, the plaintiffs should have judgment.

While it results in a loss to the defendants, it is due entirely to their neglect of such opportunities as the law afforded them iu the first instance to have provision made for a payment to the persons legally entitled to the money.

The plaintiffs are entitled to judgment against the defendants for $5,324.66, with interest from. January 20, 1892, with costs.

Judgment ordered accordingly.

O’Brien and Follett, JJ., concurred.

■Judgment ordered for plaintiffs, with costs.


text:
    William T. A. Hart, Respondent, v. The Sun Printing and Publishing Association, Appellant.

      label — whether a communication be privileged is a question of la/w — head lines introducing a report of a judicial proceeding — what is not a reasonable effort on the pa/rt of an administrator to sell property of the estate for its value.

    In an action brought to recover damages for the publication of an alleged libel the question whether a communication containing the libel was privileged is one of law to be determined by the court.
    The privilege which protects the publishers of a report of a judicial proceeding from libelous charges, does not include imputations voluntarily made which are plainly irrelevant and impertinent.
    In an action brought to recover damages for the publication of an alleged libel it was shown that a newspaper published the following:
    “Sexton Hart Asked to Explain.
    “ (Creditors of an Estate Not Satisfied With Eis Administration.

      “ William T. Hart, sexton of St. Patrick’s Cathedral on Fifth avenue, is having tribulations of a complicated character with the creditors of the estate of Archibald Johnston, of which he is the administrator. Mr. Hart made a statement of his stewardship which Langan Bros., the dissatisfied creditors, say will not bear a searching examination, and after a referee had disagreed with them they referred it to Surrogate Ransom. Johnston was proprietor of the livery stables at 102,108,104 and 105 East Thirteenth street, and died insolvent. The estate amounted to about $16,000, and Mr. Hart set himself to clear it. In this clearing process, according to Langan Bros., about $9,000 disappeared. The hearing will come up next Monday.”

      Held, that the head lines of such article were not privileged under sections 1907 and 1908 of the Code of Civil Procedure, and, when considered in connection with the article introduced by them, were libelous;
    That while the statements contained in such article were defamatory, yet, if they constituted a fair and true report of the judicial proceedings therein referred' to, the defendant’s claim of privilege should be sustained in the absence of proof of actual malice on its part;
    That if, as a matter of law, the evidence showed that the plaintiff had been improvident in the sale of certain leasehold premises belonging to the estate, of which he was administrator, the jury should have been so charged at the defendant’s request, and a failure to do so was an error sufficient to justify the reversal of a judgment rendered in favor of the plaintiff.
    The fact that the administrator of an estate advertised the property belonging to the estate for sale in a manner calculated to prevent competition, and permitted a sale of it in his presence to his personal friend for about one-fifteenth of its actual value, shows that he did not make a reasonable effort to secure for the estate what such property was fairly worth.
    Appeal by tbe defendant, Tbe Sun Printing and Publishing Association, from a judgment of tbe Supreme Court in favor of tbe plaintiff, entered in tbe office of the clerk of the county of New York on tbe 20th day of April, 1893, upon tbe verdict of a jury rendered after a trial at the New York Circuit, and also from an order entered in said clerk’s office on tbe 8th day of May, 1893, denying tbe defendant’s motion for a new trial made upon tbe minutes.

      ErcmMm Bartlett, for the appellant.

      David McClure, for tbe respondent.
   Parker, J.:

Tbe judgment under review awards to tbe plaintiff damages against the defendant because it published in tbe Sum, newspaper on tbe 13th of November, 1890, tbe following :

“ Sexton Hart Asked to Explain.
<f Creditors of am, Estate Not Satisfied with His Ad/minist/ration.
William T. Hart, sexton of St. Patrick’s Cathedral on Fifth avenue, is having tribulations of a complicated character with tbe creditors of the estate of Archibald Johnston, of which he is the administrator. Mr. Hart made a statement of his stewardship which Langan Bros., the dissatisfied creditors, say will not bear a searching examination, and after a referee had disagreed with them they referred it to Surrogate Ransom. Johnston was proprietor of the livery stables at 102, 103, 104 and 105 East Thirteenth street, and died insolvent. The estate amounted to about $16,000, and Mr. Hart set himself to clear it. In this clearing process, according to Langan Bros., about $9,000 disappeared. The hearing will come up next Monday.”

