author: By the Court.—Curtis, J. Sedgwick, J., dissenting.

text:
    JAMES LYNCH, Late Sheriff of the City and County of New York, Plaintiff and Respondent, v. GEORGE D. CRARY and HENRY PIKE, Defendants and Appellants.
    H. Attachment.
    1. Levy under may be made after judgment entered and execution issued thereon.

      a. When it mat be so made.
    1; When the attachment was issued before judgment entered and was served before any action had been, or could have been, taken under the execution.
    3. Property attachable.—Trust.

      a. Property held in trust, under a verbal agreement, for the purpose of compromising with creditors, is attachable until it is actually turned over pursuant to a compromise.
    H. Application oe moneys by a creditor oe depositary.
    What not sufficient proof of application.
    Before Curtis, Sedgwick and McCunn, JJ.

      Decided May 4, 1872.
    This is an appeal by the defendants from a judgment entered on the report of a referee. A late sheriff in the county of New York sues to recover from the defendants a sum of money alleged to have been deposited with them by the firm of Stewart & Co., who were defendants in a suit in which an attachment issued to the plaintiff as sheriff.
    The referee, the Hon. Murray Hoffman, to whom this action was referred, found that one Luther W. Fuller recovered the judgment mentioned in the complaint, on August 31, 1863, against William Stewart and Henry Bramson, for the sum of two thousand one hundred and fifty-one dollars and eleven cents, upon a demand against them as partners, under the firm name of Stewart & Co. That upon the commencement oi such action an attachment was duly issued directing the sheriff to attach the property of the said Stewart and Bramson, and was delivered to the then sheriff, the present plaintiff, on August 31, 1863, to be executed according to law, and that on the same day he duly, and in due form of law, attached the sum of one thousand seven hundred and forty-nine dollars, a debt due by the present defendants to Stewart and Bramson, which sum was at the time of such attachment the money of, and belonging to, Stewart and Bramson. The referee further found that there was due • upon such judgment, for principal and interest, the sum of one thousand, eight hundred and thirty-three dollars and forty-eight cents; that the sum of one thousand seven hundred and twenty-nine dollars, and interest, exceeds the amount due on such judgment, and that, as á conclusion of law, the plaintiff is entitled to recover from the defendants the sum of one thousand eight hundred and thirty-three dollars and forty-eight cents, with costs.
    The defendants except to the findings by the referee, that the sheriff, the present plaintiff, duly, and in due form of law, attached the sum of one thousand seven hundred and forty-nine dollars ; that this sum was at the time of such attachment the money of, and belonging to, the firm of Stewart and Bramson; and that there was due upon such judgment, for principal and interest, the sum of one thousand eight hundred and thirty-three dollars and forty-eight cents; and that the sum of one thousand seven hundred and twenty-nine dollars, and interest, exceeds the amount due upon such judgment. They also further excepted to the conclusion of law of the referee, that the plaintiff was entitled to recover from the defendants one thousand eight hundred and thirty-three dollars and forty-eight cents, and costs.
    It appeared on the trial that the attachment was delivered to the sheriff at 12:55 P. M., and the judgment entered up and an execution issued thereon at 2:49 P. M.—all on August 31, 1863. There was some' conflict and obscurity of evidence as to the precise time when the attachment was served; but the referee finds, as the best result of the evidence, that it was in the afternoon of the same day, after 3 P. M., and that no action had been, or could be, taken under the execution at that time ; that it was not then produced, even if the deputy sheriff had it in his hands, and that the goods were levied on under the attachments, and the money sought to be attached under that warrant.

      Barrett & Redfield, attorneys ; Amasa A. Redfield, of counsel, for appellant.

      Brown, Hall & Vanderpoel, attorneys, and W. W. Niles, of counsel, for respondent.
   By the Court.—Curtis, J.

The first question •raised by the appellants is, whether the recovery of the judgment and actual existence of an execution in the sheriff’s hands, did not for the purpose of a levy supersede the attachment previously delivered to him.

The Code provides (section 227), in certain cases, that the property of a defendant may be attached “ as a security for the satisfaction of such judgment as the plaintiff may recover.” It further provides (section 139), that by the allowance of a provisional remedy, the court is deemed to have acquired jurisdiction, and to have control of all the subsequent proceedings. It further provides (section 232) that the sheriff shall, “subject to the direction of the court or judge, collect and receive into his possession all debts, credits and effects of the defendant;” and it further provides (section 237, subd. 4,) that “until the judgment against the defendant shall be paid, the sheriff may proceed to collect the notes and other evidences of debt, and the debts that may have been seized or attached under the warrant,” and the sheriff is directed to apply the proceeds thereof to the payment of the judgment.

An attachment is a lien on real estate only from the time it is levied; but it has been held that by its allowance the plaintiff acquires certain rights in the attached property yet not absolute liens, because they are (Thatcher v. Bancroft, 15 Abb. 243; Kulhman v. Owen, 5 Duer, 250) subject to be defeated, as for example, by a sale to a bona fide purchaser before notice or levy. Attachments have priority according to the order of their delivery to the sheriff. In this case, the attachment was delivered to the sheriff before the entry of the judgment; and upon the same day, and before any levy was made under the execution upon the judgment, the sheriff proceeded with the attachment to the store,of the defendants in this action, and duly served the attachment upon them, demanding a certificate of the money in their hands belonging to the judgment debtors. The steps taken to execute the warrant and its service, appear by the affidavit of Daniel Moore, read in evidence by consent. It would conflict with what appears to be just, and to be in accordance with the provisions of the Code creating and continuing the lien of attachments on this description of personal estate, to hold, as law, that the recovery of a judgment, and actual existence of an execution in the sheriff’s hands, supersedes an attachment previously delivered to him, and under which he may have attached debts, and be at that moment proceeding to collect them as directed by the Code. The learned referee says that this was held, even as to the effect of a judgment merely, at special term in Schiel v. Baldwin (13 Abb. Pr. 439), but adds that it did not appear in that case that any thing had been done under the attachment, and that in Fuller v. Stewart, MSS. in this court, the chief justice says: “The omission to serve the attachment until after the judgment, although issued before, is not a ground of objection for irregularity.” The conclusion arrived at by the learned referee after his careful examination appears to be correct. It seems clear that an attachment issued prior to judgment and execution, valid and properly served, may be operative as the basis of an action by the sheriff, to enforce it, and recover the property, if he can make out the case.

The next question raised by the defendant’s exceptions, is whether the sum of one thousand seven hundred and forty-nine dollars was, at the time of such attachment, the money of and belonging to the firm of Stewart and Bramson. The referee found that it was. Shortly previous to the attachment, Stewart and Bramson paid to the defendants various sums, amounting in all to about two thousand dollars. Defendants also held their notes for two thousand one hundred and thirty-nine dollars and thirty-six cents, amounts of bills of goods previously sold them. Defendants further sold them goods from May 27 to May 30, 1861, to the amount of two hundred and thirty-seven dollars and sixty-one cents, no note being taken. This last amount was paid by applying it towards a part of the sum of about two thousand dollars in defendants’ possession, reducing it to one thousand seven hundred and forty-nine dollars. .

The testimony is conflicting as to the disposition to be made of this balance, but the referee reasons, that if • there had been any application made of it to the notes, prior to the service of the attachment, it would have appeared in defendants’ books by a credit to bills receivable, and a debit to cash, of which there was no proof. Also, that the “proof of the partial application of the two hundred and thirty-seven dollars and sixty-one cents warrants an inference that the rest was not so applied. But hé concludes-that the strongest evidence that it was not so applied, appears by the complaint .and judgment obtained by the defendants against Stewart and Bramson, September 5, 1863. The sworn complaint claims, that at that time, five days after the attachment, all the notes were unpaid with interest, being an explicit statement that they had not applied the money to the notes and did not intend to so apply it.

The referee arrives at the conclusion that it was the money to the credit of Stewart and Bramson, which was attached, and he seems to have rightly done so, and there appears no good reason why his conclusion should be disturbed, unless there is force in thi,s objection, that if the money was not applied by defendants to discharge these notes, it was then held by them in trust under a verbal agreement, for the purpose of compromising with the creditors at large of Stewart and ■ Bramson. Had the money been paid these creditors pursuant to a compromise, it would have ■ been an answer; but while it remained in defendants’ hands, the creditors not having assented to any compromise, and the money at any time liable to be recalled by the. ' depositors, no trust or interest is created in behalf of such creditors as will prevent its being held under the attachment (Kelley v. Roberts, 42 N. Y. 432).

The judgment appealed from should be affirmed with costs.

Sedgwick, J., dissenting.

