author: Pbatt, J.:

text:
    Yonkers Savings Bank, Respondent, v. William H. Kinsley, Individually, and as Executor and Trustee, etc., of Hudson Kinsley, Deceased, Appellant, Impleaded with Stephen H. Thayer and Others.

      Seal estate converted into personal property — what is required to reconvert the same — land bought by executors on a forclosure sale — action to foreclose a mortgage given by an executor onpremises tabeen by him in settlement of an action of foreclosure — when the plaintiff is entitled to judgment therein.

    When land has once been converted into personalty it requires an. election or intention to reconvert to restore it to its original condition.
    Land bought in by executors on the foreclosure of a mortgage belonging to the estate is to be treated as personal property, which the executors may sell, and for which they are accountable as such, and it is immaterial whether the deed is taken in the names of the executors as such or in their individual names, and land thus purchased by an executor or administrator is regarded as a substitute for the mortgage foreclosed and takes its place for all purposes as between the executor or administrator and the parties interested in the estate. It is not treated as land belonging to the testator, and his heirs or devisees take no direct interest in it and cannot dispute the title of a purchaser from the executor, though no power of sale bo contained in the will, or from an administrator who has purchased the land under such circumstances. •
    An executor, under the power of sale contained in a will, conveyed certain real estate and took hack a bond and mortgage thereon to secure a portion of the purchase price thereof. Subsequently the mortgagor made default and the executor commenced an action to foreclose the bond and mortgage. Such action was settled by the conveyance by the mortgagor to such executor of the mortgaged premises, with other property, the executor taking the deed thereof, in his individual name. Thereafter such executor executed a mortgage on a portion of such premises to secure a loan, the proceeds of which were used to pay taxes on the real estate so conveyed to him. Default having been made on the mortgage executed by such executor, an action was commenced to foreclose the same.

      jBeld, that assuming that such executor held the land as real estate subject to a trust, even then equity would sustain the mortgage, as at the time he had no trust funds on hand, and the mortgage was made for the safety and protection of the trust estate ;
    That the receipt by such executor of the deed from such mortgagor in payment of the mortgage, was the same in effect as if he had purchased the land at a foreclosure sale, and that having taken title in his own name, he had full power to mortgage, subject to his accounting to the beneficiaries under the will.
    Appeal by tlio defendant, William II. Kinsley, individually, and as executor and trustee under tlie last will and testament of Hudson Kinsley, deceased, from a judgment of foreclosure and sale of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Westchester on the 9th day of December, 1893, u pon the decision of the court rendered after a trial at the Westchester Special Term.

      George Zahrishie, for tho appellant.

      Galvin Frost, for the respondent.
   Pbatt, J.:

This is an appeal from a judgment of foreclosure and sale entered at Special Term on December 9, 1893.

The facts and circumstances connected with the execution of the mortgage are briefly stated as follows:

The mortgaged premises were formerly a part of the estate of Hudson Kinsley, who died at the city of Yonkers March 26, 1868, leaving a will which was duly admitted to probate by the surrogate of the county of Westchester April 11, 1868, and letters testamentary thereupon were duly issued to Stephen H. Thayer, one of the executors named in the will.

By said will the testator gave all his estate, real and personal, to his executors in trust, to put the whole or the net proceeds thereof into a productive shape, and to invest all moneys not wanted for immediate use in bonds and mortgages of real estate, and in other specified securities, and to dispose of the same as particularly directed in said will, with full power and authority to sell and dispose of any aud all of the real estate and to give deeds and conveyances therefor.

Under the power of sale in the will the executor, on the 5th day of November, 1868, conveyed the premises described in the complaint, with other premises, to John T. Waring for $16,000; $6,000 of which -was paid in cash, and the balance, $10,000, was secured by a purchase-money mortgage to the executor upon the premises conveyed. Waring made default, and the executor Stephen II. Thayer commenced an action to foreclose the mortgage. That action was settled by tho conveyance by Waring to Thayer of the mortgaged premises with other property, the executor Thayer taking the deed in his own name individually.

. On tlie 10th day of December, 1880, the said Stephen PI. Thayer mortgaged the premises described in the complaint, being a portion of the premises so reconveyed to him by Waring, to the Yonkers Savings Bank, the plaintiff, to secure a loan of $3,000. It was agreed by the parties that the proceeds of this mortgage should be applied to the payment of taxes upon the premises described in the complaint and the other premises reconveyed by Waring as above stated.