On this appeal it is urged that the trial court erred:

First. In refusing to dismiss the complaint on the ground that the defendant had established the defense of justification pleaded by it.
Second. In denying a motion to direct a verdict in favor of the defendant on the ground that the article'being a fair and true l’eport of a'judicial proceeding, recovery was impossible without proving actual malice, which was not attempted.
Third. In refusing to charge certain requests of the defendant.

Touching the first ground assigned as error, it should be said that evidence was presented on the part of the defendant pointing strongly towards the truthfulness of many of the assertions complained of. If it be assumed that the testimony would have permitted a finding that the article was substantially true, it did not requii’e it.

A question for the jury was, therefore, presented in such respect, and the court properly refused to take it from them.

The Code of Civil Procedure (§ 190Y) provides, among other things, that an action cannot be maintained for the publication of a fair and true report of any judicial proceeding without proving actual malice. As the plaintiff did not prove actual malice it is insisted that a verdict should have been directed in favor of the defendant on the ground that the publication was privileged.

Prior to the publication certain proceedings had been had in the Surrogate’s Court relating to the administration of plaintiff, resulting in an appointment of a referee, the taking of testimony before him, and a report to the Surrogate’s Court. The defendant insists that the article complained of was a fair and true report of such proceedings. Whether the communication was privileged was a question of law for the court. (Lovell Co. v. Houghton, 116 N. Y. 520.) The inquiry now is whether the trial court' rightly decided it.

Section 1908 so qualifies section 1907 as to make it inapplicable to a libel contained in the heading of such a report, or to any matter added by a person concerned in the publication, or to anything •appearing in the report but not forming a part of the official proceedings. And it is the general rule that a privilege which protects publishers of reports of judicial proceedings from libelous •charges does not include imputations voluntarily made which are plainly irrelevant and impertinent. (Moore v. Bank, 123 N. Y. 420.)

Under the section of the Code referred to the head lines of this article are not privileged. And, considered in connection with the ■article which they introduce, they are libelous. Nor can it be said -that the article was a fair and true report of the judicial proceedings which had taken place at the time of its publication.

Objection liad been taken to the administrator’s account, the testimony taken before the referee and the requests to find on either side presented, resulting in a report by the referee favorable to the plaintiff. Clearly, such is not the impression given by the reading of the •article. It suggests defeat rather than triumph. It charges that plaintiff had been asked to explain; that the creditors were not satisfied with his administration; that he was having tribulations of a •complicated character; that his stewardship had not borne a searching examination; that Johnston had died insolvent leaving an estate which the plaintiff had set about to clear, and that the clearing .process had resulted in the disappearance of $9,000.

While these statements are libelous, still, if they constituted a fair report of the judicial proceedings which had been had at the time of their publication, the defendant’s claim of privilege should have been sustained, for actual malice on the part of defendant was neither proved nor attempted. But it cannot be said, as matter of law, that all of the libelous charges with which the article abounds ■had adequate support either in the testimony taken before the referee or in the' proceedings before the surrogate. By way of illustration it may be observed that the assertion that in the clearing process the plaintiff had caused the disappearance of about $9,000 is not sufficiently sustained.

The learned court, therefore, ruled correctly in such respect.

The seventh request was as follows:

“ Seventh. The evidence shows that the alleged sale by William T. A. Ilart of the right, title and interest of the intestate, Archibald Johnston, to the leasehold premises 105 and 107 East Thirteenth street to James Kenny for $110 was improvident, negligent and in violation of said Hart’s duty as administrator.”

If, as a matter of law, the evidence demonstrated that plaintiff had been improvident in the respect named in the request, it is apparent that the jury should have been so charged, for, while it might not have operated to prevent a recovery, it is not unlikely that it would have had the effect of reducing the amount of damages awarded.