This opinion will be confined to an examination of the power of the sheriff to seize, or attach property, after judgment, under an i attachment; therefore it should be stated, that it is not clear that the sheriff’s right of action in this case, assuming him to have any, is the same, whether the one thousand seven hundred and forty-nine dollars involved was money capable of manual seizure, or whether it was the amount of an indebtedness. The distinction has not been considered by the referee, and his findings in respect of the character of the property are not consistent. It may be, if the money of Stewart and Bramson remained in specie in the hands of the defendant, that, as they could, after demand, claim at their election the money itself or bring an action on the implied promise, so the sheriff could in some form exercise the same right. It may be, on the other hand, that the sheriff must act definitely one way .or the other at the time of . the levy, which is. the foundation of his cause of action. The form of action to assert one right is entirely different from an action on the other. This is only alluded to to prevent an assumption, that, as it is not here discussed, the conclusion of the referee in respect of it is acceded to. It is here neither affirmed nor denied. There is no language in the chapter of the Code entitled “Attachments,” which specifically declares that an attachment may be served after judgment. There are some provisions in that chapter, which are inconsistent . with a construction that such a service was one of the objects of the statute. There are other and more provisions which do not describe such a function of an attachment, although, if such had been meant, they would, according to the ordinary style of legislative enactments, have led to, and been accompanied by, provisions plainly descriptive of snch meaning.

If the statute meant that an attachment might lay hold of property after as well as before judgment, such a design was of so much importance and yet was so novel, it must be considered that there was an intentional obscurity on the subject. The law cannot make such an imputation upon the legislative department of the State.

By section 227, the plaintiff, “at the time of issuing the summons, or at any time afterwards, may have the property of such defendant, a corporation, attached in the manner hereinafter described as a security for the satisfaction of such judgment as the plaintiff may recover.” This section, in fact, refers to the operation and execution of the warrant after it has been obtained, and the warrant can only operate in the manner in the section described.

The property is to be attached, not to be applied to the satisfaction of the judgment, or not in satisfaction of the judgment, but as a security for the satisfaction of such judgment as the plaintiff may recover, implying that at the time of. the seizure or levy there can be no judgment in existence; that is, no part of property attached can be anything except a security at the time of being attached. Yet, if property could be attached after judgment, it ought to be and would be, something ■ much different from a security. It is not possible that this section meant that a plaintiff might have property attached for a judgment in existence at the time the attachment was levied.

A cause of action merges in the judgment obtained upon it so far as the obligation of the judgment is concerned, and a money judgment is like another.

If property was to be attached for the benefit of a plaintiff after judgment, there is no reason why this should be done in but two classes of cases.

Property can be attached only in an action arising on contract for the recovery of money only, of in an action for the wrongful conversion of personal property. This makes the right to an attachment depend upon, among other things, the present existence of a peculiar cause of action. The section, therefore, does not embrace the contingency of property being attached as a security for the satisfaction of a judgment then already obtained, because in such case the cause of action would have lost its peculiar character by having sunk into the judgment and gone out of being.

This section sufficiently and clearly discloses the reasons for giving this provisional remedy. A defendant who is a non-resident has the power unless so checked to transfer his property in this State before process on a judgment can reach it. A defendant who absconds, or hides himself, or is about to remove his property from this State, or has disposed of it, or is about to, with intent to defraud his creditors, shows a specific intention of obstructing the execution of process on a judgment. This the statute means to prevent. It means to seize and fix the property, so that in case judgment against the defendant is obtained, that property shall be in this State, so situated that the proper processes and proceedings upon the judgment may reach it. This did not make it necessary or expedient .that property should be attached after judgment.

It is clear by section 229 and the other sections, that an attachment can issue only before judgment. If property can be attached after judgment, that is, if the warrant may be put to its practical use and benefit after judgment, why did the statute forbid a plaintiff to obtain it after judgment 1

Section 230 describes the security to be given by the plaintiff in procuring the attachment. It is to the effect that “if the defendant recover judgment,” or the attachment be set aside, the plaintiff will pay certain damages. There is no reference in the section to a possibility of property being seized under the judgment against the defendant, in which case the defendant can sustain no damage by the seizure of his property, and would have no right to have the attachment set aside, since at such a time his property should be used to satisfy a judgment against him.

By section 231 the exigency of this warrant is that the sheriff shall “ attach and safely keep the property of defendant, or so much thereof as may be sufficient to satisfy the plaintiff’s demand, together with costs and expenses, the amount of which must be stated in conformity with the complaint, together with costs and expenses.” That is, the attaching is meant to occur at a time when the only guide the sheriff will have in determining the amount of property he shall take (a very important matter), is a warrant made to correspond with the demand of the complaint. If it was designed that a warrant might be levied after judgment, nothing kept back an expression that in such case the sheriff was to attach property sufficient to satisfy the amount of the judgment. As a general rule, the amount of the judgment, when it differs from the amount demanded by the complaint, is less rather than more. It would be unjust to a defendant that at such time the sheriff should'still seize property to an amount in value that had been fixed ex parte by the plaintiff.

It further appears by section 232, as well as by section 227, that the sheriff, in execution of the warrant, is to “keep the property seized by him, or the proceeds of such as shall have been sold, to answer any judgment which may be obtained in such action.” This makes a strong contrast to a sheriff being also empowered .to seize property after judgment, when it would be his duty, not to keep property or the proceeds of property to answer any judgment which may be obtained, but to at once sell, or at once pay over the proT ceecls of sale upon the judgment that has been obtained.

The case of Schub v. Baldwin, 12 Abb. Pr. 469, shows. by excellent reasoning that section 236 supports the present view.

It must be granted, that the attachment is ordinarily used before judgment, and is for security for an anticipated judgment, and that the execution is put to use always after judgment, and is to enforce a judgment already obtained. In framing a section which would enable the sheriff, in levying an attachment, to obtain the debtor’s property in the hands of third parties, and,' among it, debts due to him, the legislature went beyond the proper or specific subject of the chapter, viz: attachment, and gave the same function to an execution. It is at once seen, that they would not depart from the undoubtedly useful plan they had chosen of keeping different subjects separated from each other, unless by so doing they meant to accomplish something which they could not accomplish by confining the section to attachments only. The conclusion is, that if attachments were intended to be levied after judgment, there was no object in saying anything about executions, and that, in including executions, it was intended to effect something .that was not meant to be effected by attachments. It is as if they had diffusely said attachments may seize the debts due to defendant in the hands' of third parties ; but as this scheme, although it is as just and beneficial after judgment as before, is not applicable through an attachment, which can only be levied before judgment, it is enacted that it can be done under an execution, which is the writ meant to enforce judgments.

Section 237 is framed to direct the sheriff in his disposition of property attached by him in his proceedings as to such property. There are four subdivisions, but these come under a preliminary and general clause of direction. That clause is: “In case judgment be entered for the plaintiff in such action, the sheriff shall satisfy the same out of the property attached by him, if it shall be sufficient for that purpose.” Here is implied, that the attached property is already in the sheriff’s hands at the time the judgment is entered. And it is only to such property that the succeeding four subdivisions apply.

It is not necessary to go minutely over these subdivisions, but all of them speak of the attached property referred to in the opening clause. • Several features of the section will be noticed. Subdivision 3 says, that “if any of the attached property shall have passed out of the hands of the sheriff without having been sold or converted into money, such sheriff shall repossess himself of the same, and, for that purpose, shall have all the authority which he had to seize the property under the attachment.” A deduction from this is, that except for this provision there comes a time when the sheriff loses his power to seize property under the attachment. Such time would be the entry of judgment. The reading is, in case, and when judgment is entered for the plaintiff, if property shall have passed from the sheriff’s hands, he may retake it. There could hardly have been any notion that an attachment was active after judgment. The phrase would have been that the sheriff shall levy again, or something equivalent, instead of the round-about phrase “ he shall have all the authority which .he had to seize the same under the at- _ tachment.” If he had general power to seize after judgment, no such provision would have been made. It would not have been necessary. It cannot be supposed that an exceptional power would be given with care at the expense of throwing doubt upon the existence of a more general power which embraced the exception.

The words of subdivision 4 imply, that an attachment is not to be levied after judgment. Section 333 had given general power to the sheriff to “collect and receive into his possession, all debts, credits and effects of the defendant. The sheriff may also take snch legal proceedings, either in his own name or in the name of snch defendant, as may be necessary for that purpose.” Subdivision 4 does not give a broader power in this regard. If an attachment could have been levied after judgment, this subdivision is useless. Evidently the doubt was, although the sheriff had levied before judgment, that he had power to collect by action, &c. after judgment.

This subdivision, therefore, expressly states that this power continues, in respect of all property legally attached at time of judgment, until the judgment is satisfied.

The statute would have made an omission of moment, if, in case a sheriff had in his hands attached property, it had not provided means by which he should be able to wind up his trust and free himself from responsibility.

