text:
    John McQueen, Receiver of the Powerville Felt Roofing Company (Limited), Respondent, v. Tobias New, Appellant, Impleaded with Others.

      Pleading — equitable set-off in actions in tort— Code of Civil Procedure, section 501.
    Where an action sounds in tort the defendant will not be allowed by an appeal to the equitable jurisdiction of the court, based on the insolvency of the plaintiff and the consequent loss of the counterclaim, unless it is set off, to interpose a counterclaim.
    Where offsets have been allowed in equity it will be found that the relief granted proceeded upon the maxim that he who seeks equity must do equity or that it was granted in cases of cross-demands, arising upon contract, existing in favor of and against opposing parties where, from the nature of the claims and the situation of the parties, justice could not otherwise be done.
    In answer to the complaint in an action brought by the receiver of a corporation for a wrongful conversion of its goods, the defendant alleged the insolvency of the corporation and the appointment of a receiver; he then set up several counterclaims separately. In one instance he alleged that he held notes (which were -not due when the receiver was appointed) representing goods obtained of him by alleged fraudulent representations, made by the corporation, upon which he had obtained judgment. He also alleged that he was the bona Jide owner of a judgment against the corporation obtained in a foreign State and asked to be allowed an equitable set-oil as to all these demands.
    To this answer the plaintiff interposed a demurrer.

      Held, that neither of the counterclaims -was of the character specified in section 501 of the Code of Civil Procedure, and that no such equitable offset could be allowed.
    Appeal by the defendant, T'obias New, from an interlocutory 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 4th day of December, 1894, upon the decision of the court, rendered after a trial at the New York Special Term, sustaining the demurrer of the plaintiff to the answer of the defendant, Tobias New.

      F. J. Mather, for the appellant.

      H. II. Whitman, for the respondent.
   Yan Brunt, P. J.:

This action was brought by the plaintiff as receiver of the Power-ville Felt Hoofing Company against the defendants to recover damages for the conversion of certain property alleged to have been wrongfully taken, carried away and converted by the defendants. The complaint alleges that on the 21st of December, 1892, by a final judgment the property of the Powerville Felt Hoofing Company was sequestrated, and one Josiah Jowitt was appointed permanent receiver of said company and of its property and effects, of every kind and nature, whatsoever and wheresoever situated, and. that on the 24th of December, 1892, said Jowitt duly qualified as such receiver, and continued to act as such receiver down to the 2d of March, 1893, upon which day he departed this life; that on the 13th of March, 1893, the plaintiff was duly appointed permanent receiver in his place, and that he had duly qualified and entered upon the discharge of his duties as such receiver, and has ever since continued to act and is now acting as permanent receiver of said company. The complaint then alleges authority to prosecute the action, the incorporation of the. defendant national bank, and that on the 1st of February, 1893, the defendants wrongfully took, carried away and converted to their own use certain merchandise belonging to said company, which was reasonably worth the sum of $19,000, and judgment is demanded for the sum of $19,000, with interest from the date of said conversion.

The defendant Tobias New by his answer denies all knowledge or belief as to the appointment of said permanent receiver and as to authority to bring the suit, admits the incorporation of the defendant national bank and denies the acts of conversion. The defendant further alleges that he purchased said goods and merchandise from the lawful owners of the same.

The defendant then sets up, by way of a further and separate defense, and as an equitable set-off to any damages, if any, recoverable by the plaintiff in respect to the alleged matters complained of, that the Powerville Felt Hoofing Company and the T. New Manufacturing Company had large dealings with each other, and that during the year 1892 the said T. New Manufacturing Company sold and delivered large amounts of merchandise of great value to the Powerville Felt Hoofing Company, at fair market rates agreed upon therefor, and that at this time the answering defendant was the personal owner and holder of the stock of said T. New Manufacturing Company, owning and holding more than ninety per cent of the same; that in order to obtain credit of said T. New Manufacturing Company and of the defendant, the treasurer and secretary of said Powerville Felt Hoofing Company, during the year 1892, stated and represented to the defendant as an officer of the T. New Manufacturing Company, that the Powerville Felt Hoofing Company was solvent, responsible and able to pay its debts; that such statements and representations were believed by said T. New Manufacturing Company and its officers, and that, believing and relying upon such statements and representations, large amounts of merchandise were sold and delivered from time to time in 1892, for which merchandise so purchased the said Powerville Felt Roofing Company gave its notes to the T. New Manufacturing Company, aggregating in value about $35,000. Tbe defendant tlien alleges that said Power-ville Pelt Roofing Company was judicially declared insolvent on the 21st of December, 1892, and went into the hands of a receiver in whose custody and administration said company, its property and effects ever since have been and now are. The defendant then ■alleged that he became the lawful owner and holder for a full, valu■able consideration, of certain of said notes of the Powerville Pelt Roofing Company so made and delivered to the T. New Manufacturing Company for merchandise sold and delivered before the maturity of each thereof, and that lie now owns the judgments severally in said answer described obtained on said notes.

Then follows a description of the notes and judgments. None of said notes became due until after the appointment of the receiver of the Powerville Pelt Roofing Company.

The defendant further alleges in his capacity as owner in chief and holder of more than ninety per cent of the stock of the T. New Manufacturing Company, that in an action brought against the defendant, this receiver swore that the claims of creditors of said Powerville Felt Roofing Company filed with him aggregated upwards of $130,000, and that the total amount of assets in the receiver’s hands did not exceed the sum of $1,000. And the defendant thereupon alleges, upon information and belief, that the Powerville Pelt Roofing Company is hopelessly insolvent, and judgment is demanded that said notes and judgments obtained thereon may be applied in reduction and cancellation of the claims, if any, which may be found to be due from the defendant to the plaintiff, etc.

The defendant set up for a further and separate answer and as an equitable set-off, etc., that before the appointment of the receiver and before the 21st day of December, 1892, the said Powerville Pelt Roofing Company obtained by fraud and false and fraudulent representations from the T. New Manufacturing Company large amounts of merchandise of the value of $35,000 ; and that said manufacturing company took and received said notes from the Powerville Felt Roofing Company in payment therefor; that except for-such false and fraudulent statements and representations so made by said Powerville Pelt Roofing Company, the T. New Manufacturing Company would not have received such notes, and this defendant would not have indorsed the same or procured the same to be indorsed, and tliat in so doing lie believed and relied on tlie trutli of the statements and representations so made by the Power-ville Pelt Roofing Company, when said notes were so delivered and received. The defendant further alleged that such representations were made to influence the sales of the merchandise aforesaid, and to induce the defendant to indorse said notes, and that such statements and representations were made with intent to deceive and defraud the defendant; tliat at the maturity of each of said notes demand was made and payment refused, and the defendant elects to rescind the contract of sale of said merchandise by the T. New Manufacturing Company to the Powerville Pelt Roofing Company, and to rescind the delivery of said goods and also to rescind the contract of indorsement upon which the discount of said notes was procured. The defendant further alleges that he brings into court and tenders to the plaintiff said notes, and tenders and offers to assign said judgments so obtained to the plaintiff.

The defendant for a further and separate answer and as an equitable set-off alleges that on the 25th day of November, 1892, one "William IT. Eberts and J ohn Eberts, being lawful and genuine creditors of the Powerville Pelt Roofing Company, had duly obtained a judgment against, said company in the sum of $81,000 in the Circuit Court of Illinois in and for Cook county, and that thereafter, and on or about the oth day of November, 1892, for a valuable consideration, said judgment so obtained was duly assigned to the defendant, who is now the lawful owner and holder of the same; and he prays that he may be allowed to equitably offset so much of said judgment as would satisfy any claim which might be established against him. The defendant further alleges that he is powerless to recover his just rights in any action at law or proceeding in equity against the Powerville Pelt Roofing Compauy or the plaintiff as receiver thereof, and that unless he is aided by the equitable powers of the court in ascertaining and maintaining his just rights lie will suffer great and remediless wrong and injury.

The plaintiff demurred to so much of the answer as consisted of new matter as insufficient in law upon the face thereof to constitute any defense or offset to the complaint herein. The plaintiff "also demurred to the counterclaims contained in said answer upon the ground that neither of said counterclaims is of the character specified in section 501 of the Code of Civil Procedure, and upon the further ground that neither of said counterclaims states facts sufficient to constitute a causa of action. The court below sustained the demurrer, and from the interlocutory judgment thereupon entered this appeal is taken.

The ground upon which the appellant claims t-lie right to offset the claims set up in his answer is that he is in equity entitled to a set-off because of the fact of the insolvency of the company and the circumstances under which the debts had their origin.

