author: By the Court.—Curtis, J.

text:
    EDWIN L. BUTTERFIELD, Plaintiff and Respondent, v. WILLIAM RADDE, Defendant and Appellant.
    Before Curtis and Sedgwick, JJ

      Decided July 2, 1874.
    i. evidence.
    1. Pbbstmftiohs.
    1. Every man is presumed to obey the mandates of the law, and to perform all his official and social duties until the contrary appears.

      a. Trustee of a eorpwation presumed to be a stockholder if the law requires a trustee to be a stockholder.
    Appeals from judgment and order denying a new trial.

      S. D. Sewards, attorney, and D. C. Calvin, of counsel, for the appellant.

      Charles M. Earle, attorney, and of counsel, for the respondents.
   By the Court.—Curtis, J.

These actions are brought to recover from the stockholders, the value of goods sold to the corporation; on the ground of a failure to comply with the provisions of the general manufacturing law, in respect to paying in the capital, and making and recording the statutory certificate of such payment.

Two grounds of defense were interposed.

One, that the defendant was not a stockholder ; the other, that if he was a stockholder, he only held such stock, as collateral security for a debt, and was expressly exempted by statute, from liability in such case.

The evidence as to whether the defendant was a stockholder, was contradictory, but the question was fairly placed before the jury, and they found that he was. There is no sufficient reason for disturbing this conclusion, arrived at upon the trial by the jury.

The question as to whether the defendant, if he held any stock, did not hold it as collateral security for a debt, was in like manner left to the jury, and passed upon by them. They found he did not hold it as collateral security; upon this the evidence was also contradictory, and no ground is shown for setting aside the finding.

The exception presented by the defendant’s points, and urged at the argument, in reference to the alleged admission of a copy of an instrument'' at the trial, upon a notice to produce, given at the instant, is not entitled to much consideration, as the case appears to omit the incident.

There were some other exceptions taken on the part of the defendant, during the progress of the trial before the jury were instructed by the court.

None of these appear to be tenable.

The learned judge at the trial charged the jury as follows: “Allusion has been made to the law, that there is a presumption, because the law says that a trustee shall be a stockholder. But the statute does not state the amount of stock, and the requisition of the statute might, therefore, be complied with, perhaps by a man holding a single share. Then an allusion has been made to the by-law, which says, the stockholder must hold at least a certain amount of stock, 1 believe ten shares. I say, upon that subject, that the legal presumption following these provisions of the statute and by-laws would, be, that the defendant was a stockholder. But the plaintiff has not relied upon that presumption ; he does not rest his case upon that alone. He has brought what he says is affirmative proof to show that the defendant was a stockholder, and is to the extent of ten shares. But the presumption itself, and the proof given by the plaintiff, may be overcome by the testimony on the part of the defendant.”

The defendant’s counsel excepted to the portion of the charge concerning the presumption, that the defendant was a stockholder. It is a legal presumption, that until the contrary is shown, every man is presumed to obey the mandates of the law, and to perform all his official and social duties. It would be an unwise policy to hold that there is an exception to this salutary rule, as far as relates to the trustees, of a corporation. It would leave it open for this class of officials to take advantage of the privileges conceded to them by the statute, and" made operative through their by-laws, to induce other people to act, and to incur risks, and then to set up that there is no legal presumption tnat the trustees performed their official duties, of following the statutes and by-laws.

The principle, that every man in his private and official character does his duty, donee probetur in contrarium has been made applicable to corporations. In the Bank of the United States v. Dandridge (12 Wheat. 64), Judge Story expresses this view of it: ‘‘Acts done by the corporation, which pre-suppose the existence of other acts, to make them legally operative, are presumptive proofs of the latter.”

The learned judge in his charge does not go beyond the rule on this subject as usually recognized (1 Greenl. Ev. § 40 ; Hartwell v. Root, 19 Johns. 347).

It dbes not appear that the jury could have been misled by the charge, or that there is any well founded reason for granting a new trial.

The judgment and order appealed from should be affirmed, with costs.

Sedgwick, J., concurred.


source: Caselaw Access Project

license: Public Domain

text:
    JAMES O’BRIEN, Plaintiff and Respondent, v. THE COMMERCIAL FIRE INSURANCE CO., Defendants and Appellants.
    Before Curtis and Sedgwick, JJ.

      Decided July 2, 1874.
    I. Costs—Interrogatories.
    1. But one charge of ten clollars can be made for all the interrogatories annexed to a commission; although a number of witnesses are named in the commission, and separate interrogatories are drawn for each.
    Plaintiff’s counsel inserted in his bill of costs items ■amounting to three hundred and fifty dollars for the examination on commission of thirty-five witnesses, being ten dollars for each witness examined. Before the clerk, he only claimed ten dollars for each separate set of interrogatories or cross-interrogatories drawn and annexed by him. to the commissions issued herein, of which sets there were seventeen.
    The clerk disallowed three hundred and ten dollars of the amount claimed as above, and allowed forty dollars, or ten dollars for each commission in which plaintiff joined, which commissions were four in number.
    From the clerk’s adjustment the plaintiff appealed to the judge at special term, who affirmed the taxation of the clerk, Plaintiff now appeals to the general term.
    Brown, Hall & Vanderpoel, attorneys, and Wm. W. Badger, of counsel, for appellants.

      Raymond & Conover, attorneys, and John Notman, of counsel, for respondent.
   By the Court.—Curtis, J.

The code, as amended, allows as costs (section 307, subd. 3) “for drawing interrogatories to annex to a commission for the taking of testimony, ten dollars.” The appellants claim that this entitles them to ten dollars for each separate set of interrogatories annéxed to a commission.

The interrogatories referred to in the code are those specified in 2 Revised Statutes (394). The statute in relation to testimony taken on commission, uses the same language as the code, and apparently by the words, “the interrogatories to be annexed to such commission,” means the entire number of interrogatories to be so annexed, and not any specific sets addressed either to the same or different witnesses—neither the statute nor the code subdivides or classifies the interrogatories in sets or parts, or in any way.

The question" arises whether, for the purpose of awarding costs, there is authority for such classification and distinction. Under the system of taxation of costs existing previous to the adoption of the code, there was allowed for “ drawing and engrossing interrogatories to be annexed to a commission and settlement, two dollars and fifty cents” (3 Burrill Pr. Append 597). This appears to have been all that was ever allowed for such service, no matter what may have been the number of witnesses mentioned in the commission, or the number of interrogatories or sets of interrogatories annexed. As the code uses the phraseology of the statute, it is difficult to see how it can be made in its’present form, to bear a different interpretation from that previously given to the word interrogatories.

If the framers of this part of the amendment of the code, the purpose of which was to revise the allowance of costs for drawing interrogatories, had intended to allow ten dollars for drawing each set of interrogatories, it would have been easy for them to have said so explicitly, and it is not probable that they would have left it to be deduced from inferences, and the equities of the case. It is wore in accordance with the theory of the code in respect to costs, to suppose that no change was. intended, for the purpose of compensating parties who are compelled by the exigencies of their litigation to annex several sets of interrogatories to a commission, but that the compensation for such services was left to be considered by the court, when application was made for an. allowance, under the sue, ceeding sections of the code.

This construction will not tend to warp a provision of the code from the application its framers intended it to have, and will, very possibly, by means of the awarding of a compensatory allowance, make a just and equitable provision for parties who have necessarily and properly, as in the present action, prepared various sets of interrogatories for witnesses, to be examined under the same commission.

There appears to be no decision of the courts, in conflict at any time with these views. The certificate of one of the department clerks of the common pleas, as to the practice there, of which there is no evidence that it has been sanctioned by the court, can hardly be regarded as a controlling authority to sustain the appeal. The tendency here has been to give this statute a strict construction (Hand v. Baare, 9 Bosw. 682).

My impression is, that the order appealed from should be affirmed.

Sedgwick, J., concurred.


text:
    JOHN M. EITEL, Plaintiff and Respondent, v. JOHN BRACKEN, and another, Defendants and Appellants.
    I. SUPERIOR COURT.
    1. Jurisdiction over action and person. a. Mortgage has jurisdiction over an action to foreclose a mortgage on real estate in the city of New York, although some of the parties to the action do not reside in the city, and are not served with summons therein.
    5. Appearance by defendant, generally, without settingup a defense; want of jurisdiction,

    1. Prevents such defendant from questioning the jurisdiction.
    II. Certifícate that a mortgage or other instrument is good
    AND VALID, ESTOPPEL BY.

      a. Basis of estoppel, what is.

    1. That the certificate was made to induce a purchaser to act on its statements as true.

      Before Curtis and Sedgwick, J. J.

      Decided July 2, 1874.
    2. That the purchaser acts on the certificate, believing it» statements to be true.

      b. When the certificate does not operate as an estoppel.

    1. When the purchaser does not believe the facts to exist which the certificate stated to exist, and does act on a belief in the-existence of the facts induced by the certificate, the certifying party is not estopped from proving the real state of the-facts.
    1. Usury. In such a case, although he has certified that a mortgage made by him is good and valid, he may defend an action, brought by the purchaser, to foreclose a mortgage, on the ground that the mortgage was-usurious.
    1. This though the purchaser bought believing that as-matter oj law the certificate would protect him against such a defense and would not have bought, without the certificate.
    Appeal from judgment entered on findings of fact and law by the court.
    The action is to foreclose a mortgage for three-thousand five hundred dollars, made by the defendant, to Thomas Bracken, dated June 13, 1867, for one year, assigned by Bracken to Charles Emmons, March 25, 1868, and assigned by Emmons to James Appleby,, June 13, 1871.
    On June 13, 1869, Emmons extended the time for the payment of the bond and mortgage to June 13,. 1870. On June 13, 1870, Emmons again extended the-time of payment for one year. On June 13, 1871, Emmons again extended the time of payment for one year. And thereafter, on the same day, assigned the bond and mortgage to James Appleby. On June 13,. 1872 Appleby extended the time for one year.

