text:
    Henry L. Manning, Respondent, v. Cornelius L. Wells, Appellant.

      Parent cmd child —parent liable for necessaries furnished his infant child by a stranger.

    The complaint in an action alleged in substance that defendant’s infant son came to the plaintiff’s home in a destitute condition and without physical ability to provide himself with the necessaries oí life; that the plaintiff thereupon caused the defendant to be notified of the whereabouts of his son and of his destitute condition; that just prior to that time the defendant had refused longer to furnish his son with the necessaries of life; had denied him shelter under his roof; had abandoned and repudiated him as his son and refused longer to provide for him either in sickness or in health; that the plaintiff furnished the son with the ' necessaries of life, consisting of board, lodging and clothing, work and labor in repairing his clothes, and cared for him while he was ill at the plaintiff’s house, and furnished him with money to return to the defendant; that the necessaries thus furnished to the son were reasonably worth a sum specified in the complaint; that prior to the commencement of the action the plaintiff demanded payment of the defendant for the necessaries thus furnished, and that payment was refused.

      Held, upon the hearing of a demurrer to the complaint, that the law raised an implied promise on the part of the defendant to pay for the necessaries furnished his infant son, and that the complaint stated a good cause of action.
    Appeal by tbe defendant, Cornelius L. Wells, from an interlocutory judgment of tbe Supreme Court in favor of tbe plaintiff, entered in tbe office of tbe clerk of tbe county of Broome on tbe. 3d day of July, 1894, upon tbe- decision of tbe court rendered at tbe Broome Special Term overruling tbe defendant’s demurrer to tbe complaint.

      John Z. Lott, for tbe appellant.

      Milla/rcL da Stewart, for tbe respondent.
   Martin, J.:

Tbe allegations of tbe complaint, briefly stated, are that L. B. Wells was tbe infant, son of tbe defendant; that about June 1,1893, tbe defendant’s son came to tbe plaintiff’s borne “ in a destitute condition and without tbe physical ability of providing himself with tbe necessaries of lifethat tbe plaintiff thereupon caused tbe defendant to be notified of tbe whereabouts of bis son and of bis destitute condition; tbat just prior to tbat time tbe defendant had refused longer to furnish his son with the necessaries of life, had denied him shelter under his roof, had abandoned and repudiated him as his son, and refused longer to provide for him either in sickness or in health; that the plaintiff furnished the son with the necessaries of life, consisting of board, lodging, clothing, work and labor in repairing his clothes, and caring for him while he was ill at the plaintiff’s house, and money to secure his return to the defendant, to the value of $125.51; that the necessaries thus furnished the son were reasonably worth that sum ; that prior to the commencement of this action the plaintiff demanded payment of the defendant for the necessaries thus furnished, and that the same was not paid. The complaint was demurred to upon the ground that facts sufficient to constitute a cause of action were not stated therein.

The first question presented is, whether, upon the facts alleged, the law raises an implied promise on the part of the defendant to pay for the necessaries furnished to his infant son by the plaintiff. That it is the duty of parents to provide for the maintenance of their infant children is a principle of natural law, and the obligation to discharge this duty continues until the child is in a condition to provide for himself or becomes twenty-one years of age. The question, however, whether that duty is a legal one or only a moral duty, and whether it is sufficient to raise an implied promise upon the part of the parent to pay for necessaries furnished his child, are questions as to which there seems to be a conflict in the authorities, one class holding that independent of statute, a parent is not liable for necessaries furnished his infant child, while another class holds that a person furnishing such necessaries may recover of the parent therefor. The principle upon which the latter proceeds is that as a parent is under a natural obligation to furnish necessaries for his infant children, if he neglects that duty a person who supplies such necessaries is deemed to have conferred a benefit upon the delinquent parent for which the law raises an implied promise on his part to pay. If the latter doctrine is correct it would follow that the plaintiff’s complaint is sufficient, as it shows a clear and palpable omission of duty in that respect on the part of the defendant. Without discussing in detail or attempting to harmonize the various opinions that have been expressed upon this question, we are disposed to hold that upon the facts alleged in the complaint the law raised an implied promise on the part of the defendant to pay for the necessaries furnished Ms infant son. This conclusion is sustained. by the principle of the following authorities: Van Valkinburgh v. Watson (13 Johns. 480); Forsyth v. Ganson (5 Wend. 558); Clinton v. Rowlana (24 Barb. 634); Cromwell v. Benjamin (41 id. 558, 561); Smith v. Church (5 Hun, 109); Parker v. Tillinghast (19 Abb. N. C. 190).

The Van Valkinburgh case is directly in point. In that case the court said: A parent is under a natural obligation to furnish necessaries for his infant children, and if the parent neglect that duty, any other person who supplies such necessaries is deemed to have conferred a benefit on the delinquent parent, for which the law raises an implied promise to pay on the part of the parent.” In the Forsyth case the court recognized the liability of a parent for necessaries furnished his infant child, where the father improperly neglects or refuses to provide them.

This doctrine was also recognized in the Clinton and Smith cases, where it was held that to make a parent liable for purchases of a child a failure on the part of the parent to discharge the obligation to provide necessaries for the infant, and that the goods supplied were necessary, must be shown, thus at least inferentially holding that in case of such neglect the parent would be liable.

It was held in Cromwell v. Benjamin that the liability of a father to furnish necessaries for his minor and invalid children, who were members of his family and unable to support themselves by their labor, depended upon principles analogous to those which govern the relation of husband and wife, and that as to the wife, if he did not provide for her support, he was legally liable for necessaries furnished to her by tradesmen, even though against his orders, and that he was also liable for necessaries furnished for his children.

In Crane v. Baudouine (55 N. Y. 256, 259), in discussing the question of the liability of a parent for necessaries furnished a daughter, Eolger, J., said: “ And were she a daughter for whom, by reason of her minority and dependence upon him, the defendant was under a natural obligation to provide necessaries, this fact would be strong, with others to be mentioned, to sustain an implication of a promise.”

In the Pwrher case it was held that where a parent sent his boy away from home to attend school in a distant place, and failed to supply him with clothing suitable to the climate, and required by the boy's growth, he was liable to the person furnishing such necessaries. The doctrine of the Van Valkinburgh case was again recognized and approved in Poock v. Miller (1 Hilt. 108) and in Henry v. Betts (Id. 156). In Furman v. Van Sise (56 N. Y. 439), where this question incidentally arose, it was said by Grover, J.: “ That parents are bound to provide for and maintain their infant offspring, results from the law of nature, and is enforced upon both according to their ability.” In The Matter of Ryder (11 Paige, 185, 188), in discussing this question, the chancellor said: “Ora stranger may furnish necessaries for the child, and recover of the parent compensation therefor, where there is a clear and palpable omission of duty, on the part of the parent, in supplying a minor child with necessaries.”

While it may be that the doctrine of these cases is somewhat in conflict with the cases of which Raymond v. Loyl (10 Barb. 483) is an example, yet we are of the opinion that, in view of the fact that the plaintiff at once notified the defendant that his son was at the plaintiff’s house in a destitute condition and without the physical ability to provide himself with the necessaries of life, as was alleged in the complaint and admitted by the demurrer, under all the cases it must be held that an implied promise on the part of the defendant to pay for the necessaries thus furnished arose. In such a case very slight evidence would be sufficient from which to infer such a promise by the parent. When we assume the facts as stated in the complaint, together with such reasonable and fair intendments as are to be implied from the allegations therein, we are satisfied that a cause of action is alleged, and that, upon the admission of those facts, the plaintiff would be entitled to recover the amount claimed. It follows that the judgment should be affirmed.

Hardin, P. J., and Merwin, J., concurred.

Judgment affirmed, with costs, with leave to the defendant to answer upon the payment of the costs of the demurrer and of this appeal.


source: Caselaw Access Project

author: Per Curiam :

license: Public Domain

text:
    Adelbert G. Sergent, Appellant, v. The London and Liverpool and Globe Insurance Company, Respondent.

      Policy of fire inswance — proof of loss, not furnished within sixty days — a condition precedent to a recovery.

    Upon the trial of an action brought to recover upon a policy of Are insurance it appeared that the policy in suit contained a provision that if a Are should occur the insured should give immediate notice of any loss thereby in writing to the company, and within sixty days after the Are render a statement to the company, stating the knowledge and belief of the insured as to the time and origin of the Are and various matters connected therewith.
    It appeared that the proofs of loss, as provided by said policy, were not furnished until more than sixty days after the Are.