Stephen IT. Thayer died on the 15th day of January, 1890 ; the defendant William IT. Kinsley qualified as an exécutor under the will of Pludson Kinsley, deceased, and the executor, widow and heirs at law of Stephen IT. Thayer conveyed to the said William PI. Kinsley, as such executor, the premises described in the complaint and the other premises which had been reconveyed by John T. Waring as above stated, the mortgage to the Yonkers Savings Bank being still open.

On the 24th day of October, 1891, the interest on this mortgage being in arrears, this action was commenced.

No question was made upon the trial as to the propriety or validity of the arrangement between Mr. Thayer and Mr. Waring, or as to the bona fieles of the transaction.

The following stipulation was also produced upon the trial, to wit:

“ Exhibit A.

“ Eor the purposes of this trial it is admitted and stipulated as follows:

“ 1. That all the allegations of fact contained in the complaint, excluding conclusions of law, are true as therein set forth, except that the defendants do not concede that anything is due the plaintiff on the mortgage, or that the interests of the defendants accrued subsequently to the lien of the mortgage. It is admitted, however, that the amount unpaid upon the bond set forth in the complaint is the sum of $3,000, with interest thereon from the first day of June, 1889.

2. That all the allegations of fact contained in the answer of the defendant William H. Kinsley, excluding conclusions of law, are true as therein set forth.

“ 3. That the defendants do not question the propriety and validity of the arrangement between Mr. Thayer and Mr. Waring, set forth in tbe answer, which resulted in the reconveyance to Mr. Thayer therein mentioned.

“ 4. That the money advanced by the plaintiff upon the bond and mortgage set forth in the complaint was advanced for the purpose of paying taxes upon the mortgaged premises and the other premises mentioned in the answer, and was so applied under the supervision of the mortgagee, as follows:

Redemption from sales for taxes of 1876 and 1877... $1, 633 76

Taxes of 1878 ...........................'....... 395 25

Taxes of 1879................................... 419 12

Taxes of 1880................................... 352 69

Total.............................'......... $2,800 82

The balance of the $3,000 borrowed from the plaintiff was applied by Mr. Thayer towards the payment of the taxes for 1881 upon the same property, and the amount of these taxes, 71$, was assessed against the premises described in the mortgage, and the residue against the other property reeonveyed by Waring to Thayer.

“5. That the personal estate of Hudson Kinsley, deceased, in the hands of Mr. Thayer, amounted to $70,000 ; that there was income therefrom to an amount larger than the amount of said taxes, which income was paid as it accrued to the legatees under the will.

“ 6. That subsequent to the death of Mr. Thayer his heirs and legal representatives executed and delivered a deed purporting to convey and release the mortgaged premises and the other premises mentioned in the answer to the defendant William H. Kinsley, as executor and trustee under the will of Hudson Kinsley, deceased.”

The defendants are met on the threshold of this case by the fact that the loan this mortgage was given to secure was for the benefit of the estate, and in absolute good faith. There is, therefore, no justice or equity in the defense.

Assuming that there was a conversion of the land sold to Waring, there never was any reconversion, as when land has once been converted into personalty it requires an election or intention to reconvert to restore it to its original condition.

There is no question made but that the executor made a valid sale to Waring, and it is clear that the land and mortgage he took as security was personal property and whether he received money or took land in payment was immaterial; lie was only accountable to the estate for liis conduct.

This subject lias been exhaustively examined by the Court of Appeals in Lockman v. Reilly (95 N. Y. 64). In that case the court, per Rapadlo, J., says : “ It may happen that an executor or administrator, without authority, invests the funds of the decedent’s estate in land; or he may take land in payment of a debt due to the estate which he represents, or may purchase it for the protection of the estate at an execution sale under a judgment belonging to the estate. * * * The legal title to the land is in the executor or administrator, but as between him and the legatees, next of kin and creditors of the deceased party, it is personal estate, and he holds it as the legal representative of the deceased. * t * That land bought in by executors on a foreclosure of a mortgage belonging to the estate is to be treated as personal property, which the executors may sell, and for which they are accountable as such, has been frequently decided, and it is immaterial whether the deed is taken in the name of the executors as such or in their individual names. (Clark v. Clark, 8 Paige, 152; Schoonmaker v. Van Wyck, 31 Barb. 457; Valentine v. Belden, 20 Hun, 537; Cook v. Ryan, 29 id. 249.) In all these cases land thus purchased by an executor or administrator is regarded as a substitute for the mortgage foreclosed, and takes its place for all purposes as between the executor or administrator and the parties interested in the estate. It is not treated as land belonging to the testator. His heirs or devisees take no direct interest in it and cannot disjDute the title of a purchaser from the executor, though no power of sale be contained in the will. The heirs of an intestate cannot question the title of a purchaser from his administrator who has purchased land under such circumstances. (Long v. O'Fallon, 19 How. [U. S.] 116; Williams on Executors, 650, note d.) ”