      On July 15, 1872, Appleby assigned the bond and mortgage to the plaintiff.
    Attached to the mortgage was a certificate by the mortgagor that the mortgage was valid.
    On June 15, 1870, defendant executed an instrument under seal, purporting to be an agreement between him and James Appleby, by which he covenanted that said mortgage was a valid and subsisting lien upon the premises therein described; that the whole principal sum, with interest from June 13, 1870, was unpaid, and that there were no claims, offsets or equities existing against the same.
    On June 13,1871, defendant executed another instrument under seal, purporting to be an agreement between him and James Appleby, of a similar tenor to the one of June 15, 1870. On June 28, 1872, defendant executed another instrument (not under seal) purporting to be an agreement between him and plaintiff, whereby he covenanted with plaintiff and his assigns that the said mortgage was a valid and subsisting lien on the premises therein described, and that the whole of the principal, with interest thereon from June 13, 1872, was due.
    The defense is usury; the defendant claiming that at the expiration of each year Emmons exacted from him a bonus of four hundred and sixty-one dollars as a condition for extending the payment of the mortgage another year, and that Emmons is the real owner of the mortgage, and not plaintiff.
    On the. trial the defendant sought to introduce evidence, and offered to prove, that at the time the three thousand one hundred and fifty dollars alleged to have been given by Mr. Eitel for the payment of the mortgage, was given, it was paid to Charles Emmons, by a deposit to his credit, and that nothing appears on the account of the bank to show that he ever paid it to Appleby or anybody else ; and defendant’s counsel claiming that it was in evidence clearly by the admission of Mr. Eitel, plaintiff, that in his negotiations for the purpose of the assignment of the mortgage, Mr. Emmons acted as his agent, also offered to prove by the witness, Thomas Bracken, the acknowledgment on the part of Emmons, during that period, that he knew that the certificates which had been offered in evidence in this case were not real and genuine; and that all transactions in reference' to the mortgage were usurious; and that Charles Emmons was the real holder of the bond and mortgage, notwithstanding the nominal transfers of the same, up to the transfer of the same to the plaintiff; and defendant also offered to prove that the mortgage, which is the subject of this suit, in its inception, was executed without consideration, and for the purpose of being in condition to be sold ; that Thomas Bracken never gave or received anything for it, and that the first Mr. Emmons who obtained it, knew that fact at the time; and that Charles Emmons made a Joan upon it, at a rate that was usurious.
    Objections were made by the plaintiff to these respective offers, and sustained, and exceptions were taken by the defendant. All these offers were excluded by the court, upon the ground that the mortgagor is, upon written papers in evidence in the case, estopped from contradicting his written statements. To this exclusion the defendant excepted.
    When the cause was called for trial, defendant’s counsel interposed a preliminary objection to the jurisdiction of the court with regard to the service of the summons out off the county, and read an affidavit showing the service of the summons in the' city of Brooklyn. Plaintiff’s counsel read a notice of appearance of the defendant generally in the action. The court overruled the objection, and defendant excepted. The trial proceeded, and resulted in a decision for the plaintiff.
    Afterwards judgment was entered, upon the finding of fact and law by the court, for the foreclosure of the mortgage.
    From this judgment defendant appeals.

      David R. Garniss, attorney, and, with Algernon S. Sullivan, of counsel for appellant,
    urged:—I. The objection to the jurisdiction of the court was well' taken, and the motion to set aside the proceedings should have been granted, (a.) The court had no jurisdiction. It is a city court (3 Rev. Slat. 5 ed. p. 357, .§ 1), without authority to issue process out of the city (Id. 358, §§ 11, 13), and has jurisdiction only in cases enumerated in the statute (Id. 510, §§ 133, 134; 490, § 33). The subsequently attempted extension of its jurisdiction (Laws 1873, eh. 339, p. 363), was unconstitutional, and has been so declared (Landers v. S. I. R. R. Co., 14 Abb. Pr. N. S. 346; Towle v. Covert, 15 Id. 193). (b.) That the objection was not raised by answer is immaterial. The objection that a summons, as the commencement of a suit, was not properly served, is not available in an answer or demurrer, but only on a motion to set the proceedings aside. The meaning of the language of the Oode allowing it to be set up as a defense, that “the court has no jurisdiction of the person,” is that the person is not subject to the jurisdiction of the court, not that the process has been improperly served (5 How. Pr. 96; 3 Code Rep. 161; 8 Barb. 541). In this case the motion made at the opening of the trial was the proper one to raise the question, and was in time, especially as at the time issue was joined in the suit the act extending the jurisdiction had not been declared unconstitutional (Landers v. S. I. R. R. Co., supra).

      II. A mortgage made without consideration only to be sold at a discount, is usurious (Vickary v. Dickson, 62 Barb. 272 ; 35 Id. 96; cited 37 How. Pr. 187; 53 Barb. 356 ; Stanley v. Whitney, 47 Id. 586). There can be no estoppel in behalf of one having full knowledge of all the facts, and the principal is chargeable with the knowledge of the acts of the agent (Baker v. Union Mutual Life Ins. Co., 43 N. Y. 289 Dunlap’s Paley on Agency, 261; Hutchins v. Hebbard, 34 N. Y. 24; Lawrence v. Brown, 1 Seld. 401; Plumb v. Cataraugus Ins. Co., 18 N. Y. 392; Story on Agency, § 140).
    III. The refusal to allow the defendant to show that the proceeds of the check given by Eitel were still to the credit of Emmons in the bank; that Emmons was the real owner of the bond and mortgage at the time of its assignment to plaintiff, notwithstanding his different nominal assignments of same, and that the bond and mortgage were usurious, and made without consideration, and that Emmons, as agent of plaintiff, knew these facts, on the ground that defendant was estopped from contradicting his written statements, was erroneous. So was the refusal to allow defendant to show that prior to the assignment and certificate to James Appleby, the equitable assignee and holder of the bond and mortgage was Charles Appleby, and that at the time of the transfer there was np title in James Appleby. If proven, it was a complete bar to plaintiff’s ownership. The door for this had been opened by the plaintiff’s offering in proof the certificate to Charles Appleby. The certificates given to Charles Appleby and James Appleby, and the one to Charles Appleby subsequently altered to John IN". Eitel, were given to Emmons to cover the usury. He up to Eitel owned the bond and mortgage. The certificates therefore were nullities, the parties to whom they were made never received them, and never owned the bond and mortgage. The doctrine of estoppel could not and did not apply.
    A mortgagor is not estopped from setting up fraud in procuring him to give a mortgage by his own certificate or written declaration that the mortgage is valid. Both are voidable in whosever hands they may be. He is not estopped by the belief of the other party that the certificate was a protection (Wilcox v. Howell, 44 N. Y. 398). Appellant was not estopped by the certificates of Emmons, Owen, or Appleby (Mech. Bank v. N. Y. & N. H. R. R. Co., 13 N. Y. 599), nor was he by the later certificate delivered after the assignment in name of Charles Appleby, subsequently altered to plaintiff. Admissions which come after the act do not relate back and make an estoppel by relation (Pike v. Acker, Lalor's Supplement to Hill & Denio, 90).

      S. C. Conable, attorney, and of counsel for respondent,
    urged :-I. The plaintiff having proved the above facts,-the defendant was estopped from alleging usury in the bond and mortgage. He was estopped by the covenant contained in Exhibit F., between defendant and Appleby, plaintiff’s assignor—that covenant was to Appleby and his "assigns.”
    II. The exceptions to the findings of fact can not be raised here. To enable defendant to raise those exceptions here, he should have moved for a new trial at special term, and appealed from the decision thereat; besides, in any event, said findings are sustained by the evidence.
   By the Court.—Curtis, J.

The difficulty that defendant labors under in sustaining his objection to the jurisdiction of the court is, that the mortgaged premises are in the county of Hew York, and that he •appeared generally, and answered without alleging want of jurisdiction as a defense (Spyer v. Fisher, Superior Court Reports, 2nd Serial No., p. 94, vol. 37, p. 94.)

Passing to the principal objections raised by the defendant, it must be conceded that a mortgage has so little of the element of negotiability, that the assignee, though a tona fide holder, takes it subject to ail the equities and defenses existing between the original parties. The assignee of a security of this nature has no greater title than his assignor (Davis v. Austin, 1 Ves. Jr. 247 ; Ingraham v. Disbrough, 47 N. Y. 421; Bush v. Lathrop, 22 Id. 535).

But the question arises whether the mortgagor, having given certificates of the nature shown, is estopped from contradicting these written statements.

It is well settled, that a mortgagor who induces a person to purchase the mortgage by representations, that it is valid in its inception, or free from fraud, or that a certain amount is due upon it, is estopped from setting up any of these defenses (Watson v. McLaren, 19 Wend. 557; Lesley v. Johnson, 41 Barb. 359; Ferguson v. Hamilton, 35 Id. 427; Clark v. Sinson, 4 Duer, 408).

It is a wise and just restriction, that if a mortgagor makes a false statement, orally or in writing to influence the purchase of the security, he can not take advantage of it as against an innocent purchaser. The law adjudges him to be estopped from profiting by his own fraud.

Consequently, looking at the case from this point simply, the learned judge correctly excluded the offers of the defendant.

But it is a principle also as well settled and as important for the protection of society, that in order to create this estoppel, it must appear that the party caused the other to believe the existence of the facts to which the estoppel relates, and also that the other has acted upon such belief (Keeler v. Davis, 5 Duer, 507 ; Lawrence v. Brown, 5 N. Y. 394; Chautauqua Co. Bank v. White, 6 Id. 236; Jewett v. Miller, 10 Id. 402).

If a mortgagor can show that a purchaser did not believe tile existence of the facts in reference to which the estoppel is sought to be interposed, and did not act upon any such belief, he is at liberty to do so. He can, in this way, defeat the claim that he is estopped, for the estoppel set up fails in the chief elements that unite to create valid estoppel.