      Held, that the furnishing of proofs of loss as required by the policy was a condition precedent to the plaintiff’s right of recovery, and that the non-performance of this condition constituted a complete defense to- the recovery upon such policy.
    Appeal by tlie plaintiff, Adelbert G. Sergent, from a judgment of tlie Supreme Court in favor of tlie defendant, entered in tlie office of tbe clerk of tlie county of Otsego on tlie 22d day of June, 1894, upon tlie dismissal of tlie complaint directed by tlie court after a trial before the court and a jury at the Otsego Circuit, with notice of an intention to bring up for review on such appeal an order entered in said clerk’s office on the 20th day of June, 1894> denying the plaintiff’s motion for a new trial made upon the minutes.

      Andrew Q. WasKbon, for the appellant.

      O. D. Thomas, for the respondent.
   Per Curiam :

On the trial the plaintiff was nonsuited. The ■ principal question involved upon this appeal is as to the validity of such nonsuit. The policy which formed a basis for this action, among others, contained the following provisions : “ If fire occur the insured shall give immediate notice of any loss thereby, in writing, to this company ; and, within sixty' days after the fire, unless such time is extended in writing by this company, shall render a statement to this company, signed and sworn to by said insured, stating the knowledge and belief of the insured as to the time and origin of the fire; the interest of the insured and all others in the property; the cash value of each item thereof, and the amount of loss thereon; all incumbrances thereon; all other insurance, whether valid or not, covering any of said property, and a copy of the descriptions and schedules in all policies; any changes in the title, use, occupation, location, possession or exposures of said property since the issuing of this jiolicy; by whom and for what purpose any building herein described, and the several parts thereof, were occupied at the time of fire.

This company shall not be held to have waived any provision or condition of this policy, or any forfeiture thereof, by any requirement, act or proceeding on its part relating to the appraisal or to any examination herein provided for; and the, loss shall not become payable until sixty days after the notice, ascertainment, estimate and satisfactory proof of the loss herein required have been received by this company, including any award by appraisers, when appraisal has been required. * * * This policy is made and accepted subject to the foregoing stipulations and conditions, * * * and no officer, agent or other representative of this company shall have power to waive any provision or condition of this policy, except such as by the terms of this policy may be the subject of agreement, indorsed hereon or added hereto ; and, as to such provisions and conditions, no officer, agent or representative shall have such power, or be deemed or held to waive any such provisions or conditions, unless such waiver, if any, shall be written upon or attached hereto; nor shall any privilege or permission affecting the insurance under this policy exist, or be claimed by the insured, unless so written or attached.”

That the property included in the policy in question was destroyed by fire on August 27, 1892, and that proofs of loss were not furnished until November twenty-sixth of that year, are undisputed facts in the case. Thus, it conclusively appears that the condition of the policy requiring the plaintiff to furnish proofs of loss within sixty days after the fire, was not performed or complied with. Nor is it pretended that the time was extended in writing by the defendant. The furnishing of proofs of loss, as required by the policy, was a condition precedent to the plaintiff’s right of recovery. (Underwood v. Farmers' Joint Stock Ins. Co., 57 N. Y. 500; Blossom, v. Lycoming Fire Ins. Co., 64 id. 162; O'Brien v. Commercial Fire Ins. Co., 63 id. 111; McDermott v. Lycoming Fire Ins. Co., 44 N. Y. Super. Ct. [12 J. & S.] 221; Bell v. Lycoming Fire Ins. Co., 19 Hun, 238.) And the non-performance of this condition constitutes a complete defense to a recovery upon such a policy, (Quinlan v. Providence Washington Ins. Co., 133 N. Y. 356, 362.)

These authorities seem to be decisive of the question before us, unless this provision in the policy can be held to have been waived by the defendant. We have carefully examined the evidence bearing upon that question, and regard it as insufficient to raise any question of waiver of this condition in the policy. Without discussing the other questions upon which it is .claimed that the nonsuit might be sustained, we regard the one already considered as sufficient, and, hence, do not examine the other questions presented for our consideration.

We have also examined the other exceptions to which our attention has been called by the appellant, but find none that would authorize us to disturb the judgment.

Present — Hardin, P. J., IVIartin and Merwin, JJ.

Judgment and order affirmed, with costs.


author: Martin, J.:

text:
    John D. Babcock and Another, Respondents, v. William J. Kuntzsch, Appellant.

      Venue in an affidavit — omission of “ss” — amendment thereof under section 723 of Oocle Civil, Procedure.

    The omission from the venue in an affidavit sworn to before a commissioner of deeds for the city of Syracuse of the letters “ss” and the words “City of Syracuse,” does not invalidate the oath or render the affidavit a nullity.
    The court has power to supply such omission upon motion under section 723 of the Code of Civil Procedure.
    Appeal by the defendant, William J. Kuntzsch, from an order of the Supreme Court, granted at the Onondaga Special Term and entered in the office of the clerk of Onondaga county on the 27th day of September, 1894, amending the venue of an affidavit in the above-entitled action, and denying the motion of the defendant to vacate and dismiss a replevin proceeding.

      Oostello & Welch, for the appellant.

      Gill (& /SUhoell, for the respondents.
   Martin, J.:

This is an appeal from an order made at the Onondaga Special Term September 22, 1894, denying the defendant’s motion to dismiss and vacate the replevin proceedings instituted herein by the plaintiffs, and amending the venue of the affidavit upon which the requisition was based.

The principal contention of the appellant is that the affidavit thus used was a nullity because the venue therein did not contain the words “ City of Syracuse,” and the letters ss,” and that the court had no power or jurisdiction to amend the affidavit by inserting them.

Upon the hearing of this motion it appeared by the affidavit of the commissioner of deeds before whom the affidavit in the replevin proceedings was taken, that he was a duly qualified commissioner of deeds for the city of Syracuse; that the affidavit in replevin was subscribed and sworn to by the affiant before him on the day mentioned therein in the city of Syracuse and within his jurisdiction as such commissioner of deeds. On the hearing of the motion the court denied the defendant’s application and ordered the affidavit amended.

The weight of authority in this State seems to be to the effect that the venue of an affidavit is prima facie evidence of the place where it was sworn to, and, in the absence of a venue or statement in the jurat as to where it was taken, it would contain no evidence that it was sworn to within the jurisdiction of the officer administering the oath, and without evidence that it was taken by a proper officer within his jurisdiction would be regarded as a nullity, unless the presumption would be that it was taken within his jurisdiction. But the omission does not invalidate the oath or render the affidavit a nullity when it is shown, as in this case, that it was duly administerecl by a proper officer within his jurisdiction, and the omission of the venue may be supplied by amendment. (Smith v. Collier, 3 N. Y St. Repr. 172; People ex rel. Mosher v. Stowell, 9 Abb. N. C. 456; Mosher v. Heydrick, 30 How. Pr. 161, 171; People ex rel. Morgenthau v. Cady, 105 N. Y. 299, 308; Saril v. Payne, 1 N. Y. Supp. 15; People ex rel. Osborne v. County Canvassers of Dutchess County 20 id. 329, 330.) “The omission of the letters ‘ ss ’ from the venue is immaterial.” (1 Am. & Eng. Ency. of Law, 311, citing Smith v. Richardson, 1 Utah, 194.) “Technically _ speaking, an affidavit' should not be entitled in a cause before the action is commenced, but, for convenience, in referring to the cause and connecting the application with the subsequent proceedings in the action, the strict rule of practice is frequently disregarded and the title of the' action given in the affidavit. A formal error of this nature will, as a rule, be disregarded by the court.” (1 Wait’s Pr. 640, 641, citing Pindar v. Black, 4 How. Pr. 95; City Bank v. Lumley 28 id. 397.) Section 723 of the Code of Civil Procedure requires the court, in every stage of an action, to disregard an error or defect, m the pleadings or other proceedings, which does not affect the substantial rights of the adverse party.

We are of the opinion that the court was justified in granting the order appealed from, and that it should be affirmed, with costs.

Hardin, P. 3., and Merwin, J.,.concurred

Order affirmed, witn ten dollars costs and disbursements.


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    Augusta Jones and Others, Respondents, v. Ezekiel B. Hoyt, Appellant.

      Champerty — the holding must be under a specific adverse Wile.

    There must be a specific adverse title to land before there can be an adverse holding -which will invalidate a conveyance under the Statute of Champerty, under the provision thereof that every grant of lands shall be absolutely void if at the time of the delivery thereof such lands shall be in the actual possession of a person claiming under a title adverse to that of the grantor.