Therefore, it provides that under attachment and the execution, the attached property should be turned into money by the sheriff, by sale of property other than evidences of debt, and by collecting by action, the evidences of debt still left in his hands, and choses in action which he could not collect before. To make an end of the matter, it is provided that this remainder may be sold, under an order of the court, in a proceeding particularly described. The court may exercise this power at the expiration of six months from the docketing of the judgment.

The fact that this six months is fixed to begin at the docketing of the judgment, clearly shows that the statute did not know that any part of attached property could be such as might be taken after judgment, otherwise it would have made a provision as to the time through which the sheriff must make diligent efforts to collect such property, before it can be disposed of by peremptory .sale.

For if property can be taken by attachment after judgment the present provision permits the property to be sold, after (it may be) it has been but a few days in the sheriff’s hands.

An examination of some of the qualities of. the processes and proceedings made by law to enforce the judgment, shows that it is incongruous with them that a levy should be made under an attachment after judgment. In this case the fact is that an execution on the judgment was in the bands of the sheriff at the time he levied under the attachment.

• An attachment is not a lien upon property, personal or real, until it is levied (Rogers Bonner, 55 Barb. 9 ; S. C., 45 N. Y. 379). An execution is such a lien as soon as it is issued to the sheriff, except against bona fide purchasers. To levy an attachment after judgment is to annul this operation of an execution. In no part of the statute is such a purpose expressed. •

An execution can be issued within five years after, the docketing'of judgment, and after that it can be issued only by leave of the- court upon motion^ unless an execution has been issued within the five years. If the attachment be used' at all for the purpose of a levy after judgment, there is no limit of time beyond-which it cannot be so used. Yet the rights of the judgment debtor need as much protection from an attachment as from an execution.

By section 290, the execution must be returned within sixty days after its receipt. This is for the protection .of both parties to the action.

One instance of the relation of a return of an execution to the rights of the parties may be considered. The judgment creditor has no right to take certain supplementary proceedings or to bring certain equity actions, until the execution has been returned. The judgmentidebtor has an exemption from these proceedings and these actions, until this return. But if it is supposed that an attachment may do the duty of an execution, there are no corresponding provisions of law as to what effect upon the rights of the judgment creditor and debtor an outstanding attachment has. As to a creditor’s bill, the rule is that the plaintiff-must have exhausted his legal remedies before he applies in equity. If an attachment has been issued then before its return, not only is not the legal remedy of a plaintiff in a creditor’s bill exhausted, but even equitable assets may be reached by it. The warrant (section 248) is to be returned only when it shall be fully executed and discharged. As it is a legal writ, i. it does not provide an equitable remedy, if the law maintained consistency, it would not permit creditor’s bills to reach equitable assets in two classes of actions, being those in which attachments may be issued.

Several instances of the same kind might be given ; but perhaps it is not necessary. One further result will be noticed. After levy, the party through whom debts attached may be collected, is the sheriff, unless the plaintiff give indemnity, &c. This must be after judgment, if the levy can be made after judgment. Many important provisions of law have secured to the plaintiff himself, the sole right to begin and prosecute, irrespective of the sheriff, after execution has been returned, all other proceedings to enforce the judgment, with the exception, of course, of the case of property attached being in the hands of the sheriff at the time of the entering of judgment. But the sheriff has in his power to take from the plaintiff this right, if after judgment all kinds of property may be seized under an attachment after judgment.

Before the Code, it did not enter the mind of any, that an attachment was to be used, except before judgment; Outside of those provisions of the Code, that specifically relate to attachments, the other provisions that relate to execution, viz: section 236 and sections 283, et seq, and to supplementary proceedings, sections 292, et séq. (particularly noticing that portion of the latter which provides for the application of property of the debtor to the satisfaction of the judgment at any time after execution), accomplish all that would be claimed to be beneficial in allowing property to be attached after judgment.

There were, therefore no mischiefs to move the legislature to give a novel effect to an attachment. Especially is there room for great wonder, if, when the legislature considered that it would be well to enforce a judgment by means of an attachment, that they deprive all suitors of this benefit, except such as might be plaintiffs in two classes of actions—one on a contract and one for the wrongful conversion of property.

The result is, that the sheriff never in a legal sense levied the attachment upon the property in question in this action, and never acquired the right to bring an action against the defendants.

Judgment should be reversed, and a new- trial ordered, with costs to defendants -to abide the event.


source: Caselaw Access Project

author: By the Court.—McCunn, J.

license: Public Domain

text:
    ANTON HUPFEL, Plaintiff and Respondent, v. ELIZA SCHŒMIG, Defendant and Appellant.
    The provision of the Code (subdivision 8, section 401), which requires a judge before whom any motion is made, to obtain, modify or set any order for an injunction, order of arrest, or warrant of attach•ment, to render and make known his decision on such motion within twenty days after the day the same was submitted to him for decisión, is simply directory, and its non-observance furnishes no reason for vacating and setting aside his decision made after the twenty days had expired.
    The following decisions declaring the provision of section 267 of the Code, that provides that the judge before whom a case is tried, must file his decision within twenty days, as merely directory, cited as authority in this case: O’Brien ®. Bowers, 4 Bom. 668; People ®. Dodge, 5 How. Pr. 47; Lewis ®. Jones, 13 Abb. Pr. 427; Stewart ®. Slater, 6 Due}', 83 and 102.
    A party considering himself aggrieved by the delay of the judge (beyond the twenty days) in filing his decision, can by mandamus compel him to render and make known the same.
    Before McCunn, Curtis and Sedgwick, JJ.

      Decided May 13, 1872.
    This is an appeal from an order, denying defendant’s motion to vacate an order of Justice Speeder, made and entered on December 19, 1871, continuing injunction of Justice McCueve, granted ex parte, June 6, 1871, on the ground that more than twenty days had elapsed between the time of submission of the motion to Justice Speeder to continue said injunction (August 34, 1871), and the time of the decision and order of said justice, continuing said injunction, and appointing a receiver.

      C. C. Egan, of counsel for appellant.
    I. The order made on December 19, 1871, was Justice Speeder’s decision of the motion submitted on August 34, 1871, (Bently v. Jones, 4 How. Pr. 435; King v. Stafford, 5 Id. 30 ; Howard v. Freedman, 6 Robt. 511), and could not then be legally made, especially after defendant’s protest (Code, § 401, subd. 8.)
    II. The act required to be done is not permissive, but is prescribed as a duty, and must be obeyed (Sedgwick on Interpretation of Statutes, 366, 377, 380, citing Vattel; Rules 1, 6, 7, also quoting at p. 384; Domat's

      Rules, § 7). The words are clear, plain, unambiguous and imperative, showing the intent of the legislature (which is' to govern); and require (in such case) no construction (Sedgwick on Interpretation, 266, 277, 287, setting forth Vattel’s Rules, § 16, and rules following ; also Domat's Loix Civile [at page of Sedgw. 283-4] §§ 4, 12, 13; see also Sedgw. p. 378, 379 and note 490 and 491; Mewell v. People, 3 Seld. 97; McClusky v. Cromwell, 1 Kern. 593). The aim and object here being one of general public necessity, the more effectual protection of the liberty of every citizen, and of the rights and use of property, the statute calls for, and must receive a rigid, strict construction (Lieber’s Recapitulation of Rules [in Sedgwick on Interpretation, p. 287], rules 3 and 4; Mayor v. Furze, 6 Hill, 612, per Nelson, J).
    III. Contemporaneous mandatory statutes come in aid of a strict construction of the statutes in question (1 Sess. Laws of 1870, ch. 151, p. 421; New Supreme Court Rule, 94).
    IV. Time is of the very essence of this statute, and'' therefore material. It is aimed at abuses of time by the courts in their decision of such motions. In such case discretion cannot be exercised (Sedgw. on Int. 418-19-20, and cases cited ; Code, §§ 331, 332, 352, 353, as to time within which appeals may be taken; Code, § 273, as to time within which referee must report [60 days] ; Litch v. Brotherson, 16 Abb. Pr. 384, per Bockes, J., special term ; Potter, J., general term).
    V. The command here is upon the judiciary, to do a certain act within a specified time. To disobey it by construing the act to be merely directory, would not only be judicial legislation (not allowed by our system of government), but would present the unseemly, spectacle of the court setting up its individual’ opinion against thecombined wisdom of the legislature, expressed in clear and unmistakable language, enjoining a duty upon said court. If a referee, sitting as a court to hear, try, and determine a cause, must by law report within sixty days (Code, § 273; 15 Abb. Pr. 384), by parity uf reasoning a judge holding a court must (when required as in this case) decide within twenty days.
    VI. The order denying defendant’s motion to vacate order continuing injunction, should be reversed ; and the order continuing injunction and appointing a receiver should be set aside, with costs.