We have examined the various authorities to which our attention has been called by the learned counsel for the appellant, but we are unable to see that any of them have any application to the facts which exist in the case at bar. Most of them are actions in equity where the set-off is allowed upon the theory that a person asking relief in equity must do equity; and the others are where cross-demands ex contractu exist against and in favor of two parties and where from the nature of the claims and the situation of the parties justice cannot otherwise be done. The most familiar instances of the rule are cases where a depositor in a bank is allowed to offset the amount of his deposit balance against indebtedness to the bank upon its failure, although perhaps such indebtedness to the bank may not have been actually due at the time of the failure of the bank.

But we have found no case where, when the action is ex delictu for the wrong of the defendant, an equitable offset of the defendant will be allowed. If such a procedure could obtain, we might easily imagine a new way to get payment for old debts. All that a creditor of an insolvent corporation, of which a receiver had been appointed, would have to do in order to procure a preference over the other creditors of the corporation, would be to take possession of the property of the corporation and convert it to his own use, and when an action was brought for its conversion, ask to offset his claim. The mere statement of this proposition seems to show that the position of the appellant cannot be sustained.

The interlocutory judgment should be affirmed, with costs.

Eollett and O’BRIEN, JJ"., concurred.

Interlocutory judgment affirmed, with costs.


source: Caselaw Access Project

author: Follett, J.:

license: Public Domain

text:
    John H. Wyman and Others, as Executors, etc., of Lizzie H. Perkins, Deceased, Respondents, v. Ellen C. Woodbury, Appellant, Impleaded with Others.

      Will — position of the residuary clause — intention■ — precatory trust — uncertain or non-existent leneflcia/i'y.

    The position in a will of a residuary clause is immaterial, provided it was the intention of the testatrix hy it to dispose of all her property not devised or bequeathed in other parts of the will.
    When it is doubtful whether the testatrix intended to give the residuum of her estate to a particular person, all the clauses of the will may be considered as bearing upon the question of intent.
    The will of a testatrix contained the following clause: “I appoint Ellen C. Wood-bury my legatee and give to her all, not before specified in this, and request her to give as I may direct or sell from what remains.”

      Held, that the testatrix intended to give all of her property not disposed of by the other clauses of her will to Ellen C. Woodbury; that such language used by the testatrix -was sufficient to devise and bequeath her residuary estate, and that the clause “and request her to give as I may direct or sell from what remains” did not create a precatory trust.
    A legacy to the ‘ ‘ poor of Bath ” is void for uncertainty.
    A legacy to “ the American Hospital if erected in -Paris ” is void where no such institution was in existence at the time of the death of the testatrix.
    Appeal by tlie defendant, Ellen C. Woodbury, from a judgment of the Supreme Court, entered in the office of the cleric of the county of New York on the 26th day of September, 1894, upon the decision of the court rendered after a trial at the New York Special Term construing the last will and testament of Lizzie H. Perkins, deceased.
    This action was begun by the executors of the will of Lizzie Ii. Perkins to obtain a judicial construction thereof.
    September 23, 1891, Lizzie Ii. Perkins, aged about sixty years, died at Paris, Prance, leaving her father, Thomas Iiarward, her sole heir and next of Idn, who died November 30, 1891, aged one hundred and three years, eight months and fifteen days, leaving an estate of considerable value. lie left no descendants, and left a last will, the executors of which are parties defendant herein. Mrs. Perkins left a holographic will and testament, executed January 6, 1890, at Paris, France, by which she made twelve pecuniary legacies amounting to $38,000, eleven specific bequests and two specific devises.
    Among other things the will provided as follows: “ I give and bequeath to my executors, hereinafter named the sum of $3,000 in trust to invest during the lifetime of my father, and after liis death I direct my executors with said $3,000 to purchase a suitable lot in the Bath burying ground in State of Maine, and to cause the remains of my mother and brothers to be removed from the tomb which I own in the city of Bath and to be placed in the ground in the said burying ground, and to cause the proper memorial stones to be erected. * * *
    “ To the American Hospital, if erected in Paris, that strangers, women, may have a place to go, I give $4,000. * * *
    “I appoint Ellen C. Woodbury my legatee and give to her all not before specified in this and request her to give as I may direct or sell from what remains.
    “ I appoint John II. Wyman, L. P. Morton and John J. Richardson executors, and direct that after the payment of my debts and sums above named, that they shall sell bonds, stocks and other property, and give the money thus collected to hospitals and homes for women in Washington and New York.”
    September 22, 1892, the will was duly admitted to probate by the Surrogate’s Court of the city and county of New York, and, October 3, 1892, letters testamentary were issued thereon to the plaintiffs, who were nominated in the will as executors. Among the papers deft by the testatrix was the following, written in her own. hand, and known in this litigation as
    “Exhibit 5.
    “ Nell, sell what you can of my things and give the money to the poor. Give of my paintings to Mrs. Dana something. Give my clothing to Lizzie Pennell and my guitar. To Martie Richardson the small set of silver with kettle, the large Sevres to be sold, money to be given to the poor. Sell the contents of the two large boxes at Lineon, money to be given to the poor. Give the McKever girls some of my paintings.
    “ I am too wild, Nell, with the thought of death, to do what I would.

      “As I think of anything, I shall put it down. Try to do as I would wish.
    “ Give Mrs. Dana my Indian shawls, Florence Matthews the small silver kettle and little cups Tea pot. Burn every paper and family picture.”
    It is conceded that Ellen 0. Woodbury is the person referred to in this paper as “Nell.” The testatrix left a personal estate inventoried at $129,790.24, which consisted of :
    Gash......................................... $2,688 14
    Furniture and goods........................... 3,478 10
    Shares of various corporations and bonds issued by . various corporations.......................... 123, 624 00
    $129,790 24
    Real estate in Brooklyn valued at....... . $10,000
    Real estate in N ewport (specifically devised to Florence Matthews) valued at...... 6, 000
    Real estate in Washington (specifically devised to Ellen O. Woodbury) valued at 2, 600
    - 18,600 00
    Total estate, real and personal................ $148,390 24
    At Special Term it was held that the legacy of $1,000 to “ The poor of Bath ” was void for uncertainty, and that the legacy o'f $4,000 to “ The American Hospital if erected in Paris ” was void because no such institution was in existence at the death of the testatrix. It was also held that the devise and bequest to Ellen C. Woodbury and to her executors,by the clauses above quoted, were.void “for want of intrinsic certainty and extrinsic application,” and that the residue of the testatrix’s estate passed to her father, Thomas Harward, sole heir and next of kin.

      William G. Choate and Charles C. Marshall, for Ellen O. Wood-bury, appellant.

      James D. Fessenden, for plaintiffs, respondents.

      George G. De Witt and Dcrniel G. BolUns, for the executors of Thomas Harward, respondents.

      B. D. SilH/mcon, for tlie Greenwood Cemetery, respondent.

      Edmund Kelly, for Dr.' Labadie Lagrave, respondent.
   Follett, J.:

The plaintiffs, executors of Lizzie H. Perkins, have not espoused the cause of any of the litigants and do not contend for any particular interpretation of the will, but simply ask the court to construe it so that they may be relieved from liability.

Ellen C. Woodbury has appealed from the whole of the judgment, but in fact she challenges only that part of it adjudging to be void the clause, I appoint Ellen C. Woodbury my legatee and give to her all not before specified in this, and request her to give as I may direct or sell from what remains.”

The sole question discussed at the bar of this court, and the only one involved on this ajjpeal, is whether Ellen C. Woodbury is the residuary legatee of the testatrix and entitled to all of her estate not legally devised and bequeathed, or are the executors of her father, who was the sole next of kin, entitled to the residuum?

The two clauses quoted in the statement which precedes this opinion are the last ones in the will, but a residuary clause may be the first, the last or an intermediate one, and it is quite immaterial what its position may be provided it was the intention of the testator by it to dispose of all of his property not devised or bequeathed in other parts of the will. (Fleming v. Burrows, 1 Russ. 276; S. C., 4 L. J. Ch. 115.) The position in the will of such a clause may sometimes aid to interpret it or the other provisions, but if the intent of the testator is manifest its position will not affect its validity.

The questions in this case are: (1) Did the testatrix intend to give all of her property not disposed of by the other clauses of her will to Ellen C. Woodbury? (2) In case that was her intent, is the language used by her sufficient, under the rules of law, to carry the residuum to Miss Woodbury ? (3) Do the words, “ and request her to give as I may direct or sell from what remains,” create a precatory trust ?