      Appeal by the defendant, Ezekiel B. Hoyt, from a judgment of the Supreme Court in favor of the plaintiffs,' entered in the office of the clerk of the county of Onondaga on the 21st day of February, 1894, upon the verdict of a jury rendered after a trial at the Onondaga Circuit, with notice of an intention to bring up for review upon such appeal an order entered in said clerk’s office on the 13th day of 'April, 1894, denying the defendant’s motion for a new trial made upon the minutes.

      George Barrow, for the appellant.

      Hunt da Everson, for the respondents.
   Martin, J.:

This action was ejectment. It was brought to recover a strip of’ land in the possession of the defendant, which was about eight and one-half feet in width, lying immediately north of the premises-occupied by the plaintiffs. Both the plaintiffs’ and the defendant’s, lots were on the east side of West street, in the city of Syracuse. They were a part of what was known on the trial as block 69, which was divided into five lbts, numbered from 1 to 5, inclusive. The defendant was the owner of lot 3, while the plaintiffs claim to own the northern portion of lot 4. One of the questions which arose upon the trial was the true location of the line between lots 3 and 4.

The plaintiffs claim that they were the owners, and entitled to the possession of thirty-five feet of the northern portion of lot 4, and that it included the land in question. The defendant denied that the plaintiffs owned or were entitled to the possession of any portion of the strip in question. He also claimed that he had acquired title to it by adverse possession, and that the line between the parties had been established by practical location.

On the trial the court submitted to the jury three questions : .(1) Whether the plaintiffs had the record title to the strip of land in question; if so [2) whether the defendant had acquired title to it by adverse possession, and (3) whether there had been a practical location of the line between these lots, so as to leave the strip in question as a part of the defendant’s premises. Upon all these questions the jury found in favor of the plaintiffs. A careful and somewhat critical examination of the evidence has led us to the conclusion that it was sufficient to justify the court in submitting those questions to the jury and to uphold its verdict.

The appellant, however, now contends that the deed to the plaintiffs’ grantor or predecessor in title was void under the provisions of section 147 of article 4 of title 2 of chapter 1 of part II of the [Revised Statutes, which declares that “ Every grant of lands shall be absolutely void if, at the time of the delivery thereof, such lands shall be in the actual possession of a person claiming under a title adverse to that of the grantor.” It is manifest, we think, that this statute has no application to this case. Here the question, so far as it is claimed that that statute has any bearing, was one merely of the location of the proper line between lots 3 and 4. It does not appear that either the defendant or any of his grantors ever had or claimed to have any title to lot 4 or any portion of it. There must be a specific adverse title before there can be any adverse holding under this statute. To constitute a violation of this statute a possession under some specific title, which in itself is adverse to the title of the plaintiff, must have been shown. (Crary v. Goodman, 22 N. Y. 170; Sands v. Hughes, 53 id. 296; Christie v. Gage, 71 id. 192; Higinbotham v. Stoddard, 72 id. 94, 100; In Matter of Department of Parks, 73 id. 560, 567; Pope. Hanmer, 74 id. 240, 245; Dawley v. Brown, 79 id. 390; Danziger v. Boyd, 120 id. 628; American B. N. Co. v. N. Y. E. R. R. Co., 129 id. 253, 263.)

The doctrine of these cases fully sustains the proposition stated. It follows, therefore, that as in this case neither the defendant nor his grantors claimed under any specific title which was in itself adverse to the title of the plaintiffs, the defendant’s contention cannot be sustained.

We are of the opinion that the questions in this case were properly submitted to the jury; that there were no exceptions which would justify an interference with the verdict, and that the judgment should be affirmed.

Hardin, P. J., and Merwin, J., concurred.

Judgment and order affirmed, with costs.


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    Isaac P. Powers, Appellant, v. Hiram Knapp, Respondent.

      Liability of sioclcholder under section 10 of chapter 40 of 1848, as amended by chapter 333 of 1853 — stock issued for property is liable neither for calls by the corporation nor for claims against it.

    In an action brought against a stockholder of a corporation organized under the provisions of chapter 40 of the Laws of 1848, to charge him with the liability-created by section 10 of said act (providing that stockholders shall be liable until the stock is paid in full and a certificate thereof shall be recorded), for a debt held by the plaintiff against the corporation, the defense interposed was based upon the provisions of section 3 of chapter 333 of the Laws of 1853 (an act to amend chapter 40 of the Laws of 1848), which provided that the trustees of a corporation organized under chapter 40 of the Laws of 1848 might purchase mines, manufactories and other property necessary for their business, and issue stock to the amount of the value thereof in payment therefor, and that the stock so issued should be declared and taken to be full stock and not liable to any future calls, and that the holders thereof should not be liable for any further payments under the provisions of section 10 of said act.
    It was found by the jury that the stock held by the defendant was issued in payment for property purchased by the corporation. That the property so purchased was fairly worth the face value of the stock issued therefor, or, if not, that the overvaluation of the property was the result of an honest mistake as to its value, and was not the result of dishonesty or fraud.

      Held, that the clear purpose of the Legislature, by the enactment of chapter 833 of the Laws of 1853, was to exempt the holder of such stock from the liability imposed by the provisions of section 10 of chapter 40 of ¿he Laws of 1848;
    That under such amendment a part or the whole of the stock of the corporation organized under such act might be paid for by the purchase of property at its fair value, and when thus paid for the holder of the stock was not afterwards liable either for calls by the corporation or for claims against it.
    Appeal by tlie plaintiff, Isaac P. Powers, from a judgment of the Supreme Court in. favor of the defendant, entered in the office of the clerk of the county of Jefferson on the 28th day of IVIarch, 1894, upon the verdict of a jury rendered after a trial at the Jefferson Circuit, and also from' an order bearing date the 4th day of December, 1893, and entered in said clerk’s office denying the plaintiff’s motion for a new trial.

      Hawnihal Smith, for the appellant.

      Watson M. Rogers, for the respondent.
   Martin, J.:

This action was brought against the defendant as a stockholder of the Winslow & Knapp Lumber Company to recover a debt held by the plaintiff against that corporation. The Winslow & Knapp Lumber Company was incorporated under the provisions of chapter 40 of the Laws of 1848 and the subsequent acts amendatory thereof and additional thereto.

The action was founded upon the provisions of section 10 of that act, which reads: “All the stockholders of every company incorporated under this act shall be severally individually liable to the creditors of the company in which they are stockholders to an amount equal to the amount of stock held by them respectively for all debts and contracts made by such company until the whole amount of capital stock fixed and limited by such company shall have been paid in, and a certificate thereof shall have been ’made and recorded as prescribed in the following section; and the capital stock, so fixed and limited, shall all be paid in, one-half thereof within one year and the other half thereof within two years from the incorporation of said company, or such corporation shall be dissolved.”

The defense is based upon the provisions of section 2 of chapter 333 of the Laws of 1853, which was an act to amend chapter 40 of the Laws of 1848. Section 2 declares: “The trustees of such company may purchase mines, manufactories and other property necessary for their business, and issue stock.to the amount of the value thereof in payment therefor; and the stock so issued shall be declared and taken to be full stock and not liable to any further calls; neither shall the holders thereof be liable for any further payments under the provisions of the tenth section of the said act; but in all statements and reports of the company to be published this stock shall not be stated or reported as being issued for cash paid into the company, but shall be reported in this respect according to the fact.”

On the trial, at the close of the evidence, the court, following a former decision of this court (71 Hun, 371), held that the defendant was a stockholder in the Winslow & Knapp Lumber Company and liable for the amount of the plaintiff’s debt, unless the stock held by him was issued under the provisions of the amendatory statute passed in 1853.

Tlie questions whether the stock held by the defendant was issued in payment for property purchased by the corporation, whether, if the stock was issued for property, it was fairly worth the face value of the stock, or, if the property was valued too high, whether such valuation was fraudulent, were submitted to the jury in a charge to which there was no exception. The jury found for the defendant. While the evidence bearing upon these questions was conflicting, still a careful reading of it renders it clear that it was sufficient to justify the verdict if the jury gave credit to the testimony of the defendant’s witnesses. The question of the credibility of the witnesses was for the jury. We are of the opinion that under the evidence the questions submitted were questions of fact for the jury; that the evidence was sufficient to justify its verdict ; that the verdict was not so clearly against the weight of evidence as to authorize this court to disturb the judgment, and that the finding of the jury upon the questions submitted should be regarded as final. Therefore, in the further discussion of the case, it will be assumed that the stock held by the defendant was issued in payment for property purchased by the corporation; that the property so purchased was fairly worth the face value of the stock issued therefor, or, if not, that the overvaluation of the property was the result of an honest mistake as to its value, and was not the result of dishonesty or fraud.