      Corliss & Erbe, for respondent.—I.
    The provision contained in subdivision 8, section 401, of the Code, as to the time within which a decision on a motion shall be rendered and made known, is merely directory (Burger v. Baker, 4 Abb. Pr. 11; People v. Dodge, 5 How. Pr. 47; Stewart v. Slater, 6 Duer, 83, 102; O’Brien v. Bowes, 4 Bosw. 663; Lewis v. Jones, 13 Abb. Pr. 427).

    II. If the said provision be imperative and not merely directory, then the judge, after the lapse of twenty days from August 24, 1871, could, upon the principle contended for by the appellant, make no order, either continuing or discontinuing the injunction.
    III. Without a positive order, discontinuing and dissolving the injunction, the - same continues to stand in full force, upon its original basis, until the final determination of the action (Kelly v. Jeroloman, 7 Robt. 158).
    IV. If the judge lost jurisdiction of the question, after the lapse of twenty days, the appellant cannot object to his action ; for such objection cannot result in any practical benefit to him. The injunction will still remain in force.
   By the Court.—McCunn, J.

This is an appeal from an order made at special term, refusing to set aside another order of said special term, because the learned justice who heard the first motion at special term to dissolve the injunction, neglected to file or make known his decision within the twenty days prescribed by section 401 of the Code. The last order made at special term, and from which this is an appeal, should be affirmed for the following reasons:

First. Subdivision 8 of section 401 of the Code is directory. Such was the construction put upon a similar provision in section 267, by Mr. Justice Woodbtjff in this court in the case of O’Brien n. Bower, 4 Bosw. 663, and such has been the uniform current of decisions in all the courts (People v. Dodge, 5 How. Pr. 47; Lewis v. Jones, 13 Abb. Pr. 427; Stewart v. Slater, 6 Duer, 83, 102).

While I am holding, however, this construction of section 401 of the Code to be the correct one, yet I hold that the party aggrieved by the undue delay of a judge can have ample and complete remedy by mandamus against that judge to compel him to file or make known his decision and the proceedings thereunder.

In nearly all cases heard before a single judge the mind of the court is made up as to what its adjudication may be, but sometimes from press of business and other good and sufficient causes, a judge delays putting his views on paper and filing the same until after, but this neglect of the judge should not prejudice the suit- or in whose favor he may have decided, especially, as I have said before, the party deeming himself aggrieved has a complete remedy

Order affirmed, with costs.


author: By tot Court.—Curtis, J.

text:
    JAMES PENDRIL, by His Guardian, &c., Plaintiff and Appellant, v. THE SECOND AVENUE RAILROAD COMPANY, Defendant and Respondent.
    It is undoubtedly true, that on the trial of an action brought to recover damages caused by the negligence of the defendant, that the negligence of the plaintiff may so clearly appear (as contribuí- ' ing to the accident) that it would become the duty of the judge to dismiss the complaint.
    But where the evidence discloses facts and circumstances which would cause a fáir difference of opinion and judgment whether or not the plaintiff was guilty of any negligence, it is the right of the plaintiff to have the question of negligence submitted to the jury.

      Held, that the facts in this case (see the statement and.opinion) should have been submitted to the jury, and the question of -negligence considered and decided by them.
    Before McCunn, Curtis and Sedgwick, JJ.

      Decided May 13, 1872.
    This action comes before the court on an appeal by the plaintiff from a judgment entered upon an order dismissing the complaint, and also from an order denying plaintiff’s motion for a new trial. The plaintiff sues to recover damages for alleged negligence on the part of the defendants in driving one of their cars over him, and cutting off his right arm. The defendants deny negligence on their part, and set up that the injuries were occasioned by the negligence of the plaintiff.
    It appeared, on the trial, that the plaintiff, a boy of five years of age, with a large boy, about twelve, who held him by the hand, attempted to cross the Second avenue, at the upper Twenty-eighth street crossing. The boys passed over defendants’ westerly track, and had passed so far over their easterly track that the large boy was clear of the horses of defendants’ car, which was being driven up the avenue, but the small boy, the plaintiff, was thrown down by the off horse, and run over by the car wheel, and was lying, when the car was stopped, between the wheels on the easterly rail of the track, with his arm so nearly severed at the shoulder that it had to be amputated.
    The evidence shows that the boys were on the westerly track, and crossing over towards the easterly track upon the crossing, when the car was about ninety or one hundred feet from them. That the car was driven “very rapidly,” “the horses were on a fast gaitthe witness wa,s “ not positive whether they were running or trotting.” It appears that the rate of speed was such that it was unsafe for the witness to get on or off, at the time. The grade was ascending, up which the car was coming with. very few passengers in it. The driver was on the front platform, standing with his back against the front, of the car or window. The reins were slack, and he held them in both hands, shaking them.
    It was about noon, a clear day, and the plaintiff conspicuously dressed. The pole of the car was ten feet in length, and the car twenty-two feet, making thirty-two feet in length, and from the testimony, considering the grade and the load, could have been stopped in from sixteen to twenty-two feet.

      Lewis Johnston, attorney for appellant.

      Albert Matthews, of counsel.

      John H. Platt, attorney for respondent.

      John Slosson, of counsel.
   By tot Court.—Curtis, J.

The appellants claimed, upon the argument, that it was a matter of right to have the issue of negligence submitted to the jury, where it depends on “inferences to be derived from a variety of circumstances, in regard to which there is room for a fair difference of opinion between intelligent and upright men.” That all the circumstances of this case should have been submitted to the jury, so that they might have determined how far such circumstances tended to establish the assumed fact of negligence on the part of the plaintiff, and that plaintiff’s extreme youth obligated defendants to use extra care and caution to avoid inflicting injury.

On the part of the respondents, it was claimed, that there was no negligence on the part of the defendants, but on the contrary, that the evidence tended to show that the driver of the car used great diligence to prevent the accident, and .that the negligence of the plaintiff is self-evident.

The question arises whether this is a case that should have been left to the jury. It is undoubtedly true, that when the negligence of the plaintiff is clearly shown, there may be occasions when it becomes the duty of the judge to dismiss the complaint. But it does not appear that this is a case of that character. The evidence shows that the car was being driven at an unusual and rapid rate of speed up an ascending grade; that the driver was leaning back on the front platform, shaking his loose reins. It was noon, his view was unobstructed, and when he stopped the car the front wheel had passed over the plaintiff. As the plaintiff approached the track, passing over the westerly track first, the car was ninety or one hundred feet off. It could have been stopped in from sixteen to twenty-two feet. A careful driver, with proper control of reins and brake, could have avoided the collision. With reins held taut, the driver could have sheared the horses off the track and prevented the knocking down, by the off horse, of the plaintiff, as he passed over the easterly rail of the track. • A proper control and nse of the brake could have certainly stopped the car a fraction of a second sooner, which would have prevented the wheel ! passing over the plaintiff. It looks as if the driver did not get himself in a position to stop the car until the horse was upon the plaintiff, and then it was too late to arrest its motion by some five or six feet, so as to save plaintiff from the wheel. An adult might be deceived in the rate of approach and speed of a street car driven very and unusually rapidly; and last of all at such a time should the driver be, as the witness testifies, “ carelessly in front of the car, the lines in both hands shaking them,” apparently urging his horses to a still higher rate of speed. His duty was to have the reins and brake in his control, and to drive in a careful and usual manner. It is impossible to conceive that a man, put in so responsible a position by the defendants, would wantonly drive over a child, but it looks very much as though he was driving in an inconsiderate and negligent manner.

The negligence, if any, of the plaintiff, crossing the avenue, led by the hand of another child of maturer years, under these circumstances, is not so apparent as the respondents claim. On the contrary, it seems dfficult to see wherein it consists. An adult, acting with reasonable prudence, might be deceived by unusual and careless driving, and run over in consequence of it. It would be a retrograde movement in civilization to establish a rule that those who obtain the privilege of running horse cars on railways, through the streets of a crowded city, can run them without some observance of care and protection towards those whom old age, infirmity or tender years, commend to universal consideration and care.

The theory that the cars in such case would be a longer time in making their trips, and that children should be kept in the house or under the care of some suitable protector when they go in the streets, has no controlling force. The idea of feudality, that the footman must keep out of the way of the horseman, has given place, in the most enlightened and cultivated cities of the world, to a careful and practical consideration for the pedestrian, increasing in proportion to personal incapacity. The concession of privileges to increase means of communication through the streets of a city does not, even by implication, waive any privilege of personal safety to the citizen and his household. Their rights and welfare are not relinquished to favor any increase of speed. The child has its rights; one is to be educated by the State, which provides instruction. At certain hours of the day, the streets and avenues traversed by horse railways, are thronged, and crossed necessarily by many tens of thousands'of children on their way to, or from, places of instruction, profiting by this public provision and invitation extended to them. To have an adult custodian with any considerable number of them would be impossible. To keep them at home would conflict with the best interests and the established system of the State, and be a denial of the rights of the child.