It is perfectly clear that the testatrix did not intend to die intestate as to any part of her estate. It is manifest that she did not intend that any part of her estate should go to her next of kin, her father, a centenarian and more, wlio, as it appears by his will, had a considerable estate, the pecuniary bequests therein amounting to more than $90,000, $34,000 being left to charitable corporations. Neither did she intend that all of the avails derived from the sales of “ bonds, stocks and other property” should be divided among “hospitals and homes for women in Washington and New York,” because her pecuniary bequests, amounting to $38,000, exceeded the value of all of her estate other than her bonds and stocks, most of which she sjiecifically devised and bequeathed.

The fact that the testatrix did not intend to bequeath to Ellen O. Woodbury her “bonds, stocks and other property,” directed by the final clause to be sold and the avails given to hospitals and homes, is not decisive of the question whether the testatrix intended that Miss Woodbury should be the residuary. legatee, because it often happens that a residuary clause carries to such a legatee lapsed devises and bequests and property which the testator intended and attempted to give to others, but failed by reason of the invalidity of the provisions by which the intention was attempted to be effectuated. But when it is doubtful whether the testator intended to give the residuum of his estate to a particular person all of the clauses of the will may be considered as bearing on the question of intent.

It was shown that Miss Woodbury was the intimate friend and ■companion of the testatrix, to whom, when the latter was “ wild with the thought of death,” she appealed, to “ burn every paper and family picture ” and to dispose of many of her articles of personal property as directed, and to “try to do as I would wish.”

The clause under consideration begins: “I appoint Ellen C. Woodbury my legatee, and give to her all not before specified in this,” etc. This language was designed to express an intent then existing in the mind of the testatrix. What was it ? Clearly not to give to Miss Woodbury a particular sum, for none is mentioned, nor to make a specific bequest or devise, for no property, real or personal, is specified, and so, if the testatrix had an intent, as we must presume she had, we are driven to the conclusion that her intent was to give her what remained after paying her debts and satisfying the particular legacies and devises made by the will.

The last word of the following sentence is not meaningless: •“ To give as I may direct or sell from what remains.” Remains plainly refers to some part of her estate. What part? Manifestly to the part left undisposed of by the other clauses of her will. Remains in this connection denotes residue. This brings us to the second question, is the language employed sufficient under the rules, of law to carry the residuum to Miss Woodbury ?

The words “ I appoint A. my legatee,” or, “ I nominate A. my legatee ” of a sum specified or of the residue of my estate carries to A. the sum specified, or the residue, as effectually as though the formal and more usual words “ I bequeath to A. a sum specified, or the. residue of my estate,” had been used. (Spark v. Purnell, Hobart, 75; Tayler v. Web, Style, 301; Jackson v. Kelly, 2 Vesey Sr. 285 ; Parker v. Nickson, 1 De G., J. & S. 177 ; Waite v. Combes, 5 De G. & S. 676; Hughes v. Pritchard, L. R. [6 Ch. Div.] 24; Laing v. Barber, 119 Mass. 523; Succession of Ehrenberg, 21 La. Ann. 280.)

“No pai’ticular mode of expression, is necessary to constitute a. residuary legatee. It is sufficient, if the intention of the testator be plainly expressed in the will, that the surplus of his estate, after payment of debts and legacies, shall be taken by a person there designated.” (2 Will. Ex. [7th Am. ed.] 801, and cases cited; 1 Jarm. Wills [6th Am. ed.], 721, et seg., and cases cited.)

If so intended, the word “ bequest ” will pass real estate, and the word “devise” will carry personalty. (Cole v. Covington, 86 N. C. 295; Williams v. McComb, 3 Ired. Eq. [N. C.] 450; Laing v. Barbour, supra ; The Estate of Pfuelb, Myrick Pro. Rep. [Cal.] 38 ; Jackson v. Kelly, supra ; Hughes v. Pritchard, supra; Peoples Trust Company v. Smith, 82 Hun, 494; 1 Will. Ex. [7th Am. ed.] 94; 1 Jarm. Wills [6th Am. ed.], 693, 697.)

The clause under consideration is sufficient in law to devise and bequeath the residuary estate to Ellen C. Woodbury.

This brings us to the third question, does the clause create a. precatory trust?

The testatrix did not direct Miss Woodbury to give or sell any part of the property devised and bequeathed to her. The clause implies that she may make a direction, but she never did by a subsequent testamentary instrument, and a trust is not created.. (Matter of Will of O’Hara, 95 N. Y. 403 ; Matter of Will of Keleman, 126 id. 73.)

Tlie judgment should be affirmed except tlie part which declares to be void the clause: “I appoint Ellon C. Woodbury my legatee, and give to her all not before specified in this, and request her to give as I may direct or sell from what remains.” This part of the judgment should be reversed and the executors directed to pay and transfer to Ellen 0. Woodbury all of the testatrix’s estate not held to have been legally devised and bequeathed by the judgment of the Special Term. Miss Woodbury having appealed from the whole of the judgment, the Greenwood Cemetery and Dr. Labadie Lagrave were justified in appearing in this court to sustain their bequests. The plaintiffs, Ellen 0. Woodbury, the executors of Thomas Harward, the Greenwood Cemetery and Dr. Labadie Lagrave are entitled to costs, payable out of the estate.

Van Brunt, P. J., and O’Brien, J., concurred.

Judgment modified as directed in opinion, and affirmed as modified, with costs to the plaintiffs, Ellen C. Woodbury, the executors of Harward, the Greenwood Cemetery and Dr. Lagrave payable out of the estate.


author: Beekman, J. :

text:
    The People of the State of New York ex rel. Harry P. Pike and Another, as Trustees, etc., of Hannah Benrimo, Deceased, and Another, Appellants, v. Edward P. Barker and Others, as Commissioners of Taxes and Asssessments of the City of New York, Respondents.

      Tax laws in New York city — substantial compliance therewith sufficient — persons designated as executors and trustees — striking out executors and correcting a, name — alphabetical order.

    Tax laws are not to be treated as traps laid to snare assessors, but should be upheld, and the acts of public officers under them sustained, where there has been a substantial compliance with all the requirements designed for the protection of the taxpayer.
    There appeared upon the assessment roll of personal assessments under the letter “P” the following : “ Pike, Henry, and Emma Benrimo, as executors and trustees of estate of Hannah Benrimo, deceased, * * * $85,000.”
    This entry was objected to on the ground, among others, that the assessment should have been entered under the letter “ B,” and that the name of Pike was Harry P. and not Henry. It was also objected to on the ground that the executors had wholly administered the estate of the decedent, and were without property in their hands, as executors, which could be made the subject of taxation.
    The tax commissioners thereupon corrected their books by striking- out the words “ executors ” and corrected Mr. Pike’s name and reduced the assessment, the entry as corrected reading as follows: “Pike, Harry P., and Emma Benrimo, as trustees of estate of Hannah Benrimo, deceased, 'x' * * §75,000.”

      Held, that the designation as “executors” was mere surplusage and was not operative to destroy the legal effect of that portion of the description which correctly indicated the capacity in which the parties were assessed;
    That the commissioners had power to strike out such words and also to correct Pike’s name;
    That the statute does not require the same assessment to be entered more than once upon the assessment roll, and that it was correctly entered in the alphabetical arrangement under the letter “ P.”
    Appeal by the relators, Harry P. Pike and another, as trustees, etc., of Hannah Benrimo, deceased, and another, from an order of the Supreme Court, granted at the New York Sjiecial Term and entered in the office of the clerk of the county of New York on the 21st day of February, 1895, dismissing a writ of certiorari to review the proceedings of the respondents as commissioners of taxes and assessments of the city of New York and confirming a certain assessment made by them.

      Inicien B. Chase, for the appellants.

      Francis M. Scott and George S. Coleman, for the respondents.
    Order affirmed, with costs on opinion of Special Term.
    Present — Yan Brunt, P. J., O’Brien and Parker, JJ.
   The opinion of the Special Term was as follows :

Beekman, J. :

Hannah Benrimo died on the 6th day of January, 1893, leaving a will appointing TIarry P. Pike and her daughter, Emma Benrimo (now Emma Chase), executor and executrix of the same and also trustees of a fund bequeathed to them in trust for the benefit of her said daughter during her life. Prior to the making of the assessment complained of the executors had wholly administered upon the estate of the deceased, and had retained to themselves, in their capacity as trustees, all of the property which appertained to the trust estate. As executors purely they were, therefore, without any property in tlieir hands which eonld be made the subject of taxation. In making up the assessment rolls for the taxation of personal property for the year 1894, the relators were included therein under the following entry: Pike, Henry, and Emma Benrimo, as executors and trustees of estate of Hannah Benrimo, deceased, * * * $85,000.” The relators received actual notice of the assessment and objected before the respondents to the same, on the ground that the assessment was invalid because it assumed to assess the relators as joint owners of the .fund in their several capacities as executors and trustees, and that there was no such joint ownership; that the assessment should also have been entered against the relators in that portion of the assessment roll devoted to names commencing with the letter B, and that the property assessed had been overvalued. A further objection was made that the name of the relator Pike was Harry P. Pike and not Henry Pike, as stated in the assessment list. The tax commissioners thereupon corrected their books by striking out the words executors and ” and correcting Mr. Pike’s name, and also reduced the valuation to the sum of $75,000, which, upon the evidence, was quite within the limit of their right to assess. The entry then read as follows: “ Pike,. Harry P., and Emma Benrimo, as trustees of estate of Hannah Benrimo, deceased, * * * $75,000.”