The effect of the refusal naturally was to lead the jury to believe that such portion of the article was not true, and to persuade them to compensate the plaintiff because of it. And we must assume that it was considered by the jury in awarding damages.

The inquiry then is whether the evidence justified the request. That Archibald Johnston owned an undivided one-eighth of the leasehold premises at the time of his death is demonstrated. An attempt was made to confuse the question of ownership upon the trial, but it was not successful.

Hart owned an undivided one-half interest, and subsequently he purchased of Mrs. Johnston an undivided one-eighth owned by her, for which he paid $1,500. This purchase furnishes some evidence at least of Hart’s opinion as to the value of the one-eighth owned by the estate.

What Hart, as administrator, did was to advertise the interest of the estate for sale at the Real Estate Exchange, and thus was given to it the appearance of regularity. But the notice of sale did not assert that the interest to be sold was one-eighth, but rather that it was all of the interest of the deceased, whatever it was, and was believed to be one-eighth. The indefiniteness of the notice of sale respecting the quantity of the estate to be sold was certainly not calculated to encourage bidders. Nor did it have that effect, for at the sale it was struck down to Mr. Merritt, counsel for Hart, whose bid was in form made for a Mr. Kenny, who turns out to have been a friend of the administrator, having constant business relations with him, for $110 — nearly $1,400 less than Hart paid Mrs. Johnston for a like interest.

A quarter interest was still outstanding, and Hart commenced an action of partition which resulted in a sale of the leasehold estate, of which he became the purchaser.

The sum of money which he subsequently realized for the property thus purchased makes it clear that the one-eighth interest was fairly worth at least the sum which he paid Mrs. J ohnston for her interest.

Without presenting more of the details of the testimony it is apparent that Hart was neglectful and improvident in the discharge of his duty as administrator in respect to the interest under consideration.

If he was not the real beneficiary of the purchase nominally made for Kenny’s benefit, in which direction the evidence strongly points, his friend was.

Assuming the most favorable view possible, and we have presented a case where an administrator advertising property for sale in a manner calculated to prevent competition, permits a sale of it in his presence to his personal friend for about one-fifteenth of its actual value. Under such circumstances it is not possible to reach the conclusion that he made a reasonable effort to secure for the estate what the interest was fairly worth. On the contrai-y, the evidence considered as a whole required the determination reached in another forum where a referee found that the administrator, this plaintiff, had been neglectful of his duty, and this court, in affirming the decision of the referee, said: “ With respect to this sale to Kenny the referee held that it was improvidently made and in violation of their duty as administrators, and that the administrator Hart should be personally charged with the value thereof, with interest.” (In re Johnston Estate, 74 Hun, 618.)

Having reached the conclusion that the court erred in refusing to charge as requested, it follows that the judgment should be reversed, with costs to the appellant to abide the event.

Van Brunt, P. J., and Follett, J., concurred.

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


author: Per Curia-m:

text:
    Joseph A. Vega and Another, Appellants, v. George B. French and Another, Respondents.

      Conveyance from a husband to his wife— evidence as to its being fraudulent as to • creditor's.

    A husband to whom his wife had loaned from time to time, for a period covering some thirteen years, various sums of money which, without interest, amounted to §6,817.33, gave a bill of sale to her of merchandise and book accounts of the estimated value of $7,507.91. She, however, failed to obtain certain of the merchandise therein mentioned of the value of $3,430.88. After taking possession of the property she constituted her husband her agent and attorney, and undertook to continue the business, while holding her husband’s creditors at bay.

      Held, that wnile such evidence would have justified the court in concluding that the bill of sale was made with intent to defraud the creditors of the husband, yet the evidence being equally consistent with the view that no such intent was entertained by the parties, the judgment of the court, that there was no fraud, should not be reversed.
    Appeal by the plaintiffs, Joseph A. Vega and. another, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of New York on the 19th day of May, 1893, upon the decision of the court, rendered after a trial at the New York Special Term, dismissing the plaintiffs’ complaint on the merits.