Judge Mason, in Mangam v. Brooklyn R. R. Co., 38 N. Y., 461, defining the rights of children of tender years, says : They are not beyond the pale of the law when in the streets ; common humanity is alive to their protection, and the law both in reason and justice, and out of compassion to their weakness and inability to protect themselves, should throw a broader shield of protection around them against injuries from the careless conduct of the strong than it affords to an adult, who is capable of self-defense and protection.”

Judge G-boveb, in the same case, considers “ that a somewhat different rule, in determining the case to be exercised, is to be applied to infants, than is applicable to adults, where the inquiry is whether their negligence has contributed to an injury received.” In the case of O’Mara v. The Hudson R. R. Co., 38 N Y. 449, the same views are sustained, and Chief Justice Hunt affirms that the young “ cannot be required to exercise as great foresight and vigilance as those of maturer years.” This, an engineer is bound to know, and if the child is within his view, to act accordingly.” These observations apply with great force to the case under consideration. There is not shown in it that _ negligence on the part of the plaintiff, that sustains a departure from the general rule, that the question of the contributory negligence of the party injured should be left' to the jury. (It may be regarded as now in accordance with the uniform tenor of the recent English cases and those in our courts, that the general questions of negligence of the defendants, and the contributory negligence of the plaintiff, are exclusively within the province of the jury (Lunt v. Railway Co., 1 Law Rep. Q. B. 277; Belbee v. Railway Co., 18 Com. B. N. S. 584; Stupley v. Railway Co., 1 Law Rep. Ex. 21 ; Stubley v. Same, Id. 13; Hogan v. Eighth Ave. R. R. Co., 15 N. Y. 383; Ernst v. Hudson R. R. Co., 35 N. Y. 38 ; McGrath v. Same, 32 Barb. 147; Maloy v. N. Y. Cent. R. R. Co., 58 Barb. 184 ; Mulhado v. Brooklyn C. R. R. Co., 30 N. Y. 373 ; Brown v. N. Y. Central R. R. Co., 34 N. Y., 404 ; Creed v. Hartman, 29 N. Y. 592; Keller v. Same, 24 How. Pr. 177 ; Mentz v. Second Avenue R. R. Co., 2 Robertson, 357; and affirmed in court of appeals, Albany Law J. vol 1, p. 99.

In view of what may be considered the settled law in respect to these questions, this case should have gone to the jury.

The judgment and order appealed from should be set aside and a new trial ordered.


text:
    THE CENTRAL NATIONAL BANK OF THE CITY OF NEW YORK, Appellant, v. CYRUS CLARK, Respondent.
    An order of the court, granting to a party the inspection and copy of books, papers and documents in the possession or control of the other party (Code, § 388), is appealable (Matter of Duff, 51 How. Pr. 350).
    Under the authority of the case, Matter of Duff, Ante, any discretionary order made at special term is appealable to the general term of the same court.
    The discretion of a judge should not be -his mere will and pleasure.
    It should not be arbitrary nor capricious.
    Discretion is “ Discernere per legem quid sit justum."

    An application to the court under section 388 for inspection, copy, &c„, may also include a discovery” under the revised statutes (Lowell v. Clark, 7 How. Pr. 158).
    Before McCunn, Curtis and Sedgwick, JJ.

      Decided May 13, 1872.
    Appeal from an order of the special term granting inspection of books, &c., under section 388 of the Code, and “discovery ” under the revised statutes.

      Martin & Smith, for plaintiff and appellant.

      L. B. Clark, for defendant and respondent.
   By the Court.—McCunn, J.

The first question to be disposed of, is whether this is an appealable order.

Looking at all the facts, and guided as we must be by the light’of a very recent case in the court of last resort (In the Matter of Duff, 51 How. Pr. 350), we must hold this is an appealable order. Section 388 of the Code declares, “That the court before which an action is pending, or a judge or justice thereof, may in their discretion, and upon due notice, order either party to give the other an inspection or copy, or permission to take a copy of any books, papers, and documents in his possession, or under their control, containing evidence relating to the merits of the action or the defense therein. So that the very language of the section says the court may in their discretion ” order either party to give an inspection or copy, &e., of any books, papers and' documents. The section of the revised statutes (sec. 30, 2 R. S. 199), relating to this subject, says: “ The court shall have power in such cases as may be deemed proper to compel any party to a suit pending therein to produce and discover any books, papers and documents in his possession or power relating to the merits of any such suit or any defénse thereon.” Now, this certainly imparts only a discretionary power in the court or judge to determine under all the circumstances whether it is a proper case to exercise such discretionary power.

Formerly it was thought that a suitor cannot have a substantial right to what a judge or a court has a discretion to withhold or grant.

The party making the application, however, was not cut off from the relief he sought by the denial' in the first instance of such relief, for it was and is entirely in the discretion of the court to hear a renewal of the motion or not, and the judge can order it to be heard on the same papers if advisable.

This power I know is very rarely exercised, but still, there may be occasions when justice may require the exercise of just such a power ; because, in motions not appealable, a grevious wrong maybe committed by misapprehension of the law,- or the facts by the justice who hears the motion, and for which there might be no redress in the absence of the right to appeal, if this power to rehear did not exist. The case of White v. Munroe (33 Barb. 650), until very recently might have been a case in point in favor of this present motion, not being an appealable motion, because I found that this decision (White n. Monroe), had not been overruled or disturbed in any way until the announcement of the decision in the Matter of Duff in September last. It is true, that appeals have been heard in the same court without the question of their being appealable motions being raised. Yet this settled nothing, and I certainly can find no case in our appellate court (court of appeals) until the case above cited (Duff’s Case, 51 How. Pr.) appeared on the subject. But we do find there (court of appeals) the following cases in point as to this not being an appealable order: St. Johnt v. West, 4 How. Pr. 329 ; Buffalo Savings Bank v. Newton, 23 N. Y. 160.

But, as I have said before, this very recent case in the court of appeals (Duff’s Case) disposes of all these questions, and settles the fact that any order, any discretionary order, made at special term, is appealable to the general term of same' court; and that upon the principle that an appellate court (general term) has a right to examine and say whether the judge below, on hearing the motion, exercised in his decision the proper discretion or not. I think this is a wise view, because it enables suitors and counsel who may deem themselves aggrieved by a decision against them, which, according to the old doctrine, was not deemed appeal-able, to appeal and have the question thoroughly discussed and disposed of in an appellate court without putting them to a renewal of a motion or to an application to rehear a motion when an order was granted which the party aggrieved might deem improvidently •granted against them. So that we must hold this to be an appealable order. The discretion of a judge should not be his mere will and pleasure, it should not be arbitrary, it should not be capricious. Discretion, taken as it ought to be, is discernere per legem quid sit justum. If discretion were left arbitrary in the judge he might introduce whatever novelties or whims he thought best and proper—for instance, the case of People v. N. Y. Central R. R. Co., 29 N. S., 418, which (decision at special term) is certainly a novelty in its way. Now we all know such precedents should not be allowed to stand unless reviewed by an appellate court and examined with great care and caution. It was, I have no doubt, for the purpose of meeting just such cases—cases where such unlimited discretion is exercised—that the court of last resort have held such orders appealable and the exercise of such discretion reviewable by a court in banco.

The application made below, and the order granted thereunder, and from which this is an appeal, are so framed as to include in the same proceeding both the “discovery” authorized by the revised statutes and the “ inspection and copy,” &c., provided for by section 388 of the Code. It has been held that this can be done, (Lowell v. Clark, 7 How. 158).

Here the petition contains all the allegations required to bring the case within the provisions of the statutes. It shows that the books, papers, and entries are “ in the possession and under the control of the plaintiff and its officers ” ; that such books “ contain evidence relating to the defense of the action,” and that such books and entries relate to the defense therein. What more could this petition .state ? The action is against the sureties on a bond given by an officer of a bank to said bank for the faithful performance of his duties as such officer; and the plaintiffs allege as a breach of that bond that the defendant appropriated and paid to certain firms in this city large sums of money belonging to them (the bank) against the spirit of that bond. The defendant denies these breaches, and says that the officer for whom he became surety in that bond did not commit these breaches, and alleges that if a full inspection of the books of the bank is granted such a state of facts, he is advised, will be discovered. We therefore hold that the order below should, be affirmed, with this exception, that the words “in the bank ” should be interlined after the word “hours” on the sixteenth line of said order, and that the said order granted below, and from which this appeal is taken, should be amended accordingly.


author: By the Court.—Sedgwick, J.

text:
    THOMAS P. ELDRIDGE, and others, Plaintiffs and Respondents, v. ALOLPH C. STRENZ and DANIEL SCHAFER, Defendants and Appellants
    Whenever a composition is made with creditors, every agreement or arrangement by which an advantage is secured by any one or more of the creditors which is denied to others, is a fraud upon the creditors from whom it is concealed, although it neither has or can have the effect of depriving them of any portion of the amount which they had agreed to receive, and all such agreements are void (See the facts stated in opinion of the court, including this case within this rule and the authorities cited).
    Before McCunn, Curtis, and Sedgwick, JJ.