There can be no doubt if the foreclosure of the mortgage from Waring had proceeded to sale, that Thayer could have purchased it in and taken title in his own name subject only to an accounting to the estate. But, even assuming for the sake of argument, that Thayer held the land as real estate subject to a trust, even then equity'will sustain the mortgage, as at the time he had no trust funds on hand and the mortgage was made for the safety and protection of the trust estate. (New v. Nicoll, 73 N. Y. 127 ; Payne v. Wilson, 74 id. 348; see, also, ease of McLean v. Ladd, 66 Hun, 341, and cases there cited.)

We think that receiving the deed from Waring in payment of the mortgage was the same in effect as if Thayer had purchased it at a foreclosure sale, and that, having taken title in his own name, he had full power to mortgage, subject to his accounting to the beneficiaries under the will.

The judgment should be affirmed, with costs.

Brown, P. J., concurred ; Dykman, J., not sitting.

Judgment affirmed, with costs.


source: Caselaw Access Project

author: Brown, P. J.:

license: Public Domain

text:
    James H. Stuart, Appellant, v. Mutual Reserve Fund Life Association, Respondent.

      Life insurance policy — the sense in which language is used, when a question for the jury — question in an application for insurance ■ — waiver of a defense.

    When the sense in which language is used by the parties in an application for a policy of life insurance is in doubt, its proper meaning may present a mixed question of law and fact, the decision of which must be left to the jury.
    An application for a policy of life insurance contained the following question: ‘‘Has any physician given an unfavorable opinion upon the life of the appli- . cant with reference to life insurance or otherwise ? ”

      Held, that such question was not equivocal or ambiguous, and did not call for an. opinion as to the manner of living, or the then condition of health of the applicant, further than as those elements might affect the risk of insurance upon the individual, and a false answer thereto rendered the insurance policy void.
    After the death of a person to whom a policy of life insurance had been issued, proofs of death were furnished to the insurance company, and the latter advised the administrator that upon the facts as they then appeared the proofs were approved and the claim would be paid on a specified date. A mortuary call was made by the insurer assessing its members for approved claims, among which was the claim upon the life insurance policy of such decedent, and the money was collected, but the corporation did not pay the amount of the policy in accordance with its notice, and thereafter notified the administrator of such decedent of its revocation of the approval of the claim, and declined to pay it. An action was thereafter commenced to recover the amount of such policy.

      Held,, that a defense to the action brought on the policy, based upon facts unknown to the insurer at the time of such notice and assessment, had not been waived by it.

      Appeal by the plaintiff, James H. Stuart, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Kings on the 22d day of January, 1892, upon the verdict of a jury directed by the court after a trial at the Kings County Circuit, and also from an order entered in said clerk’s office on the 23d day of February, 1892, denying the plaintiff’s motion for a new trial made upon the minutes.

      Alfred It. Page, for the appellant.

      F. A. Burnhmn and Willimn O. De Witt, for the respondent.
   Brown, P. J.:

This action was brought by the plaintiff as assignee of William R. Page, administrator of John B. Page, deceased, upon two certificates or policies of life insurance, dated September 25, 1885, issued by the defendant upon the life of said John B. Page, and payable to his legal representatives within ninety days after receipt of satisfactory proofs of death.

A verdict was directed for the defendant upon the ground that the answers made by the insured in his application to the two following questions were untrue:

First. Q. Has airy proposal to insure the life of the applicant ever been declined ? If so, by what company or association % Second. Q. Has any physician given an unfavorable opinion upon the life of the applicant with reference to life insurance or otherwise \

To both questions the answer returned was “ No.”

Hr. Page died on October twenty-fourth following the issuing of the policies. Proofs of death were furnished on December sixteenth, and on May 10, 1886, the defendant advised the administrator of Mr. Page that as the facts then ajrpeared the proofs were approved, and the claim would be paid on July thirtieth.

