text:
    PHILIP GOERLITZ, Plaintiff, v. CHARLES MALAWISTA and Another, Defendants.

      Fee to a son or his issue, subject to a life estate — when the contingency relates to the death of the testator, a/nd when to that of the life tenant.

    A testator, by liis will, bequeathed his estate to his wife ‘ ‘ for and during her natural life, if she shall so long continue and remain my widow, and upon her decease or second marriage the same to revert to my son, Anderson, or his. issues, and such other children as I shall leave, or their issues.” * * * In case my wife deceases or marries again, leaving no children of mine or their issues living, then I bequeath all my estate, both real and personal, to my surviving brothers and sisters.

      Held, that the devise was in the alternative, and substitutionary.
    That the contingency created thereby related to the death of the life tenant, and not to the death of the testator, and that the estate given to the son, Anderson, was a conditional fee, subject to be defeated by the birth of issue and the death of Anderson during the life of the life tenant.

      SubmissioN of a controversy without action, pursuant to section 1219 of the Code of Civil Procedure.
    The controversy arose out of the refusal of the defendant to pay -tbe balance of the purchase-price of certain premises in the city of New York, upon the ground tbat the title thereto* offered to be conveyed by the plaintiff, was defective.

      John F. BrodsJcy, for the plaintiff. ■

      A. Stern, for the defendants.
   Barrett, J.:

The question presented by the agreed case is, whether a specific performance should be decreed of a contract for the purchase of ■certain premises in this city. The plaintiff is the vendor, and be .asks a judgment requiring the defendants to so perform.' The ■defendants asked to be released and pray tbat the plaintiff be required to return to them the sum paid on account of the purchase-price. The objection to the plaintiff’s title arises from the will of W. Ander.son Waydell, who owned one undivided third interest in the premises in question. The clauses of this will which we are called upon to •consider are the “second” and “fifth.” They read as follows :

Second. I give and bequeath unto my wife, Mary Elizabeth Way-dell, all my real and personal estate, whatsoever and wheresoever, for and during her natural life, if she shall so long continue and remain my widow, and upon her decease or second marriage the -same to revert to my son Anderson or his issues, and such other ■children as I shall leave, or their issues, share and share abke, provided tbat the issues of any deceased child of mine to be entitled to .and receive only such portion as their parent would have received if living.

Fifth. In case my wife deceases or marries again, leaving no children of mine or their issues living, then I bequeath ah my estate, both real and personal, to my surviving brothers and sisters, share and share abke.

The widow, Mary Elizabeth Waydell, is still alive and has not remarried. Anderson Waydell was the testator’s only son. He is. alive and unmarried.

The plaintiff claims title under a deed executed by the widow and this son. The surviving brothers and sisters referred to in the fifth clause of the will have fortified this deed, two of them by a quitclaim. and two by a full covenant warranty deed. The plaintiff contends that these deeds cover every possible interest in the premises, while the defendants insist that Anderson "Waydell could not, by a conveyance during the lifetime of the widow, cut off the contingent interests of bis future-born children. The question thus presented is an interesting one. W. Anderson Waydell gave bis widow a life estate so long as she remained a widow Upon her decease or second marriage"tbe property was “to revert ” — meaning to go “ to-Anderson Waydell or bis issues.” Both sides agree, and correctly,, that the words “ or bis issues,” as here used, are not words of limitation, but of substitution. There is, indeed, nothing in the will which, would justify our changing the phrase from the disjunctive to the-conjunctive. The disjunctive was used advisedly. It appears again, in the expression which immediately follows: “And such other children as I shall leave or their issues; ” and it appears once more in the fifth clause. And further, the “ issues ” of any deceased child are to take “ only such portion as their parent would hare reeewed,. ifli/oi/ng.” Thus the devise was clearly meant to be in the alternative and substitutionary.

The real difference between the parties is, whether the contingency referred to is the death of the testator, or the death of the life tenant. The plaintiff, conceding that the words “ or bis issues ” are substitutionary, claims that they were used to prevent a lapse in case Anderson Waydell should not be living at the testator*8 death; and that, thus, as Anderson survived bis father, he took absolutely.

The defendants, on the other hand, making the same concession, as to the substitutionary character of the words, claim that Anderson took a conditional fee, subject to its being defeated by the birth of issue thereafter, and the death of Anderson during the life of the life tenant.

It is a well-settled general rule that, where there is a devise or bequest, simpUeiter, to one person, and in case of bis death to another, the words refer to a death in the lifetime of the testator. (Vanderzee v. Slingerland, 103 N. Y., 53.) But this rule only applies-when the context of the will is silent and affords no indication of a. contrary intent. (Id., 56.) “ Indeed,” said ANDbews, J., “the tendency is to lay hold of slight circumstances in the will to vary the construction .and to give effect to the language according to its natural import.” This doctrine was reaffirmed and applied in Matter of New York, Lackawanna and Western Railroad Company (105 N. Y., 95).

There can be no doubt that such circumstances exist in the case at bar. The plaintiff’s contention entirely overlooks the provision as to the remarriage of the life tenant. The estate is given to her for and during her natural life, “ if she shall so long continue and remain ” the testator’s widow; and “ upon her decease or second' marriage ” it is to “ revert ” to Anderson or his issues. How could the testator possibly have intended the estate to'so revert upon his . own death ? He might have contemplated his wife’s decease during his lifetime, but scarcely her second marriage. It is plain that he intended the alternative gift to relate to the termination of the life estate (while in actual enjoyment) by the death or remarriage of his widow. Thus Anderson took a remainder vested in right, but not in possession or enjoyment, and subject to be divested by his own death, with or without issue, during the lifetime of the widow. In the latter contingency the interest of his issue, if he have issue, will be changed from a contingent to a vested remainder. (Moore v. Lyons, 25 Wend., 144.) And such issue will take as purchasers, under the will, and not as heirs-at-law of their father. In the same contingency, if he die without issue, the executory devise over under the fifth clause will take effect. This fifth clause, read in connection with the last words of the second clause, “ as their parent would have received if li/oing,” strengthens these views, and the-entire purpose of the testator becomes apparent.

The remainder is to vest in possession and enjoyment upon the death or remarriage of the life tenant. Then “ if living ” he is to receive what has previously been vested in right. Hpon the happening of either of those events — the death or remarriage of the widow — the fee is to vest absolutely in Anderson, if he be then living. If not, it is to so vest in his living issue if such there be. If, however, Anderson be then dead and without living issue, the gift over takes effect. This conclusion is supported by the cases already cited and also by the English authorities. (Girdlestone v. Doe, 2 Simon, 225; Salisbury v. Petty, 3 Hare, 93; Price v. Lockley, 6 Beav., 180; Jarman on Wills [5th Am. ed.], vol. 1, pp. 515-517; vol. 2, pp. 790-793.) In Girdlestone v. Doe, a testator bequeathed forty pounds per annum to A for life and after her •decease to B or his heirs. It was held that B did not take the absolute interest, but that the words or his heirs ” created a substitutional, .gift for his next of kin in the event of B dying in the lifetime of A.

Price v. Lockley seems to be precisely in point, except that the will related solely to .personalty while here the residue is mixed. 'The bequest was to the testator’s wife for life or so long as she should remain his widow; and after her decease or second marriage, in ■either case, the property was to be sold and the proceeds divided •equally “ among my said (the testator’s) four children or the survivor •of them or their heirs.”

One of the four sons assigned his share in the lifetime of the widow just as Anderson has done in the case at bar. This son died before the widow, leaving five children. It was held,upon the death •of the widow, that these children took by way of substitution as .against their father’s assignee. And in Salisbury v. Petty the word “ or ” was held to mean, in case of the death of the primary legatee, prior to the actual receipt of the legacy, leaving issue. For which proposition the vice-chancellor cited Hervey v. McLaughlin (1 Price, 264), and the cases collected by Mr. Jarman (vol. 1 pp. 452, 454; vol. 2, p. 699 et seg.).

The case of Black v. Williams (51 Hun, 280) does not conflict with these authorities. There the contingency was plainly to happen in the lifetime of the testator. Fouque gave a life estate to his widow and a vested remainder, with full power of disposition to his son. He then proceeded : “ In case of the death of both my ■wife and son, and that my son should be without any legitimate family, my pixrperty * * * should go to my family.” In harmonizing the latter provision with the full power of disposal given -to the son, there is a plain implication after the phrase, “ in case •of the death of both my wife and son,” of the words “ before my death.”

It is, therefore, our judgment that no conveyance by Anderson, ■during the lifetime 6f the widow, can cut off the interest of any children hereafter born to him. Such children will take by substitution in case of Ms death during his mother’s life. At all events, the plaintiff’s right is certainly not so free from doubt as to enable' him to give the defendants a marketable title, under the rules which govern in specific performance, and consequently the defendants should not be compelled to take.

There should, therefore, be judgment upon the agreed case for the defendants, releasing them from the contract and directing the repayment of $2,000 and interest from the 17th day of May, 1889,, with costs.

YaN Brunt, P. J., and Bartlett, J., concurred in the result.