      Decided May 13, 1872.
    Appeal from judgment.
    The facts and points in the case appear fully in the opinion of the court.

      Mr. Livingston K. Miller, for appellants..

      Mr. G. A. Seixas, for respondents.
   By the Court.—Sedgwick, J.

This action was upon a promissory note for one thousand one hundred thirty-five dollars and thirty-five cents, made by Strenz, .one of the defendants, and indorsed by Schafer, the other of the defendants.

The answer was, that this note was one of four (three of them for one thousand one hundred and thirty-five dollars and thirty-five cents, and the fourth for two hundred' and eighty-nine dollars and thirty-five cents), made by Strenz, indorsed by Schafer, and given to the plaintiffs, that Strenz, being indebted, had made with various of his creditors, and among them the plaintiffs, a composition agreement, by which the creditors were bound to accept for the amount of their respective claims, these promissory notes, at three, six, and nine months, in the aggregate, for. thirty per centi of such' claims, to be indorsed by defendant and Schafer; that the four notes above referred to were given as if in pursuance of this agreément, but were in fact drawn by the plaintiffs, in sums much larger than had been specified in the composition agreement; that is, for sixty per cent, instead of for thirty per cent, of the plaintiff’s claim, in fraud of the creditors who had signed the agreement, and in fraud of the defendants ; that the first of these notes has been, paid; that “ the whole amount to be paid the plaintffs under the agreement above set forth, amounted to the sum of one thousand. eight hundred and one dollars and five cents, with interest from July 6,1869 ; and that, deducting the sum of one thousand one hundred and thirty-five dollars and. thirty-five cents, already paid • as above, there remains due only the sum of seven hundred and sixty-eight dollars seventy cents, with interest from July 6, 1869, which these defendants have repeatedly offered to pay the plaintiffs upon a surrender of all the notes given under the aforesaid agreement, and which they are and always have been willing to pay, but which sum the plaintiffs have refused.”

On the trial it appeared from the plaintiff’s testimony, that when Schafer indorsed the notes, he did not read them, and that virtually the plaintiff represented to him, that the notes were for the thirty per cent, named by the agreement, and that he, believing this to be the fact, indorsed the notes, which were for sixty per cent. The court charged the jury, that under the circumstances, except for the admission made by the indorser in the answer, he should direct the jury to find a verdict in his behalf; but that if the indorser was deceived into endorsing the notes, the verdict against him must be for the amount admitted in the answer, seven hundred and sixty-five dollars and seventy cents, with interest,—to which the defendant’s counsel excepted.

If the court’s attention had at the time been pointed to the form of the admission of the answer, it would have noticed that the averments were, that under the composition agreement seven hundred and sixty-eight dollars and seventy cents only remained due, and that the defendants had promised to pay this upon a surrender of all the notes. This seems to be no admission that anything was due under the cause of action stated in the complaint, as affected by the allegations of the answer. Effect should be given to the averment that the sum the defendants had offered to pay upon a surrender of the notes, as qualifying the succeeding averment that this sum the defendants have been always willing and ready to pay. The answer was in substance, that there was a full defense to the note, but that they were willing to be bound by the composition agreement, provided the plaintiff returned to them the other notes which the answer alleged they had no right to retain.

The court, therefore, inadvertently erred in this instruction to the jury.

A more important matter may be considered, upon the exception made by the defendant’s counsel to the following charge of the court: “If you believe these three witnesses in regard to that transaction, the plaintiffs are entitled to your verdict, as against the defendant Strenz, for the entire amount of the claim, which is one thousand two hundred and eighty-nine dollars and thirty-seven cents.”

The three witnesses referred to were one of the plaintiffs, the book-keeper of the plaintiffs,- and the attorney at law of the plaintiffs.

By their testimony it appeared that Strenz became insolvent. At his request the plaintiffs caused to be drafted the composition agreement as follows: “We, the undersigned creditors of Mr. A. 0. Strenz, do hereby agree to accept for the amount of our respective claims the sum of thirty cents on a dollar at three, six, and nine months, with a satisfactory indorsement, with interest from date of notes.”

The attorney for the plaintiffs was employed by them, at a yearly salary. He had his office in their store, and gave to them all of his time that they required for their business. He was out of the city at the time the composition agreement was drawn. One of the plaintiffs testified that before their attorney came back to town the defendant Strenz had said to the witness, “that if I could get the settlement through, or thought that we could aid him in getting it through, he would be willing to pay us two to one ; that was the thing exactly. I told him that we could not afford to do anything, or that we could not afford to let our attorney spend his time without being paid something. I introduced our attorney to Mr. Strenz. I told him what Mr. Strenz had proposed, and that if he would take hold of the matter he could take hold.”

The attorney testified that the last witness introduced him to Mr. Strenz and said, “Mr. Strenz is in difficulty; lie is obliged to make a settlement of his indebtedness; we have got a paper drawn and have been at work some little time about it, but do not appear, to make any headway, and we want you to take hold of it, and I will tell you what he is willing to do. He is willing to give you the same amount he settles with us for ” “ for my services in obtaining a settlement.”

Under the court’s charge, the jury, in viewing the testimony of these two witnesses, perhaps might reconcile the statements and believe that the first witness had testified accurately in saying that the plaintiffs were to be paid two to one, inasmuch as they could not afford to lose their attorney’s time, for which they paid a salary, unless Strenz would give a compensation, which was, according to the attorney’s testimony, to take the shape of a payment, or seeming payment to him, for his services. It was to be accomplished in this way. Strenz would pay the attorney an amount equal to thirty per cent, of plaintiffs’ claim, and the plaintiffs would stop an equal amount out of the attorney’s salary. It seems impossible to doubt the testimony of one of the plaintiffs, that the agreement was that they were to have two to one if they got the agreement through, or aided in doing this.

The plaintiffs say they communicated this to the attorney. But the attorney says their communication was that given above. The agreement was, however, not waived, as matter of fact, although the attorney undoubtedly believed that he was interested in the agreement. The attorney acted upon the agreement as he understood it. He spent much time, and did much, in securing the signatures of creditors to the instrument. The plaintiffs signed it last. This is a fact, with much, meaning.

If their endeavor, under their" private agreement, had been only to get the agreement signed by creditors, it would have been quite influential to that end that they should sign at once as creditors in a large amount.

The attorney, following his own understanding of what the agreement was between the plaintiffs, Strenz and himself, drew six notes, three of them to plaintiffs’ order, for their thirty per cent., and the other three to his own order for an equal amount. If these notes had been made and indorsed and delivered, it is only a conjecture what use the plaintiffs would have made of the three drawn to their attorney’s order, under their verbal agreement with 'Strenz. The fact was that Strenz, learning that there were six notes drawn, told the attorney that Schafer, on seeing that there were six, would be , very likely to object on that account to sign them. The attorney, probably thoughtlessly, destroyed the six notes, and drew them only for the same aggregate amount, making sixty per cent, of plaintiffs’ claim, to the order of the plaintiffs. These were signed and indorsed. The attorney testifies that afterwards the plaintiffs “had them, and kept them ever since. They did not belong to me; half of them belonged to the plaintiffs and half to myself. Out of the first note which was paid, I did not get my half; they kept the whole of it—my half has gone to them as the salary I received'—towards paying them what they paid me— _ towards my four thousand dollarsthe plaintiffs “received the whole of it, and out of it they paid me a salary, so that, after all, half of these notes were not for me, really ; they were for the plaintiffs ; and out of it the plaintiffs were to pay me my salary, if you choose to put it in that way.”

It in this way appears that the promise to pay the attorney for services was the means used for the accomplishment of the agreement that the plaintiffs were to have two to one. This was not the less the real fact because the attorney at one time believed that he was really to receive the compensation. It may be that the plaintiffs were sufficiently convinced for their own purposes that at the right stage the attorney would follow their wishes or commands.

This was the substance of the testimony of the three witnesses referred to by the court in that part of the charge under consideration. The securities, that is, the notes so obtained by the plaintiffs, were fraudulent and void.