Assuming these to be the facts, it would seem that the provisions of the amendment of 1853 were sufficient to relieve the defendant from the liability sought to be enforced by this action. The only liability incurred by the defendant, if any, was that created by section 10 of the statute of 1848, and but for the amendment of 1853 the defendant would have been liable under section 10, and the court so held. Obviously, the purpose of that amendment was to authorize the creation of a class of stockholders who would be free from the liability imposed by section 10, and as to whom none of the provisions of that section should apply. The amendment of 1853 in clear and positive terms declares that such stockholders shall not be liable “ for any further payments under the provisions of the tenth section.” Clearly the purpose of the Legislature was to exempt the holder of such stock from any liability under the provisions of section 10 of the original act, and no stronger or plainer language could have been employed to express that purpose.

Under tliat amendment a part or tbe whole of the stock of such a corporation may be paid for by the purchase of property at its fair value, and when thus paid for the holder of the stock is not afterwards liable either for calls by the corporation or for claims against it (Schenck v. Andrews, 46 N. Y. 589.) If any part of the stock ot such a corporation has been so issued without fraud in the valuation of the property, the holders thereof cannot be madei liable to creditors either by a failure of the stockholders to pay the remainder of the capital, or by an omission of the officers of the company to record the certificate of such payment. {Brown v. Smith, 13 Hun, 411; affd., 80 N. Y. 650.) A mere mistake or error of judgment of the trustees, either as to the necessity of the purchase or as to the value of the property, if made in good faith and not in evasion of the statute, will not subject the holder of stock issued for property to the liability provided by section 10. Section 2 of the statute of 1853 gives the trustees a discretion, and they are to be the judges both as to the necessity for the property purchased and as to the value of it. Good faith and the exercise of a proper discretion and honest judgment are all that is required. (Schenck v. Andrews, 57 N. Y. 133; Boynton v. Andrews, 63 id. 93; Douglass v. Ireland, 73 id. 100.) The questions in the case whether the property purchased was worth the nominal value of the stock or oelieved by the trustees to have been of that value, or whether the transaction was a sham by which the trustees sought to evade the statute, were questions of fact and properly submitted to the jury. (Lake Supemor Iron Co. v. Drexel, 90 N. Y. 87, 94.) A discrepancy in the opinions of witnesses upon the question of value cannot be considered as sufficient to establish fraud so as to render a stockholder individually liable.” (Boynton v. Andrews, 63 N. Y. 95.) One who seeks to attack stock issued for property, and thereby to create a cause of action in his favor against a stockholder, must allege that such stock was issued for property received by the corporation at a fraudulent valuation, and the burden of establishing fraud is upon him. (Rowell v. Lambert, 66 Hun, 4.) We think the principle of these cases fully justified the court in submitting the questions it did to the jury, and requires us to uphold the judgment upon the merits.

Our attention is called by the appellant to several rulings made by the trial judge as to the admission and rejection of evidence. Each of the exceptions to such rulings has been carefully examined, but we find none that present any error that is prejudicial to the plaintiff. It should be borne in mind that the only questions submitted to the jury were whether the stock held by the defendant was property stock, and, if so, whether it was fraudulently issued. While evidence was admitted which tended to show that the defendant was not a stockholder in the corporation against which the plaintiff’s debt existed, yet, at the close of the evidence, the court held, as a matter of law, that the defendant was such a stockholder. This did not render the evidence which tended to show that he was not a stockholder -inadmissible at the time when it was admitted, as the court could not then have known that the defendant would not be able to furnish sufficient proof to establish that fact. Therefore, it cannot be said that when the evidence was offered it was inadmissible. Moreover, if the evidence was inadmissible, its admission could not' have prejudiced the plaintiff, and the error should be disregarded.

Thus we are led to the conclusion that the questions at issue between the parties in this case were properly submitted to the jury; that the evidence was sufficient to uphold its verdict; that none of the exceptions taken to the admission or rejection of evidence are sufficient to justify a reversal, and that the judgment should be affirmed.

Hardin, P. J., and Merwin, J., concurred.

Judgment and order affirmed, with costs.


text:
    The People of the State of New York, Appellant, v. Samuel K. Hawkins, Respondent.
    “ Oonmct made” goods — chapter 698 'of 1894 unconstitutional.

    Chapter 698 of the Laws pf 1894, which provides that no person shall have in his possession for the purpose of sale or offering for sale any convict-made goods, wares or merchandise manufactured in any State (other tha^i the State of New York) without the brand, mark or label “convict made,” followed by the year and name of the penitentiary, prison, reformatory or other establishment in ■which it was made, is in violation of that provision of the Federal Constitution which places the control of interstate commerce in the hands of Congress alone, in that it is a discrimination against the products or the industries of other States in favor of those of the State of New York.
    Appeal by tlie plaintiff, Tbe People of tlie State of New York, from an interlocutory judgment of tlie Supreme Court in favor of tlie defendant, rendered at tbe Delaware Oyer and Terminer and entered in tbe office of the clerk of tbe county of Delaware on tbe 30th day of October, 1894, upon the decision of tbe court sustaining tbe demurrer of tbe defendant to tbe indictment.

      William, F. White, for the appellant.

      Frederick Oollwi, for the respondent.
   Martin, J.:

Chapter 698 of the Laws of 1894 provides: “ Section 1. All goods, wares and merchandise made by convict labor in any penitentiary, prison, reformatory or other establishment in which convict labor is employed in any State, except the State of New York, and imported, brought or introduced into the State of New York, shall before being exposed for sale be branded, labeled or marked as hereinafter provided, and shall not be exposed for sale in any place within this State without such brand, label or mark.”

Then follows section 2 which, in effect, provides that the brand, label or mark required shall contain the words “ convict made,” followed by the year and name of the 'penitentiary, prison, reformatory or other establishment in which'it was made, in plain English lettering, and that the same shall be placed upon each article, where it will permit, and if impossible shall be in the form of a tag, and attached to each article where it will permit, and upon the outside of and in the most conspicuous part of the finished article, its box, crate or covering.

Section 5 of that act amends section 384b of the Penal Code, so as to provide: A person having in his possession for the purpose of sale, or offering for sale, any convict-made goods, wares or merchandise, manufactured in any other State, without the brand, mark or label required by law, or who removes or deraces such brand, mark or label, is guilty of a misdemeanor, punishable by a fine not exceeding ten hundred dollars nor less than one hundred dollars, or imprisonment for a term not exceeding one year nor less than ten days, or both.”

The defendant was indicted for a rdolation of this statute, in having in his possession for sale, and offering for sale, shoe brushes manufactured by convict labor at Cleveland, Ohio, which were not branded, labeled or marked as required by the foregoing statute. To this indictment the defendant demurred upon the ground that the facts stated in the indictment were not sufficient to constitute a crime. This demurrer was allowed by the court, and judgment allowing it was duly entered in Delaware county.

It is not claimed by the respondent that the indictment in this case was in any respect defective or insufficient if the law under which it was found was valid. The only ground upon which the defendant contends that the indictment was defective, or upon which he seeks to uphold the judgment herein, is that the statute under which it was found was unconstitutional and void. Hence, the constitutionality of this statute is the only question upon this appeal.

It was held by the learned trial judge in the court below that the statute was unconstitutional, because it operated upon property owned at the time it took effect, as well as property thereafter acquired, and thus constituted an unlawful interference with vested rights, and upon the further ground that the statute in question makes such a discrimination between goods manufactured in foreign States and those manufactured in this State as to make it repugnant to the provision of the Federal Constitution, which places the control of interstate commerce in the hands of Congress alone.

We do not deem it necessary to discuss or decide the question whether this statute was void, because it operated upon property owned when it took effect, nor whether it is void as being in contravention of any of the provisions of the Constitution of the State.

By the Federal Constitution the power to regulate commerce among the several States is vested in Congress. It seems to be well settled that, under this provision of the Federal Constitution, no-State has the power to enact any law which discriminates against the products or industries of other States in favor of those of its own, but that every person has the same right to dispose of goods, manufactured in another State, as he would if manufactured in the State where tliey were owned or sold, and that any local legislation which, in terms, or by its necessary operation denies or interferes with that equality when applied to the products of another State, is a burden upon commerce among the States, and, consequently, unconstitutional and void. (Ward v. Maryland, 12 Wall. [79 U. S.] 418; Welton v. State of Missouri, 91 U. S. 275; Guy v. Baltimore, 100 id. 434 ; Webber v. Virginia, 103 id. 344; Brimmer v. Rebman 138 id. 78; Voight v. Wright, 141 id. 62; People ex rel. P. R. R. Co. v. Wemple, 138 N. Y. 1; Ex parte Thomas, 71 Cal. 204; Georgia Packing Co. v. Mayor, etc., of Macon, 60 Fed. Rep. 774.)