Judgment for the defendants, releasing them from the contract and directing the repayment of $2,000 and interest from the 17th day of May, 1889, with costs.


source: Caselaw Access Project

author: Barrett, J.: "Van Brunt, P. J.: Daniels, J.:

license: Public Domain

text:
    THE PEOPLE OF THE STATE OF NEW YORK, Appellant, v. WILLIAM J. H. BALLARD and Others, Respondents.

      Attorney-general only cmthorieed to Tiring a suit to call the trustees of a corporation to account when public intes'ests a/re involved — not to settle private disputes between the trustees and certain of the stockholders.

    In an action t>roug]it by the attorney-general, in the name of Tlie People, to compel the defendants, who were trustees and officers of the Spring Yalley Hydraulic Gold Company, a corporation created under the general manufacturing act of 1848, to account for their official conduct in the management and disposition of the property of the company, and to pay to the company the value of' the property which they had transferred to other corporations in violation of their official duties, it appeared that the trustees were guilty of a technical wrong to a minority of the stockholders, dissenting from their action, in transferring without their consent the company’s property to a new corporation, but. that such action on the part of the trustees was necessary to save the property, - and was, in truth, a substantial benefit to all concerned.

      Held, that while the non-assenting stockholders had a right to refuse to accept the benefit conferred by this action of the trustees, it was not a proper case for the attorney-general to bring an action in the name of the People to compel the trustees to account for such official conduct on their part.
    The attorney-general of the State of New York, under the provisions of section 1808 of the Code of Civil Procedure, authorizing him to bring an action, if, in his opinion, “the public interests ” require it, has no authority to bring an action in the name of The People for the settlement of strictly private disputes between the trustees and a portion of the stockholders of a private corporation not charged with any public duties.
    Where it appears that an action has been brought in the name of The People by the attorney-general, not upon the relation or for the benefit of creditors of a corporation, but solely in the interests of certain stockholders thereof, who are dissatisfied with the action taken by its trustees, it is competent for the court to inquire into the question as to whether there is an enforceable public interest involved in the action.
    Appeal by plaintiff from a judgment dismissing the plaintiff’s •complaint, entered in the office of the clerk of the county'of New York on the 23d day of March, 1889.
    The action was brought, pursuant to the authority contained in .sections 1781 and 1782 of the Code of Civil Procedure, to compel the defendants, who were trustees and officers of the Spring Yalley Hydraulic Gold Company, to account for their official conduct in the management and disposition of the property of the company, .and to pay to the company the value of the property which they bad transferred to other corporations in violation of their official duties. The defendant, the Spring Yalley Hydraulic Gold Company, was incorporated on February 11,1880, under the general manufacturing .act of the State of New York, passed February 17, 1848.
    The court found that there was no evidence in this action of a public grievance, and that the People, having no interest in the subject-matter of the action, or of any of the acts therein complained of, could not maintain the action.

      J. Lwigdon Ward, for the appellant.

      Treadwell Cleveland and Joseph U. Choate, for the respondents.
   Barrett, J.:

The question is here presented whether the People can maintain .an action under sections 1781 and 1782 of the Code, to redress a .strictly private wrong ? There is not a suggestion of public right or interest in the case.

The corporation is not a public one, nor is it a private corporation with public duties. The People of the State have no special interest -to be subserved by tlie proper and effective administration of the franchise, nor have the people of any locality in the State, nor has any class of citizens. It is, in fact, an ordinary business corporation, organized under the general act of 1818, for the purpose of mining in California, and it is, therefore, essentially what is known as a private corporation.

The attorney-general has brought this action in the name of the People alone. There is no relator. It does not seem to have been brought for the benefit of creditors, for it nowhere appears that any creditor has invoked the attorney-general’s authority, and, indeed, the creditors were apparently provided for by the arrangement which the action questions. It is quite clear, upon the face of the complaint, that the action is solely in the interest of certain stockholders who are dissatisfied with the action of the trustees. The entire dispute, both upon the pleadings and the proofs, is between the trustees and a small minority of stockholders.

For the action complained of the trustees have the authority of a large majority of the stockholders. By that action they undoubtedly saved the property of the company for the ultimate benefit of both stockholders and creditors. They were, however, guilty of a technical wrong to the minority in transferring, without their consent, the company’s property to the new California corporation ; and, although this action of theirs was necessary to save the property, and was, in truth, a substantial benefit to all concerned, yet the non-assenting stockholders have a right to refuse the benefit and to insist that they shall not be saved, against their will, by an act in excess of the trustees’ authority. This is precisely what this case comes to, and, while no court should deny to the minority their full legal rights under the circumstances, it seems to me that they might well have been left to secure these rights by action in their own name and at their own risk and expense. The question of The People’s right, as quasi statutory guardian for these stockholders, to maintain this action, was very fully and thoroughly considered by Mr. Justice Ingraham at Special Term, and his conclusion was adverse to the right. The same question was discussed by Judge Earl in the late case of the People v. Lowe (117 N. Y. 175), and that learned judge also denied the right. Unfortunately, the decision in that case was placed upon another ground, and the question was not determined by the Court of Appeals. Judge Earl’s opinion, therefore, is only his individual judgment, but, as such, it is entitled to the consideration always due to the reasoning of this distinguished jurist. My own judgment, upon a careful examination of the statute, in the light of these opinions, and after due consideration of the history of the law on the subject down to the passage of the Code of Civil Procedure, is that the legislature never intended to afford this as a concurrent remedy in ordinary disputes between stockholders and trustees of private corporations. It may be going too far to say that the actions provided for in subdivisions 1, 2, 5 and 6 of section 1781 of the Code, must relate, when brought by the Attorney-General in behalf of the People without a relator, to public corporations or corporations clothed with public duties. The wording of the revisers’ notes to that provision of the Revised Statutes from which this section of the Code was, in part, drawn, gives color to this view; but the language used by the revisers in the act seems broader than the intent expressed in the note. That language may, without affecting the result in the present case, be deemed broad enough to cover cases where the public is in any wise interested in the management and disposition of the funds and property of a corporation, public or private, or in the faithful administration of the duties imposed upon its trustees. But, to maintain such an action, there must be some sort of public interest. That seems to be contemplated by the language used in section 1808, where the Attorney-General is authorized to bring the action, if, in his opinion, “ the public interests ” require it. His judgment on that head, however, does not conclude the inquiry as to whether there is an enforceable public interest involved.

A public right may be involved and the attorney-general may or may not deem it in the public interest to enforce that right by action. His judgment is conclusive as to the propriety and wisdom of bringing the action, not, of course, as to the right to maintain it. The reference in the section, however, to public interests is significant, and I cannot but think that it is illustrative of what was contemplated by sections 1781 and 1782. The history of the law on the subject also favors this construction, and is opposed to a literal reading of either the Revised Statutes or the Code.

The public interest which authorizes the maintenance of the action may, doubtless, be intimately associated with private right. But I cannot believe that the door was opened as widely as the appellant claims, or that it was intended to permit the Attorney-General, upon behalf of the People, to interfere in strictly private disputes, entirely dissociated from public interests, merely because such disputes happen to occur within corporate lines.

Mr. Justice Daniels evidently appreciates the difficulties which must follow his conclusion. For he acknowledges that, owing to the estoppel operating upon the assenting stockholders, the liabilities of the trustees must necessarily be limited to the measure of redress due to the non-assenting stockholders. The statute, however, authorizes no such limitation, nor does it make any provision for the settlement of the equities as between the assenting and non-assenting stockholders. How would it be possible in an action to which these stockholders are not parties to go into such questions ? To take . proof and adjudicate that some were estopped and others not ? To bind the People thereby and to shape the judgment with relation thereto ? The statute contemplates nothing of the sort. On the contrary, it distinctly provides for a judgment compelling the derelict trustees to pay to the corporation or to its creditors the value of any property which they have transferred to others by a violation of their duties.

And that, indeed, is the judgment which the People here demand. They do not; and they could not, ask for a judgment compelling the trustees to pay to the stockholders the proportionate value of the property transferred, that is, proportionate to the amount of the non-assenting stock. Nor could the court compel the trustees to pay such proportionate sum to the corporation for the use and benefit of the non-assenting stockholders. It follows that the People were not entitled, upon the pleadings and proofs, to such a judgment as the statute authorizes, and that the complaint was properly dismissed.

If the non-assenting stockholders had brought their action against the trustees, they would have been.met with proof, in mitigation of damages, of the almost hopeless condition from which the property was rescued by the united action of the trustees and the majority of the stockholders. By the present action, brought, no doubt, in perfect good faith by the attorney-general upon their representations, the non-assenting stockholders are enabled to evade this situation, and. if they were successful, the statute would have been utilized in the name of equity to work real injustice.

The judgment should be affirmed, with costs.

"Van Brunt, P. J.:

I concur in the result of the within opinion. An examination of the cases decided under the Revised Statutes shows that the courts by judicial construction of the provisions of the statutes had so limited their operation that such statute had not the force which the plain meaning of the words employed gave to them. The provisions of the Code upon this subject are substantially the same as those contained in the Revised Statutes, and should receive the same construction until the interpretations placed upon the Revised Statutes are reconsidered. It follows that the decision in respect to the sections of the Code in question made in the case of the People v. Lowe (47 Hun, 577) was erroneous.