On June first a mortuary call was made by the defendant assessing its members for approved claims, among which was the one in suit, and the money was collected. The defendant did not pay in accordance with its notice of May tenth, and in March, 1887, it notified the administrator of its revocation of approval of the claim, and declined to pay it. This action was commenced on September 28,1888.

The appellant contends that by its approval of the proofs and promise to pay the claim, and collection of the money by assessment upon its members, the defendant waived any right to declare the policy void for breach of its conditions, and cites Smith v. Glens Falls Ins. Co. (62 N. Y. 85) to sustain this contention.

That case is not applicable to the present controversy. It was a case of fire insurance, where, in consideration of the surrender and cancellation of the policy, the defendant agreed to pay a specified sum in settlement of the loss. The policy was surrendered, and after that the defendant refused to pay, and pleaded a breach of warranty in an action brought to recover the sum agreed to be paid.

The court held that the defense of a breach of condition of the policy did not survive its surrender and cancellation, and that the action was not on the policy, but on the new agreement, and that the defendant must pay.

A similar ruling was made in Nat. Life Ins. Co. v. Minch (53 N. Y. 144-151).

The present case has in it no element of settlement. The defendant never promised to pay absolutely. The statement of the letter of May tenth was that on the evidence then with the association, and as the facts then appeared, it would pay on July thirtieth.

At the time of writing that letter it did not know of the facts now asserted as a defense, and consequently, then, could not waive a defense based upon them. (Robertson v. Metropolitan Life Ins. Co., 88 N. Y. 541.)

Neither is the fact that the money to pay the claim was collected by assessment upon the members of the association available to the plaintiff, nor does it affect the right of the defendant to reject the claim upon evidence subsequently obtained. Such, I think, would be the duty the officers owed to the association, if they were satisfied from their examination that there was a breach of the contract. (Fisher v. Andrews, 37 Hun, 176; Mayer v. Equitable Reserve Fund Life Association, 42 id. 237.)

We, therefore, reach the inquiry whether the court properly determined that the answers to the questions I have quoted were untrue.

The evidence on the subject was not in dispute. The question is, did it compel the conclusions drawn from' it ?

It appears that Mr. Page had a tontine policy in the Equitable Life Assurance Society. That policy provided that the tontine dividend should be applied only to purchase an annuity to reduce premiums during the subsequent continuation of the policy. The tontine period had expired in November, 1881. The association had, however, made an offer to the holders of such policies, including Mr. Page, in addition to the provision I have quoted from the contract, that the tontine dividend might be applied to the purchase of additional insurance equal in value to the annuity provided in the contract. But the offer was subject to the condition that the person accepting it should pass a satisfactory medical examination as to the insurable character of his life.

On the day preceding the application for the policies in suit Mr. Page called upon the Equitable Association and saw Mr. Van Oise, the assistant actuary. The additional insurance to which he would have been entitled to was $1,100, and he expressed a desire to accept the offer made to him.

He was sent by Mr. Van Oise to the medical department to be examined for that insurance. He was examined by Dr. William S. Seaman, a medical examiner of the company. The result of that examination was that albumen was found in his urine, and Dr. Seaman refused to approve the application, and communicated that conclusion to Mr. Van Oise.

Mr. Van Oise testified: “I saw Mr. Page again on that same day after I had sent him or took him to the medical department. * * * I told him that our doctor had refused to pass him for the increased amount of insurance. * * * I told him that the doctor would not approve him. * * * In the conversation I had with Mr. Page it was stated that the doctor refused to approve him on account of the condition of 'his health. * * * I think he asked why the doctor refused to approve him; * * * what was the matter with him. My recollection would be that I evaded the answer.”

It further appears by the testimony of Dr. Gale, who was Mr. Page’s physician at his home in Vermont, that on his return from New York in September, 1885, at Page’s request, he made an examination of his urine. And that Page then told him of his application to the Equitable Association for additional insurance, and tliat he had submitted to an examination, and an unfavorable opinion had been passed upon him, and he wanted Dr. Gale to examine his urine and see if there was any trouble.

The appellant claims that as no formal proposal for insurance was made by Mr. Page to the Equitable Association, but the offer made to the policyholders was in the nature of a settlement of their tontine dividend, this evidence does not establish that the negative answer given to the first question was false. But, passing this, I think it permits no other conclusion than the untruthfulness of the answer to the second question.