In this view of the law, it seems that the defendants’ offers to show, that Charles Emmons was the real' holder of the bond and mortgage in question, and that the certificates of the defendant were not real and genuine, should have been received. Also all other offers, to show facts tending to prove that the plaintiff never believed, or acted upon the statements in the certificates, should have been received.

In the case of Van Sickle v. Palmer (2 N. Y. 612), where the action was to forclose a mortgage, the defense being usury, it was held, that the written certificate was not conclusive as to the defendant, but that he was entitled to show by the attorneys, whether the plaintiff shared in the five hundred and sixty-six dollars paid to them for their services.

In Wilcox v. Howell (44 N. Y. 398), it was held insufficient to create an estoppel, that the certificate of i he mortgagor that the mortgage was valid, and that no deiense existed to it, was believed by the holder to be a protection, as a matter of law; but that the facts stated therein must be relied on as true, and in this" reliance the holder must have purchased.

These decisions sustain the principle, that this class of certificates, amount to very little by way of estoppel, except where an innocent party believes in the statements contained in them, and acts upon them. It is contrary to good morals, that a certificate containing an unadulterated falsehood, and known to both the maker and the recipient, to be simply such, should be sustained as sufficient to protect the latter in the purchase of a mortgage, because he believed it would so protect him as a matter of law, and would not have bought the mortgage without it.

The evidence offered by the defendant in this aspect of the case, was material, and admissible, and should have been received, and is of such importance as to entitle the defendant to a new trial.

The judgment appealed from by the defendant should be reversed, and a new trial ordered.

Sedgwick, J., concurred.


text:
    MARY C. ADAMS, Plaintiff and Appellant, v. JOHN W. MILLS, Defendant and Respondent.
    I. MARRIED WOMEN.
    1. Frauds and omission of her husband.
    1. She is affected and bound by the frauds and omissions of her husband in attending as her agent to her property intrusted by her to him.
    1. A married woman intrusted certain of her moneys to her husband, who was a trustee and the secretary of a company, with power to use the same as he might deem proper. The husband, although not authorized either as secretary or trustee to borrow money for the corporation and thereby create a debt binding on the corporation, unless expressly authorized so to do by a majority of the trustees, undertook to make an arrangement between himself as agent of his wife of the one part, and himself as secretary and one Brown as the treasurer of the company of the other part, whereby he as such agent assumed to loan to. and he as such secretary with said treasurer assumed to borrow for, said company, money of his said wife, on condition that it should be repaid on demand with twelve per cent, interest.
    Before Curtis and Sedgwick, J. J.

      Decided July 2, 1874.
    Held,
    that no debt was created under chap. 40, § 13, of laws of 1848.
    3. Omission by husband to pile bepobts.

      a. She can not derive any benefit from such omission.
    H. MANUFACTURING LAW. LAW OF 1848, CHAP. 40, § 13._
    1. What is not a debt within the meaning of such section (see above)..
    3. Who can not talce advantage of an omission to file reports (see above).
    Appeal by plaintiff from judgment in favor of defendant, entered on the report of a referee.
    This action was brought to recover from the defendant a debt, alleged to be due from the Hilliard & Adams Manufacturing Company to the plaintiff, for money loaned by plaintiff to it. The plaintiff claims that this company being a corporation, duly formed and organized under the general manufacturing act of this State, omitted to make the annual reports required by section 12 of that act, in the years 1870 and 1871, and that the defendant being a trustee of that corporation, consequently, became liable for the payment of ■its debts.
    The defendant insists that the alleged loan by plaintiff to the corporation, if ever made, was made without the knowledge or authority of the board of trustees, or a majority of them, and not in their usual course of business, but to one of the officers of the company, which the .plaintiff knew and had notice of, and on his personal credit and responsibility, and that it was collusively credited to the plaintiff on the books of the company. Various defenses were interposed to the action by the answer.
    The company was organized April 28, 1869. The trustees were Bobert B. Hilliard, Charles S. Adams {the husband of the plaintiff), Francis M. Brown, Bobert Cochran, and the defendant, John W. Mills. The corporators organized on May 3, 1869, and elected Bobert B. Hilliard, president, and Charles S. Adams, secretary. The former acted as president until his death, January 10, 1870, and the latter continued a trustee and secretary during the existence of the company, and was also temporary president after Mr. Hilliard’s decease, from January 18, 1870, until Mr. Cochran’s election to the presidency, February 18, 1870.
    On January 14, 1871, proceedings in bankruptcy were instituted, in the United States district court for the southern district of Hew York, against the company, and an injunction issued enjoining both the company and its officers from proceeding or inter-meddling with the business or assets of the company.
    The referee found that the plaintiff, having some money in her own name, intrusted it to her husband, Charles S. Adams, who was the secretary of the corporation during the entire period of its existence, with power to use the same in such way as he might deem proper. That the husband, thus having the funds of his wife under his control, and without any direction on her part, entered into an agreement between himself, as agent of his wife, of the one part, and himself, as the secretary of the corporation, of the other part, with the knowledge of Francis M. Brown, the treasurer of the corporation, by which he purported to lend three thousand eight hundred dollars, and some other amounts of the funds so intrusted to him by the plaintiff, his wife, to the corporation, on condition that it should be repaid on demand, with interest at twelve per cent., without any authority from the trustees of the corporation to make any such arrangement, and without their knowledge.
    The referee also found that Charles S. Adams, neither as the secretary of said corporation, nor in his capacity as trustee, had authority to make any such arrangement with any person, nor had he authority in any way to borrow money for the corporation, and by that means to create a debt binding the said corporation, unless expressly authorized so to do by a majority of the trustees.
    The referee also found that Charles S. Adams fraudulently concealed from his cotrustees the fact that any such arrangement had been made, and that his cotrustees were entirely ignorant of the existence of any such arrangement, until after the corporation had been declared bankrupt by said district court, and that the claim made by the plaintiff in her complaint was not a debt existing against the corporation at the time they failed to make the report as required by law, and that the defendant was not liable to pay the claim to the said plaintiff, but that the defendant was entitled to have the complaint dismissed, and judgment in his favor for costs.
    The referee, by the findings made on the settlement of the case after his report, found that “F. M. Brown, treasurer, • borrowed this money of plaintiff for the company, agreeing that the company should pay it, on demand, with interest at the rate of twelve per cent, per annum.” He also found “that the money was used by said treasurer to pay the debts of the corporation and also, that “the money was credited at the time in the books of the company to the plaintiff;” and also, “that the account was balanced in February,, 1870, and one hundred and twenty-one dollars and fifty-four cents, as interest, was credited.”
    Judgment, dismissing the complaint and adjudging costs against the plaintiff, was entered on the referee’s report.
    The plaintiff appeals from the judgment.

      William H. Dickenson, attorney, and of counsel for appellant,
    urged :—I. The evidence sustains the position that this was an express contract lawfully made by Brown, the treasurer, and a lawful obligation of the company. It is admitted that the treasurer made the contract as alleged, but it is claimed that he had no authority. We reply: The treasurer was the sole financial agent. He borrowed the money. He was in the habit of borrowing money. Every one of the five trustees knew that money was borrowed by the company, yet no objection to this practice was made by any trustee. The treasurer’s habit of borrowing, which it was defendant’s duty to know of (because the books would have proved it, and he should have known the contents of the books), which practice was not objected to by defendant or the other trustees, was a practice acquiesced in by all the trustees, and this constituted an authorization to the treasurer to borrow money for the use of the company (Merchants’ Bank v. State Bank, 10 Wall. 647; Angell & Ames on Corp. S 297). The referee suggests that the second by-law (which forbids the issue of promissory notes without a vote of a majority of the board of trustees) impliedly restricts the general right to borrow money without such vote of trustees, and that 0. S. Adams knew this, and that plaintiff must be held to know what her .agent knew. To this we reply : (a.) That the by-law is presumed to be repealed by implication, because it was constantly violated with the knowledge of the trustees, and without objection from them. Money was constantly borrowed, and notes were constantly issued without any vote of trustees (Angell & Ames on Corp. §§ 238, 252, 284, 329). (b.) The by-law should not be extended beyond its terms. It could not have been the intent to forbid the treasurer to borrow small sums temporarily, in an emergency, to meet payments. If the intent had been to cover all loans, the word loans would have been included in the by-law. (3.) If there was no valid express contract, there certainly was a valid implied contract on the part of the corporation to repay the plaintiff’s money. The referee finds that the treasurer used this money to pay debts of the corporation. The treasurer had authority to pay the corporate debts. There is no pretense that he had not. The use of plaintiff’s money for that purpose was an acceptance by the corporation of the plaintiff ’ s money for that purpose, and as the corporation can not use plaintiff’s money for such purpose, and be justified in refusing to return it, the law implies a contract to repay (Chitty on Cont. 6 Am. ed. 601). (4.) It makes no difference, in respect to this action, whether the contract was express or implied. (5.) As against the Hilliard & Adams Manufacturing Company, the plaintiff's claim is upon contract, either express or implied, and therefore the defendant is liable, under section 12 of the general manufacturing act of 1848. That section certainly provides for all contract debts of the corporation. The phrase in the section is, “all debts existing or contracted, &c.,” implying perhaps, as the referee suggests, that only contract debts are included, but clearly including all contract debts. (6.) The referee suggests that this claim is inequitable as between plaintiff and defendant, and that the claim against the corporation arises in equity (as an implied contract), and not in law (as an express contract), and therefore plaintiff must show equity against defendant, or fail. This would be sound reasoning if the action were against the corporation. If the claim against the corporation is not based on a valid express contract, but rests on an implied contract, and such claim is against equity, it ought not to be enforced against the corporation. The law does not imply contracts against equity, though it may enforce express contracts against equity, leaving the equity courts to furnish a remedy. (7.) There are no equities between plaintiff and defendant. The plaintiff is in no way responsible for the acts of Charles S. Adams, her husband, in his capacity of trustee. She was not a trustee, and is not responsible for the mistakes or omissions of the trustees of this corporation. She was simply a creditor. As such, as the referee suggests, she had notice through her agent, Charles S. Adams, of the second by-law, but in the same way she had notice that the company was borrowing money and issuing notes without any vote of trustees, and that defendant and Cochran (his partner) loaned money to the corporation without any vote of trustees, and she had a right to suppose that the second by-law was repealed, and to suppose that the treasurer had a right to borrow her money, and to fix the rate of interest.