The relators, still claiming to be aggrieved, now apply to this court on certiorari to cancel the whole assessment.

They insist upon the application of a most rigid rule of construction of the statute and the acts of the tax commissioners-under it. It is true that the authority to exercise the powers of taxation has been carefully scrutinized and limited to the express warrant of the statute and cannot be extended by implication or construction. (McLean v. Jephson, 123 N. Y. 142-146.) I am not aware, however, of any authority which requires the court to prefer a construction which will defeat rather than sustain a tax, nor do I believe that any court has asserted or will assert any such unreasonable doctrine. The public has a most vital interest in sustaining the taxing power, for upon it rests the very existence of government, and while the individual right of the taxpayer to have the law substantially complied with in the process through which his proportion of the burden is laid upon him, is undoubted, the pub-lie is equally entitled to the benefit of a fair and reasonable construction in support of the tax and to have the tax sustained where' there has been no substantial departure from statutory requirement. The statute applicable to the case at bar requires that “ where a person is assessed as trustee,.guardian, executor or administrator he shall be assessed as such with the addition to his name of his representative character, and such assessment shall be carried out in a separate line from his individual assessment.” (R. S. [8th ed.] p. 1097.) The object of this provision is that each class of assessments may be dealt with singly in reference to deductions and other considerations peculiar to each, and also be free from the confusion and error likely to result both to the city and taxpayer, if personal and trust funds should be assessed together. It was the right of the relators to have this provision observed, and their right was respected. They insist, however, upon a legal exactness of definition in characterizing the particular representative capacity in which they are assessed, as if the stress of the statute was upon this instead of upon the separation of one class of assessments from the other. No such exactness is required. If the representative character of the relators is indicated with substantial correctness the statute has been complied with, and the fact that the description is inartificial and without legal nicety does not vitiate the assessment. Tax laws are not to be treated as nicely-laid traps to snare unwary assessors, but should be upheld, and the acts of public officers under them sustained where there has been a substantial' compliance with all the requirements designed for the protection of the taxpayer. As was said by Peckham, J., in Overing v. Foote (43 N. Y. 290-297), concerning assessors in making up tax lists: “ In construing the acts of these officers we should not sacrifice substance to form, nor lose sight of the spirit and purpose of the laws they are required to execute.”

In the case at bar the fund assessed was held by the relators as trustees and was subject to assessment against them in that capacity. They were so described in the assessment roll, and the entry of the assessment was made on a separate line as required by the statute. It is true that they were also designated as executors, but this was mere surplusage, technically inaccurate, in view of the legal ownership of the fund by them as trustees, but certainly not operative to destroy tlie legal effect of tliat portion of the description which correctly indicates the capacity in 'which they were assessable. The collocation of these words is not at all infrequent where the same persons are both executors and trustees under a will, and the addition of the word “ executors ” as employed by the tax commissioners in this case may more fitly be regarded as a redundancy of expression or an inartificial designation in no way misleading or raising any doubt as to the capacity in which the relators were actually assessed. In order to destroy the assessment and avoid the tax, the relators have taken the position that the assessment is in form against the executors and trustees as joint owners of the fund, when as a matter of fact no such joint ownership exists. The court will not favor a construction so strained as to require such an extraordinary legal proposition as a joint ownership by executors and trustees of property under the same will to sustain it. Nor in order to defeat a tax will it grope for a theory upon which to support such a postulate.

No such purpose is imputable to the tax commissioners in this case, and the assessment must, therefore, be upheld as sufficiently made against the relators as trustees under the will. Tlie commissioners, upon hearing the objections of the relators, struck out the words objected to, and also corrected Mr. Pike’s name from Henry Pike to Harry P. Pike. This seems to have been within their power. (People ex rel. Neustadt v. Coleman, 42 Hun, 581.) In that case the change made was much more substantial, as -it eliminated from the assessment tlie names of two non-resident executors, leaving only the name of the resident executor, who was thus taxed in respect to the whole trust estate, although jointly owned by him with the others. (See, also, Van Voorhis v. Budd, 39 Barb. 479.)

The objection is also made to the assessment that it has been entered on one line only against Pike, whereas it should also have been entered on another line against Beurimo. 'Section 813 of the New York City Consolidation Act (Chap..,410.of the Laws 1882) provides that “the assessed valuation of all personal property shall be entered by said commissioners in books or rolls in alphabetical order of the names of persons and corporations subject to taxation.”

It is sufficient to say, in answer to this objection, that the ownership of the fund in question was joint; each relator had an interest in the whole; they were not owners respectively of undivided halves. The law required them to be assessed together in respect to the fund, and the tax commissioners fully complied with the law when they entered the assessment in alphabetical arrangement under the letter P. The statute does not in terms require the same assessment to be entered more than once, and it would be unreasonably extending it by construction to hold that there must be as many separate entries as there may be trustees whose names are headed by as many different letters of the alphabet. Such a course would be inconvenient in the extreme and likely to raise questions of multiple assessments of the same property. When the assessment has been once properly entered, the act is complete and the statutory requirement has been fully satisfied. If the alphabetical arrangement is required to facilitate the examination of the roll by those who may be affected by the assessment, it is quite as much their duty to search against all the trustees as against one, and this they can do without appreciable inconvenience.

The entry of the assessment against the name of the relator Pike was especially appropriate, in view of the fact that the other trustee was the beneficiary of the trust and subject to limitation on that account in participating in the administration of the same. (Rogers v. Rogers, 111 N. Y. 228.)

The relators have been treated with perfect fairness by the respondents. They were personally notified of the assessment, and a full hearing was afforded to them in respect to their objections, .and every effort was made, short of canceling the assessment, to meet their complaint.

The amount of the assessment was reduced as soon as the attention of the respondents was called to their overvaluation. The fact that the relators are subject to assessment for taxation in respect to the reduced amount is unquestioned. The objections now insisted upon are highly technical, and are of no value or consequence to the relators except in so far as they may be available to afford an escape from any taxation. I am of the opinion that the points raised by the relators are without merit, and that the respondents have not committed any errors calling for a reversal of their action.

The writ is dismissed, with costs.


author: Parker, J.:

text:
    In the Matter of the Judicial Settlement of the Accounts of Charles Brenneman, as Surviving Executor, etc., of Frederick Leonhard, Deceased. Charles Brenneman, as Executor, etc., Appellant; Mary E. Side and Others, Respondents.

      Misapplied trust funds — claiming the property in which they are invested — jurisdiction of the Surrogate’s Court.

    Where a trust fund has been misapplied the beneficiary may follow it and may reclaim it in whatever form it has been invested by the trustee, provided the rights of honafide purchasers do not intervene.
    The beneficiary’s right to reclaim from an executor misappropriated moneys belonging to an estate is not affected by the fact that the executor has substituted other money for such money or exchanged it for other property, and this right can be enforced against property which the wrongdoer has obtained in exchange therefor, provided the beneficiary elects to take it in the shape into which it has been converted.
    Where a trustee in the purchase of property uses his own money and that of his cestuis que trust jointly in the payment therefor, if the cestuis que trust so elect they will become co-owners of tile property in the proportion which the contributions from the trust fund and the personal moneys of the trustee bear to the sum total invested.
    The Surrogate’s Court has jurisdiction to compel an executor or trustee to account for real estate in which the moneys of the estate have been invested, if the facts surrounding it are such that it may be treated as personalty, and can compel an accounting of such real estate as a part of the assets of the estate.
    Appeal by Charles Brenneman, as surviving executor, etc., of Frederick Leonhard, deceased, from portions of a decree of the Surrogate’s Court of the county of New York, entered in said Surrogate’s Court on the 11th day of November, 1891, passing his accounts as such executor.
    Frederick Leonhard died July 3, 1873, leaving a last will and testament, wherein, after giving certain legacies to his children, Elizabeth Brenneman, Joseph and Augustus Leonhard, and directing that the payment of his debts should be provided for, he provided as follows:

      “ Thirdly. All the rest, residue and remainder of my estate, both real and personal, I give, devise and bequeath unto my wife, Mar-' garet Leonhard, to have and to hold the same for and during her natural life.
    “ Fourthly. After the decease of my said wife I give, devise and bequeath unto my said three children all the said rest, residue and remainder of my said real and personal estate, share and share alike, to have and to hold the same to them, their heirs and their assigns forever: * * *
    “ Lastly. I nominate and appoint my son Joseph F. Leonhard and my son-in-law, Charles Brenneman, executors of this my last will and testament.”
    Charles Brenneman duly qualified as executor, and letters were, issued to him as such on August 20, 1873, and he has continued to act as such executor down to the present time.
    Margaret Leonhard, the testator’s wife, died on the 24th day of July, 1891. All of the persons interested in the estate have waived all claim against the accounting executor, except Mary E. Side, Frederick Leonhard, Josephine Leonhard and Edward Leonhard, who are each entitled to one-eighteentli of the residuary estate.
    The referee found, among other things, that the executor collected the sum of §768.13, interest upon mortgages which had accrued prior to the death of the testator, viz., July 3, 1873, and has not charged himself with the same as principal in Schedule “A” of his account as amended.
    That the executor, when he received the moneys of the estate, deposited them in a bank account in his individual name, wherein were deposited moneys belonging to himself, and that he mingled the moneys of this estate with his own.
    That prior to the death of the testator, and about June, 1873, Charles Brenneman, the executor herein, had formed a quasi partnership with Frederick Folz and Frank ILeerlein for the purchase of land and the erection of buildings thereon.
    That the partnership thus formed continued down to and about the 16th day of March, 1875.
    That between June, 1873, and the close of the partnership, March 16, 1875, Charles Brenneman, the executor herein, paid into the partnership the sum of $120,224.07, and received therefrom during said time the sum of $91,035.71, an excess of payments over receipts of $29,188.36.

      That Charles Brenneinan, the executor herein, drew from the account where the moneys of this estate were deposited and mingled with his own moneys the sums paid into the partnership between September, 1873, and March 16, 1878.
    That of the moneys paid into the said partnership by Charles Brenneinan between September, 1873, and March 16,1875, the date of the partnership settlement, $12,388:71 were moneys of the estate of Frederick Leonhard, deceased, and formed part of the $29,188.36 which said Brenneman had invested at the close of the partnership, March 16, 1875. >
    That at the close of the partnership business, March 16, 1875, Charles Brenneinan, the executor herein, received, subject to mortgages amounting to $42,000, the property situated at the southwest corner of Mott and Houston streets, being about sixty-tliree feet four inches wide on Houston street by seventy-six feet one-half inch on Mott street, as and for the moneys invested and his share of the profits of said partnership.
    That the executor collected $704.50 rent per month on the said property at Houston and Mott streets, between July 24, 1891, and August 23, 1892, amounting in the aggregate to $9,158.50.
    That the executor herein paid taxes on the said property at Houston and Mott streets, between July 24, 1891, and August 23, 1892, amounting to $866.67.
    That the executor herein paid interest on mortgages on said property at Houston and Mott streets between July 24, 1891, and August 23, 1892, amounting to $2,394.17..
    The referee reported, as a conclusion of law, so far as the interest of Mary E. Side, Frederick Leonhard, Josephine Leonhard and Edward Leonhard are concerned, as follows :
    That the executor should be charged with the interest on mortgages collected by him, which interest had accrued prior to the testator’s death, aggregating $768.13.
    That the executor should be charged with jnmrfr'ír the property situated at the southwest corner of Mott and Houston streets, being about sixty-three feet four inches wide on Houston street by seventy-six feet one-half inch on Mott' street, as an asset of the estate, subject, however, to the mortgages thereon, amounting to $42,000.

      Tliat the executor should be charged with the surn of -Jf iff si of $9,158.50, reDts collected on the Houston and Mott street property, between July 24, 1891, the date of the death of the life tenant, and August 23, 1892, viz., $3,886.24.
    That the executor should be credited with the taxes paid on the Houston and Mott street property between July 24, 1891, and August 23, 1892, to wit, $866.67.
    That the executor should be credited with the interest on the mortgages paid on the Houston and Mott street property between July 24, 1891, and August 23, 1892, to wit, $2,394.17, leaving a balance in the hands of the executor of $11,877.93 in cash, and it'r8-§3"B' of the Houston and Mott street property, subject to the mortgages of $42,000, of which balance the contestants are entitled as follows: Mary E. Side, one-eighteenth ; Edward Leonhard, one-eighteenth; Josephine Leonhard, one-eighteenth; Frederick Leon-hard, one-eighteenth.

      Howard Y. SUlhnan, for executor, ajipellant.

      Henry A. Forster, for the respondents.
   Parker, J.:

The question to be considered relates to the findings that the executor is chargeable with of the property at the southwest corner of Houston and Mott streets.

In May, 1873, the executor entered into a partnership with Fred, erick Folz and Frederick Heerlein to buy, improve and sell real estate. The partnership continued until March 16, 1875, when it was dissolved and the assets were divided, the executor receiving as his share of the assets the three houses on the southwest corner of Houston and Mott streets.

The executor invested from $26,000 to $29,000 in the partnership, his partners testifying that the former was the correct amount, and the executor the latter, and the referee found the fact to be as testified to by the executor. Of this amount, the contestants claimed‘that afiotit $15,000 was the money of the estate, but the referee has found that the true sum was $12,388.71.

One of the difficulties which confronted the contestant^, in their effort to ascertain tlie amount, was due to the fact that the executor did not keep a separate account with the funds of the estate. All receipts, whether of moneys of the estate or his own personal funds, were deposited to his individual credit and drawn out by checks as demands were made upon him by parties interested in the estate, or by his own creditors or for business ventures.

There was no difficulty whatever in determining the sum for which he should account, but as the executor was insolvent, the contestants deemed it essential, if the accounting was to result in any practical benefit to them, to trace such of the funds into the real estate venture as were actually put into it. Even the Houston and Mott street houses were by the executor conveyed to his father and the life tenant in 1876. Another reason, doubtless, was to secure a portion of the profits resulting from the real estate investment between the time of the death of the life tenant and the institution of this proceeding for'an accounting.

Between the time of the testator’s death and the termination of the real estate partnership in 1875, the executor received sums of money from various sources aggregating $25,618.13, and he paid out for legacies, debts of testator and in satisfaction of liens $10,606.79, thus leaving in his hands $15,011.34.

That the executor was either unwilling or unable to assist the contestants in'their inquiry as to the disposition which he had made of this unaccounted for balance clearly appears from the following extract from his testimony : Q. ■ Your balance of January, 1875, according to your account, should have been $12,211.21. From your check book the balance is shown to be $1,220.61, leaving a balance of over eleven thousand dollars estate money used. In December, can you tell me where that money was? A. No doubt loaned it. Q. You can’t tell me the loans or the amounts ? A. I could not. Q. Now, in July, 1875, you should have had a bank balance according to your own statement and your own account of $14,871.76. Your bank balance in both banks, the German Exchange and the Germania, shows a balance of $1,960.37, or $12,911.50 of the estate money used by you. Can you tell me where that money was at that time ? A. I cannot. * * * Q. From your accounts you owed to this estate $15,821.87, and your bank Balance on that day shows $746.77, showing over $15,000 or $15,075.10 of the estate money that was used by you. Can you tell me where the money was on that date ? A. I could not. * * * Q. Now, in March, 1876, March 8th, * * * where then was this money ? A. I could not tell you. I don’t know. Q. Is that the best answer you can give me in regard to that ? A. It is so long I can’t tell you what I did with it. Q. You had no bank account at that time? A. No. Q. Savings or business bank account? A. No. Q. You had no securities of any description in March, 1876? A. No, sir. * * *”

The Referee : “ Let him tell me what he did on May, 1876, with the estate ? A. I don’t remember that.”

He further testified that the properties conveyed by him in 1876 to his father and the life tenant represented all the property that he held of any kind or description at that time.