“Whenever a composition is made with creditors every agreement or arrangement by which an advantage is secured by any one or more of the creditors, which is denied to others, is a fraud upon the creditors from whom it is concealed, although it neither has, nor can have, the effect of depriving them of any portion of the amount which they had agreed to receive.”

Of course, a person about to sign as security or indorse paper given in composition, is interested in knowing, and entitled to know, the real amount of liability the debtor is to assume under it—concealment of additional liability to be undergone by the debtor is injurious to him, and is fraudulent.

The creditors who do not receive this advantage are presumed, in the absence of proof to the contrary, not to have known that the agreement was made for the secret advantage.

• These rules are applicable to this case, although it is claimed that the additional security given to the plaintiffs was for their services in getting the composition through, and not for their execution of it. In the first place, if the secret agreement were in fact, to compensate for services,- it was only so in part, because it clearly implied that the plaintiffs were to sign, as well as to get others to sign. In the second place, when the agreement is considered, in its relation to circumstances, it appears to be simply a colorable device to gain an advantage over other creditors. In the third place, if it was actually intended only to provide reasonably for the payment of services, which were for the common benefit of all creditors thus led to make a settlement beneficial to them, the other creditors should not have-been left ignorant of it. Such agreements, from their nature, are likely to be used to the injury of persons interested, and are against the policy of the law, and are void. This last observation is meant to be confined to the case of a creditor, bargaining for compensation, under a state of facts like those in this case (Pinne v. Higgins, 12 Abb. Pr. 343; Hall v. Merrill, 5 Bosw. 267; Renard v. Fuller, 4 Id. 107 ; Hughes v. Alexander, 5 Duer, 488; Russell Rogers, 10 Wend. 479 ; Brick v. Cole, 4 Sandf. 79).

In this last case cited, it is said that in cases like the present, the agreement for additional security is void as against the other creditors, because it is wrong to them, but that it is void as against the debtor, because he is said to have acted under a moral duress, made by the claim for advantage, and the implied threat, that if such claim is not granted, the creditor will not sign. If there is a distinction which should be kept in view in cases against the debtor, such duress appears by the evidence to have existed in this case. The evidence is not abundant, but is sufficient on this point. If there was no evidence of its existence, inasmuch as such a private agreement is a wrong to the other creditors, it is the duty of the debtor not to make it. If, however, it be made, the creditor, by paying under it, puts the agreement into practical effect, and does another wrong to the creditors. By payment, he would reduce his assets, which the creditor'believed or had a right to believe would not be lessened by a private and fraudulent contract. It would seem that the law must allow a debtor to refrain from this additional wrong, and will permit him to defend on such grounds, in an action to enforce the secret agreement.

The plaintiffs claim that at least they should recover in this action, as much as they could, at all events, have had under the composition, or if the note in action had conformed to the composition. No decision is now made in reference to the parties’ rights, under the original and legal agreement. It cannot, however, be said that the note in suit only fails for a part of the consideration. The consideration of the note was an agreement, and was illegal, not in part, but wholly. There can be no recovery based upon this illegal consideration.

Judgment must be reversed, and a new trial granted, with costs to abide the event.


text:
    CHARLES SCHLESINGER and JOSEPH BLUMENTHAL, Plaintiffs and Respondents, v. SARAH HEXTER, Defendant and Appellant.
    The defendant and her husband assigned to plaintiffs a chattel mortgage, and the defendant covenanted in the assignment as follows:
    “And the said Sarah Hester, by and with the consent of her husband, does hereby covenant and agree, that the sum of six thousand five hundred dollars remains due and unpaid upon said chattel mortgage, and she hereby guarantees the payment of the same.”
    The plaintiffs foreclosed the chattel mortgage, and recovered about one thousand eight hundred dollars, and brought suit to recover four thousand seven hundred dollars, and interest on the guarantee.
    The answer among other things set forth the foreclosure and sale of a part only, and that all of the property was worth more than the amount due, and that defendant was ignorant of the amount realized at the sale. The reply took issue upon all the matters set forth in the answer.
    The plaintiff on the trial merely proved the interest on four thousand seven hundred dollars, to date of trial, and rested.
    Defendant moved to dismiss the complaint, which was denied, and then proved she was a married woman at the time of the execution of the guarantee, and rested, and moved again for a dismissal, which was denied, and the jury rendered a verdict for five thous- and two hundred and eleven dollars and seventy-seven cents.
    The following rules and principles of law applied by the court in its judgment of reversal (exclusive of the question of defendant being a married woman): The general rule, that the burden of proof is on the party holding the affirmative, has an exception that applies here, namely: that when the plaintiff grounds his right of action upon a negative allegation, the establishment of this negative is an essential element of the case (1 Greenl. on Shi. § 75), unless the subject matter of the negative averment lies peculiarly within the knowledge, of the other party. In the latter case the allegation is taken as true, unless disproved by the party having peculiarly the knowledge.
    As the issues were framed in this case, the plaintiff was bound to give affirmative proof of his averment that Tie had not been paid on the mortgage. . . . • . .
    , I. The alleged breach was the nonpayment.
    H. The nonpayment was an omission of a third party, of which omission both parties had equal knowledge.
    HI. The amount realized, or that had been paid, was peculiarly within the knowledge of- the plaintiff, who took and sold the property under the mortgage, and received the proceeds.
    IY. This ruling is especially applicable in a case where the defendant, being a surety, may ask an account from the plaintiff of the proceeds of the mortgaged property.
    Before McCunn, Curtis and Sedgwick, JJ.

      Decided May 13, 1872.
    Appeal from a judgment.

      Buckham & Smales, attorneys for appellants.

      Stephen A. Walker, of counsel.

      F. Sherman Smith, attorney for respondent.

      James M. Smith, of counsel.
   By the Court.—Sedgwick, J.

The complaint alleged that the defendant theretofore was the owner of a certain chattel mortgage, that the defendant executed and delivered to the plaintiff an assignment of such mortgage, and guaranteed the payment of the said mortgage ; that there was due upon said mortgage, at the time of the assignment, six thousand five hundred dollars, which became payable on May 1, 1869, but that no part of the same has been paid, except about one thousand eight hundred dollars.

Copies of the mortgage and. assignment referred to, were attached to the complaint.

By the mortgage it appeared that the defendant was mortgagee. It contained no covenant that the mortgagors would pay to the mortgagee the amount secured by the mortgage. The assignment, on its face, was made by Sarah Hexter (the defendant) and David Hexter, her husband, in consideration of six thousand five hundred dollars, “to us in hand paid” by the plaintiffs. It contained the following covenant: “And the said Sarah Hexter, by and with the consent of her said husband, does hereby covenant and agree that the sum of six thousand five hundred dollars remains due and unpaid upon said chattel mortgage, and she hereby guarantees the payment of the same.”

The answer denied all the allegations of the complaint, except such as were thereafter admitted; the answer admitted in substance that she was the owner of the mortgage referred to, and that she did make an assignment of it to the plaintiffs, but that the clause-purporting to be a guarantee of its payment was inserted by mistake, without the knowledge or authority of the defendant, and she demanded judgment that the assignment be reformed by striking from it the words “ And she hereby guarantees the payment of the same.”

The answer for a further defense alleged that before the commencement of the action the plaintiffs took, by virtue of the mortgage, the mortgaged property, and foreclosed the mortgage, sold the property, received the proceeds of the sale; that at the time of the sale the property was worth more than the amount due on the mortgage; and that she, defendant, had not any knowledge or information sufficient to form a belief, of the amount of the proceeds of the property so sold, or of what, if any part of the said sum of six thousand five hundred dollars remained unpaid to them ; and she claims and insists that the plaintiffs are chargeable with the full value of the said goods and chattels, and she denies that she is indebted to them in any amount whatever.”

The reply averred that the property referred to in the answer was sold under the foreclosure mentioned in the answer at public auction, and for its fair market value, and took issue upon the other allegations of the answer.

On the trial by a jury, the plaintiffs did not, as appears by the printed case, produce the mortgage or assignment, and only proved that the interest on four thousand seven hundred dollars, from May 1,1869, was five hundred and eleven dollars and seventy-seven cents, and then rested.

The defendants proved that the defendant was a married woman at the times of the mortgage and assignment and down to the trial.

The defendant moved-to dismiss the complaint, on the ground that the defendant, at the time she executed' the assignment, was a married woman, and that it did not appear that she made the covenants in it a charge on her separate estate, and also on the ground that the plaintiffs had not made out any cause of action against the defendant, and had given no evidence to create any liability against her in this action.