      D. & T. McMahon, attorneys, and D. McMahon, of counsel for respondent,
    urged :—1. The referee found as a matter of fact, that S. C. Adams, neither in his character as secretary of the corporation, nor as a trustee, had authority to make an arrangement to place these funds of his wife in the hands of the said corporation on condition that it should be repaid on demand, v/ith interest at rate of twelve per cent, per annum. He also found as a matter of fact that Charles S„ Adams had no authority in any way to borrow money for the said corporation, and by that means to create a debt binding the said corporation, unless expressly authorized to do so by a majority of the trustees. The referee also found as a matter of fact that Charles S. Adams fraudulently concealed from his cotrustees the said arrangement, and the latter were entirely ignorant of the existence of any snch arrangement. The evidence given on the trial fully supported these findings. It is therefore apparent that the only claim, if any, Mrs. Adams had against the corporation in question was to get the moneys back that her husband mingled in the company’s bank account, on the equitable principle, that the same were ex aequo et bono the property of the plaintiff, and that the corporation were trustees of such funds, or bound to account to her for the same. Such aright always is of a purely equitable character (N. Y. Ins. Co. v. Roulet, 24 Wend. 505); The words of section 12 of the general manufacturing act are, ‘ ‘ All the debts of the company then existing and for all that shall be contracted before such report shall be made” (Laws of 1848, p. 57, ch. 40, § 12). The statute does not employ the words “liabilities.” nor does it use the words, “all debts, claims and demands.” It uses the words “debts” alone. The debt must be proven (Shaler Co. v. Bliss, 27 N. Y. 297). In using the words “ debts” the statute has been construed to mean “ debts in presentí,” not merely a claim maturing or a liability which may ultimately ripen into debts (Oviatt v. Hughes, 41 Barb. 541). A promissory note before maturity is not an existing debt (Nimmons v. Harrison, 2 Sweeny, 663).
    II. In this case the company, if liable at all, were only liable from the fact that the moneys in question might have gone into their bank account, and they might under some circumstances be liable therefor, which could only be ascertained in equity.
    III. The claim of liability of the respondent to the appellant is abhorrent to every notion of sound equity and morality, and the appellant should be held to be estopped from making such claim. The wife trusts her moneys to her husband as her agent to manage for her. Such agency is good (Owen v. Cawley, 36 N. Y. 600). That agent happens to be the secretary of the corporation in question. It is Ms duty by law to cause to be drawn up and furnished to the trustees of this body the annual reports. He deliberately neglects to do it, although Judge Cochbawe had taken the pains to-furnish him and the treasurer with a copy of the’ general manufacturing act and to direct their special attention to the necessity of complying with section 12. How the wife comes in and sues one of the innocent trustees (the respondent), who has been led to believe all along by the machinations of this womans agent and husband that the corporation was perfectly solvent, and thereby deluded into believing that there was no necessity to file such a report. The husband kncw what were his duties, and that the respondent relied upon his properly performing them, yet he deliberately omits to prepare and file this annual report. Under such a case as this it is evident that the appellant should establish to the mind of this court what she failed to-do before the referee that she had a bona fide claim,, which was a debt within section 13 of the act of 1848, and that she could take advantage of the neglects and omissions of her own husband and agent, to fasten a liability on innocent third parties (See Daly v. N. Y. Chemical Ins. Co., 2 Hall, 550).
   By the Court.—Curtis, J.

A careful examination of the evidence fails to show that the findings of the referee are unsustained by the evidence.

The defendant John W. Mills, and his cotrustee Robert Cochran, were from the commencement of the business of the corporation, made the victims of very specious and knavish delusions. The expenses of conducting the business were out of all proportion to its amount, or its capital. The books contained misstatements and errors of the most barefaced character, in order to give the false impression that the business was successful. A letter read in evidence from the treasurer, F. M. Brown, to the plaintiff’s husband, indicates very clearly that they were conniving to deceive the defendant and the two other trustees. Untrue statements were prepared and presented, purporting to show that the business was exceedingly prosperous, and during its short existence, two dividends of ten per cent, each were declared, for no object apparently, ■ but to increase the confidence of the defendant Mills and his co-trustee Cochran, and to procure very considerable loans from them. These dividends were not paid.

It will also be observed that Adams, as. president pro tern., and secretary of the corporation, had duties to perform, in respect to the annual report, which he entirely neglected.

It is no part of the policy of the law, while increasing the right of a married woman in the use and .disposition of her property, to place her in a position to take advantage of the neglects and frauds of her husband and agent. She can not intrust him with property, and hold him out to .the world as her agent in respect to it, and then profit by his frauds and omissions in attending to it, and fasten liabilities for his wrong doing, and neglects, on innocent third parties (Daly v. Chemical Bank, 2 Hall, 550; Lindner v. Sahler, 51 Barb. 322). As to these frauds and omissions of official duty, in which the plaintiff’s husband and agent is found by the referee to have been a participant, it must be held, that his knowledge was so far a notice to her, that she can not derive benefit from them, at the expense of the deluded victims whom she has enabled her agent, collusively and wrongfully, to place in an attitude of liability.

It could never have been the intention of the framers of section 12 of this act, that it should ever be successfully invoked, to carry through a fraudulent scheme. Where the element of fraud enters into an attempt to create and enforce an alleged liability under its provisions against a trustee, it ceases to be operative. The party seeking to make a trustee liable for a debt of the corporation, must be free from fraud and wrongful complicity in the creation and establishment of the demand, he thus attempts to enforce.

' In giving effect to this highly penal provision of the statute, the courts have not inclined to a very extended latitude of construction. It is but just and equitable, that as the money of the plaintiff in this circuitous way went into the bank account of the corporation, and was applied towards the payment of its debts, that there should be a resulting compensation to her from the corporation. But the right to this, is very far from being a debt, such as is contemplated by section 12 of the act, in its description of such debts of the corporation as the trustees shall be liable for. The plaintiff’s claim is of more extensive import, than the ordinary and legal signification of the term “ debt.” It is lack-' ing the incidents of directness and of contract, that enter into the legal definition of that term. It would ill accord with the reason and object of the statute to extend its meaning so as to embrace and define as an existing debt, for the purpose of enforcing the penalty against a trustee, a transaction such as is presented by the proofs in this case (3 Black. Com,. 154 ; In re Denny, &c., 2 Hill, 220; Nimmons v. Hennion, 2 Sweeny, 663 ; Obicht v. Hughes, 41 Barb. 541; Watervliet Turnpike Co. v. McKeon, 6 Hill, 620).

It was among other matters claimed by the corporation on the argument, that the death of the president, in January, 1870, exonerated it from the obligation to publish the annual statement, and that it was again exonerated in January, 1871, by the proceedings in bankruptcy. But I see no reason why surviving officers and trustees should not comply with the statutory provision as far as possible in case of the decease of the president, nor is it apparent how the pendency of a bankruptcy proceeding can operate to release them from this statutory obligation. But in the view taken, it becomes unnecessary to discuss these questions of exoneration from compliance with the statute.

There were many other exceptions than those here discussed taken by the plaintiff, and presented on the argument, but they are not of a character to affect the conclusion arrived at, that the judgment appealed from should be affirmed, with costs.

Sedgwick, J., concurred.


author: By the Court.—Sedgwick, J.

text:
    WILLIAM S. ARNOLD and Others, Plaintiffs, v. EMERSON C. ANGELL, Defendant.
    Before Curtis and Sedgwick, J.J.

      Decided July 2, 1874.
    I. Accounting, action nob. When sustained.
    1. An unsustained averment of partnership in the complaint does not prevent the upholding an action for an accounting, in there are other averments in the complaint sustained by the evidence which are of themselves sufficient to entitle the plaintiff to an account.

      a. What allegations in a complaint being sustained by the evidence are sufficient to sustain an action for an accounting, although there is an averment of partnership not sustained by evidence.
    Motion for a new trial at general term, under section 268 of the Code.
    The complaint in this case was as follows:— “I. That on or about April 25, 1870, the plaintiffs and the defendant entered into a copartnership by verbal agreement, for the purpose of carrying on the business of a Turkish bath establishment, at No. 61 Lexington-avenue, in the city of New York, and on July 22, 1870, the plaintiffs made a further verbal agreement that their said copartnership should continue five years.”
    “II. That prior to April 25, 1870, the defendant alone carried on the establishment, and in order to sustain and enlarge his business, these plaintiffs entered into the said copartnership under the agreement that the defendant should conduct the business in his name, and that these plaintiffs should make advances of money to the concern for the purpose of its business, and for improving and equipping the establishment, and that the defendant should receive three-quarters of the net profits, and that the plaintiffs should receive one-quarter of the net profits, and that interest should be allowed upon the amount contributed by them, and charged as an expense of the business.”
    ‘ ‘ III. In pursuance of said agreement, these plaintiffs, between May 9, 1870, and October 27, 1870, contributed to the said copartnership, the sum of sixteen thousand five hundred dollars.”
    “IV. The business of the said copartnership has been carried on since the time of its formation as aforesaid, and the defendant has from time to time applied to his own use, from the receipts and profits of said business, large sums of money exceeding the proportion thereof to which he was entitled, and has concealed, and now conceals from the plaintiffs, the receipts and profits of said business, and has refused, and still refuses, to give account thereof to the plaintiffs, or to give them access to the books of the concern, and excludes them from any participation in the management of said business, and he refuses to pay the debts due from said copartnership, although he has funds sufficient for that purpose.”
    “Therefore, the plaintiffs demand judgment, that the said copartnership be adjudged dissolved, that a receiver of the property, rights and good will of said copartnership be appointed, with power to dispose of the same, and to collect all debts for the benefit of all parties entitled thereto, and that the proceeds thereof, after the payment of the just debts of the copartnership and the costs of this action be divided between the parties hereto, according to their respective rights.”
    The answer was a general denial.
    The cause was tried by the court without a., jury.
    The manner in which the questions involved came before the general term appears in the opinion.