That inquiry was not limited to an opinion given upon an application for insurance.

The information called for was whether in “ reference to insurance or otherwise” an unfavorable opinion had been given as to the applicant’s life.

The criticism made upon the form of this question is not, I think, well founded. I do not consider it equivocal or ambiguous. It does not call for an opinion as to the manner of living or the present condition of health of the applicant, further than as those elements might affect the risk of insurance upon the individual.

The life is referred to as the subject of insurance, just as in fire or marine insurance a building or vessel would be referred to, and the inquiry is whether an opinion had ever been given that was unfavorable to the life considered as an insurable thing.

Undoubtedly, when the sense in which language is used or intended to be understood by parties is in doubt, its proper meaning may present a mixed question of law and fact, which must be left to a jury to determine; but I do not think this is such a case.

The question was plain and intelligible, and the insured must be held to have known that Dr. Seaman had given to Mr. Van Cise an opinion that was unfavorable to his life as an insurable risk. His answer was, therefore, properly held by the trial court to have been untrue.

The answer to this and other questions was by the terms of the policy warranted to be true and made a part of the contract.

Its untruthfulness, therefore, avoided the contract. (Foot v. Ætna Life Ins. Co., 61 N. Y. 511; Edington v. Ætna Life Ins. Co., 77 id. 564.)

The respondent lias called our attention to alleged breaches of other conditions, and to the clause in the contract providing that no suit shall be brought after the lapse of one year from the date of the death of the insured.

I am of the opinion that the evidence permitted the conclusion that tlie breach of the condition as to other insurance, and as to the time of the commencement of an action to recover upon the policies was waived by the defendant, but whether the question was one to be determined by the court or jury it is unnecessary to decide; nor, inasmuch as we think the judgment must be affirmed, is it necessary to state the reason that leads to that conclusion.

The judgment must be affirmed, with costs.

Pratt and Dykman, JJ., concurred.

Judgment affirmed, with costs.


text:
    Isaac Bell and Another, Appellants, v. The City of Yonkers, Respondent.

      Proceedings of a common council — its minutes only prima facie evidence thereof— they may he shown by parol testimony — the presumption that a resolution was adopted as written may be overcome — notice of assessment — error in the description of the assessment district — substantial compliance sufficient — relief against an assessment —failure to assess property within the district renders the assessment void.

    What were the proceedings of a common council is a question of fact, and its minutes are not conclusive evidence thereof, in the absence of a provision to that effect in the charter creating such council. Such minutes are only prima facie evidence of its action, which, as the evidence of the record is not conclusive, may be shown by parol evidence.
    The contention that a common council, in adopting a report, must be presumed to have adopted it as printed and not as read, has no force in the presence of competent and uncontradicted evidence showing the contrary fact.
    Where the object of making a description of an assessment district a part of the notice of assessment was that every landowner therein should know that his land was liable to be assessed, and the same was not a part of the proceeding to fix the district, if the notice is addressed to every person within the district as fixed, the assessment will not be held to be void because it was addressed to or reached parties outside of the district.
    A notice given under the charter of a city, which required a notice that the report of its assessors had been “completed and so deposited,” stated that the assessors had “ assessed the expenses” in question, and had “made a report in writing,” which was the manner in which they were required to make it, and had “deposited the same with the city clerk,” the officer with whom the charter required them to deposit it. Such notice also stated the time and place when and where “the parties interested-can be heard,” under a provision of the charter which required a notice of the time and place to be fixed “to review their report,”

      Held, that such notice contained the substance of all that the statute required, and that a literal compliance with the law was unnecessary.
    In an action brought to cancel an assessment, it is incumbent upon the plaintiff to establish some substantial error in the assessment proceedings, by which he was actually prejudiced, in order to entitle him to the cancellation of an assessment levied upon his land.
    An omission to assess property situated within an assessment district affords a good ground for declaring the assessment void.
    Appeal by tlie plaintiffs, Isaac Bell and another, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clei’k of the county of Westchester on the 26th day of August, 1893, upon the decision of the court rendered after a trial at the Westchester Special Term confirming an assessment levied upon real estate of the plaintiffs and dismissing the plaintiffs’ complaint.
    The complaint in this action brought to vacate an assessment contained the following prayer for relief:
    “ That the defendant, and all persons claiming under the defendant, be forever barred from all claim to any interest in or lien or incumbrance upon said lands and premises of the plaintiffs for or on account of said so-called assessment,, and that the said so-called lien and incumbrance and assessment may be canceled of record and vacated and set aside, and the said property of the plaintiffs be declared free and clear therefrom, and the defendant perpetually enjoined from taking any proceedings to enforce said lien or assessment, and from selling plaintiffs’ said land, or any part thereof, for payment of said assessment, and for such other or further judgment as may be just.”