The effect of the testimony to which we have referred was to negative at least the possibility of its investment in anything else than the partnership houses. As the contestants were necessarily largely dependent upon the testimony of the executor to show that the moneys of the estate were invested in this property, resort was had to his examination on proceedings supplementary to execution in the year 1876, with the following result: “ Q. Now, on the prior examination in this proceeding, was this question put to you as having been put to you on an examination in supplementary proceedings, and did you give this answer ? Q. What did you do with the money ? A. I put it where it belonged. Q. Did you give that testimony? I suppose so. * * * Q. Was this question asked you at that time; where was that? A. The estate ofFrederick Leonha/rd. Q. Did you give that testimony ? A. I suppose it must be true ; yes, I said that. Q. Was this question asked you in the prior examination in this matter ? Was that testimony true ¡ is that the fact that the money belonged to the estate of Frederick Leonhard ? A. If I said so it must be so. Q. It is so, isn’t it? A. Yes; that is right. Q. On the prior examination in this matter, was this question put to you as from the supplementary proceedings ; was this question put to you in that examination and did you give this answer ? Q. How did you get it from there ? A. I had misappropriated funds of the estate which came into my hands as executor, and had used them to build houses in Hester, Essex and Houston streets. Q. "Was tliat question asked and did you give that answer ? A. I don’t recollect any more; I suppose it was so if it is there. Q. Are the statements made in that answer 'true ? A. I suppose they are. Q. They are true, aren’t they ? A. I think so; yes, I stated that. * * * Q. The houses at Houston and Mott were conveyed to you to represent your share in the partnership, property? A. Tes, sir. Q. Both money invested and profits, if any? A. Yes. Q. They still stand in your name? A. Yes, sir. Q. And have never been out of it, except during the times they were conveyed, as you have testified to Mrs. Leonhard and your father? A. Yes.” “Q. It was afterwards retransferred to you? A. Yes, sir. Q. And whatever it was transferred to him for was canceled ? A. There was a running account between us.”

It would far exceed the proper limits of this discussion to attempt anything like a review of the testimony in this voluminous record so far as it bears upon the present question, but what we have quoted sufficiently indicates that the referee and the surrogate as well, who confirmed his report and entered a decree thereon, were justified hi the conclusion reached, that a sum exceeding $12,000 in money of the estate was invested by the executor in the real estate ventures with his partners Folz and Heerlein. The executor was not idle in his efforts to create the impression in the mind of the referee that the money was not invested in the real estate, and from his standpoint there was occasion for activity, for the profits resulting from the real estate during the period which lasted between the time of the death of the life tenant and the commencement of the accounting were far greater than the legal rate of interest which otherwise would be charged. Again, he was quite likely not without hope tiiat a decree which should merely adjudge that he had a certain amount of money in his hands belonging to the estate, out of which he should pay over to the contestants four-eighteenths, would result less seriously, than one which should adjudicate that in a particular piece of valuable property, still remaining in the family, the moneys of the estate were invested, and that such moneys and the interest which they purchased constituted assets of the estate. With that end in view he produced two books of account which he claimed contained the items of account between himself and his partners Folz and Heerlein. They did show certain payments and receipts of moneys during tbe years 1873, 1874 and 1875, but did not furnish evidence as to the source from which the principal amount of moneys came, which were invested in the real estate partnership. The accuracy of the books did not pass unchallenged. Folz and Heerlein testified that the basis upon .which they made a settlement with the executor was entirely different from that shown by the books; the first book also bore evidence of mutilation, some thirty-four pages being missing; the tops of several of the j^ages were off and appeared to have been cut off, and they were open to criticism of a character tending strongly towards justifying the referee in regarding the testimony of the executor on the other examinations, to which we have referred, as not being overborne, to say the least, by the books.

Our conclusion being that the evidence justified the finding of fact made, we come now to the questions of law involved.

It is a general rule where a trust fund has been misapplied, that the beneficiary may follow it so long as it can be traced, until the rights of a bona fide purchaser intervene, and may reclaim it in whatever form it has been invested by the trustee. (Newton v. Porter, 69 N. Y. 133 ; Holmes v. Gilman, 138 id. 369.)

The beneficiary’s right to reclaim misappropriated estate moneys from an executor is not affected by the fact that the executor has substituted other money for it, or exchanged it for other property. (Van Alen v. American Natl. Bank, 52 N. Y. 1; Baker v. N. Y. Natl. Ex. Bank, 100 id. 31.)

This right can be enforced against property which the wrongdoer has obtained in exchange, provided the beneficiary elects to take it in the shape into which it has been converted. (Matter of Cavin v. Gleason, 105 N. Y. 260.) Where trust moneys can be followed into the lands, to the purchase'of which they have been applied, the cestui que trust may elect whether to hold the unfaithful trustee personally responsible, or claim the lands. (Ferris v. Van Vechten, 73 N. Y. 113.)

And if a trustee in the purchase of property uses his own money and that of his cestuis que trust in payment, if the cestuis que trust so elect they will become co-owners of the property in the proportion which the contributions from the trust fund and the personal moneys of the trustee bear to the sum total invested. (Holmes v. Gilman, 138 N. Y. 369-378.)

The principle enunciated by the several cases to which we have referred are applicable to the facts of this case, but they were applied by a court having general jurisdiction in equity, whereas the Surrogate’s Oourt has not such jurisdiction, and this brings us to the question whether the Surrogate’s Oourt had jurisdiction to compel the executor to account for lands in which he had invested the funds ■of the estate. The Surrogate’s Oourt has such jurisdiction only as is given it by statute, which governs it in proceedings for an •accounting, and for the disposition of the assets of the decedent, and where the aid of a court of equity is required to impose a trust the Surrogate’s Oourt cannot declare and direct the execution of it in advance of the making of a decree of a court of general jurisdiction establishing it. But this does not prevent the Surrogate’s Court from compelling an executor or trustee to account for real estate in which the moneys of the estate have been invested, if the facts surrounding it are such that it may be treated as personalty, and compelling an accounting of it as a part of the assets of the •estate.' Such a situation has illustration in Redfield on Surrogates’ Courts (5th ed.), 425. Laud bought in by executors, on a foreclosure of a mortgage belonging to the estate, is to be treated as personal property, and a Surrogate’s Oourt has jurisdiction to direct an •accounting in respect thereto, where the administrator, through a mesne conveyance, has acquired title in his individual name. It is not necessary to first proceed in equity for the imposition and declaration of a trust.”

'In In re Gilbert (39 Hun, 61) an administrator purchased land on foreclosure by crediting the amount of the purchase price on a mortgage belonging to the estate, conveyed the land to his son for a nominal consideration and took a reconveyance from his son on a nominal consideration, and it was held that the Surrogate’s Court had jurisdiction to compel him to account for it and would treat it as personal estate.

In the course of the discussion had the court said : “ The administrators as such took the title as purchasers on the mortgage foreclosure sale, and without any consideration paid, they, through his son, placed the title in the appellant. In the hands of the administrators the property had the character of personalty, and the handing it over to one of them, unembarrassed with any other facts, would seem to continue its character and relation to the estate represented, of which it might be treated as assets for the purpose of accounting. * -x- -x- we are inclined to think that upon that state of facts the surrogate had jurisdiction of the proceeding.”

The discussion in Lockman v. Reilly (95 N. Y. 64) is in point: It may happen that an executor or administrator, without authority, invests the funds of the decedent’s estate in land; or he may take land in payment of a debt due to the estate which he represents, or may purchase it for the protection of the estate, -x- * -x- Under such circumstances the executor or administrator in one sense holds the land in trust for the persons beneficially interested in the estate, aud can be compelled to account for it. -x- * * The legal title to the land is in the executor or administrator, but, as between him and the legatees, next'of kin and creditors, "x' * * it is personal estate, and he holds it as the legal representative of the deceased. * * * It vTas not made as a purchase of land * * * under a power contained in the will, for there was no power in the will to invest in land. * * * The effect of the conveyance to the executrix was to make the land in her hands take the place of the mortgage as personal estate; and she was liable to account for it as such. * * * The beneficiaries * * * only had the right to require the executors to account for it as for any other item of personal estate in her hands-as executrix. * "x" * That land bought in by executors on a foreclosure of a mortgage belonging to the estate is to be treated as personal property, which the executors may sell, and for which they are accountable as such, has been frequently decided, and it is immaterial whether the deed is taken in the names of the executors as such or in their individual names. * * * The beneficiaries under the will * * * never had any interest in it as land. It was personalty when the testator died, and, so far as their rights are concerned, it still remained personalty in the hands of the-executrix.”

These cases seem to be authority for the proposition that the Surrogate’s Court, in a situation such as is presented by this record,. could treat the lands, into which the moneys of the estate went, as personalty and compel the executor to account therefor.