That the purpose and effect of the statute under which the respondent was indicted was to discriminate between convict-made goods manufactured in another State and the same class of goods manufactured in this State is manifest, and we are, therefore, of the opinion that the statute under consideration falls within the provision of the Federal Constitution which confers upon Congress the power to regulate commerce among the several States. As was said in the Welton case: The fact that Congress has not seen fit to prescribe any specific rules to govern interstate commerce does not affect the question. Its inaction on this subject, when considered with reference to its legislation with respect to foreign commerce, is equivalent to a declaration that interstate commerce shall be free and untrammeled.” Commerce among the States cannot be said to be free when a commodity is, by reason of its foreign manufacture, subjected by a State Legislature to discriminating regulations or burdens. . The main object of commerce between the States being the sale and exchange of commodities, the policy that interstate commerce should be free and untrammeled would be defeated by discriminating legislation like that of the act in question.

In view of the authorities cited, further discussion of this question seems unnecessary. We are of the opinion that they fully sustain the result reached by the - court below, and that the judgment should be affirmed.

Hardin, P. J., and Merwin, J., concurred.

Interlocutory judgment allowing the defendant’s demurrer affirmed, and after such judgment of affirmance is entered in the judgment book, a certified copy of such entry shall be forthwith remitted to the clerk of Delaware county, with whom the original judgment roll is filed, in accordance with the provisions of. section 547 of the Code of Criminal Procedure.


author: Hardin, P. J. :

text:
    William D. Halsey, Appellant, v. Ebenezer H. Hart, Respondent.

      Possession — when prima facie evidence of ownership — testimony of an interested party — the verdicts of jumes rendered in Justices’ Courts — when controlling.

    The possession by a person of a cutter is pi'ima facie evidence of his ownership of it.
    The jury, upon the trial of an action, has the right to disbelieve the testimony given by one of the parties thereto sworn as a witness.
    The verdicts of juries rendered in Justices’ Courts, if there is a conflict in the evidence, arc regarded as controlling unless they are manifestly and clearly against the weight of the evidence.
    Appeal by the plaintiff, William D. Halsey, from a judgment of the County Court of Tompkins county in favor of the defendant, entered in the office of the clerk of the county of Tompkins or. the 13th day of August, 1894, upon the decision of the court reversing the judgment of a justice of the peace of the town of Ulysses, Tompkins county.
    This was an action in replevin brought to recover the possession of a cutter.

      John A. Milne, for tlie appellant.

      William Austin, for the respondent.
   Hardin, P. J. :

Plaintiff derived possession of the cutter in the year 1885 or 1886 from Mrs. Harmon. When he visited her house the cutter was in her possession. He entered into negotiations with her for the purchase thereof, and consummated it by paying her three dollars and fifty cents. She, by her conversations and declarations, made contemporaneous with the sale to him, asserted her ownership of the cutter. She had had possession of it for a considerable length of time. Undoubtedly the evidence discloses that the cutter was once the property of the defendant’s father. There is no direct and positive evidence that the father of the defendant did not sell or give the cutter to Mrs. Harmon. Her possession of it was prima faeie evidence of the ownership of it. If she owned it at the time she sold it io the plaintiff, of course he acquired an absolute title to it. As bearing upon the theory that she was the owner, and that she, by her sale to the plaintiff, conferred upon the plaintiff an ownership 'in the cutter, are the declarations made by her, and her actual sale thereof to him, to which may be added the fact that the evidence discloses that for some time after the defendant acquired knowledge that the plaintiff had possession of the cutter, the defendant acquiesced in the possession of it by the plaintiff.' At least he delayed for some period of time after lie derived such information his efforts to gain possession of the cutter. It was for the jury to determine, upon all the evidence presented by the plaintiff, as well as the testimony presented by the defendant, whether the plaintiff was the owner of the cutter at the time this action was commenced in February, 1893. It is true the defendant was sworn as a witness and gave testimony quite inconsistent with the theory upon which the plaintiff sought to maintain his ownership and right to possession of the property. The defendant, however, being a party in interest, the jury may have disbelieved his testimony, as, under the rules laid down frequently by courts, it had the right to do. (Elwood v. Western Union Tel. Co., 45 N. Y. 549; Kavanagh v. Wilson, 70 id. 177; Koehler v. Adler, 78 id. 287; Wohlfahrt v. Beclcert, 92 id. 491; Honegger r. Wettstein, 94 id. 253; Bean v. Van Hostrand, 23 Wkly. Dig. 97.) According to the usual rule applied to verdicts taken in Justices’ Courts where there is a conflict in the evidence, the verdict is regarded as controlling unless it is manifestly and clearly against the weight of evidence. We are not prepared to say this is such a case as requires the verdict to be disturbed on that ground.

(2) It is insisted in behalf -of the plaintiff that he remained in possession of the cutter more than six years next preceding the commencement of the action, and more than six years next preceding the seizure of it by defendant, and, therefore, that the defendant’s right to take from him the possession of the cutter is barred by the Statute of Limitations. (See §§ 380, 382, 397, Code Civ. Proc.) Some of the evidence would seem to indicate, although not very clearly, that the plaintiff had possession of the cutter, to the knowledge of the defendant, more than six years prior to the 4th of February, 1893, when the defendant took the same out of the possession of the plaintiff. Possibly the evidence may have led the ¡jury to And that the plaintiff had had possession of the property for more than six years prior to the taking of the same from his possession by the defendant, and if the facts were thus found, the verdict may have been predicated upon the idea that the defendant’s right was barred by the Statute of Limitations. (Duryea v. Andrews, 34 N. Y. St. Repr. 774.) However, without passing definitely upon this phase of the case, if the position stated in the first branch of this opinion is correct, the judgment of the County Court should be reversed, and the verdict and judgment of the Justice’s Court sustained.

Martin and Merwin, JJ., concurred.

Judgment of the County Court reversed, with costs, and the judgment of the Justice’s Court affirmed, with costs.


author: Hardin, P. J.:

text:
    Marx J. Cross, Respondent, v. A. Palmer Smith and Another, Appellants, Impleaded with Others.

      Motion to strike out testimony —when too late-what objections to testimony wre insufficient to present the question of its admissibility under section 829 of the Code of Civil Procedure — when a bond and mortgage ma/y be enforced for the amount advanced thereon — costs in equity actions.

    If, upon the trial of an action, testimony inadmissible under section 829 of the Code of Civil Procedure has been admitted in evidence over the objection of one of the parties that it was incompetent and immaterial, a motion thereafter made to strike out such testimony on the ground that the evidence was incompetent and immaterial, “ and on the further ground that the answer involved a personal transaction and communication between the witness and Timothy Smith, deceased, and was, therefore, incompetent under section 829 of the Code,” may be properly denied on the ground that the motion is made too late.
    Where a person purchased a bond and mortgage in good faith and in reliance upon representations made by the mortgagor and mortgagee that the bond and mortgage were valid and were given for a full consideration and free from usury, the same may be enforced by him or his assignee for the amount of money that was advanced thereon.
    Where in an action in equity each party succeeds as to part of the matters in litigation between them, costs are not allowed to either as against the other.
    Appeal by tbe defendants, A. Palmer Smith and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the cleric of the county of Jefferson on the 14th day of August, 1894, upon the report of a referee directing the cancellation and discharge of a certain deed and mortgage, and adjudging that the appellants have collected and received rents of certain premises in excess of the amount of their mortgage thereon, and awarding the possession of said premises to the plaintiff.

      Henry Purcell, for the appellants.

      James A. Ward, for the respondent.
   Hardin, P. J.:

Plaintiff’s complaint alleges that on the 24th day of August, 1872, Samuel Wilson deeded his interest in the premises described in the ccnnplaint to Moses Ii. Cross, and that Moses H. Cross executed a mortgage on the said premises to Samuel "Wilson for the sum of $5,000. The deed was recorded August 26, 1872, in the Jefferson county clerk’s office. The complaint further alleges that on the 26th of August, 1872, Wilson sold, assigned and transferred the mortgage (and the bond accompanying the same) to one Timothy Smith, since deceased, for the sum of $4,500. And the complaint alleges that the conveyance and the mortgage and the transfer thereof were “ in fact one transaction, and was a scheme, device and contrivance on the part of said Timothy Smith to retain a bonus of five hundred dollars for the loan of said five thousand dollars, and as unlawful usury, and said mortgage is usurious.”