      JP. M. Brown, for the appellants.

      John D. Quincy, for the respondents.
   Per Curia-m:

This action was brought by judgment creditors to have a bill of sale, executed by the husband, George B., to the wife, Ellen French, set aside upon the ground that it was made with intent to hinder, delay and defraud creditors’ In addition, the plaintiffs sought to obtain a lien on certain real estate owned by the wife; but as no sufficient proof was offered to sustain any such lien, it appearing that the property was purchased by the wife with her own money, this question need not be further considered.

There is only left for our consideration the question of the validity of the bill of sale. The appellants concede that the wife, from time to time, covering a period of some thirteen years, loaned to her husband an amount which, without interest, was $6,817.33. The estimate placed upon the property included in the bill of sale, consisting of tobacco and book accounts, was $7,507.91. So, that if the entire amount was realized by the wife, the value of the property turned over to her would exceed by $500 or $600 the principal amount claimed by her and interest thereon. It appears, however that the plaintiffs refused to deliver, and retained, $1,200 worth of the tobacco which was included in the bill of sale; and this, together with twenty-four cases relinquished to another creditor, which were worth $1,230.88, also included in the bill of sale, would, assuming that the wife got the full value for the remaining property, leave the amount actually received by her much less than the amount of her claim, without interest.

There is much force in the argument that, notwithstanding the result showed that the wife got less than the amount due her (it appearing that the bill of sale provided that she should get some $500 or $600 more than was actually due her), coupled with the other facts appearing, that upon taking possession she constituted her husband her agent and attorney, and undertook to continue-the business whilst holding the creditors at bay •— such evidence would have justified the court in concluding that the bill of sale was-made with intent to defraud the creditors. The evidence, however, is equally consistent with the view that no such intent was entertained by the parties; for, in addition to the showing that the consideration for the bill of sale was an honest indebtedness due from, the husband to the wife, it would appear that the real intent was-to pay the debt of the wife, and that out of the moneys which she-might realize she was prepared, with the assistance of her husband, to continue the business with a view of realizing therefrom sufficient, to pay her husband’s creditors, thus negativing the idea that the purpose was to defraud. All that can be said is that upon the evidence a question of fact was presented, which has been found adversely to the plaintiffs; and such finding that there was no fraudulent intent having sufficient evidence to sustain it, and not being overborne by weight of evidence to the contrary, it is not the duty of this court to disturb it.

The judgment should be affirmed, with costs.

Present — O’Brien, Eollett and Parker, JJ.

Judgment affirmed, with costs.


author: Per Curiam :

text:
    Thomas J. McKee and Another, as Executors and Trustees, etc., of Matthew Byrnes, Deceased, Respondents, v. The New York Elevated Railroad Company and Another, Appellants.

      Judgment enjoining the operation of an elevated railroad, unless certain damages were paid and a conveyance taken — modified on appeal so as to allow condemnation proceedings to he taken.

    In an action brought to recover damages, alleged to have been sustained by reason of the construction and operation of an elevated railroad, the plaintiff obtained judgment against the defendant restraining the operation of such road unless within a certain time it should pay a certain sum and accept a conveyance or release of the property rights in question, which, as a matter of fact, would be invalid; the judgment did not fix a sufficient period within which the defendant might acquire title to the real estate in question by condemnation proceedings.

      Meld, that such judgment should, on appeal, be modified by striking out the alternative as to the payment of the money and the receipt of the release or conveyance, and by directing that an injunction absolute issue, unless, within six months after the entry of the order upon such appeal, the defendant should have condemned the easements in question.
    Appeal by the defendants, The New York Elevated Railroad Company and another, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 12th day of February, 1894, upon the decision of the court rendered after a trial at the New York Special Term.
    The judgment rendered, after the usual recitals, was as follows:

      “First. That Thomas J. McKee and Fernando Baltes, as executors of and trustees under the last will and testament of Matthew Byrnes, deceased, the plaintiffs herein, recover of the New York Elevated Railroad Company and the Manhattan Railway Company, the defendants herein, the sum of two thousand one hundred and ■six dollars and twenty-five cents, as and for the damages sustained in respect of the premises known as Nos. 403, 403£, 405, 407, 409 and 409£ Third avenne, in the city of New York, by reason of the acts of the said defendants from the twentieth day of December, 1884, to the twenty-third day of May, 1893, the date of the trial of this action, together with interest on said sum from the said twenty-third day of May, 1893, to the date of the decision herein, amounting to ninety-one dollars and twenty-six cents, and the further sum of two hundred and ninety-seven dollars and thirty-two cents, for their costs, disbursements and extra allowance herein, amounting in the aggregate to the sum of two thousand and four hundred and ninety-four dollars and eighty-three cents, and have execution therefor.
    “ Second. That the defendants, The New York Elevated Railroad Company and The Manhattan Railway Company, from and after a period of ninety days after service upon 'said defendants, or their attorneys, of notice of entry of judgment herein, be, and they and each of them hereby are perpetually enjoined and restrained from maintaining, or in any way using the elevated railway structure on Third avenue, in the city of New York, in front of the premises of the plaintiffs, known as Nos. 403, 403J, 405, 407, 409 and 409|- Third avenue, and more particularly described in the findings of fact herein.

      “ Third. That upon tender to the plaintiffs within ninety days after service upon the defendants, or their attorneys, of a copy of this judgment, with notice of entry thereof, of the sum of thirty-five hundred dollars and interest thereon from the twenty-third day of May, 1893, the date of the trial of this action, plaintiffs shall, within said ninety days, deliver, or cause to be delivered, to the defendants, a conveyance and release duly executed by the plaintiffs and all other persons having any interest in or lien upon said premises, conveying and releasing to the defendants all right, title and interest in and to such property or easements as had been taken by the defendants, and a release from the plaintiffs of all future damages to be incurred by plaintiffs from the maintenance of the present structure and the operation of the defendants’ railroad in front of the plaintiffs’ premises, as the same is at present operated and maintained, and in the event said money is so tendered to the plaintiffs, the injunction heretofore provided for shall not issue herein.

      “Fourth. The tenders provided for in this judgment may be made by and to the attorneys for the respective parties hereto.
    “ Fifth. Either party may apply at the foot of this judgment’ for further direction as to the enforcement of the same.
    “ Sixth. The injunction hereinbefore granted shall be wholly inoperative if, before the time fixed for the commencement thereof, the defendants shall have obtained by purchase or due process of law the right to maintain their elevated railroad structure in said street in front of the plaintiffs’ premises.
    “ Seventh. Execution to enforce the money judgment herein is hereby stayed until the expiration of thirty days after notice of entry of judgment herein.”

      Arthur O. Townsend, for the appellants.

      William R. Page, for the respondents.
   Per Curiam :

By the judgment the trial judge directed as the alternative to the injunction that 'defendants pay a certain sum of money, found to be the value of the easements, upon the payment of which they were to receive a conveyance and release of the property or easements affected.

It is conceded that by the will appoipting the plaintiffs executors and trustees they were given a life estate in the projierty without a power of sale. Under such will, therefore, the trustees or executors havé no 'present power to sell any of the testator’s real estate, and could not, therefore, give the conveyance or release required as a condition for the payment by defendants. The latter have a right to have the alternative to the injunction fixed upon equitable principles, which includes the right to receive a valid title to the easements to be paid for. It is true that three months were also given within which the defendants had a right to condemn, but, with knowledge of the character of such proceedings and the time which necessarily would be taken up, we think the period fixed for three months in which to condemn was too short. As they could not, therefore, condemn within that time, we have here a case where an injunction is to issue unless the defendants shall pay a sum and accept a conveyance or release which would concededly be invalid.