This motion was denied, and under the direction of the court the jury found for the plaintiffs in the sum of five thousand two .hundred and eleven dollars and seventy-seven cents. Exceptions were duly made to the court’s rulings. The contract was, the defendant ;* hereby guarantees the payment of the mortgage.” The breach was the nonpayment of the mortgage. This brings in the exception to the general rule, that the burden of proof is on the party holding the affirmative. This exception is that when the plaintiff grounds his right of action upon a negative allegation, the establishment of this negative is an essential element of the case (1 Greenl. on Ev. § 75), unless the subject matter of the negative averment lies peculiarly within the knowledge of the othey party. In such case, the averment is taken as true, unless it is disproved by the party having peculiarly the knowledge.

Although it appeared by the printed case that the mortgage was not actually produced in evidence, yet the points on both sides seem- to consider it to be a fact that the mortgage was actually produced by the plaintiff. As a general rule, this would sufficiently create a presumption that the mortgage was not entirely paid. But the complaint averred that it had been partly paid, and to the extent of about one thousand eight hundred dollars. The answer alleged that the property mortgaged had been taken possession of by the plaintiffs, and that it was of the amount secured by the mortgage, and alleged a want of information and belief as to the amount the property brought on the sale. The reply admitted that the property had been all sold, with a trifling exception, for fair prices, and at a fair auction sale. When the plaintiff took possession of the property under the mortgage, that was payment, to the extent, at least, of the price it afterwards brought (Case v. Boughton, 11 Wend. 106), so that the plaintiffs were bound to give affirmative proof of the amount that had not been paid on the mortgage, for the following reasons : First. The alleged breach was the non-payment. Second. This non-payment was by a third party, of whose omission to pay the defendant had as much knowledge as the plaintiffs had. Third. The amount that had been paid, that is, the amount of the proceeds of the sale, was peculiarly within the knowledge of the plaintiffs, who had taken the property, sold it, and received the proceeds. Fourth. This is especially right in a case where the defendant, being a surety, may ask an account from the plaintiffs of the proceeds of the mortgaged property.

It would seem proper to explain the reasons for not passing upon the more important questions involved in this case. Some of these reasons are: First. The averments of the complaint do not show whether or not the defendant, at the time of the bringing of the action, had any separate estate. Such an averment was made in the complaint in the. Corn Exchange Insurance Co. v. Babcock (42 N. Y.). Proof of such a fact might set at rest a perplexing doubt that exists in this case, and which was not fully argued. This doubt is this. If thé contract in question is not valid by virtue of the statutes of 1860 and 1862, but is valid irrespective of those statutes, it is to be enforced according to Yale v. Dederer (22 N. Y. 460), and Owen v. Cowley (36 N. Y. 604), as an equitable lien upon the separate estate as a whole (Ballin v. Dillaye, 37 N. Y. 39). If there is no separate estate, there is a doubt that there is a lien. Second. Another doubt exists as to the separate estate which may be the subject of such a lien. Is it separate estate, wholly acquired after the contract in question was made ? Third. Can an action be maintained where it is not made to appear that the judgment can be enforced by means of an execution to be levied upon a, separate, estate %

On a new trial, the. necessity may be obviated of deciding, with perhaps no practical bearing, these and other delicate questions existing in this case.

The judgment must be reversed, with costs to abide the event, and with a new trial.


author: By the Court.—Curtis, J.

text:
    JACOB GREENTREE, Plaintiff and Respondent, v. SAMUEL W. ROSENSTOCK, Defendant and Appellant.
    A., under authority, collected moneys for B., who assigned the same to 0. After the assignment an action was commenced by D. against the assignor B., and an attachment was issued therein and the sheriff levied upon the moneys in the hands of A., as the property of B. In the mean time, A. had notice of the assignment of the moneys in his hands from B. to 0., yet, notwithstanding, after the perfection of the judgment in the action of D. against B. and issue of execution, A. paid over the moneys to the sheriff on the execution.
    These facts being established in an action brought by C. against A., to recover these moneys, it was Held, that the payment of the moneys .by A. to the sheriff on the execution issued in the attachment suit was no protection against, nor bar to, the recovery of the moneys by 0., the plaintiff, in this action.
    A. should have called upon 0. to interplead in the attachment suit, or otherwise sought the protection of the court, after he had received notice of the assignment. He paid the moneys over to the sheriff at his own risk.
    Before McCunn, Curtis, and Sedgwick, JJ.

      Decided, May 13, 1872.
    Appeal from a judgment entered upon the report of a referee and from an order denying a motion for a new trial on the ground of newly discovered evidence. The facts and points in the case fully appear in the opinion of the court.

      Mr. Cornelius A. Runkle, of counsel, for appellant.

      Mr. Roger A. Pryor, of counsel, for respondent.
   By the Court.—Curtis, J.

The plaintiff sues as the assignee of Hathan Hofflin, to recover four thousand one hundred and fifty-three dollars and seventy-five cents in gold, collected by the defendant in California, acting as the agent of Hofflin. Defendant’s answer puts in issue the alleged assignment from Hofflin to Greentree, and sets up that the coin was attached while in defendant’s possession, in a suit brought by Hath an Strauss against the firm of Strauss, Hartmann, Hofflin & Co., of which Hathan Hofflin was a member, September 18, 1867, and that January 1Ó, 1868, Strauss recovered a judgment and the sheriff levied upon the attached coin, and applied the same in part satisfaction of the judgment.

The action was referred, and upon the referee’s report a judgment was entered in favor of the plaintiff, and now comes before the court upon an appeal from the judgment, and an appeal from an order denying defendant’s .motion for a new trial, on the ground of newly discovered evidence.

The present suit was commenced by Greentree claiming under the assignment, December 23, 1867, and subsequently, on August 4, 1868, Bosenstock paid to the sheriff, on an execution issued on a judgment in the attachment suit, the sum of four thousand one hundred and fifty-three dollars and seventy-five cents, with interest, in gold, equal to five thousand nine hundred and forty-six dollars and eighty-nine cents in currency. It thus appears that the defendant, many months after notice of the assignment, and after the bringing of the present suit, paid over this fund to the sheriff at his own risk, and without calling upon the claimants to interplead, or in any way invoking the protection or instructions of the court.

If the assignment to Greentree transferred to him all ■ Hofflin’s interest in the'fund in the defendant’s hands, before the commencement of the attachment suit, that suit and the proceedings under it constitute no bar to the plaintiff’s claim. The plaintiff could not be divested of his property and right to collect it from the defendant by reason of an attachment suit and judgment therein against another man (Clarke v. Goodridge, 41 N. Y. 210).

The referee correctly held that the payment by the defendant to the sheriff was, as a matter of law, no protection to him against this plaintiff’s claim. Any other ruling would tend to confuse and unsettle all rights to property.

An exception was taken by the defendant to a question to the Register of the Gold Exchange, who is present and records the sales of gold, and who was called to prove the value of the gold. The question was as follows : ‘ ‘ By whom were the statements made which were heard by you?” It appeared these statements were made by purchasers and sellers of gold in the ring, in front of him, .and the entries of whose bids were immediately made by him and telegraphed. It was his duty to be the witness and the recorder of these transactions, and as he was called to show his knowledge of the gold market, and consequently of the value of gold, it was proper to show his means of knowledge. Bo ground of objection was stated, and as the referee found against the claim of conversion, and sustained the action as for money had and received, and for the amount stated in the stipulation, five thousand nine hundred and forty-six dollars and eighty-nine cents currency, this exception is without importance.

The defendant further excepts to the finding of fact by the referee, that there was an assignment executed by Hoffiin to the plaintiff on June 9, 1867, and also to the finding by the referee that the consideration for such assignment was the loan of notes, and the payment of a sum of between seven hundred and eight hundred dollars.

The execution of the assignment to the plaintiff at that time, was testified to by three witnesses, and the consideration thereof by two witnesses. Though this was the principal issue in the case, there was no conflicting testimony introduced for the defense, and I cannot see how the referee could very well have found differently from what he has done.

Since the judgment, the defendant has moved for a new trial on the ground of newly discovered evidence, ' on the issue of the making of the "assignment; It is shown by affidavit that plaintiff, since the judgment, stated to a creditor of his, who remarked to him that he would soon be able to pay him out of this judgment, “You know very well how that is, that is Nathan’s money (meaning said Hofflin), and Nathan is not so liberal as to give anything away, no more to me than to you.” And later, when requested by him to pay out of this judgment, plaintiff said such money belonged to Nathan, and that he had spoken of such judgment as Hofflin’s judgment. All this might be proved, and yet it would not show that Green tree, the plaintiff, did not own the property under the assignment, when the attachment suit was commenced, September 18, 1867, and when he commenced , this action, December 23, 1867. The proof of the execution of the assignment was conclusive, and the newly discovered evidence does not appear to be of a character to change the result.

The application for a new trial on this ground does not seem to come within the rules which have governed the court in granting such motions.

For these reasons I think the judgment and order appealed from should be affirmed.