      Steele & Boyd, attorneys, and of counsel for defendant,
    urged I. A partnership is not established within the meaning of the law—and the decisions (Ogden v. Astor, 4 Sandf. 311; Pinckney v. Keyler, 4 E. D. Smith, 469 ; Burckle v. Eckart, 1 Denio, 337; Wetmore v. Baker, 9 Johns. 307; Chase v. Barrett, 4 Paige, 160).
    II. Equity can not be invoked by a party who has. an adequate remedy at law. If the plaintiffs made an agreement to advance the sum of sixteen thousand five hundred dollars, and that they were to receive interest on the same, and one-quarter of the profits, or a sum equal to one-quarter of the profits (as the complaint alleges), their remedy is clearly in an action at law, against the defendant, to recover a sum equal to one-■quarter of the profits.
    III. The plaintiffs are not entitled to an accounting in this action. Where the plaintiff files his complaint, alleging a partnership, and asking for an accounting by the defendant, if he does not establish the existence of the partnership, he will not be entitled to the accounting. The mere relation of creditor of the defendant is not, of itself, sufficient to entitle plaintiff, to an accounting (Salter v. Ham, 31 N. Y. 321).

      Flanagan & Bright, attorneys, and O. E. Bright of counsel for plaintiff.
   By the Court.—Sedgwick, J.

The defendant moves for a new trial under section 268 of the code. I think that the motion should be denied.

The case was tried by a judge at special term. He found, as a matter of fact, that the plaintiffs had agreed with the defendant to make the advances which the evidence showed were made to the defendant, and they had mutually agreed that the plaintiffs should receive one-fourth of the profits of a certain business, until all the debts were paid, when these advances should be repaid, but the learned judge found that the parties were not partners. He further found that an account of the business should be taken, of its expenses and receipts, and of the advances made by the plaintiffs.

These findings were supported by sufficient testimony given in the case. The plaintiffs’ right of action on the facts, was in its nature equitable. The relation of the defendant to them was such that he might properly demand directly an accounting, as to the whole-of the business. The complaint did not aver a case which put the right to an accounting solely on the fact that a partnership existed, but considering the allegations of a partnership as surplusage, enough was left - to support the findings of the learned judge.

The motion should be denied, with costs.

Curtis, J., concurred.


text:
    WILLIAM BUTLER DUNCAN, and others, Plaintiffs and Appellants, v. JACOB BERLIN, and others, Defendants and Respondents.
    Before Curtis and Sedgwick, JJ.

      Decided July 2, 1874.
    I. ATTACHMENT AGAINST PROPERTY.
    1. Factob. Deduction from proceeds of property which was levied on in his hands.
    1. What can not be made before paying over such proceeds under the attachment.

      a. The amount of a checlc drawn on the factor by the attachment debtor, and which check the factor on the day of the service of the attachment, but before its service, informed the holder, was good and would be paid, but did not accept in writing (the check not being presented for payment until the day after the service of the attachment), can not be so deducted.

    H. Repbesentation by factob of amount due fbom him to
    ATTACHMENT DEBTOB.- MISTAKE IN.
    1. Effect of.

      a. When the factor represents that the balance due by him to the attachment debtor is sufficient to satisfy the attachment debt, whereby the sheriff or attachment creditor refrains from levying on certain specific property of the attachment debtor in the hands of the factor, and it turns out that the representation was made through mistake, the balance being in fact not sufficient to satisfy the attachment debt, the effect as between the attachment creditor and factor is, that the creditor will be regarded as standing in the same position as if he had levied on the specific property.

      a. Therefore, the factor can not pay out of the proceeds of such specific property to the prejudice of the attachment debt a check, the amount of which could not, under the above stated circumstances, be deducted from the proceeds of property which had been levied on.

      Appeal from order at special term denying a motion for a new trial, heard on a case containing exceptions.
    The complaint alleged that on or before January 16, 1866, a firm of Blagge & Co., had money and other property in the hands of the plaintiffs, constituting the firm of Duncan, Sherman & Co. ; that on said day the defendants procured an attachment agamst the property of said firm of Blagge & Co., as non-residents, which was delivered to the sheriff; that the defendants caused said “ sheriff to serve said attachment against the said firm of Blagge & Co., upon the said firm of Duncan, Sherman & Co., and to levy upon any property or debt due to the said firm of H. Blagge & Co., from the said firm of Duncan, Sherman & Co.” That the plaintiffs informed the said sheriff at the time of said service, that they were unable to state whether “there was any sum due from them to said firm of H. Blagge & Co., but if, upon making up the two accounts, any sum was due to them, they would pay the same over to said sheriff for the use of the said defendants ;” that subsequently, and on or about May 28, 1866, the said account was made up, and an erroneous balance was made of one thousand eight hundred and sixty-one dollars and thirty-one cents, as due to H. Blagge & Co., which sum the plaintiffs, on the same day, paid to said sheriff for the use of the defendants ; that said erroneous balance was made by reason of an error and mistake of the plaintiffs or their clerks in not charging the said H. Blagge & Co. in their account a sum of one thousand dollars, which had, in fact, been paid to them before January 16, 1866, and, in fact, the true balance due to H. Blagge & Co., was eight hundred and sixty-one dollars and thirty-one cents.
    The answer admitted the above averments as to the issuing of an attachment, the service and levy thereof, the information given to the sheriff, and the payment of one thousand eight hundred and sixty-one dollars and thirty-one cents, to the sheriff for the benefit of the defendants ; but put in issue the other' averments.
    The issue was tried before a judge and jury.
    On the trial it appeared that these plaintiffs had, in their account with H. Blagge & Co., made a mistake in favor of H. Blagge & Co., in the sum of one thousand dollars.
    The firm of H. Blagge & Co. did business in Texas. H. Blagge, one of the firm, was a resident in Texas. Fell, the only other member of the firm, was a resident of Mew York. The attachment was issued against the property of EL Blagge only.
    The firm of H. Blagge & Co., sent goods from Texas to the plaintiffs, who from time to time accepted and paid bills upon them, drawn by H. Blagge, and protected themselves by the proceeds of the goods which were sold from time to time.
    On January 16, .1866, there was a balance in favor of H. Blagge & Co., of about four hundred and seventy dollars. The plaintiffs at that time had on hand, unsold, five bales of cotton, of the value of nine hundred and sixty-eight dollars and ten cents, belonging to H. Blagge & Co., and three bales of wool and three bales of cotton, of the value of five hundred and thirty-eight dollars and eighty-eight cents, also some pecan-nuts of the value of sixty dollars.
    On this day, and when the attachment was served, the defendants’ attorney had a conversation with plaintiffs’ agent, in respect of the amount in value, in the plaintiffs’ hands, on which the attachment might be levied. The plaintiffs’ agent testified that he estimated the value of the property on hand, and the cash balance, and told the defendants’ attorney, that there might be a very considerable portion of what would be required to satisfy the claim, and that it was u quite possible” that he said “that the amount would be a little short of two thousand dollars.” Upon receiving this statement, the defendants stayed a further levying of the attachment, which might have been made upon the cotton, wool and -pecan-nuts above specified. For the purpose of the trial, the action was tried, as if the property on hand on Januaiy 16, 1866. had been turned into money in the hands of the plaintiffs.
    The plaintiffs’ agent in making the statement had made the mistake in favor of H. Blagge & Co. of one-thousand dollars, and had also deducted from the general balance fifteen hundred dollars as paid or payable on - January 16, 1866, to one Leary. As to this last amount the facts were that Leary held a check of H. Blagge & Go. upon the plaintiffs, drawn by the hands of Pell, January 16, 1866, payable to Arthur Leary or bearer, for one thousand five hundred dollars. Ou that day, and before service of the attachment, Leary took the check to the plaintiffs, who told him that it was good, and would be paid upon presentation. On the same day Leary deposited the-check in his own bank, and on January 17, upon presentation to the plaintiffs, it was paid.
    . At the time of the service of the attachment, there-was in the city of New York, known to the defendants, pecan-nuts aud forty-six bales of merchandise of the value of more than one thousand dollars. These were owned by H. Blagge & Co., and had been consigned from Texas to Pell, at New York, for the purpose of being returned, because they were unsuited to the Texas market, to the person who had sold the goods to H. Blagge & Go.

    The defendants, having obtained judgment against. H. Blagge & Go., issued execution, and upon its presentation to the plaintiffs by the sheriff, they paid to him one thousand eight hundred and sixty-one dollars and thirty-one cents. This sum was paid over to the defendants.
    In the case at bar, the jury, under the direction of the court, rendered a verdict for defendants.
    Plaintiffs moved at special term, on a case containing exceptions, for a new trial, which motion was denied. From the order denying the motion for a new trial, plaintiffs appeal.

      Wm. D. White, attorney, and Hon. E. L. Fancher, of counsel for appellants,
    urged:—I. The attachment in this case could be only available to reach any sum or debt which was actually due Blagge & Co. at the time it was levied (Lanning v. Streeter, 57 Barb. 33), and then, only, when the particular debt or avails of property were specified (Id. 42).

    Here it is not shown that the attachment or execution had been, or could have been levied on any property beyond the actual balance in the hands of the plaintiffs. A mistaken or supposed balance was not subjected to the levy.
    II. It is plain the defendants have, through a mistake of fact, received from the plaintiffs the overpayment of one thousand dollars; and money paid under mistake of fact may be recovered back. (Bank of Commerce v. Union Bank, 3 N. Y. 230, and cases cited ; 2 Smith Lead. Cases, 237; Law Lib. 28 [N. S.] 269, and notes ; Kingston Bank v. Etting, 40 N. Y. 391.) And it is no defense, that the plaintiff omitted to use vigilance and care, by which the mistake would have been avoided. (Kingston Bank v. Etting, 40 N. Y. 391; Duncan v. Berlin, 11 Abb. Pr. [N. S.] 116.)