The force of this objection is sought to be met by the suggestion that before the injunction goes into operation the plaintiffs will have obtained power to sell the easements under chapter 209 of the Laws of 1891. By this act power is.given to the Supreme Court to authorize the mortgaging or sale of real estate under certain conditions therein enumerated; but we have grave doubt as to its being applicable to a conveyance or release of easements by trustees, such as plaintiffs here, appointed under a will. It is not, however, necessary for us to determine that question at present, as we think that the rights of the parties should have been determined by their situation at the time of the entry of judgment. And when it then appeared that the plaintiffs had no power to give a valid release or conveyance, the court should not have directed the defendants to pay as an alternative for the injunction a sum of money. The defendants have had ample time since their road was constructed within which to condemn the property, and, under the circumstances here appearing, the proper alternative would have been to direct that an injunction issue unless within a'reasonable time they took condemnation proceedings and acquired the easements.

Our conclusion, therefore, is that the judgment should be modified by striking out the alternative as to the payment of the money and receiving the release or conveyance, and by directing that an injunction absolute issue, unless, within six months after the entry of the order upon this appeal, the defendants shall have condemned such easements, with costs to appellants.

Present — O’Brien, Follett and Parker, JJ.

Judgment modified as directed in opinion, with costs to appellants.


author: Pee Oueiam :

text:
    In the Matter of the Application of The Attorney-General for Leave to Commence an Action to Annul the Charter of The Central Stamping Company.

      Action to annul a corporate clia/i'ter— violation of the Oode of Oivil Procedure, § 1798 — application fen1 lerne to bring such action, how made — the duty of the Attorney-General cannot be delegated.

    An order permitting an action to be brought to annul the charter of a corporation, because the corporation has violated section 1798 of the Oode of Civil Procedure, should not be granted, except on the written application of the Attorney-General to the court, stating that, in his opinion, the action can and ought to be maintained for reasons given.

      Tlie duty is devolved upon Mm by statute to determine whether, in 1ns opinion, the action can and should be maintained, and this duty he cannot delegate. His determination must be made as the basis of an application, and evidence of it must be presented to the court.
    Appeal by The Central Stamping Company from so much of an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 23d day of April, 1894, as granted leave to the Attorney-General of the State of New York to bring an action against said company to procure a judgment vacating its charter and annulling its existence.

      Howard Mcmsfield, for the appellant.

      Louis Marshall, for the Attorney-General, respondent.
   Pee Oueiam :

An order permitting an action to be brought to annul the charter of a corporation, because it has violated section 1798 of the Code of Civil Procedure, should not be granted except on the written application of the Attorney-General to the court, stating that, in his opinion, the action can and ought to be maintained for reasons given. By statute the duty is devolved on him to determine whetlier, in his opinion, the action can and should be maintained, which duty he cannot delegate. This determination must be made as tlie basis of an application, and evidence of it must be presented to the court. In this case no application has been made by the Attorney-General or by any one who swears that he is authorized to act for him, and there is no evidence in the record that the Attorney-General has determined that an action should be brought or that this particular application should be made. In matters so important as the beginning of actions for the dissolution of corporations, such'a practice is too loose and ought not to be tolerated. If, the Attorney-General be of the opinion that such action can and ought to be maintained, he should make a written application to the court stating his conclusions, accompanied by such affidavits and evidence as is deemed necessary to support the application. The application in this case, if such it can be called, is simply an affidavit made by an attorney, in which it is stated that in the opinion of the affiant a cause of action exists, and that the suit should be brought, but the affiant does not state tliat he has been authorized to represent the Attorney-General or to make the application in his behalf. We have not overlooked the opinion of the Attorney-General, contained in the record, in which he says: “ Counsel for petitioner may apply in my name, upon notice to the corporation for leave to commence the action.” Counsel did not apply in the name of the Attorney-General, but in his own. It is not stated in the opinion that the Attorney-General has determined that an action can or ought to be maintained.' This is altogether insufficient to authorize the court to grant the order, which should be reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs, without prejudice to the right of the Attorney-General to apply for leave to bring an action.

Present — Yan Brunt, P. J., Follett and Parker, JJ.

Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs, without prejudice to the right of the Attorney-General to apply for leave to bring action.