In the month of August, 1873, Timothy Smith died, leaving a last will and testament-, wherein he appointed Timothy A. Smith and A. Palmer Smith and one Perry H. Smith executors. Tlie will was admitted to probate by the surrogate of Jefferson county, and letters testamentary were issued to two executors, and they, by an instrument bearing date August 31, 1875, assigned the bond and mortgage to the late John C. McOartin, who on the same day assigned the bond and mortgage to Timothy A. Smith and A. Palmer Smith. The assignment was recorded in the clerk’s office of Jefferson county.

Tlie complaint describes the premises which were described in the mortgage mentioned, and further alleges that by a deed bearing date June 2, 1873, Moses II. Cross conveyed the premises to one Maltby, who on the 1st day of August, 1875, conveyed the premises to the plaintiff. It also alleges that on the 29th of December, 1879, “Said Samuel Wilson, by deed executed, acknowledged and delivered on that day, conveyed his interest in the mortgaged premises to the plaintiff, Mary J. Cross.” The complaint also alleges that on the 27th of August, 1877, the defendants, Timothy A. Smith and A. Palmer Smith, then being owners of the mortgage given by Cross to Wilson, commenced an action to foreclose said mortgage. .. An answer was interposed by the plaintiff, Mary J. Cross, who was a defendant in that action, and also by her husband, Moses II. Cross, alleging that the mortgage was usurious and void. The issue joined in that action was brought to trial, and a judgment entered on the 6th of April, 1878, decreeing the foreclosure of the mortgage and tlie sale of tlie premises. The premises were sold on the 30th day of April, 1878, and were bid* in on the sale by the defendants, Timothy A. Smith and A. Palmer Smith, who received the sheriff’s deed, which was recorded in the office of the cleric of Jefferson county, and under that deed they entered into possession of the premises. In that action Mary J. Cross and Moses II. Cross appealed from the judgment directing a sale of the premises, and the judgment was, by the General Term, reversed. On the 20th day of June, 1879, a motion was made in the General Term for restitution and for restoration of the premises. Timothy A. Smith and A. Palmer Smith were ordered to surrender and deliver up to Mary J. Cross and Moses TI. Cross the possession of the premises so sold under said judgment, unless the said Timothy A. Smith and A. Palmer Smith should give a bond in the sum of $5,000, with sureties, “ that they would account for the rents and profits of said mortgaged premises.” Subsequently Timothy A. Smith and A. Palmer Smith, with two sureties, executed a bond on the 14th of July, 1879, conditioned that Timothy A. Smith and A. Palmer Smith “account for the rents, issues and profits of the mortgaged premises.” It is averred in the complaint that since the 30th day of April, 1878, Timothy A. Smith and A. Palmer Smith have remained in possession of the premises and have “ received the rents and profits of said mortgaged premises.” It is averred in the complaint that the rents of said premises “ amount to upwards of $1,000 a year, and have all been paid to defendants Smith since October, 1877.” And it is averred in the complaint that Timothy A. Smith and A. Palmer Smith “ have received the rents of said premises from the receiver appointed by the County Court, and from the tenants who have occupied said premises under them since the 30th day of April, 1878, which in the aggregate amounted to more than sufficient to pay, satisfy and discharge the said mortgage on said premises, executed by the said Moses H. Cross to the said Samuel Wilson, and now owned by the defendants, Timothy A. Smith and A. Palmer Smith.” It is also averred in the complaint that the plaintiff “ demanded of the defendants, Timothy A. Smith and A. Palmer Smith, an account or statement of the rents received by them, and the expenditures by them made for repairs on the buildings and for taxes and insurance by them paid, but the said defendants liave neglected and refused, and still neglect and refuse, to give any statement of account.” The complaint further avers “ that in equity all that is due defendants Smith is the sum of four thousand and five hundred dollars, with interest from August 24th, 1872. That all sums paid on said mortgage or received from said property for or on account of rents or otherwise, over and above said sum of four thousand five hundred dollars and legal interest, together with such sum paid by said defendants Smith for taxes, insurance and repairs, the said defendants should in equity pay to plaintiff on account therefor.”

In plaintiff’s complaint she asks that “an accounting be had between the parties to this action; that the amount found due on said mortgage be ascertained and stated; that the account of said Smiths for money paid, laid out and expended by them for repairs, insurance and taxes on the property be stated and passed upon.” Also that Timothy A. Smith and A. Palmer Smith “ be ordered and directed to pay to plaintiff whatever sum the said Smiths have received for rents of said premises over and above amount sufficient to satisfy said mortgage; or, if the sum so received is insufficient- to satisfy said mortgage or the amount due thereon, that the sum remaining due and unpaid be ascertained, which sum the plaintiff hereby offers to pay to the defendants; ” ■ and the plaintiff asks to “ be permitted to redeem said premises from said mortgage, and have such other, further or different relief as may be agreeable to equity, or she may be entitled to as a matter of law, or the court may see fit to grant.” The complaint was verified in August, 1891.

Timothy A. Smith and A. Palmer Smith served an answer to the complaint which contained several denials of the allegations of the complaint, and they allege they were in possession “ of said premises in pursuance of an order of the court made in said foreclosure action; that no final judgment has ever beeii rendered in said action, and that said action is still pending, and the defendants have never become liable to said Mary J. Cross, or to any other person, to account for the rents and jn’ofits of said premises.” They also allege that on the 27th of August, 1877, they commenced an action to foreclose the mortgage referred to, and that the action, after issue joined, remained without any final judgment entered therein. The issues joined in this action were referred and tried before the same referee and apparently at the same time that the action to foreclose the mortgage was tried. In this action the referee found that at the time of the execution and delivery of the mortgage Moses II. Cross and Samuel Wilson' were co-partners in the grocery and butcher business in the city of Watertown, and that as such co-partners they were the owners of the mortgaged premises described in the complaint. lie also found, viz.: “ Said Moses IT. Cross and Samuel Wilson applied to said Timothy Smith for a loan of money to be secured by a mortgage upon said premises. Said Smith declined to loan said Cross and said Wilson money upon a mortgage to he executed by them, and suggested that if one deeded to the other and the grantee gave back a mortgage, he (Smith) would buy such mortgage at a discount. Thereafter the said deed and mortgage hereinbefore mentioned were executed and delivered.

The said deed was executed and delivered by said Wilson to Moses II. Cross, and said mortgage executed' by Cross and delivered to Wilson, for the purpose of raising money with which to pay the linn debts of Cross and Wilson, with intent on their part of borrowing money of the said Timothy Smith and disposing of the mortgage to him at a discount; that said mortgage Avas in form transferred by said Wilson to said Smith for the sum of $4,500. That the said mortgage and the said bond accompanying it, as betAveen said Wilson and Cross, had no validity and inception, but the same Avere made for the purpose .hereinbefore stated. That said Timothy Smith received an assignment of said bond and mortgage and advanced said $4,500 therefor, understanding they Avere bona fide and'valid securities, relying upon the false representations of the mortgagor and mortgagee that they Avere valid securities given upon a full consideration and free from usury. That the said bond and mortgage Avere usurious. ” After stating the accounts between- the parties, treating the mortgage as valid in the hands of the assignees thereof for the sum of $4,500 and interest thereon, and, after alloAving the expenditures made by the parties in possession of the mortgaged premises for taxes, insurance and repairs, the referee charged them with the receipts from the rents, issues and profits of the premises, and found that On the first day of January, 1893, there was due said Smiths on account of said mortgage the sum of $298.25.” The referee further found that During the year 1893 the said Smiths received in rents from said premises, over and above all sums expended by them on said premises during that year, the sum of $738, which overpaid the amount due said Smiths $422.11, January 1st, 1894. That during the year 1894, and up to March 1st that year, said Smiths received $108.96 over and above all sums paid out by them during that period. That there is due the plaintiff from said A. R. Smith and Lucy A. Smith, as administratrix of the estate of Timothy A. Smith, deceased, the sum of $531.07, with interest on $422.11 from January 1st, 1894, and interest on $108.96 from. March 1st, 1894.”

The referee found as conclusions of law, viz.: 1. That the plaintiff, Mary J. Cross, is entitled to a judgment or decree adjudging the bond and mortgage executed by the defendant Moses H. Cross on the 24th day of August, 1872, paid and satisfied ; and that the same, together with the sheriff’s deed above mentioned, be canceled of record.

2. That the plaintiff is entitled to full restoration and possession of the premises described in the complaint.
“3. That she recover the sum of $531.07, with interest, * * * together with costs of this action.”