And the decree certainly does not transcend the rule which they establish, as will be observed from a 'reading of the provisions of the decree bearing upon that subject. They read as follows : “ The said executor is also charged with of the property situated at the southwest corner of Houston and Mott streets, in the city of New York, being about 63 feet 4 inches wide on Houston street by 76 feet -J inch on Mott street, subject, however, to the mortgages thereon, amounting to $42,000. * * * And it is further ordered, adjudged and decreed that $12,388.71 of the $29,188.36 invested by the executor in the property at the southwest corner of Houston and Mott streets, being about 63 feet 4 inches wide on Houston street by 73 feet inch on Mott street, was money of the estate of Frederick Leonhard, deceased; that the executor is charged with ¡Hrrftli sa^ property as an asset of the estate, subject, however, to mortgages tliereon amounting to $42,000.” Of this interest the decree adjudges that each one of the four parties in whose behalf the contest was made is entitled to a one-eighteenth part thereof. While the Surrogate’s Court had undoubted authority under the facts in this case to decree as it did, a practical difficulty may confront the successful contestants as to the manner in which, if at all, its provisions may be enforced for their benefit. But with that question we have no concern on this review, for we have only to consider whether the decree violates any of the legal rights of the executor.

The decree should be affirmed, with costs.

Yan Brunt, P. J., and O’Brien, J., concurred.

Decree affirmed, with costs.


author: Per Curiam :

text:
    In the Matter of the Judicial Settlement of the Account of Margaret H. De Forest, as Administratrix of Charles T. De Forest, Deceased. Margaret H. De Forest, Appellant; American Surety Company, Respondent.

      Swrogate’s Court — judicial settlement of an administrator’s account — the citation should issue to all creditor's.

    Where an executor or administrator seeks a judicial settlement of his account under section 3728 of the Code of Civil Procedure, it is the better practice to serve the citation upon all the persons interested in the estate of the decedent, including creditors who have been paid in full and who have receipted for the payment.

      Semble, that as this section enables a creditor or a person interested in the estate, although not cited, to appear and make himself a party to the proceeding, the failure to cite the creditor or person interested would not oust the Surrogate’s Court of jurisdiction.
    Motion.for a reargument upon an appeal by the petitioner, Margaret H. De Forest, from an order of the Surrogate’s Court of the county of New York, entered in said Surrogate’s Court on the lltli day of December, 1891, directing the issuance of a supplemental citation to all the creditors of the estate of her intestate and staying the entry of a decree of the judicial settlement of her accounts as such administratrix until the service and return of such citation.

      JRastus 8. Pcuiisom, for the motion.

      8. 8. Perry, opposed.
   Per Curiam :

The appeal in this matter was taken from an order of the Surrogate’s Court directing that a supplementary citation issue to all the creditors of the estate, including those whose claims the administratrix claimed to have paid in full. Upon the argument of this appeal the order of the surrogate was affirmed, and this motion for a reargument is made upon the ground, apparently, that it has not been the customary practice to cite creditors upon an accounting whom the executor or administrator claims to have paid in full and for which payment the executor or administrator presents alleged vouchers.

It is a familiar rule upon an accounting to cite all legatees whether vouchers for the payment of their legacies are produced or not; and it is difficult to see how there can be any distinction between the case of a legatee of a decedent and that of a creditor of a decedent. Certainly in the statute where the question of citation is spoken of, no such' distinction is hinted at. Section 2728 of the Code of Civil Procedure reads as follows: “ In either of the following cases an executor or administrator may present to the Surrogate’s Court his account and a written petition duly verified, praying that his account may be judicially settled; and that the sureties in his official bond or the legal representatives of such surety and creditors or persons claiming to be creditors of the decedent and the decedent’s husband or wife, next of kin and legatees if any, or if either of those persons has died, his executor or administrator, if any, may be cited to attend the settlement.”

The right to this accounting depends upon the lapse of one year rnd the publication of a notice to creditors. The surrogate, upon the presentation of such a petition, must issue the citation accordingly. And there is a further provision that a creditor or a person interested in the estate, although not cited, is entitled to appear at the hearing and thus make himsélf a party to the proceeding. It would seem, therefore, that it was in contemplation of the statute that all creditors of the decedent should be cited, and if they are dead their executors or administrators, if any there be. It may well be that where a creditor has not presented his claim and has not thereby intervened in the proceeding, he may not be entitled to notice. But having intervened by the presentation of his claim, it is difficult to see upon what theory he should be ignored in the subsequent proceedings.

It does not seem to be any answer to this suggestion that the-executor claims to have paid the creditor in full and presents a voucher; because the creditor, if he were allowed an opportunity to do so, might be able to establish that the voucher presented was not his and that he had not been paid.

In view of the provision that a creditor or person interested in the estate is entitled to appear on the hearing and thus make himself a party to the proceeding, although not cited, it may be that the failure to cite the creditor does not oust the court of jurisdiction in respect to the accounting. But it is manifest that it is the better practice, where it is possible, to cite the parties who were interested in the estate at the time of the death of the decedent, unless there is some reason shown why the ordinary course should not be pursued.

The argument that it is difficult, in many cases, to serve a citation upon all creditors whether they have been paid or not, does not seem to be entitled to a great deal of weight, because if any obstacles exist which cannot be overcome, undoubtedly service of citation may be disjiensed with. The language of the statute does not seem to have made it obligatory upon the surrogate to issue such citation. But where the surrogate has directed such a citation to issue, this court should not, except in a very plain case, say that it was not a wise exercise of power. Parties, in case they desire, upon the payment of claims, to obviate the necessity of serving citations upon such creditors as they have paid, may very easily take a waiver of citation in the manner provided for by the practice in the Surrogate’s Court.

There does not seem, therefore, to be any reason for a reargument, and the motion should be denied, with ten dollars costs.

Present — Yan Brunt, P. J\, O’Brien and Follbtt, JJ.

Motion denied, with ten dollars costs.


author: Merwin, J. :

text:
    Peter J. Doherty, Respondent, v. John Shields, Appellant.

      Complaint, using the common counts, good— objections not available upon appeal— resultant facts should be stated — waiver of conversion and a suit on contract — amendment of pleadings erroneously directed, disregarded on appeal.

    A complaint that does not state the facts constituting an alleged cause of action, but makes use of the form of a'common count, is in form good.
    Where a bill of particulars is embodied in a complaint, if the complaint is good upon its face, whether it is sufficiently definite, or whether there is more than one cause of action, or whether there is a misjoinder of causes of action, are questions not available to a party upon an appeal from the judgment rendered against him in the action.
    Where the plaintiff in an action waives the defendant’s tort, and brings his action for goods sold and delivered, it is not necessary to allege in the complaint facts tending to establish the fraud; the special facts may be given in evidence upon the trial.
    When the fact that is stated in a complaint is the result of other facts, the resultant fact, and not those facts furnishing evidence thereof, should be stated.
    Where a plaintiff waives the conversion of personal property by the defendant and sues as for goods sold and delivered, there may be a recovery although it is not shown that the defendant has disposed of the property.
    In all cases of the wrongful conversion of personal property, actual or constructive, the plaintiff may waive the tort and recover the value thereof in an action for goods sold and delivered, but he cannot by changing the form of the action evade the rule requiring such proof of a conversion as would be necessary in any other form of action for the recovery of the value.
    Actions ex delictu and ex contractu in such cases are concurrent, and the proof must be the same in each.

      Where an amendment of a complaint to make it conform to the facts proved upon the trial is unnecessary, if the trial court erroneously directs such an amendment, the error will he disregarded' upon an appeal from the judgment rendered in the action.
    Appeal by the defendant, John Shields, from a judgment of the Supreme Court in favor of tlie plaintiff, entered in the office of the clerk of the county of Chemung on the 9th day of April, 1894, upon the report of a referee.

      Babcock, Baxter do Gibson, for the appellant.

      8. 8. Taylor, for 'the respondent.
   Merwin, J. :

In the complaint in this case it is alleged that between the 1st day of January, 1891, and the 1st day of June, 1892, the defendant became indebted to the plaintiff in the sum of $5,542.16, the same being for goods, wares, merchandise, stone and materials sold and delivered by the plaintiff to the defendant, and for goods, wares, merchandise, stone and materials belonging to and owned by plaintiff and received by the defendant and for- which the defendant promised and agreed to pay, and also for work, labor and services performed by the plaintiff for the defendant and for which the defendant promised and agreed to pay; that such goods, wares and merchandise, stone and materials, work, labor and services were reasonably worth the sum of $5,542.16, and that defendant had paid on account thereof the sum of $4,075.75, and no part of the balance had been paid. Then followed an itemized account of the claim in the form of a bill of particulars. Judgment was demanded for the balance, being the sum of $1,466.41. In the answer the defendant admits that he has paid the plaintiff the sum of $4,075.75, as alleged in the complaint, and denies- all the other allegations. Payment in full is set up, and a counterclaim for damages for the failure by plaintiff to perform his agreement with defendant to build the necessary masonry on eight miles of railroad on the Lehigh Valley Railroad Company’s extension near Van Ettenville and furnish the material therefor. The plaintiff in his reply admitted the making of the agreement substantially as alleged, but denied its breach, and alleged that the defendant released and discharged him from all obligations thereunder.