      F. C. Cantine, attorney, and A. J. Vanderpoel, of counsel for respondents,
    urged:—I. The plaintiffs can not maintain this action. They were bound to pay over to the sheriff the balances and proceeds of property of Blagge & Co. in their hands on January 16, 1866. In violation of their obligations and duty to the process of the court, they thereafter paid to Blagge <& Co. more than two thousand dollars, 1. The fact that at the time they made the payments of Blagge & Co.’s check, on January 17, for one thousand dollars, the draft on February 13, and the subsequent payments, they overlooked the fact of the payment of January 15, for one thousand dollars, and so mistook the state of the accounts, gives them no cause of action against the defendants. 2. The remedy of the plaintiffs for moneys paid to Blagge & Co. after the service of the attachment, is against Blagge & Co. If, on May 35, before the payment to the sheriff, the plaintiffs had discovered the error in the omission to charge the one thousand dollar check it would have been no defense for them in a suit by the sheriff, that they had by mistake, after the service of the attachments, paid Blagge & Co. all but eight hundred and sixty-one dollars and thirty cents.
    II. If the new matter upon which the first point is based did not exist, and the case had stood in that behalf, in the same condition as it did when previously before the court, the conduct of the plaintiffs wo eld have estopped them from, maintaining this action. 1. The plaintiffs repeatedly told the sheriff and the defendants’ attorney that they had sufficient propej+y in their hands belonging to Blagge & Co. to pa? the claim ci the defendants; and the sheriff tL'i.K'Upo*. abandoned further pursuit for other property. 3. After receiving payment from the plaintiffs, the sheriff" returned the execution “satisfied,” and the judgment was thereupon canceled and satisfied. The cemsequence was, that the defendants lost any líen th:-y might have had upon the property of Blagge & Co,, and the rights of the subsequent creditors of that f- 'in. immediately attached. The facts of this case are clearly within the principle of the following authorities, viz.: (Continental National Bank v. National Bank of Commonwealth, 50 N. Y. 575, 583 ; Dezell v. Odell, 3 Hill, 216 ; Regney v. Smith, 39 Barb. 383; People v. Reeder, 25 N. Y. 302, citing and approving Dezell & Odell, supra; Manufacturers’ Bank v. Hazard, 30 N. Y. 280, where an equitable estoppel is defined ; Price v. Neal, 2 Burr, 1354). 3. It now appears, that in consequence of the statements and assurances given by plaintiffs to the deputy sheriff, and to Mr. Cantine, as attorney for the attaching creditors, that the creditors caused the sheriff to cease following and holding on to other property of the debtors, Blagge & Co., which was liable to attachment. By the negligence of the plaintiffs in making the mistake,, the creditors have been prejudiced.
   By the Court.—Sedgwick, J.

The learned judge was bound in directing a verdict for the defendants, to construe the evidence most favorably for the plaintiffs. It is apparent from Mr. Batching’s evidence, considered with the undisputed facts of the case, that on January 16, 1866, when the attachment was about to be served, he clearly asserted that there would be sufficient property to pay the defendants’ claim. The property on hand, was deemed, between the parties, and was so treated on the trial, as cash in pl’aintiffs’ hands. He further testifies, that in making his calculations, he deducted the drafts of which the plaintiffs had been advised. One of these was held by Leary, and was for one thousand five hundred dollars.

Beyond the burden of proving affirmatively the cause of action, there is here an admission, that if this one thousand five hundred dollar draft was not properly chargeable against the goods, which were pursued, by the attachment, there might have been seized property sufficient to satisfy the defendants’ claim, after deducting the mistake of one thousand dollars, which no doubt was made. The accounts in evidence, and the oral testimony, furnish facts enough to show that the admission was not erroneous, and almost sufficient of themselves to show that a levy might have been made, which would have secured the defendants. The accounts show that, aside from goods on hand, the proceeds of which had not been received, and correcting the mistake of one thousand dollars, there was a cash balance in favor of H. Blagge & Co. of four hundred and seventy dollars, on January 16, 1866. Mr. Kitching testifies there were on hand five bags of wool, which the accounts show to have been of the value of nine hundred and sixty-eight dollars and ten cents. Further the testimony shows that the steamer Leary, which had arrived January 13, had three bags of cotton and three bags of wool, which the accounts show to have been of the value of five hundred and thirty-eight dollars and eighty-eight cents. In addition, Mr. Kitching shows there were pecan-nuts of the value of sixty dollars, all these might have been seized under the attachment, if the defendants had pushed proceedings under the attachment in the manner they had adopted, but which they stopped in consequence of the statement of the plaintiffs’ agent.

We say here that no question has been made as to whether there was a technically correct service. These matters seem to have been waived from first to last On the argument of the appeal, a substantial point wat raised, that in fact the attachment was only against the individual property of H. Blagge. But as to the goods in question, and which were consigned to the plaintiffs, we think the pleadings prevent that question being raised.

Therefore, on the trial, if the judge was correct in finding that the one thousand five hundred dollars was not properly to be charged upon the property on January 16,1874, it seems to me, that the case showed beyond doubt, that by relying on the erroneous statement oí' the plaintiffs, the defendants were prejudiced to an amount sufficient to satisfy their claim.

1 he questions we consider relate to the perfecting ■of t1 e lien of the attachment on January 16.

Leaving aside any inqinry as to whether Leary, was holder of the check for value, or whether there is any presumption that he would have been injured by the non-payment of the check on January 17, it seems olear to me, that whatever the personal obligations of the plaintiffs to Leary might have been on January 16, because they said the check was good, and could be paid, the fact was that that transaction did not lessen the fund of money and property, which the defendants would have had the opportunity and right to attach. There is no evidence that the defendants knew or acquiesced in the amount of the check being deducted.

On this ground, I am of opinion that the order denying the new trial should be affirmed.

There were other goods, consisting' of pecan-nuts and forty-six packages of merchandise on board the ■steamer Leary, which the defendants insist they might have seized if they had not relied on the plaintiffs’ statement. As these were not consigned to the plaintiffs, and were not under their control, the averments of the complaint do not make an admission of record, perhaps, that as to them the attachment bound the goods of H. Blagge & Co. As it was issued against the property of Pell individually, it is doubtful at least, whether seizing these goods under the attachment would have been a levy upon anything but Pell’s interest in them. As to the value of that interest, no proof was given, and no judgment could be formed, as to the extent of the detriment the defendants suffered by not making the levy. I do not rest, therefore, the decision upon these facts.

The order should be affirmed, with costs.

Sedgwick, J., concurred.


text:
    WILLIAM S. SEE, Plaintiff and Respondent, v. ISAAC BERNHEIMER, Defendant and Appellant.
    Before Curtis and Sedgwick, JJ.

      Decided July 2, 1874.
    I. CONTRACT. PAYMENT ON CONDITION. PERFORMANCE.
    1. Condition complied with. This must be shown by plaintiff.

      a. Where A, agreed to pay C. out of funds in his hand belonging to B. for goods to be sent by C. to B. at a specified place, when the goods shall have arrived at such place,
    Held,
    that C. to recover from A. must prove that the goods arrived at the specified, place.

      b. Evidence. Presumption of arrival.

    1. No presumption arises against A. that the goods had arrived, from the fact that 0. had shipped them by railroad or steamer to B., at the specified place.

    Appeal by defendant from a judgment in favor of plaintiff entered on the report of a referee.
    The complaint averred that, on June 22, 1859, in consideration that the firm of Lee & Mapes (the plaintiff being the assignee of the interest of that firm) would sell to one Hayward, of St. Paul, Minnesota, right marble mantels and mantel breasts, the defendant promised said firm that he would be answerable for the payment by the said Hayward of the price of the goods so sold; that afterwards the plaintiffs, on the faith of the said guaranty, sold and delivered to the said Hayward the said articles for the price of two hundred and thirty-two dollars; which sum became due from Hayward to said firm on or about said August 3, 1859 ; that payment was duly demanded of Hayward, but the same was not made, of which the defendants had due notice, and that payment had been demanded of defendant, and by him refused.
    The answer contained a general denial.
    The issue was referred, and on the trial the plaintiff testified that the defendant and Hayward came together to the office of his firm; that the defendant said that Hayward was building some houses at St. Paul, Minnesota, for him, as contractor; that he, defendant, wanted some mantels for the houses ; that the bill for the mantels was to be made out to Hayward, and presented to the defendant, and he would pay it out of the money he had in his hands due Hayward; that the defendant was to pay for them as soon as they arrived at St. Paul, in Minnesota. He was to get word from Hayward. Hayward was to write him back, and then • Bernheimer was to settle the account.
    At close of plaintiff’s case the defendant moved that the complaint be dismissed on the following, among other grounds: that the defendant was sued as guarantor, and that the contract, not being in writing, was void under the statute of frauds ; that it was not shown that Hayward had notified the defendant of the arrival of the goods, or that the goods ever arrived in St. Paul.
    The motion was denied; to which exception was taken. The plaintiff applied for leave to amend the complaint. Leave was granted, and to this the defendant excepted.

      The amended complaint averred, as to the contract, that Hayward was constructing houses at St. Paul for the defendant; that on that account the defendant was, or was about to become, indebted to Hayward, and then had funds payable to Hayward; that it was mutually agreed between the plaintiff’s firm, the defendant and Hayward, that the firm should send the goods, and that the defendant would pay to the firm so much of his then or prospective indebtedness to Hayward as was necessary to discharge the claim of the firm ; that relying on this promise, the goods were sent to Hayward, at St. Paul; and the goods were received and used by the defendant in the construction of his houses.
    The defendant moved to dismiss the amended complaint, on the ground that it was not sustained by the evidence. The motion was denied, and exception taken to the ruling.
    The defendant gave evidence.
    It appeared in evidence that Hayward had died before he could give notice of the arrival of the goods, if they in fact had arrived.
    The referee directed judgment for the plaintiff.