Daniels, J.:

The action was brought pursuant to the authority contained in sections 1781, 1782 of the Code of Civil Procedure. Its object was to compel the defendants, who were trustees and officers of the Spring Yalley Hydraulic Gold Company, to account for their official conduct in the management and disposition of the property of the company, and to pay to the company the value of property which they had transferred to another corporation in violation of their official duties. The Spring Yalley Hydraulic Gold Company was incorporated in 1880 under the manufacturing laws of the State of New York. Its capital of $200,000 was divided into shares of one dollar each, and it was afterwards increased to the sum of $300,000, divided into like shares. After its incorporation it obtained by conveyances, made for that object, two parcels of mining property in the State of California, for which it issued nearly all of the stock into which its original capital was divided. The business of the company was that of mining upon these two parcels of land, and it continued in the pursuit of that business until 1886. And in July of that year the trustees and officers of the company, who are made defendants in the action, conveyed to a corporation, formed under the laws of the State of California, and known as the Spring Yalley Gold Company of California, all the property, real and personal, of the company of which they were officers, situated in the State of California. This disposition of the property of the Spring Yalley Hydraulic Gold Company was approved by stockholders holding 143,668 shares of its stock.

But the holders of a large number of its other shares did not then, and have not since, assented to that disposition and conveyance of the property of the company. It was further alleged in the action, and evidence was given in proof of the allegations, that unauthorized dispositions of the stock of the company had been made by its trustees and officers soon after the time of its incorporation. Whether this disposition of the shares of stock was unauthorized or not, it is not necessary to examine or consider for the disposition of the appeal. For as the complaint was wholly dismissed, if the conveyance made of the property in July, 1886, by which it was conveyed to the Spring Yalley Gold Company of California, was illegal or unauthorized, that will be sufficient to entitle the plaintiff to maintain the action, if the right to do that has been- vested in the People of the State.

The objection has been taken in the action, and it was allowed to prevail at the trial, that the People had no such right or interest in this controversy as entitled them to maintain the action. And that objection has been urged as an answer to the appeal taken from the judgment by the plaintiff. It is no doubt true, as a general legal principle, that a party, to maintain an action in a court of justice, must appear to have an interest in its subject-matter, and that suits brought in the name of the People form no exception to the general application of this principle. That was held in People v. Albany, etc., Railroad Company (57 N. Y., 161); People v. Ingersoll (58 id., 1), and People v. Brooklyn, etc., Railroad Company (89 id., 75). But neither of these actions proceeded under these provisions of the law, nor was anything decided in either of them denying the power of the legislature to authorize an action for these objects in the name of the People, when it shall be brought by the Attorney-General. And the same answer is applicable to People v. Rome, etc., Railroad Company (103 N. Y., 95), which, like the others, did not depend upon this statutory authority.

The law, as it is contained in these sections of the Code of Civil Procedure, was not then for the first time enacted by the legislature of the State, but it was made a part of article 2, title 4, chapter 8 of part 3 of the Revised Statutes. And it proceeded upon the power and duty of the State to restrain corporations created under its authority from the violation of the limitations designed to be imposed upon them, and to restrict their officers within the limits of their duties and obligations.

Por these objects jurisdiction was given the Chancellor over directors, managers and other trustees and officers of corporations, to compel them to account for their official conduct in the management and disposition of the funds and property committed to their charge, and to compel them to pay to the corporation represented by them, and its creditors, all sums of money and the value of all property which they might have acquired to themselves or transferred to others, or might have lost or wasted, by any violation of ■their duties as such trustees, and to set aside alienations of proj)erty made by them contrary to the provisions of law, or for purposes foreign to the lawful business and objects of the corporations, where the person receiving the property knew the purpose for which the alienation was made. Other powers were also vested in the Chancellor by other subdivisions of the section, designed still more effectually and completely to prevent the abuse of their authority by the trustees and officers of corporations. And it was further provided by section 35 of the same article that this jurisdiction should be exercised on bill or petition, as the case may require or the Chancellor may direct, at the instance of the Attorney-General prosecuting in behalf of the People of this State, or at the instance-of any creditor of such corporation, or at the instance of any director, trustee or officer of such corporation having a general superintendence of its concerns. And this legislation has not been questioned or deprived of its authority by any decision of the courts of the State which have either been referred to or discovered in the course of the investigation suggested by the action. Rut the same jurisdiction was continued and vested in the Supreme Court upon the abolition of the Court of Chancery* This legislation has remained a part of the statutory law of the State from the time of its enactment until the present time, and, without being substantially changed, was made to consist of article 2, title 2, chapter 15 of the Code of Civil Procedure. And this article has, in like manner and in still more general language, directed that the action to attain these ends may be brought by the Attorney-General in behalf of the People of the State, or by any creditor, or trustee, director^ manager or other officer of the corporation having a general superintendence of its concerns, except in the cases where the object of the action may be to gecure the suspension of a defendant from exercising the functions of his office, or removing him from his office, etc.

The only exception which was made to the application of these enactments in the provisions of the Revised Statutes, was that they should not extend to any incorporated library society, to any religious corporation, or to any Lancasterian or select school incorporated by the Regents of the University or by the legislature. (2 R. S., 466, § 57.) And no greater restrictions have been incorporated in the Code of Civil Procedure as they have been defined and declared by section 1804. The authority in this manner provided did, therefore, include this corporation formed under the manufacturing laws of this State, and also its trustees and officers,- and rendered them liable, for misconduct of this description, to be prosecuted in the name of the People in an action brought by the Attorney-General.

To commence and prosecute the action it was not necessary that any person should be joined as relator with the People, for the right to prosecute the action has been in the most general and unqualified manner vested in the People of the State. And the object of so vesting it was the protection of the citizens of the State and others from injury and loss through the misconduct and unauthorized acts of trustees and officers of corporations formed under the authority of its laws. By section 1808 of the Code of Civil Procedure, where the action can be brought only by the Attorney-General in behalf of the People, if a creditor, stockholder, director, or trustee, of the corporation applies to him to commence and prosecute it, there the suit is to be governed as to the parties by section 1986 of the Code, and the applicant made a party to it as the individual on whose relation it is prosecuted. But this action is not within these sections. For it does not appear that any person applied to the Attorney-General as relator to prosecute it. And, in addition to that circumstance, it is not such an action as could be prosecuted only by the Attorney-General. For by the latter part of section 1782 of the Code, authority has been given to a creditor, trustee, director, manager or other officer of the corporation having a general superintendence of its concerns to commence and prosecute the action. The suit, therefore, was not only authorize by these provisions of the statutes, but it was also one which might either be prosecuted in the name of the People by the Attorney-General, or by a creditor, or either of the officers mentioned in section 1782 of the Code. And that -was deemed the proper construction to be applied to these enactments in the decision of People v. Lowe (47 Hun, 577, 582). For the objects which were designed to be attained by the suit, it was-regularly instituted and prosecuted under this authority.

■ The court at the trial has found, as a fact, that the trustees-directing, and the officers executing, the conveyance acted in good faith. But that of itself will not sustain the legality of their proceedings. Neither will the authority providing- for its dissolution, the payment of its debts, and the distribution of its assets among its stockholders, protect these defendants, if the corporation was, in fact,, insolvent. For no such authority was either invoked or followed in the acts of these officers so far as they have been made the subject of complaint. What the law authorized them to do was to manage the stock, property and concerns of the corporation. (2 R. S. [6th ed.], 503, § 29.) That neither contemplated nor allowed a conveyance of all its property to another corporation in consideration of the issuing of its own shares of stock, to be delivered to the-shareholders of the corporation of which these defendants were-trustees and officers. It conferred no more authority upon them' than was requisite for the management and good conduct of the business of the company of -which they themselves were officers. They were vested with no power whatever to make such an exchange as this, which was the disposition of all the .property of this-corporation. This subject has so often been considered by the courts as to require no more than a general reference to the authorities, which, with rare exceptions, restrict the officers of corporations to-the management of its affairs and business, and forbid them from making such a disposition of the property and assets of the company as substantially -to terminate and destroy its ability to carry on the business.for which it may have been created. This was held to be-the law in Abbot v. American Hard Rubber Company (33 Barb., 578); Frothingham v. Barney (6 Hun, 372); Taylor v. Earle (8 id., 1); Blatchford v. Ross (54 Barb., 42); Metropolitan, etc., Railway Company v. Manhattan, etc., Company (14 Abb. N. C., 108); Copeland v. Citizens’ Gas-Light Company (61 Barb., 60) Stevens v. Rutland, etc., Railroad Company (29 Vt., 545); New Orleans, etc., Railroad Company v. Harris (27 Miss., 517), and Railway Company v. Allerton (18 Wall., 233). In Treadwell v. Salisbury, etc., Company (7 Gray, 393) it was incidentally considered that the trustees of a trading corporation might make such a disposition as this of its property. But the point was not essential to the decision of the case, and is quite evidently in conflict with the rule which has been sanctioned and followed by the other well-considered authorities. In Hancock v. Holbrook (9 Fed. Rep., 353) the property was disposed of for the payment of debts, the power to do which would ordinarily be included within that vested in the directors or trustees. In the case of Buford v. Keokuk, etc., Company (69 Mo., 611) the disposition which had been made was sustained under the application of the principle’ of estoppel; while in Miners’ Ditch Company v. Zellerbach (37 Cal., 543) there was no more than a sale of corporate property. And what was said in Hodges v. New England Screw Company (1 R. I., 312, 347) and Wilson v. Proprietors of Central Bridge (9 id., 590), in no substantial manner detracts from the support of the principle which has already been mentioned; and, under its application to this case, what these trustees and officers did, in the conveyance of the property of their company to the California Company, was beyond the scope of their authority, and a misappropriation of the property made the subject of the conveyance. And for that they are legally liable to account in this action.