Judgment was entered on the 14th day of August, 1894, in accordance with the findings of the referee. Several requests to find were made, to which the referee yielded, and sevei-al requests to find were made which he refused to find. Exceptions were served and filed.

Appellants challenge some of the findings made by the referee .and insist that there is no evidence that Cross & Wilson applied to Smith for a loan, and he refpsed it and suggested the scheme of one • party deeding to the other and the other giving a mortgage bach, and he would purchase it at a discount. Moses II. Cross was called as a witness for the defendants, and testified that the firm of Cross & Wilson in 1872 was in debt; and this witness was ashed the following question : “ Q. State whether or not this bond and mortgage were made for the purpose of raising money? [Objected to by defendants Smith as incompetent and immaterial. Objection overruled and defendants excepted.] ” The witness answered, “ It was given for the purpose of getting money for the firm of Cross & Wilson. Q. Was there any other consideration except for the purpose of getting money for the firm? [Objected to by defendants as incompetent and immaterial. . Objection overruled and defendants excepted.] A. There was not.” The witness continued and said : “At the time the bond and mortgage were given there was no dissolution of the firm; I went out of possession of the premises on the appointment of James M. Carpenter as receiver.” We have stated all 'the objections that were made to the testimony which we have quoted, and we think they were properly overruled. It is true that at a later stage of the examination the defendants’ attorney moved to strike out the answers of the witness on the ground that the evidence was incompetent and immaterial, “and on the further ground that [the] answer involved a personal transaction and communication between the witness and Timothy Smith, deceased, and was, therefore, incompetent under section 829 of the Code.” This motion was denied and defendants excepted. According to the rule laid down in Levin v. Russell (42 N. Y. 251), in the opinion of Ghtovbr, J., we think the motion was too late. In addition to the evidence which we have already quoted, the plaintiff called Samuel Wilson as a witness, who testified that he went into partnership with Cross in April, 1865, and continued until the fall of 1812, and he stated the purpose for which the deed was given by him to Moses Cross in the following language: “ It was given for the purpose of raising money; the money was raised to pay our firm debts.” Thereupon the following questions were propounded to the witness : “ Q. State whether or not there was any other consideration between you and Cross for the deed except it was made for the purpose of raising money to j>ay the firm debts ? [Objected to as incompetent and immaterial. Objection overruled and defendants excepted.] A. No, sir. Q. State whether or not it was agreed and consented to between you and Cross, before you gave him the deed, that he was to give back to you a mortgage for $5,000 and you should negotiate the same and raise money on it to pay your firm debts? [Objected to by defendants as incompetent and immaterial. Objection overruled and defendants excepted.] A. Yes, sir; that was the agreement. Q. After the mortgage given from Cross to you was disposed of, did Mr. Cross have the money ? [Objected to as incompetent and immaterial. Objection overruled and defendants excepted.] A. Yes, sir, most of it. Q. State, if you can, for what purpose the money was used ? [Objected by defendants as incompetent and immaterial. Objection overruled and defendants excepted.] A. It was used to pay our firm debts; I had part of it and Cross had part of it.” We think the objections taken to the questions propounded which we have just quoted were not sufficient to present the question whether the evidence was objectionable under section 829 of the Code of Civil Procedure.

In Stevens v. Brerman (79 N. Y. 259) a general objection was made and overruled, and it was said the exception did not jn’esent the question as to the competency of the witness to testify under section 8g9 of the Code of Civil Procedure.

In Sanford v. Ellithorye (14 Wkly. Dig. 154) it was held by the General Term of the third department in 1882 that “ an objection to testimony inadmissible under section 829 of' the Code of Civil Procedure, to be available on appeal, must be made in such terms as to call attention to that fact; an objection on the ground that it is incompetent and immaterial’ is not sufficient.” (Somerville v. Crook, 9 Hun, 668.) We think the finding complained of by the appellants is sustained by evidence, and, therefore, the case of Sickles v. Flanagan (79 N. Y. 224) does not apply to the case in hand. We think the evidence warranted the referee in finding that Timothy Smith purchased the bond and mortgage for $4,500 in good faith and in reliance upon representations made by the mortgagor and mortgagee that the bond and mortgage were valid and given for a full consideration free from usury, and that in his hands or in the hands of his assignee the same could be enforced for the amount of money that was advanced thereon. (Miller v. Zeimer, 111 N. Y. 441; Payne v. Burnham, 62 id. 69.)

(2) In June, 1891, when this action to redeem was commenced, according to the report of the referee, there was apparently due in the neighborhood of $1,500 on the mortgage, and the referee expressly states that'on January 1, 1893, there remained due on the mortgage $298.25, and it was only by allowing the rents accruing after that date and just prior to the conclusion of the trial, that the referee reached a conclusion that the mortgage had been overpaid by the rents and profits. It appears by the referee’s report that he took tlie account for rents to March 1, 1894, and, having done so, reached the conclusion that the mortgage was overpaid. His report bears date July 12, 1894. In the second volume of Barbour’s Chancery Practice, page 199, it is said : “Asa general rule, a party coming into a court of equity to redeem pays costs to the defendant, in addition to the amount due upon the mortgage, although he obtains the relief prayed for; yet, if the defendant improperly resists the claim of the complainant to redeem, or sets up an un conscientious defense, he will be refused his costs, and may be compelled to pay costs to the adverse party, in the discretion of the court. * * * It is essential to a bill to redeem a mortgage that the complainant should offer to pay the debt, interest and costs.” .In the case in hand there was no tender in advance of the action of the amount due upon the mortgage.

In Slee v. Manhattan Company (1 Paige, 48) it was held, viz.: “ "Where a party files his bill to redeem, the general rule is that he must pay costs to the mortgagee, although he should be successful. There are, however, excejrtions to this rule, as where the mortgagee sets up an uirconscientious defense; in such case the mortgagee is not only refused costs, but must pay costs to the other party.”

In Benedict v. Gilman (4 Paige, 58) it was held, viz.: “Asa general rule, a party who is permitted to redeem mortgaged premises, whether he is plaintiff or defendant in the suit, must pay the costs of the suit, in addition to the amount due on the mortgage.” The same rule was restated iu Vroom v. Ditmas (4 Paige, 526). The rules relating to the exercise of discretion in equity cases were stated in Couch v. Millard (41 Hun, 215) and in West v. The City of Utica (71 id. 546), relating to costs in equity actions, and in the latter case it was held that the discretion exercised in an equity action as to costs may be reviewed. Following the case of Rosa v. Jenkins (31 Hun, 384).

In Law v. McDonald (9 Hun, 23) it was held that “ Where, in an action in equity, each party succeeds as to part of the matters in litigation between them, costs are not allowed to either as against the other;” and that case was approved in West v. The City of Utica (supra). And in Law v. McDonald {supra) the judgment was “ modified so as to be without costs to either party as against the other.” We think that rule should be applied to the case in hand. •

The judgment should be modified by striking therefrom the award of coots to the plaintiff and by inserting a provision therein to the effect that neither party shall recover costs against the other, and, as so modified, affirmed, without costs of the appeal to either party. (See West v. City of Utica,, supra.)

Martin and Merwin, JJ., concurred.

Judgment modified by striking therefrom the award of costs to the plaintiff and by inserting a provision therein to the effect that neither party shall recover costs against the other, and, as so modified, affirmed, without costs of the appeal to either party.


text:
    Lucy A. Smith, as Administratrix, etc., of Timothy A. Smith, and Another, Appellants, v. Moses H. Cross and Another, Respondents.

      Ohcvraater of a mortgagee in possession — not divested until rents are applied — action to foreclose a mortgage by assignees of the mortgage in possession —when objections taken fw the first time upon appeal a/i'e raised too late — costs, when not allowed against the plaintiff.