      A. J. Dittenhoefer, attorney, and C. A. Runckle, of counsel, for appellant.

      Sidney T. Harris, attorney, and of counsel, for respondent.
   By the Court.—Sedgwick, J.

The plaintiff clearly could not recover upon any contract testified to in the case, excepting that one which the plaintiff stated in his testimony. He swore that the money was to be paid by defendant out of funds due to Hayward, when the goods arrived in St. Paul, and when Hayward had notified him of their arrival. If such was the contract, even if its terms were not reasonable, the defendant’s liability arose only from it. In fact, if the debt was to be paid out of Hayward’s money, it was a reasonable and probable provision in favor of Hayward that the defendants should pay only after it was certain that Hayward had received the mantels. The notice by Hayward, perhaps, might be dispensed with, he having died before he could send the notice. This, however, did not dispense with the obligation on plaintiff’s part to prove that the goods had in fact arrived in St. Paul’s. This was one of the conditions, on the happening of which the defendants were to pay out of Hayward’s funds. There was evidence that the goods were sent from the city of Hew York, but not that they arrived at St. Paul’s. There was no presumption against the defendants, that because they were sent by railroad or by steamer they reached the city of St. Paul’s.' For failure to prove this, the referee, in my opinion, should have granted the motion to dismiss the complaint.

It is unnecessary to go further, although I think that the promise of the defendant was evidence of an independent obligation on his own part and not simply a promise to answer for the debt of Hayward. In view of our conclusion, it would be of no practical importance to determine whether the referee had power to amend the complaint.

I am of opinion that the judgment should be reversed, a new trial ordered, the order of reference discharged, with costs to appellant, to abide the event.

Curtis, J., concurred.


author: By the Court.—Monell, Ch. J.

text:
    EDWIN L. BUTTERFIELD, Plaintiff, v. WILLIAM RADDE, Defendant.
    [See note at end of the case.]
    Before Monell, Ch. J., and Sedgwiok, J.

      Decided September 1, 1874.
    I. APPEAL TO COURT OF APPEALS—CERTIFICATE OF GENERAL TERM.
    1. When necessary.—See Laws of 1874, ch. 322.

      a. Motion for, when made.

    1. May be made at any general term of the court in which the decision was made, and need not necessarily be made at the general term which rendered the decision.
    2. Classes of cases in which alone a certificate should be granted.
    1. Public statutes, when their construction is involved.
    2. Public importance, or a la/rge public interest where the questions of law affect them.
    3. Importance, where the principles involved are of importance to others than the parties litigant.
    4. Number of cases, when a large number of eases are depending on the determination of the one case.
    3. Requisite to the granting of a certificate.
    1. Doubt as to the correctness of the decision.

      a. In addition to the case falling within one of the above classes, there must be a fair and reasonable ground to doubt the correctness of the decision.
    4. Decision, what does not fall within any of the above classes.

      a. Presumptive evidence.—Stockholder of manufacturing company.

    1. A decision that proof that the defendant was a trustee of the corporation, was presumptive evidence that he was a stockholder, the act under which the corporation was organized requiring that a trustee should be a stockholder, does not fall within any of above classes.
    1. There is no doubt of the correctness of the decision.

      Motion by defendant for a certificate to authorize an appeal to the court of appeals.

    This is a motion made under chapter 322 of the Laws of 1874, for a certificate or order to authorize an appeal to the court of appeals.
    The papers used upon the motion state, that the action was to enforce the liability of the defendant, as a stockholder of a manufacturing company, organized under the laws of this State, for the debts of the company.
    On the trial there was proof that at the time the indebtedness accrued, the defendant was a “ trustee ” of the corporation.
    Such proof the court at the trial and at the general term, held was presumptive evidence that the defendant was a stockholder, the act requiring that a trustee should be a stockholder, and the defendant excepted to the decision.
    That is the only question, which it is claimed, should be reviewed by the court of appeals.
    The judgment was less than five hundred dollars.

      Mr. S. D. Sewards, for the motion.

      Mr. C. M. Earle, opposed.

       Note.—For principal case, see ante, p. 1.

   By the Court.—Monell, Ch. J.

The statute under which this motion is made (chapter 322, of the Laws of 1874), declares that no appeal shall hereafter be taken to the court of appeals, from any judgment or order granting or refusing a new trial, where the amount of the judgment does not exceed five hundred dolíais, &c„, “ unless the general term of the court from whose decision such appeal shall be taken, shall, by an order, to be entered in its minutes, sfazh there is involved some questions of law which ought to be reviewed in the court of appeals

The first objection to this motion, is, that the motion should have been made to the same general term by or in which the decision was rendered. Such, however, is not a correct construction of the statute. The motion must be to a general term of the court, and can not be made elsewhere ; but there is nothing in the statute that requires the same general term in which the decision was rendered exclusively i.o entertain the motion. It may do so, and so may any other general term.

The court in banc or in general term, may consist of two or more judges, but a concurrence of at least two judges is necessary to render a decision. A general term is a mere branch of the court; and in this court, is changing in'its personal constantly. It would have been impracticable to have required these motions to be made to or at the same term in which the decision was rendered. Frequently decisions are made after the adjournment of the term, and after the members who constituted it, have become occupied in other branches of the court; and it would be difficult to-reconstitute the court as it was when the decision was made, so that a motion could be entertained by it.

The judgments the court of appeals is authorized to-review, are such as are made by the court at the general term. But they are the judgments of the court and not of the general term.

Hence the legislature has provided, that the motion shall be made to the general term £i of the court ” from whose decision the appeal shall be taken.

We think the motion is properly before us.

The intention of the statute was, doubtless, to relieve in some measure, the court of last resort, of its overburdened and fast accumulating calendar of causes. Heretofore there has been no restriction to appeal from judgments of courts of record. All alike were subject to review; and there could be no discrimination between such as involved difficult or important principles of law, and such as merely involved small and insignificant sums of money. But as the parties to a controversy do not litigate to establish or settle principles of law, but merely to get or to prevent the getting of money, it was well to put a limit to appeals, and to fix the limit by the sum of money involved.

In thus fixing the limit at five hundred dollars, the legislature was careful to retain the power of ultimate review in cases where it would be proper, without regard to the amount. So that, when in the judgment of the court sitting in. general term, there is some question of law involved, which ought to be reviewed in the court of appeals, such general term may allow the appeal to be taken.

In making this exception the legislature has conferred a discretionary power upon the general terms, which should be wisely and discreetly exercised, and especially with reference to the accomplishment of the objects of the statute, and not to defeat its ends.

The most usual objects to be attained by litigation^ is, the enforcement and protection of rights, or the prevention or redress of wrongs, and no just discrimination can be made which shall wholly exclude a party in any case from seeking in the courts such protection or redress. But the legislature has always assumed the right to limit and restrict jurisdictions and to confine litigants to tribunals having reference to the amount in controversy alone. Hence inferior courts not of record have been established, with jurisdiction limited to a small sum of money, and their judgments made final, except in exceptionable cases.

To have the law settled is perhaps of more importance, than to have it settled correctly. Conflict of decisions and want of harmony in the views of different tribunals, renders the law unstable, and necessarily leads to and increases litigation. But so long as the end is accomplished, it is not of much importance how it is done, nor whether the ultima thule, is the court of appeals, the supreme or superior court, or even a court of a justice of the peace.

Few questions of law can be said to arise in any case, which have not an analogy to be found in the books ; and their determination by any tribunal of sufficient learning, if made a final determination, would as effectually, and probably as satisfactorily, settle the law as if it .was carried by successive stages to the highest tribunal.

To give such effect to the statute, as we must assume was intended by the legislature, which was to relieve the court of appeals from the great pressure upon its calendar, we must be satisfied upon these applications, that the questions of law involved in the case are of a nature which in the language of the statute c ‘ ought to be reviewed ’? by that tribunal, and that they fall within one or other of the following classes.

That they involve the construction of a public statute ;

That they involve questions of law of public importance or as affecting a large public interest;

That a large number of cases are depending upon the determination of the one case ; or

That the principles involved are of importance to others than the parties litigating.

And in respect to either of these classes of cases, the court must be satisfied that there is fair and reasonable ground to doubt the correctness of the decision sought tobe reviewed.

But if the decision concerns the parties to the action only, and is of no general or public importance, the judgment of the general term should be final.

There is much room for difference as to what cases fall within, the classes indicated ; but that is unavoidable. The court will best subserve the interests of the public, in very sparingly granting permission to continue litigations beyond the general term, and to grant it only in case of both great importance and doubt.

In the case before us, the question which it is desired to obtain a review of, is of no public or general importance ; nor do we entertain any doubt of the correctness of the decision of the general term upon it and the defendant must be concluded by such decision.

The motion must be denied, with costs.

Sedgwick, J., concurred.

Note.—Notwithstanding this decision, defendant appealed from the judgment to the court of appeals. The plaintiff moved that court to dismiss the appeal. In opposition to the motion defendant urged that the legislature could not limit the right of appeal as provided in the act, and that the act only prohibited appeals from orders granting or refusing new trials, and not irom judgments. The court, however, dismissed the appeal,


text:
    HOMER A. MOREHOUSE, Plaintiff and Respondent, v. ISRAEL YEAGER, Defendant and Appellant.
    Before Mohell, Ch. J., and Sedgwick, J.

      Decided September 3, 1874.
    I. Order at special term.—Appealability op.
    1. Test of.

      a. The test is whether it involves the merits of the action or affects a substantial right.
    It is immaterial whether it is one within the discretion of the court or not.
    3. What not appealable.

      a. An order denying a motion to strike out parts of a pleading is not.
    Appeal from an order.
    The motion at the special term was for an order directing certain parts of the complaint to be stricken out as “irrelevant and redundant.”
    The motion was denied, and the defendant appealed.

      Mr. Swain, for the appellant.

      Mr. Compton, for the respondent.
   By the Court.—Monell, Ch. J.