But this liability is necessarily to be limited by the circumstance that more than a majority of the shareholders of the corporation consented to this disposition of the property. They have estopped themselves by their consent from questioning the legality of the conveyance in this manner executed and delivered. But the large number of shareholders who withheld their consent are entitled to be indemnified for the injury and loss in this manner occasioned to them. And, within the scope of these provisions of the law, the People, for their benefit, are entitled to maintain the action and to secure for them this measure of redress.

Whether the statute of limitations will create a legal answer to other causes of complaint presented against these defendants it is not necessary to decide. The action was not disposed of upon that ground, but the complaint was dismissed because of the inability of the People to maintain the action, and upon the assumed fact that the defendants, in what they did for the disposition of the property of the company, acted in good faith. But if this be conceded, as long as they acted without legal right and in violation of the law, their good faith will afford them no protection.

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

Judgment affirmed, with costs.


author: Cullen, J.:

text:
    NATIONAL BANK OF THE REPUBLIC, Respondent, v. NAVASSA PHOSPHATE COMPANY, Appellant.

      Indoi'sement of a note by a corporation by its president — when the corporation is estopped to deny his authority — evidence, of indorsement of other notes — of the entries of such notes in the corporate boohs.

    In an action, brought against a corporation to charge it as indorser upon a promissory note, it appeared that the note in suit was made to its order as payee, and was indorsed “Navassa Phosphate Co., "W. E. Lawton, President,” and was subsequently discounted by the plaintiff. Evidence was given showing the indorsement by Lawton of similar notes, but no direct authority to do so from the trustees of the defendant was shown, nor was any such authority conferred by the by-laws of the defendant.

      Held, that evidence that Lawton had indorsed many other notes in like manner was not of itself sufficient to charge the defendant upon the note in suit.
    That such evidence of indorsement, coupled with evidence that entries had been made in the books of the corporation of the receipt of the proceeds of such notes, was competent by way of estoppel in establishing the plaintiff’s cause of action, although the other trustees had no knowledge, in fact, of these transactions, and although these indorsements were not in the course of business of the corporation, but were made for the purpose of using its credit for the individual benefit of Lawton.

      That the evidence of such entries in the hooks of the corporation should have been furnished by the books themselves, and, in the absence of excuse for their not being produced, the testimony of the clerk.who kept the book was not admissible to prove such entries.

      Seville, that oral evidence as to the indorsement of the other notes was competent.
    Appeal by the defendant from a judgment, entered in the office of the clerk of the county of New York on the 2d day of July, 1888; and also from an intermediate order or interlocutory judgment, entered in said office on the 25th day of June, 1888, denying defendant’s motion for a new trial.

      William G. Gullmer, for the appellant.

      Stem <& Myers, for the respondent.
   Cullen, J.:

Tbis action is brought against the defendant as indorser of a promissory note made by one John Need.

The answer puts in issue the indorsement by the defendant. The plaintiff bad the verdict at circuit, and from the judgment entered upon tbat verdict tbis appeal is taken. The note in suit was made to the order of the defendant. The evidence for the plaintiff tended to show tbat it was transferred by the defendant to the Delta Azotin Company on account of a debt claimed to be due from the defendant to the latter company. Upon such transfer it was indorsed Navassa Phosphate Co., W. E. Lawton, President.” The note was subsequently discounted by the plaintiff for the Delta Azotin Company. Evidence was also given of the indorsement by Lawton of similar notes, but no direct authority from the trustees for such purpose was shown. The defendant denied all authority in Lawton to indorse notes, and also the existence of any debt to the Delta Azotin Company or from Need. Lawton appears to have absconded after having issued a large •amount of fraudulent paper. The case was submitted to the jury under instructions tbat if either of the defendants received the proceeds of the note when it was indorsed and delivered by the president, or tbat if, as to the plaintiff or third parties, the president was apparently authorized to indorse and deliver the note, the plaintiff was entitled to recover the verdict. Proof that Lawton was the president of the defendant, without proof of his authority to indorse notes, did not show that the indorsement was that of the-corporation. (People's Bank v. St. Anthony’s Church, 109 N. Y., 512; McCullough v. Moss, 5 Denio, 567; Niagara Falls Suspension Bridge Co. v. Bachman, 66 N. Y., 262.) The only power conferred upon the president by the by-laws was that of presiding at meetings of the board of trustees. No resolution of the board granting further power was produced. It was, therefore, incumbent upon the plaintiff to establish Lawton’s power to bind the company by further proof.

This, we think, could have been shown in two ways :

Fwst. By the acquiescence or ratification by the trustees of the-assumption of such power by Law'ton.

Second. By proof of such a course of dealing by Lawton, and such negligence on the part of the trustees as would estop the-defendant from denying Lawton’s authority. (N. Y. and N. H. R. R. v. Schuyler, 34 N. Y., 30.)

■Evidence was given by Jones, president of the Delta Azotin. Company, to the effect that he had received many such notes from Lawton, and by one Kirkland, a clerk of Lawton’s, and practically, also, the bookkeeper of the defendant, so far as the New York office was - concerned, that Lawton had endorsed 300 or 400 notes like the one in suit and had them discounted, and that the witness Kirkland had made entries in the books of the company of the proceeds of such notes. Knox, the president of the plaintiff, testified that similar-notes had been discounted by the plaintiff and subsequently paid. We think that these facts, if proved by competent evidence, were-sufficient to justify the submission to the jury of the question of' estoppel on the part of the defendant as to Lawton’s authority.

It may be assumed that the other trustees did not know that Lawton was indorsing commercial paper; but if such were the fact; and entries of the transactions disclosing their nature were made-in the books of the defendant company extending over a long period, the mere ignorance of the trustees would not suffice to relieve the defendant. The corporation is justly chargeable with notice of all that should have been known by the trustees as well as what actually was known. If, for several years, Lawton, though without authority was using the credit of the company and the corporate machinery to avail himself of that credit, entering the transactions on the books, of the corporation and paying obligations out of apparently corporate funds, we think the trustees could not, by their negligence in omitting to discover the fact and practically turning over to Lawton the whole management of the New York office, relieve the company from liability to those who had acted on the faith of the-apparent power. But the indorsement of numerous notes was not: of itself sufficient to charge the company; such was a mere repetition of the fraud. The essential point was to charge the defendant with either actual or implied notice. The entries of the transactions in the company’s books may have been of such a character as to have; accomplished this object. Such entries as well as the notes were,, against the defendant’s objection that the evidence was secondary and under its exception, proved, not by. the books or notes, but by the testimony of the clerk, Kirkland. As to the notes we are inclined, to think the ruling of the trial court correct. (Chrysler v. Renois, 43 N. Y., 209.) But as to the books we can find no justification for it.. The objection was directed to the exact defect, and an exception-was taken to the ruling of the court. It was the vital point of the.- . case, and contradictory evidence of a similar character offered by the defendant was excluded. Without this objectionable testimony the evidence would have been insufficient to justify the submission to the jury on this branch of the case. For this error, therefore,, the judgment must be reversed, unless, as is now claimed, the-evidence on the other branch of the case, i. e., that the company had received the proceeds of the note, was so conclusive that the court, should have directed a verdict for the plaintiff on that ground.

We think this claim cannot be sustained. The evidence of the various transactions with the Delta Azotin Company, by which the note in suit was indorsed to that company, is solely that of Jones, its president. He testified that it was delivered by Lawton in part, payment of a running account in favor of the Azotin Company, against the defendant for goods sold. The books of neither company were produced to show the account. Jones does not state what goods were ever sold to the defendant, and the existence of any dealings between the two companies is denied by the defendant. Lawton, who is the defaulting president, was interested in the Delta Azotin Company. To say the most of this evidence, it was neither .so satisfactory or so conclusive that the question of the existence of the debt and the payment of it by the note in suit should not have been submitted to the jury for determination.

The judgment appealed from should be reversed and a new trial ordered, costs to appellant to abide the event.

Yan Brunt, P. J., concurred.

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


author: Yan Brunt, P. J.:

text:
    NATHANIEL WHITMAN, Respondent, v. PETER BOWE, Appellant.