    The character of a person, as a mortgagee in possession of real estate cannot be divested until the application of the rents thereof collected by him has been made by the court in satisfaction of the mortgage.
    Upon the trial of an action, brought to foreclose a mortgage by assignees of the mortgage who were in possession of the real estate covered thereby, the plaintiffs should be charged with the amount of the rents and profits of the land received by them,-and upon an ascertainment of the amount received it is proper to state the amount of the principal and accrued interest, and upon such amount to apply the rents received; and if anything remains duo upon the mortgage, the plaintiffs are equitably entitled to a decree establishing that amount, and directing that unless the same be paid the defendants’ right in the premises should he foreclosed.
    Where it has been assumed in the course of the trial of an action brought to foreclose a mortgage, in which the defense of usury was pleaded, that the questions relating to the inception of the mortgage were raised by .the pleadings, it is too late, upon an appeal from a judgment rendered therein, for the plaintiffs to contend that the defendants were precluded by certain admissions contained in their answer from giving proof of the circumstan'ces relating to the alleged usury in the mortgage.
    Where it was shown upon the trial of an action brought to foreclose a mortgage by the assignees of the mortgage who were in possession of the real estate covered thereby that the plaintiffs while in possession of the mortgaged property had collected rents and profits sufficient to pay the mortgage in full, prior to the termination of the reference to hear and determine ordered in the action, a conclusion of the referee therein allowing certain costs to the defendants upon the dismissal of the complaint is erroneous.
    The complaint should in such case be dismissed without costs, and upon an appeal the judgment rendered upon the report of such referee will be modified by striking therefrom the allowance of costs against the plaintiffs.
    Appeal by tlie plaintiffs, Lucy A. Smitli, as administratrix, etc., of Timothy A. Smith, and another, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of Jefferson on the 13th day of August, 1891, upon the report of a referee dismissing the plaintiffs’ complaint and discharging the Us pendens filed in the action.
    In August, 1877, this action was commenced to foreclose a mortgage given as collateral to a bond executed by Moses H. Cross to one Samuel Wilson. The mortgage was given to secure the consideration stated therein of $5,000, and covered lands 'in Jefferson county. In the complaint it is averred that “ the said mortgage was given to secure a part of the purchase price of the above-described premises.” The answer of Moses H. Cross and the answer of Mary J. Cross contained averments setting out that the mortgage was usurious, having been made for the purpose of raising money, and was sold by Wilson, the mortgagee, to one Timothy Smith for the sum of $1,500 and no more. Several trials have been had and several appeals taken in the case. (See 16 Hun, 188; 25 id. 68; 90 N. Y. 519.) The only conclusion of law stated by the referee, whose decision is under review, was as follows: “ That the plaintiffs’ complaint be dismissed, and that the plaintiffs recover costs unless the offer made herein by defendants, Moses II. Cross and Mary J. Cross, was more favorable to plaintiffs at the time of the. offer than the amount then due on the mortgage, in which case plaintiffs are to have costs to the time of the offer, and defendants costs subsequently thereto.” The referee found, among other conclusions of fact, viz.: “ The plaintiffs are entitled to enforce the collection of said mortgage to the amount of $1,500, advanced by Timothy Smith as hereinbefore found, with legal interest thereon, less the amount paid or applied thereon, out of moneys received for rents.” He also found that the said sum of $4,500, with interest thereon, was all paid prior to January 1, 1894. The referee’s report boars date July 12,1894. A judgment has been entered in the Jefferson county clerk’s office thereon dismissing plaintiffs’ complaint and awarding defendants the sum of $733.62, as and for their costs and disbursements of the trial, and the appeal now before us is from that judgment.
    A fuller statement of the facts relating to this case appears in the last preceding case (p. 49.)

      Henry Pureell, for the appellants.

      James A. Ward, for the respondents.
   Hardin, P. J.:

Plaintiffs’ learned counsel insists that the referee erred in making certain findings of fact which support plaintiffs’ right to recover the amount advanced by the assignee of the mortgage, to wit, $4,500, notwithstanding the defense of usury, in accordance with the principles laid down in Miller v. Zewner (111 N. Y. 443). It seems the complaint was like an ordinary one in mortgage foreclosure cases, and that the prayer in the complaint ivas for a judgment declaring $5,000 of principal to be due upon the mortgage. However, the answer sets up in detail the facts relating to the circumstances of the origin of the mortgage, and of the sale thereof by the mortgagee to Timothy Smith, and, so far as we are able to discover from the course of the trial, as presented in the case before us, no objection was taken during the progress of the trial which called the attention of the referee to the point now suggested. Appellants call our attention to the case of Day v. Town of New Lots (107 N. Y. 148) and Romeyn v. Sickles (108 id. 650), which were actions at law where technical rules were applied to the pleadings. However, as nearly as we can discover from the course of the trial in this case, the question which those cases determined was not fairly presented to the referee. It seems, by the course of the trial, that the parties assumed that the rule which is applicable to cases in equity applied, and that the referee was authorized t'o give such relief as, at the time of pronounciug bis decision, according to tbe proofs presented and principles of equity, the parties were entitled to by the case presented. He seems to have ascertained the amount of principal and interest due upon the mortgage upon the basis of its being valid to the extent of $4,500, and having ascertained that amount, he then proceeded to apply upon the evidence produced before him in this case (and perhaps in the other action brought to redeem from the mortgage which was tried at the same time before him); and upon, such evidence reached the conclusion that the said sum of $4,500, with interest thereon, was all paid prior to January 1, 1894.” By adopting such course he manifestly received evidence of facts and circumstances of the parties beyond the exact limits of the issues originally framed between the parties. After a sale of the premises upon a decree of foreclosure the plaintiffs took possession and received the rents and profits of the land covered by the mortgage, and equitably they should be charged with the amount thereof, and upon an ascertainment of the amount received it was proper to state the amount of the principal and accrued interest, and upon such amount to apply tire rents received on the mortgage in accordance with the findings of the referee, taking as a basis $4,500 and interest thereon, and the plaintiffs, if anything remained due upon the mortgage, were equitably entitled to a decree establishing that amount and a provision to the effect that, unless the same should be paid, the defendants’ right therein should be foreclosed. (Ruckman v. Astor, 9 Paige, 517.) Plaintiffs’ character as a mortgagee in possession could not be divested until the application of the rents had been made by the court in satisfaction of the mortgage. (Hubbell v. Moulson, 53 N. Y. 225.)

(2) We have assumed that the evidence warranted, as we think it did, the findings of fact made by the referee to the effect that the mortgage was valid to the extent of $4,500 and interest thereon.

(3) It is contended by the appellants that there were certain admissions in the answer which precluded the defendants from giving proof of the circumstances relating to the alleged usury in the mortgage. The course of the trial seems to have assumed that the questions relating to the inception of the mortgage were raised by the pleadings. Under such circumstances we think the plaintiffs are too late in their objection. The answers were very broad, and warranted tlie admission of all the facts and circumstances that were developed relating to the alleged usury in the mortgage. It is difficult to see that the plaintiffs in that regard have been surprised or misled by the course of the trial. The course of the trial is quite different from that pursued in Dunham v. Cudlipp (94 N. Y. 129).

(4) Several exceptions were taken during the progress of the trial to which attention has been given, but it is not believed that they present prejudicial error which require us to interfere. - This is an equity action. (See opinion of Cross v. Smith at this term.)

(5) According to the course of the trial and the findings made by the referee, it is quite apparent that the referee finally reached the conclusion to dismiss the complaint on the ground that the bond and mortgage, so far as they were valid, had been paid by the rents received by the plaintiffs of the premises. It appears by the case that during the hearing before the referee the trial “ was suspended by consent of the parties, and the hetion in this court brought by the defendant Mary J. Cross against the plaintiffs herein, for the redemption of said mortgaged premises, on the ground that the mortgage had been fully paid, and which case is now on appeal to the General Term, was proceeded with before the same referee who tried this action.” The case then continues to state, viz.: On the trial of said redemption action the' plaintiffs in that case gave evidence before the referee from which the referee found that between May 1, 1878, and March 1, 1894, while the plaintiffs in this action were in possession of the said mortgaged premises, they received in rents from the same the sum of $12,477.04, and the defendants in that action — the plaintiffs in this —■ gave evidence from which the referee found that while the said plaintiffs were in possession of said mortgaged premises they paid out for the benefit of the same the sum of $3,951.10. The amounts so found by the referee as having been received and disbursed are fully set out in finding nineteen of his said report, which is here referred to.”

After the parties had adopted such a course for the trial of this action, and, in pursuance thereof, it had been made to appear by evidence which warranted the finding that the said sum of $4,500, with interest thereon, was all paid prior to January 1st, 1894,” we think the discretion exorcised by the referee in respect to the costs was erroneous. After reaching such conclusions he might properly hare dismissed the complaint, without costs, and we are of the opinion that he ought not to have awarded costs in favor of the defendants.

We think the judgment should be modied by striking therefrom the costs awarded against plaintiffs, and, as modified, affirmed, without costs of this appeal to either party.

MaRtih and Merwin, JJ., concurred.

Judgment modified by striking therefrom the costs awarded against the plaintiffs, and, as modified, affirmed, without costs of the appeal to either party.

       See ante, page 49.— [Rep.

      See ante, page 49.