Any order made at special term which “involves the merits of the action or affects a substantial right,” may be reviewed on appeal by the general term. Code. § 349.

The construction of this section in recent cases, renders it immaterial whether the order is one which is within the discretion of the court or otherwise (Matter of Duff, 41 How. Pr. 350 ; People v. N. Y. Central R. R. Co., 29 N. Y. 418; Gray v. Fisk, 53 Id. 630 ; Livermore v. Bainbridge, 15 Abb. Pr. N. S. 436); the test of its appealability, and the only test, being, whether the merits of the action are involved, or whether a substantial right is affected. If either, then an appeal lies. The section of the Code referred to, relates and is confined to appeals from the special to the general term of the same court. It has no relation to, nor is it affected by, the section which authorizes an appeal in certain cases, from the general term to the court of appeals (section 11 of the Oode), and as the cases cited involve the power of the latter court, and only incidently declare or approve of the powers of the general term over discretionary orders, we must look to the adjudication of the general terms for a construction of the section concerning appeals to that branch of the court.

The recent decisions of the court of appeals referred to, somewhat disturb if they do not overrule the cases in which it was heretofore held, that orders resting merely or wholly in the discretion of the court, could not be reviewed, by the general term. Indeed, some of the cases went further and held, that no substantial right could be affected, where it was discretionary to grant or withhold the order (Tallman v. Herman, 10 How. Pr. 90).

But the clear language of the Code leaves the question free from embarrassment by any of the decisions; and the test to be applied, and the only test, is, does the order relate to the merits of the action, or does it affect a substantial right ?

In the application of this test, this court has uni formly held, that motions generally in respect to the pleadings, do not involve the merits or affect a substantial right (Marble Iron Works v. Smith, 4 Duer, 362; Salters v. Genin, 10 Abb. Pr. 478; Geis v. Loew, 36 Sup. Ct. 190).

And a motion, like the one involved in this appeal, to strike out portions of the complaint as irrelevant or redundant, has been held to be no exception (Murphy v. Dickinson, 40 How. Pr. 66 ; Mercantile Mut. Ins. Co., 10 Abb. Pr. N. S. 37; Field v. Stewart, 8 Id. .193). The last case is a decision of the general term of this court and is decisive of the question in this case.

The order below neither involved the merits of the action, or affected a substantial right of the party, and it should be affirmed, with costs.

Sedgwick, J., concurred.


author: Monell, Ch. J.

text:
    SPECIAL TEEM.
    JAMES MORGAN v. BEN HOLLADAY.
    Before Monell, Oh. J., at Special Term.

      Decided 1874.
    L EXECUTION.—SALE OP PERSONAL PROPERTY UNDER,
    1. HOW SET ASIDE.

      a. On motion.
    3. PoK WHAT CAUSES SET ASIDE.
    1. When the property was sold at a great sacrifice and there was
    a mere technical payment of the bid, a sale will be set aside.* For a violation of the statute.

    1. In not having the property present and in view of those attending the sale.
    3. In not selling in lots and parcels, when the interest of the judgment debtor is not. that of a pledgor.

      a. Lease. This although the property was held by a lessee under a lease from the judgment debtor for two years.
    Motion to set aside a sale of personal property, sold under an execution.
    Judgment having been entered in favor of the plaintiff against the defendant, an appeal was taken therefrom to the general term. An undertaking on the part of the defendant, under section 335 of the Code, was duly filed, but there was no undertaking given under section 334.
    As it was claimed that the undertaking filed was insufficient to stay execution upon the judgment, an execution was put into the sheriff’s hands, under which he sold the right, tifie and interest, of the defendant in a large amount of household furniture, which was held under a lease for two years, by one Jaffray.

      * Note.—The case does not decide that the elements of sacrifice and technical payment of the bid or either of them, must necessarily exist to authorize the setting aside a sale for a violation of the statute in both or either of above particulars.

      The sum bid was eight hundred and fifty dollars, and the value of the property about thirty thousand dollars. The purchase, however, was subject to the right of possession in Jaffray for about two years.
    The sheriff sold the property in one parcel, and it was alleged, that only a small portion of it was in view of the bidders. a

      Mr. J. Sessions and J. Larocque, for the motion.

      Mr. A. Thain and A. W. Gleeson, opposed.
   Monell, Ch. J.

From an examination of the question which presented itself to me on the argument of the motion, I am satisfied that the court has the power to entertain a motion to set aside a sale by a sheriff of personal property under an execution. The power was and is constantly exercised by courts of equity, to avoid sales of real property (1 Barb. Ch. Pr. 538; Kellogg v. Howell, 62 Barb. 380), and, in some reported cases, it has been exercised by courts of law to avoid sales of personal property (1 Burr. Pr. 300 ; Bixby v. Mead, 18 Wend. 611). The power is recognized in the following cases (Davis v. Tiffany, 1 Hill, 643; Ames v. Lockwood, 13 How. Pr. 555 ; Richards v. Varnum, 8 Id. 79). Ih all the cases in which the motion has been de nied, it was in the exercise of the discretion of the court and not for the want of power (Meyers v. Kelsey, 19 J. R. 197; Adams v. Elliott, 1 How. Pr. 239). When there are sufficient grounds, therefore, and it does not appear that any substantial right will be prejudiced by a summary examination, a motion is a proper proceeding.

In this case there has been only a mere technical payment of the bid, and the check given by the purchaser remains in the sheriff’s hands. The sale as conducted by the sheriff, was, I think, a violation of the statute in two particulars.

First. A large portion of the property was not present and within view of those attending the sale (3 JR. 8. 367, § 33); and

Second. It was not sold in lots and parcels (lb.)

The interest of the defendant was not that of a pledgor / and, therefore, the sale was not justified by section 30 of the same statute under which the case of Tift v. Barton (4 Denio, 171), was decided.

The sale should have been in such lots and parcels as was calculated to bring the highest price, subject to •Jaffray’s right of possession.

By the sale, the purchaser became the absolute owner of the property subject only to its being used by the tenant for less than two years.

It is very clear that the manner of selling prevented competition, and grossly sacrificed the property.

The purchaser obtained property worth thirty thousand dollars for eight hundred and fifty, and he now claims also to be entitled to the rent of it.

A sale, such as this, ought not to be allowed to stand.

The motion is granted, setting aside the sale. The order must direct the sheriff to restore to the purchaser his bid.


author: Monell, J.

text:
    WILLIAM JAMES STEWART and Others v. THOMAS J. POWERS and Another.
    Before Monell, Oh. J., at Special Term.

      Decided , 1874.
    L REVIVAL OF ACTION AFTER DEATH OF ONE OR MORE PARTIES.—SUPPLEMENTAL COMPLAINT.
    1. Motion for leme to file a supplemental complaint is TJ$mECESSAnv where such complaint is filed to revive an action after the-death of one or more parties.
    1. This, although one year has elapsed since the death before-the filing of the complaint.

      a. Beaus. A motion to set aside a supplemental complaint so filed for such purpose without leave of the-court first obtained, on the ground of irregularity, was-denied.
    Motion to set aside a supplemental complaint.
    Two of the plaintiffs having died, pending the action, and more than a year having elapsed since such-death, a supplemental complaint, alleging such death, and that others, named therein, had succeeded to the interests of the deceased persons, was, without any leave obtained therefor, served upon the defendants, for the purpose of reviving the action in the name of such successors in interest.
    The motion was made on the ground that it was-irregular to serve the supplemental complaint without leave of the court.

      Mr. E. D. James, for the motion.

      Mr. A. R Dyett, opposed.
   Monell, J.

The question involved in this motion has not, that I am aware of, been adjudicated upon by this court. In the supreme court the decisions are conflicting. Those holding that a motion is unnecessary, are Matter of Bordsdorf (17 Abb. Pr. 168); approved in Roach v. La Farge (19 Id. 67); while Green v. Bates (7 How. Pr. 296) ; Johnson v. Williams (2 Abb. Pr. 229); special term decisions, and Coon v. Knapp (13 How. Pr. 175); a general term decision, and Gordon v. Sterling (Id. 405); decided at special term, held that a motion is necessary.

Perhaps a literal reading of section 121 of the Code, will favor the construction, that a motion is required in all cases; and the difficulty arises from the word “ allow,” which seems to apply to each mode of reviving an action. Thus “the court on motion, at any time within a year thereafter, or afterwards on a supplemental complaint, may allow the action to be continued,” &c.

An action does not abate by reason of the death of a party. It may, in effect, be suspended ; but the suspense is removed by allowing it to be continued by or in the name of the successor in interest. If the proceeding to revive is promptly taken, it is accomplished by a mere motion ; but if a year elapses, a more formal mode is prescribed. And where a supplemental complaint is resorted to, it at once puts the party in possession of all the material facts, in a form that an issue can be framed for trial.

The word “allow” is not, I think, to be taken necessarily, in an active sense, as requiring some possitive action of the court, but rather in the passive sense, of permitting the action to prevail without regard to the cause of suspension ; so that it stands revived by the service of the supplemental complaint notwithstanding the suspension.

This view is in analogy to the mode of revival before the Code. A bill of revivor was filed without leave being obtained, and was so far an original proceeding, not requiring the allowance of the court. The practice prescribed by the Code was designed to be assimilated to the former chancery practice; and following that practice, it is reasonable to suppose, that it was intended, to provide for a revival of an action, in accordance with such former practice ; with the addition, of also providing for a more summary mode, when the application was promptly made.

The opinion of the supreme court, in Matter of Bordsdorf (supra), very fully examines the question, and, as I think, arrives at a correct conclusion.

The construction of the section, in that case, was, that it is unnecessary to obtain leave of the court to serve a supplemental complaint to revive the action. And such construction is strengthened by the provision, in the same section, for reviving after judgment for the possession of real property ; which provides forth e revival on motion within one year after the death, or af forwards on supplemental complaint. Very clearly, I think, in such a case no leave to serve a supplemental complaint is required.

The motion is denied, with ten dollars costs.