      Action for use and occupation — proof of mere occupation not sufficient; the conventional relation of landlord and tenant must he shown — taxation, in attachment proceedings, of rent hy the sheriff — estoppel.
    In an action to recover for the use and occupation of premises in the city of New York, it appeared that an attachment was issued against a tenant in possession of the premises, and his property was seized by the sheriff and left upon the premises in question, of which the debtor was a lessee; that subsequently a written memorandum was made between the attaching creditors and the debtor, by which such rent as might fall due to the landlord was to be paid by the sheriff, and “ be treated and regarded as an expense of such sheriff in this action under the process held by him;” that this memorandum was shown to the deputy sheriff, who looked at it and said, “All right.”
    The lease of the premises to the debtor expired while the attached property remained therein, and thereupon another written memorandum was made by the same parties to substantially the same effect, and was shown to the deputy sheriff with the same result. The sheriff’s bill was subsequently presented to-the court to be taxed, and included charges for such rent, which were allowed therein by the court.
    The judgment was in the first instance in favor of the debtor and was appealed from; the attachment was continued pending the appeal, and was finally vacated on the decision of the appeal.
    In an action brought against the sheriff to recover for the rent of the premises during the time that the attached property remained there:

      Held, that it was necessary to show that the conventional relation of landlord and tenant existed between the parties, in order to justify a recovery, and that the facts in this case did not establish the existence of that relation.
    'That the mere occupation of premises by a party does not make him liable to the owner in an action for use and occupation.
    'That the written memorandum in this case simply provided that the sheriff should be permitted to pay the rent, and treat such payment as an expense incurred by him in the action, but did not establish a personal liability therefor on his part.
    'That the fact that the sheriff taxed the rent on his bill was not an acknowledgment upon his part of such personal liability.
    Appeal by the defendant from a judgment entered, after a 'trial ■at the New York Circuit before the court and a jury, in the office of the clerk of the county of New York on December 8,18.88; and also from an order, entered in said clerk’s office on January 4,1889, ■denying the defendant’s motion that the verdict be set aside and that a new trial be granted; and also from an order, entered in said •clerk’s office on the 1st day of July, 1889, denying a motion to vacate and set aside the judgment entered in this action and that a new trial be granted.

      Charles F. MaeLean, for the appellant.

      Homer A. Nelson, for the respondent.
   Yan Brunt, P. J.:

This action was brought to recover for the use and occupation of .a loft at No. 4 Great Jones street, in the city of New York, for the period from May 1,1881, to August 30,1885, and a recovery having been had, from the judgment thereupon entered this appeal is taken, .and also from the order denying a motion for a new trial. Subsequently a motion was made for a new trial on the ground of newly-discovered evidence, which was denied, and from such order an .appeal was also taken.

The facts upon which the recovery in this case was based are .somewhat complex, and for a proper understanding of the question involved it is necessary that they should be stated in some detail.

During the years 1880, 1881 and 1882 the defendant was sheriff •of the county of New York. On the 4th of May, 1881, certain .attachments were duly issued against the United States Beflector 'Company upon the application of Hall, Nicoll & Granbery. These .attachments were placed in the bands of the sheriff to be by him ■executed. On that day the defendant, by his deputy, seized under •said attachments and took into his possession a large stock of goods, ■fixtures, machinery and material in a loft in a building owned by ■the plaintiff at No. 4 Great Jones street. At that time the United ■States ■ Reflector Company was the lessee of the loft in question, and was in possession thereof, as such lessee, carrying on its business there. On the 5th of July, 1881, while the defendant was in possession of the property seized under the attachment, and had the ■same in the plaintiff’s building, the following agreement was entered into between the attaching creditors and the United States Reflector •Company:

The undersigned, parties in interest in this action, consent and agree that the property now in the custody of the sheriff of the ■county of New York, at No. 4 Great Jones street, remain there, ■and that the sheriff shall pay the rent due Nathaniel Whitman for said premises when he seized such property, and such rent as has or may fall due since such seizure, until such property is finally disposed of, and that such rent be treated and regarded as an expense ■of such sheriff in this action under the process held by him.”

This agreement was taken to the sheriff’s office and shown to Mr. Douglass, the deputy, who looked at it and said, “ All right.” 'The lease of the United States Reflector Company of the premises in question, expiring in January, 1882, in that month, while the .sheriff had the custody and possession of said property, another agreement was entered into between Hall, Nicoll & Granbery and the United States Reflector Company, as follows:

“ The undersigned, parties in interest in this action, consent and agree that the property now in the custody of the sheriff of the ■county of New York, at No. 4 Great Jones street, may remain there in his discretion, and' that the sheriff shall pay the rent due Nathaniel Whitman for said premises, when he seized such property, and such rent as had or may fall. due since such seizure, until such property is finally disposed of or removed, and that such rent be treated and regarded as an expense of such sheriff under the process held by him.”

This stipulation, as to the payment of rent, was also taken to Douglass, according to the testimony of the plaintiff, and there was about the same conversation as previously. The plaintiff also testifled that he had seen Douglass several times in the meantime and asked him each time to pay some rent, and particularly after he had learned that Douglass had received some money to meet in part his charges, and that Douglass’ answer was that he need not worry about his money, that he had plenty of money and could wait, and that he was sure to get it. It appears that at various times subsequently the sheriff was required to present his bill to the court and tax his charges under the attachment, and that in these bills were included charges for rent, which were allowed as proper items to be taxed in the sheriff’s bill. In the attachment action judgment passed in the first instance in favor of the Reflector Company. From this judgment the plaintiffs in that action appealed, and the attachment was continued pending the appeal, and in May, 1883, the warrants of attachment were finally vacated.

On the Yth of August, 1883, the defendant commenced an action to foreclose a lien which he claimed in his favor upon the property in question. To his complaint in that action the Reflector Company and one Corbit, who claimed an interest in the property by assignment thereof, demurred, which demurrers were finally sustained, and in November, 1885, the complaint as to the company and Corbit was dismissed.

Pending these appeals, and in February, 1885, the plaintiff commenced proceedings in the Third District Court to dispossess the Reflector Company as tenant, and this defendant and Hall, Nicoll & Granbery, as under-tenants, as holding over in default of payment of rent. This case was tried in May, 1885, and during the ¿proceedings a stipulation was made between the defendant and the plaintiff that any judgment obtained in that action should not be evidence of any other thing in any other suit, action or proceeding between the parties thereto on behalf of either party. A warrant of dispossession was issued to the marshal in June, 1885, which was finally executed on or about September, 1885, and the plaintiff was awarded judgment against the defendant for the value of the use and occupation of the premises from the 1st of July, 1881, to the 1st of August, 1885.

It is urged, upon the part of the defendant, that no recovery can be had against the defendant because the conventional relation of landlord and tenant was not established as existing between the parties. It is undoubtedly true that, in order to entitle the plaintiff to recover for the use and occupation by defendant of real property, it is necessary to establish that the conventional relation of landlord, and tenant existed between the parties (Preston v. Hawley, 101 N. Y., 586); and the question of difficulty, in the consideration of a given state of facts, is to determine whether there is sufficient evidence to establish the existence of this relation or not. It is not necessary that there should be an express agreement between the parties in order to establish this relation. But there must be proof authorizing the inference that the parties intended to assume such relations toward each other. It would, therefore, appear that the mere occupation of premises upon the part of a party does not make him liable to the landlord in an action for use and occupation. Where a party retains possession of premises against the will of the owner, and there is no implication which may be gathered from the surrounding circumstances to prove that the occupant intends to occupy the relation of tenant toward the landlord, other proceedings must be, taken by the landlord in order to recover possession of the 'premises, or the value of their occupation, than an action to recover rent by way of proof of value of such use and occupation. Kent of premises may be recovered where there have been circumstances, from which the inference may be drawn that the parties agreed that, it should be paid.

The question involved in the case now before the court is, whether the circumstances established by the evidence will support the inference of an agreement upon the part of the sheriff to pay rent. It seems to us, upon an examination of the record, that no such implication can arise.

Great stress is laid upon the agreements 'made between the Keflector Company and Hall, Nicoll Granbery in July, 1881, and January, 1882, but it will be seen that the whole scope and purport of these agreements were that, as between the parties, the sheriff should be permitted to pay the rent and treat such payment as an expense of the sheriff in the action. It is said that these agreements were taken to the deputy sheriff and he assented to the same. That may all be very true. The sheriff may have been perfectly content that the parties should make this agreement, but from this fact there was no inference to be drawn that he Intended to pay the rent out of his own pocket or become liable therefor, and then look to the property attached for reimbursement. The stipulation authorized him to do so if he chose, but he does not seem to have so chosen. The sheriff liad agreed to do nothing. He had entered upon the premises rightfully as an officer, seizing the property of the Reflector Company. The Reflector Company was at that time rightfully in possession of the premises, and the sheriff, by virtue of its right of possession, entered upon the premises. He in no manner recognized the rights of the landlord or agreed to become liable for the rent, and it is clear that in all the conversations between Whitman and the deputy, all that the deputy intended, and all that Whitman had a right to understand or did understand, was that he would get his money out of the property attached, and that this was ample to meet all the charges which might be incurred .against it. And this undoubtedly was plaintiff’s idea, when he procured these stipulations to be signed between the parties to that •action and carried them to the sheriff, to see whether he would recognize the obligations which were there imposed. All that the sheriff* undertook to do was to see that the rent was secured out of the property precisely the same as his other expenses and then to pay it over to the landlord.