It appears that the defendant had a contract with the Lehigh Talley Railroad Company to do the grading and mason work on eight miles of railroad situate near Tan Etteuville, N. Y., and made a subcontract with plaintiff to build the necessary mason work and furnish material therefor at certain prices. The plaintiff entered upon the performance of his contract in April, 1891, and continued at work until the last of July of that year. There was some dissatisfaction as to his work and some misunderstanding as to his right to use native stone. The referee finds : “ The work of the plaintiff Doherty was then proceeding in a manner slow and unsatisfactory; he was losing money, and desired defendant Shields to take the contract off his hands, which the said defendant agreed to do on or about the last of July, 1891. The said contract was, by mutual consent of the parties, rescinded, and any cause of action -which the defendant Shields may have had against the plaintiff for damages for bis non-performance of said contract, was, by agreement of the defendant, waived and released. The defendant Shields then assumed full charge of said work and completed the same.”

The referee also finds that at the time of rescinding the contract and the taking hold of the work by defendant, there was no agreement made between the parties as to the material left on the ground; that there was left upon the ground materials which had been drawn there by plaintiff under his special contract, consisting of certain quantities of cement, sand and stone of the value of $925, being a portion of the items stated in the complaint; that this cement, sand and stone was the property of plaintiff, and in July or August, 1891, the defendant, without the consent of plaintiff, appropriated it to his own use and used it in the construction of said railroad work; that there had been built by plaintiff prior to the rescission, masonry which had been estimated and accepted by the engineers in charge, to the amount of $1,855.65, and there had been built by the plaintiff before the rescission, masonry which was afterwards measured and accepted by the engineers, to the amount of $1,527.25; that on or about the last of July, 1891, the plaintiff was the owner of certain tools and implements necessary and proper to be used in the construction of the work, consisting of two derricks of the value of $300 and a number of other smaller items, in all of the value of $375.16 ; that “these articles of property the defendant at the fúme lie took charge of the E. E. work, requested the plaintiff that he •allow the defendant to use in the work, and agreed to return them to the plaintiff on demand. The plaintiff allowed the property to remain and be used by the defendant in the work until about the month of September, 1891, at which time the plaintiff duly demanded of the defendant said articles of personal property; that the defendant refused to return and deliver said property to the plaintiff, and has wrongfully appropriated the same to his own use;” that the plaintiff delivered to the defendant 195 empty cement bags, for which the defendant received for the use and benefit of plaintiff the sum of nineteen dollars and fifty cents, which he agreed to pay to the plaintiff; “that during the progress of the work by the plaintiff, and since that time and before the commencement of this action, the defendant paid to the plaintiff, and to and for his benefit and at his request, in paying laborers upon the work whom the plaintiff was owing, and other indebtedness of the plaintiff incurred by him in the prosecution of said work, and upon the indebtedness of the defendant to the plaintiff as herein found, including the item of mason work in findings nine and ten, the sum of $1,075.75.”

The ’ mason work in findings 9 and 10 is the same above ref er■red to as accepted by the engineers. The mason work and the property used or appropriated by the defendant, including the item for bags, amount in the aggregate to $1,702.56, and are all included in the items stated in the complaint. After deducting the payments there is a balance of $626.81, and for this, with interest from July 1, 1892, judgment was ordered.

Ye find no sufficient reason for disturbing the findings of fact by the referee.

It is quite evident that the payments made were understood by both parties to be applicable in the first instance to the payment of the work accepted by the engineers. Those items amounted to $3,382.90, and the balance of the payments, being $692.85, was left to be applied on the other account, so that the real controversy here is over the materials and tools appropriated by the defendant. The proposition, therefore, of the defendant, that the plaintiff cannot recover for anything done under the special contract (McCreery v. Day, 119 N. Y. 1), is not applicable.

Tlie defendant claims that the complaint is not good, in that it does not state the facts constituting the cause or causes of action, but makes use of the form of the common count. In Allen v. Patterson (7 N. Y. 476) it was held that such a complaint was in form good, and that view has been taken by many authorities since. (Cudlipp v. Whipple, 4 Duer, 610; Betts v. Bache, 14 Abb. Pr. 279 ; Griffin v. Jackson, 36 N. Y. St. Repr. 110; Hentz v. Miner, 46 id. 636; Fulton v. Met. Life Ins. Co., 4 Misc. Rep. 76; 1 Rumsey Pr. 246.) A bill of particulars was embodied in the complaint, and upon its face the complaint was good. "Whether it was sufficiently definite or whether there was more' tlian one cause of action, or whether there was a misjoinder (Code, § 499), are questions not available here.

The referee allowed a recovery upon the theory that the plaintiff had the right to waive the tort and sue in this form of action for the value, and, therefore, a further question upon the complaint arises, and that is, whether it was necessary to allege the circumstances of the transactions which gave the plaintiff the right to treat the taking and appropriation by the defendant as a sale and delivery and so recover the value. Of a similar action it is said by Judge Johnson in Harpending v. Shoemaker (37 Barb. 291): “In such an action it was never necessary to state in the complaint how or under what circumstances the money came to the defendant’s hands. That is mere matter of evidence.” So it has been held that in an action in replevin to recover goods obtained by a defendant through a purchase under fraudulent representations it was not necessary to allege in the complaint the facts going to establish the fraud, but the plaintiff must declare generally, claiming the property as his and give the special facts in evidence on the trial. (Hunter v. Hudson River Iron Co., 20 Barb. 493; Bliss v. Cottle, 32 id. 322.) The same rule would apply if .the tort was waived and the action was brought for goods sold aud delivered. (Roth v. Palmer, 27 Barb. 652; Weigand v. Sichel, 4 Abb. Ct. App. Dec. 595 ; Goodwin v. Griffis, 88 N. Y. 638.) In Rochester R. R. Co. v. Robinson (133 N. Y. 242) it was held to be good pleading, under the Code of Civil Procedure, to state facts according to their legal effect, and when the fact to be stated is the result of other facts the- resultant fact, not those furnishing evidence thereof, should be stated. ’ To the same effect is Thayer v. Gile (42 Hun, 268), where it was held that, under the general allegation of a conversion, the plaintiff might show the facts and circumstances indicating that there was in fact a conversion. (See, also, Boyce v. Brown, 7 Barb. 85.)

It would seem from these authorities that the plaintiff, under his complaint, had the right to show the facts and circumstances under which the defendant became possessed of the property in question and appropriated it to his own use.

But it is urged that as to the derricks and other tools it is not shown that defendant has disposed of them, and, therefore, there cannot be a recovery as for goods sold and delivered. The contrary rule is, however, settled in Terry v. Munger (121 N. Y. 161). But the defendant says there was here a bailment and the rule does not apply. If it was a bailment, upon demand and refusal to deliver, there was a conversion (Edwards on Bailments [3d ed.], § 59), and then came the right of plaintiff to waive the tort and sue as upon sale and delivery. No good reason is apparent for applying the rule to one case of conversion and not to another. In the Terry case the rule is stated as a general rule. In Spoor v. Newell (3 Hill, 308) it is said by Judge Cowen : “ In all cases of a wrongful conversion of personal property, actual or constructive, I admit the plaintiff may waive the tort and recover the value in an action for goods sold and delivered; but he cannot, by changing the form of action, evade the rule requiring such proof of a conversion as would be necessary in any other form of action for the value. Actions ex delictu and ex contractu in such cases are concurrent; but the proof must be the same in each.” The proof of demand was, therefore, properly received under the complaint.

One of the conclusions of law of the referee was that the complaint be amended so as to conform to the facts found. This is claimed to be error within Romeyn v. Sickles (108 N. Y. 650). If the views of the sufficiency of the complaint as above expressed are correct, there was no need of any amendment, and, therefore, the error,, if there was one,, was harmless.

The defendant suggests that under the evidence it should be said that the plaintiff consented that the defendant take the property. It should not, however, be said as matter of law that there was any understanding that the defendant should have it without paying its value. If not, then the defendant gets by the judgment, all he would be entitled to have in any event; he is charged with the value and credited with the payments.

We find no good reason for disturbing the judgment, and it should, therefore, be affirmed.

Hardin, P. J., and Martin, J., concurred.

Judgment affirmed, with costs.