In these stipulations and in the conversations between the deputy and the plaintiff, there is not a scintilla of evidence going to •show that there was any understanding that the sheriff was to be personally responsible. It is true that the plaintiff states that he made demands upon the sheriff for rent, and that the sheriff stated that he could not pay the same. But it also appears in that connection that this demand was made because the sheriff had received money on account of his charges and expenses. This would seem clearly to show that there was no expectation upon Whitman’s part, at this time at least, that the sheriff should pay out of his own pocket this rent, looking.to whatever lien he might have upon the property in question to secure himself for such advances. The fact, also, that the sheriff taxed the rent in his bill of costs was no acknowledgment, upon his part, of the liability. It was only doing that which the parties had requested him to do by these stipulations, which had been entered into undoubtedly by and with the consent of Whitman.

Under these circumstances, it is difficult to see exactly at what time or period the defendant assumed the relation of tenant towards the plaintiff. As has already been said, he went into possession as holding an attachment against the property of the Keflector Company, which company was entitled to the possession of the premises in question. He remained in possession after its lease had expired, but he in no manner recognized the plaintiff to be his landlord, and in no manner assumed any obligation to pay the plaintiff, as tenant, for the use and occupation of the premises in question. He was ■ only willing to secure, as far as lay in his power, to the plaintiff the value of such use and occupation, pursuant to the stipulations of the parties, out of the property which he held under the attachment. And it seems to be clear that neither the plaintiff nor the sheriff understood that any individual liability was to be incurred by the sheriff, but that the plaintiff was to be paid the value of the use and occupation of these premises by the sheriff out of the attached property. These circumstances rebut any presumption which might otherwise arise, that the conventional relation of landlord and tenant was intended to be established between the plaintiff and defendant. The sheriff was in possession with a large amount of property, against which, if the attachments were upheld, he had his claim for charges; and that it was the source from which all these expenses were to be paid, these stipulations entered into between the parties with the knowledge and consent of the plaintiff, seem sufficiently to prove. And there is not a scintilla of evidence tending to show that the sheriff at any time recognized the plaintiff as his landlord, or that he intended to occupy in any way the position of tenant. Neither is there any evidence that the plaintiff ever expected the defendant to obligate himself for the payment of the rent, nor did he make any claim that there was any such agreement, so far as this record shows, except by the commencement of this action.

As already stated, whatever claims for rent were made against the sheriff were made because of the fact that the sheriff had received money from the parties to the original litigation on account of the expense which he had been put to in reference to the care and custody of the property. We think, therefore, that no obligation has been established upon the part of the defendant to pay to the plaintiff the rent of the premises in question.

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

The appeal from the order denying the motion for a new trial on the ground of newly-discovered evidence, in view of the conclusion to which we have come, it is not necessary to consider, and such appeal should be dismissed, without costs.

Brady and Daniels, JJ., concurred.

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

Appeal from order denying motion for new trial on ground of newly-discovered evidence dismissed, without costs.


author: JBeady, J.:

text:
    JOSEPH L. SPOFFORD and Others, as Executors, etc., of EUGENE W. SPOFFORD, Deceased, Respondents, v. PAULINE S. PEARSALL, Appellant, Impleaded, etc.
    Will— direction to divide the estate anwng “ brothers, or their lawful issue, me surviving,” followed by a provision giving one sha/re to each living brother — the issue of a deceased brother takes nothing.

    A testator directed the residue of his estate “to be divided into as many equal parts as I shall have brothers, or their lawful issue, me surviving, but for the purpose of determining the number of such equal parts the issue of a deceased brother, whether one or more, shall stand in place of his, her or their father as one person only; I make the following disposition of the said equal parts: 1. In case my brother, Joseph L., survives me I give one of said equal parts to him, absolutely; or in case of his death before me leaving lawful issue, then I give such part to such issue in equal shares and proportions.” He then gave to each of his brothers, Paul U. and Edward Clarence, or to their issue, one of said equal parts, except that the shares of the respective brothers were placed in trust for them for life. The will further provided:' “ In case any of my property remains undisposed of under the foregoing provisions of this will, by reason of the death of my said brothers without issue before my death, I give, devise and bequeath such property as may remain undisposed of as aforesaid to my sister, Pauline, wife of Thomas W. Pearsall, if living, and to her issue if she be dead.”
    The testator, at the time of the execution of the will, had three brothers living, with whom he resided, and also a sister, and a niece, who was the daughter of a deceased brother. It was claimed by the niece that she was entitled to take a one-fourth interest under the provisions of the will.

      Held, that, in order to sustain this claim, the court would be obliged to reject, supply or transpose the words of the will, and carve out an entire inheritance by adding thereto apt words to accomplish that result.
    That the particular reference in the will to the brothers’ names ana to his sister was a positive indication that the testator intended to give his estate to them, and to them only.
    Appeal by the defendant Pauline S. Pearsall from a judgment, ■entered in the office of the clerk of the county of New York on July 26, 1889, after a trial at a Special Term held in the county •of New York.

      Thomas G. Shearman, for the appellant, Pauline S. Pearsall.

      William Pierrepont Willia/ms, Thomas T. Sh&rma/n, William V. Rowe, for the respondents.
   JBeady, J.:

This action was brought to obtain a judicial construction of the will of Eugene ~W. Spofford who died on the 23d of August, 1887. .It bears date the 16th of June, 1887. At the time of its execution he had three brothers living, with whom he resided, a sister and a niece who was the daughter of his deceased brother Gardiner S. Spofford. Gardiner died on the 23d of January, 1887, intestate, and several months, therefore, prior to the death of the testator. The contention arises upon the third and fourth clauses of the will, which are .as follows:

Third. All the rest, residue and remainder of the estate, both real and personal, which shall belong to me at the time of my death, or as to which I shall have the power of appointment or disposal by last will and -testament (after payment of the aforesaid sum of fifty thousand dollars, in case by the terms of the foregoing clause of this will the same shall become payable), I direct to be divided into as many equal parts as I shall have brothers, or their lawful issue me surviving. But for the purpose of determining the number of •such equal parts, the issue of a deceased brother, whether one or more, shall stand in place of his, her or their father as one per.son only. I make the following disposition of the said equal parts:

“ 1. In case my brother Joseph L. survives me, I give one of said equal parts to him absolutely, or in case of his death before me leaving lawful issue, then I give such part to such issue in equal shares ■and proportions.

“ 2. In case my brother Paul N. dies before me, leaving lawful issue, I give one of said equal parts to such issue in equal shares and proportions. But in case my said brother Paul N. survives me, I give this said equal part of my estate to my trustees hereinafter name'd. In trust, nevertheless, to invest and keep invested the same, and to receive the income ■ thereof, and to pay and apply - the said income to the use, maintenance and support of my said brother Paul N. during his natural life, and at and after the death of said Paul N. after my death, he leaving lawful issue him surviving, then I give, and said trustees are to pay over-said part to such issue' in equal shares and proportions. If said PaulN. dies after my death without lawful issue, I give, and said trustees are to pay over the said equal part of my estate to my brother or brothers then surviving, or liis or their lawful issue, if any (they or either of them having died before said Paul N.) in equal shares and proportions, such issue to take per stirpes and not. per capita; subject, nevertheless, to the following proviso, that if my brother, Edward Clarence, shall be then living, the share he would take under this (second) subdivision of this (third) clause of' ■my will shall not be qiaid over to him, but shall be retained by said trustees in trust, and the income thereof q>aid and applied to his use and maintenance and support during his natural life, and at his death to be paid to his lawful issue, if any him surviving, in equal shares, and if there be none, then to my brother Joseph L., if living, or his lawful issue, if any, he being dead, in equal shares.

“ 3. In case my brother Edward Clarence dies before me, leaving-lawful issue, I give one of said equal partst to said issue in equal shares and proportions. But m case my said brother Edward. Clarence survives me, I give this said equal part of my estate to my trustees hereinafter named, in trust, nevertheless, to invest and keep-invested the same, and to receive the income thereof, and to q>ay and apply the said income to the use, maintenance and support-of my said brother Edward Clarence during his natural life; and, at and after the death of the said Edward Clarence, after my death, he leaving lawful issue him surviving, then I give, and said trustees are to q>ay over said part, in equal shares and proq>ortions, to such issue. If said Edward Clarence dies after my death without lawful issue, I give, and said trustees are to pay over the said equal part of my estate to my brother or brothers then surviving, or his or their lawful issue, if any (they or either of them having died before said Edward Clarence), in equal shares and proportions, such issue to take per stirpes and not per capita, subject, nevertheless, to the following proviso : That if my brother Paul N. shall be then living, the share he would take under this (third) subdivision of this (third) clause of my will, shall not be paid over to him, but shall be retained by said trustees in trust, and the income thereof paid and applied to his use, maintenance and support during his natural life, and at his death to be paid to his lawful issue, if any, him surviving, in equal shares, and if there be none, then 'to my brother Joseph L., if living, or his lawful issue, if any, he being dead, in equal shares.”

“Fourth. In case any of my property remains undisposed of under the foregoing provisions of this will, by reason of the death of my said brothers, without issue, before my death, I give, devise and bequeath such property as may remain undisposed of as aforesaid, to my sister Pauline, wife of Thomas ’W. Pearsall, if living, and toiler issue if she be dead, such issue to take in equal shares and proportions.”

The learned justice presiding at the Special Term thought the-testator intended to give his entire estate in equal parts to his brothers, living at the time the will was executed, or to their issue, not to the issue of the brother deceased at all, or to his sister, except in a remote contingency. This view is sustained by cogent reasoning predicate of the terms and form, frame and substance of the clauses; and it is substantially conceded that in order to accomplish a different result, namely, a division of his estate into four equal parts, it is necessary to interpolate provisions to that effect, and whatever power the courts may enjoy of effectuating a testator’s intent in a will as it exists, by rejecting, supplying or transposing words, they have not yet attempted to change that intention and carve out another inheritance by adding apt words to accomplish that object. Here it is not necessary, however, to resort to the power suggested for the interpretation of this will, for the reason that the testator’s intention was, it clearly appears, to divide his whole estate primarily between his three brothers living and their issue. The particular reference to these brothers and to his sister is a positive indication that he had no others in view when the will was executed, and meant to give his estate to them and to them only. If there were any expressions in the clauses mentioned suggestive of an intention to provide for the issue of his brother, deceased, it would be .within the established province of the court to carry that design out fully, and it would be done with pleasure, but there, is not. His brother was dead when the will was made, and his niece was living, facts of which it must be presumed he was conscious, and yet no ref erence is made to either, a silence most effective in proof of an intention not to make provision for the niece. The language of the first paragraph of the third clause, indeed, properly interpreted, shows that such silence was intentional. He directs the residue of his estate to be divided into as many equal parts as he should have brothers or their lawful issue him surviving. His brother Gardiner was then dead, and could not, therefore, survive him. He did not, however, leave the subject in that general way, but proceeded to illustrate what he meant by “ brothers or their lawf ul issue,” and said “ I make the following disposition of the said equal parts,” and did it by naming the three brothers then living, thus generally designating the existing brothers as the objects of his bounty, and then by particular mention of each of these brothers defining and declaring how the share of each should be held and enjoyed. Indeed, the whole scheme of the disposition of the residue of his estate is predicate of the lives of these three brothers, made so by specific provision and' designation. If we seek for kindred cases with kindred results, it will not be in vain. In Glanville v. Glanville (33 Beav., 304) the trust was for four nephews and a niece, naming them, to be equally divided between them. In fact, however, there was an additional nephew at the testator’s death. The Master of the Rolls, Sir JohN Rohilly, although desirous to admit the other nephew, and justly so, felt obliged to exclude him. He said: “ I am afraid it is not in the power of the court to extend a gift where a definite meaning can be given to the words as they stand. And again :

“ I have been very desirous to admit the fourth nephew to participate in this bequest. * * * If the testator had merely said ‘ in trust for my four nephews and my niece,’ I should have come to a different conclusion, and it certainly seems strange that he should exclude a child of so tender an age, namely, a boy, who, in 1862, was only ten years old. In In re Hull's Estate (21 Beav., 314) there is given ns a stronger illustration, for there the gift in trust was to be equally divided ‘ amongst all his nephews and nieces then living, namely,’ and the testator then specified them. There were a nephew and niece, but they were not embraced within the trust. The master of the rolls, after consideration of the general doctrine which rejects a specified number when it is apparent that it was a ■‘mere slip in expression ’ (Garvey v. Hibbert, 19 Ves., 126), says:

“I think that the testator has himself specified of whom the class is to consist, and that I cannot enlarge it. He has done so by the word, ‘namely,’ in both cases, giving a distinct meaning to the'class he meant to specify. This distinguishes the present from the other ■cases and makes it a legacy only to the families he has enumerated.”

It is not deemed necessary, however, to pursue this subject further, for when we have ascertained the intention of the testator we have the guiding star which leads us through all the intricacies presented by the able counsel for the appellant to a place of security.

For these reasons, and adopting those given by Justice Babeett, is is thought that the judgment appealed from should be affirmed, but without costs.

YaN BeuNT, P. J., and Daniels, J. concurred.

Judgment affirmed, without costs.


author: Beady, J.:

text:
    MARGARET G. SPADER and Others, Appellants, v. GEORGE A. POWERS and Others, Respondents.

      Will of a testator who died in 1828 — life estate with remainder to heirs of life tenant — words of limitation not of purchase — contingent estate, application of rule in Shelley’s Case thereto.

    A testator, by his will, devised certain premises as follows:
    “To my daughter, Margaret, for and during her natural life, and after her death then to her heirs forever, or in the event of her being dead at the time of the death of my said son, Isaac M. Gilbert, then to her heirs directly in fee.”
    'The testator died in 1828, and Isaac M. Gilbert died after his father and before Margaret, who died in 1883, intestate.

      Held, that the words of the will, “ her heirs,” were words of limitation, and not of purchase; and that as the whole estate became at once, upon the happening of the contingency, vested in Margaret the life term became merged in the inheritance.
    That although the devise was contingent the rule in Shelley’s Oase operated immediately upon the happening of the contingency.
    Appeal by plaintiffs from a judgment entered, after a trial at the New York Circuit before tlie court and a jury, in the office of the clerk of the county of New York on the 14th day of November, 1888.
    The judgment, was in favor of the defendant George A. Powers,, individually and as trustee, against the plaintiffs for the costs of the action.

      W. M. Hosebauli, for the appellants.

      D. T. Walden, for the respondents.
   Beady, J.:

This action was brought to recover possession of certain real estate in this city, known as 188 Fulton street, but designated in- the will of John W. Gilbert as 132 Fulton street. He died in 1828, seized in fee simple absolute of the premises in question. He left a will dated February 13, 1827, which was proved before the surrogate of this county October 7, 1828. By his will he devised the premises to his son, Isaac M. Gilbert, for life, and after his death disposed of them in the following language:

“ To my daughter, Margaret, for and during her natural life, and after her death, then to her heirs forever, or, in the event of her being dead at the time of the death of my said son, Isaac M. Gilbert, then to her heirs directly in fee.”

Isaac M. Gilbert died after his father, and Margaret, in her lifetime, conveyed the property, the title vesting in the defendant Powers. She died in 1883, intestate, leaving the plaintiffs her heirs-at-law.

This action was brought by them upon the claim that, under the will of John W. Gilbert, Margaret’s ancestor, she took but a life estate and her heirs the fee. The defendants insist that the will having been executed, and the testator having died before the passage of the Revised Statutes, the rule in Shelley's Case is applicable, and that under it Margaret took a fee from her father, and consequently her conveyance transferred an indefeasible title which vested in the defendants.

The learned justice at circuit took the latter view and directed a. verdict for the defendant. The opinion then delivered, which sufficiently disposes of the question, is as follows:

“ Barrett, J. The will in question took effect prior to the Revised Statutes, consequently the rule in Shelley's Case is applicable to the-devise. The testator is presumed to have used the language that-he did in the sense given to it by the then existing and settled law. Under the rule in Shelley's Case it is clear that upon the death of Isaac M. Gilbert the entire fee passed to Margaret Gilbert. The-devise here is almost precisely in the language of that case. In Schoonmaker v. Sheely (3 Denio, 485) the devise was to the testator’s-son, B., during his natural life, and after his decease to his heirs and their heirs and assigns forever. It was held that B., by force of the-rule in Shelley's Case, took an estate in fee. (And see Brant v. Gelston, 2 Johns. Cas., 384; Campbell v. Rawdon, 18 N. Y., 420; Moore v. Littel, 41 id., 46.) Even where the devise was contingent, the rule operated upon the happening of the contingency. Thereupon the estate at once vested, and the life term merged in the inheritance. In case of Margaret’s death before the vesting of her life estate in possession, her heirs were to take directly from the testator. In that event the words ' her heirs ’ are words of purchase. But as her life estate vested in possession the words ' her heirs ’ are clearly words of limitation. There can be no doubt of the testator’s intention that the rule (upon the taking effect of Margaret’s life) should work the fee. The court, therefore, directs the jury to render a verdict in favor of the defendants.”

The rule in Shelley's Case (1 Coke 93 b) held, and (per Allen, J.,. in Lytle v. Beveridge, 58 N. Y., 601) upon very subtle and artificial reasoning, that when an estate of freehold is limited to a person, and in the same instrument there is a limitation, either mediate or immediate, to his heirs or the heirs of his body, the word “ heirs ” is to be taken as a word of limitation, or, in other words, the ancestor takes-the whole estate. If the devise be to the heirs of his body, he takes-a fee tail, if to heirs generally, a fee simple. And the domination of this doctrine as the controlling one prior to the passage of the-Revised Statutes is established, as we have seen, by a variety of cases. It has happily been swept away, and with it the prevalence of the ■subtle and artificial reasoning which marked its birth, and the intense refinements which were resorted to in its defense, all yielding to the ■assaults made upon it resulting in its abolition in 1830 (1 R. S., 724, Revisers’ notes; 5 Stat. at Large 302), with a view to give full effect, unembarrassed by it, to the more natural and reasonable doctrine, that the intent of the testator is the guiding and controlling rule of interpretation, in the perpetuation of which the law disregards the technical meaning of words and phrases when necessary. The same ■specious reasoning out of which it sprung is ingeniously employed by the counsel for the appellant to overcome its application here, an attempt promoted and distinguished more by prejudice against the rule than by anticipation of success in the battle against it. It is ■deemed unnecessary to follow the argument of the learned counsel, however, inasmuch as it appears, notwithstanding his claim to the contrary, that the clause of the testator’s will is within the rule considered, and with reference to which it was undoubtedly framed, and by which it was expected and iiitended it would be governed.

For these reasons, without any more extended discussion, which, however interesting, could lead to no different result, the judgment ■should be affirmed, with costs.

YaN Beunt, P. J., and Daniels, J., concurred in result.

Judgment affirmed, with costs.


author: Brady, J.:

text:
    WALTER REID, Appellant, v. THE MAYOR, ALDERMEN AND COMMONALTY OF THE CITY OF NEW YORK, Respondents.

      Estoppel — assessment in a public office, of a water rale — the property pw'ehased cmd, paid foi'with reference thereto — right of the city thereafter to increasethe amount— 1882, chap. 410, sec. 850.
    A party contemplating the purchase of real estate in the city of New York caused a search to be'made, in the office of the department of public works, for unpaid water rents affecting the premises in question, which showed unpaid water rents thereon to the amount of twenty-one dollars. After this examination he purchased the property, being allowed such twenty-one dollars from the purchase-price. He subsequently offered to pay this twenty-one dollars, when he was. informed that it was not a correct charge upon the property, it having been estimated upon buildings formerly standing thereon which had been subsequently tom down and a new building constructed, the amount of tax upon which was §105.
    The statute (section 350 of chapter 410 of the Laws of 1882) required the commissioner of public works to establish scales of rents for supplying water, and also-authorized him to modify, alter and increase such scales.

      Held, that the city was not estopped from claiming the increased sum by reason of the error in the first determination of the water rate and by the subsequent, action of the purchaser.
    Appeal by the plaintiff from a judgment, entered in the office of' the clerk of the county of New York on the 8th day of March, 1889,. after a trial at a Special Term held in the county of New York, at which the plaintiff’s complaint was dismissed upon the merits,, with costs.

      W. F. MaeRae, for the appellant.

      F. H. Hawke, Jr., for the respondents.
   Brady, J.:

The appellant made a contract on the 17th of April, 1888, for the purchase of certain property, known as 321 and 323 East-One Hundred and Fourteenth, street, in the city of New York. Prior to taking the title he caused a search to he made in the office of the department of public works for unpaid water rents, affecting the premises, which was done down to and including the 15th of May, 1888, upon which day the title was closed. The search revealed a charge of twenty-one dollars for unpaid water rents, commencing on the 1st of May, 1888. The sum. mentioned was allowed by his grantor, and oh the Monday following, and, therefore, subsequent to the closing of the title, twenty-one dollars was tendered to the department of public works and declined on the ground that it was not a correct charge for the use of the Croton water; and the reason for not accepting it, was upon the trial made apparent, and it was that that sum was charged upon buildings formerly standing upon the property, but which, subsequent, to the 1st of May, 1887, were torn down to permit the erection of two other buildings containing tenements for sixteen families, with \the necessary water-closets in each building, and the amount was, therefore, increased by proper measurements to the sum of $105, . which was duly charged upon the books of the department. The ■question presented was whether the charge of twenty-one dollars ■could be increased in the manner stated, and if yea, whether the • defendants were estopped from enforcing it by the search to which reference has been made.

The learned justice in the court below, in an opinion which fully • discusses the question, held that the city was not concluded in any way by the charge made, for the reason, amongst others, that the plaintiff had notice of the provisions of the consolidation act (chap. 410 of 1882, ■ § 350) which declared that, although the commissioner of public works was required to establish scales of rents for supplying water, he might modify, alter and increase such scales from time to time. The ■ opinion referred to is adopted as a correct exposition of the law by which the questions upon this appeal are to be governed and ■disposed of.

It may be added, however, with seeming propriety, that the facts herein established illustrate conclusively the justice of the provision by which the charge may be altered and increased from time to time. 'The sum of twenty-one dollars was adopted as appropriate to an • entirely different class of buildings, and before it was received the ■ change took jjlace of which the plaintiff complains, and which was made in accordance with the established rules of the department . and applied generally throughout the city.

It must be said, therefore, that aside from the absolute power of • change given to the commissioner, and which was essential to secure proper compensation for the use of the water, the plaintiff presents . a case which has no equitable plea to sustain it. If the sum of twenty-one dollars only had been exacted, he would have been in the . ■use of a quantity of Croton water for which he would have paid only •one-fifth of the proper charge. The construction given to the .statute in the court below is one which makes the statute effective •to prevent such inequalities, and it should be sustained.

With regard to the cases cited by the learned counsel for the appellant, it is sufficient to say that the provisions of the statute controlling the subject under investigation, are such as to render ■them inapplicable. And it must be borne in mind, that the charge for the use of water is governed by principles essentially different from those regulating and controlling the imposition of taxes.

The judgment should be affirmed, with costs.

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

Judgment affirmed, with costs.


author: Brady, J. :

text:
    JULIA FITZPATRICK, Appellant, v. MICHAEL SWEENY and Others, Defendants, BRYAN L. KENNELLY, Purchaser, Respondent.

      Marketable title — defect in description — street number will not pi'mail as against a measurement.

    Property purchased under a mortgage foreclosure was described as No. 247 West Sixteenth street, and as beginning 266 feet easterly from the north-easterly corner of West Sixteenth street and Eighth avenue, which was the same description •contained in the deed to the mortgagor and in the mortgage. The conveyance to the grantor of the mortgagor described premises 226 feet, and not 266 feet, from the said corner.
    Meld, that the purchaser at the foreclosure sale was not bound to accept the title.

      jSemble, that if the statement in the description had been simply No. 247 West Sixteenth street, resort might be had to evidence aliunde the deed to show what was intended to be conveyed, but that such a rule did not apply where, as in this case, the description started from a point erroneously described.
    Appeal by tlie plaintiff from an order made at a Special Term, lield in the county of New York, and entered in the office of the clerk of the county of New York on the 31st day of July, 1889, whereby it was ordered that Bryan L. Kennelly, the purchaser at the foreclosure sale had in the above-entitled action, under the direction ■of James E. Carpenter, referee, be discharged from any obligation to complete his purchase of the mortgaged premises.

      J. Hardy, for the appellant.

      J. M. Howers, for the respondent.
   Brady, J. :

The piece of property sold under the foreclosure was described in a diagram as No. 217 West Sixteenth street, and as beginning 266 feet easterly from the north-easterly corner of West Sixteenth street and Eighth avenue.

It was so desci’ibed in the deed conveying it to the mortgagors, and in the mortgage to the mortgagee given to secure part of the pnrckase-mon ey.

The grantor was James Black, surviving executor of John Mackintosh; and by the conveyance to Mackintosh the premises were described to be 226 feet, and not 266 feet, from the corner of the street as described in the mortgage.

It is immaterial to consider how this mistake occurred. It is enough for the purpose of this appeal to know, that it did occur, and that it was not corrected by any formal and proper proceeding initiated for that purpose as required by the rules of equity.

It is true that these premises were known as No. 217 West Sixteenth street, and, perhaps, if the description had contained nothing more than that, resort might be had to evidence aliunde the deed to show what was intended to be conveyed.

It is true, also, that, by the proceedings initiated subsequent to the sale, it becomes qidte apparent that the premises which were actually conveyed by intent, if not by words, were 226 feet easterly from the Eighth avenue, and that the deed by Black was intended to convey No. 2é7 West Sixteenth street, as it was then known, and nothing else.

But these proceedings were based upon an order of reference made in the action of foreclosure, without notice to the purchaser, and were not, therefore, in all their essential elements, an action in equity to reform the instrument by which the purchase of 217 West Sixteenth street was designed to be accomplished.

It seems to be well established that a conveyance will be so construed as to carry into effect the intention of the parties, so far as it can be ascertained from the instrument itself, but that nothing will pass by deed except what is described therein. (Thayer v. Finton, 108 N. Y., 394; Brookman v. Kurzman, 94 id., 272.) These cases recognize the proposition already suggested, that, if the description is meagre, resort may be had to evidence to show what piece of property the grantor really intended to convey, a principle that does not apply where there are metes and bounds as in this case, the description being particular and starting, as already indicated, from a point erroneously.

It seems to be also settled that; although a court of equity may, in the exercise of its power, reform an instrument upon evidence of a mistake made, or by decree carry out the intention of the parties to a contract or their privies, it can only be done in an action by which the parties in interest may be brought into court. (Crippen v. Baumes, 15 Hun, 136; Cady v. Potter, 55 Barb., 463; Fleming v. Burnham, 100 N. Y., 10) 1 Story’s Equity Jurisprudence

(§ 165) states the rule to be that, in all eases of mistake in written instruments, courts of equity will only interfere between the original parties or those claiming under them in privity.

The title, depending upon the conveyance mentioned with its attendant defects and supported by such proceedings as were adopted herein, cannot be regarded as a marketable one. It should be free from all reasonable objection, and should not be such a one as upon examination appears to be unsupported, showing the title to a part of the premises conveyed to be in another. No purchaser should be placed in such a position of jeopardy with litigation of some kind, not only possible but probable, and particularly at a time when the spirit of the age seems to be litigious.

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

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

Order affirmed, with ten dollars costs and disbursements.