      PtaJ/ph E. Prime, for the appellants.

      James M. Sunt, for the respondent.
   Brown, P. J.:

This action was brought to set aside an assessment made upon plaintiffs’ land for the construction of a sewer. Many defects in the assessment proceedings are alleged in the complaint, and the case before us contains seventy-three exceptions to the findings of the court and to its refusal to find as requested by the plaintiffs.

The grounds, however, upon which the plaintiffs have based their claim to relief upon the argument before this court are comprehended in three general propositions:

First. That the assessment district, which by the charter of the defendant it was made the duty of the common council to fix, included land omitted from assessment.

Second. That the notice of the time when the common council would act in relation to the proposed sewer did not correctly describe the assessment district as fixed by the common council.

Third. That the assessors’ notice of the completion of their report and of the time when they would meet to review the same was not in the form required by the charter.

The sections of the charter of the city to which we are referred, so far as they are important to he considered in connection with the questions presented, are contained in chapter 19 of the Laws of 1887, and are as follows:

Sec. 17. “ Prior to contracting for any such work a plain and accurate specification of the work proposed to be constructed must be prepared. * * *

“ The common council shall then fix a district of assessment, beyond which the assessment shall not extend, and cause to be published in one or more of the official city newspapers a notice that on a day therein to be named * * * it will act in relation to the work proposed to be constructed. * * *

A description of such district shall form a part of such notice.” Sec. 19. “ The assessors shall make a report in writing of the assessment so made, and deposit the same with the city clerk, and cause to be published * * * a notice that the report has been completed and so deposited, and that they will meet at a time and place therein to be specified * * * to review their report.”

It is not denied that plans and specifications were prepared, and an assessment district fixed^ and the work of construction directed by the common council in the manner provided by the charter.

The charge that the assessment district included land not assessed rests upon the following facts:

The communication from the water commissioners and the plans and specifications were referred by the common council to the street committee.

The report of that committee was prepared by the city clerk. The description of the assessment district to be recommended by the committee was on a printed slip pasted to the report.

The clerk in reading over this description thought there was an error, and he drew a line with pen and ink through and eliminated one course of the description, and the effect of this was to add to the district the rear portion of a considerable number of lots.

He then found that it was correct as printed, and he intended, before the report was presented, to attach a new slip to it, but omitted to do that, and the report as presented to the common council contained the lines stricken out in the manner stated.

In reading the report to the committee, however, he stated to its members that the description should be as if no erasure had been made from the printed matter. And when the report was presented to the common council it was read as if there had been no erasure, and as so read it ivas adopted on May 12,1890, and a resolution Avas passed fixing the assessment district. The description of the district, hoAvever, Avas not actually inserted in the resolution until May seventeenth, when a printed slip, cut from the notice of the time when the common council would meet to act upon the proposed sewer, was pasted into the minutes of the meeting.

The description so inserted was not an exact copy of that in the report, but contained tAvo errors which will be hereafter noticed.

The appellants claim fliat the district, as fixed by the common council, Avas that described in the report, with the erasures I have referred to, while the trial court has found that it Avas fixed as described in the report as if no erasures had been made.

• I have been referred to no provision of the charter that makes the report, or the resolution of the common council, conclusive evidence of what the council’s action Avas.

Hndoubtedly, either the report, in connection with the resolution adopting it, or the resolution fixing the district as it appeared in the minutes of the common council, Avould be prima facie evidence of the council’s action. But Avhat that body did was a question of fact, and, as the evidence from the record was not conclusive, parol evidence was admissible to show the fact; and it appears without contradiction, from the evidence of the city clefik, that the erasure was his act, and that neither the committee nor the common council adopted it. The description was read, to the council as if no erasure had been made, and, upon the report as read, that body acted, and the legal effect of its action was to fix the assessment district according to the printed description as if no erasure had been made to it.

The argument that the common council must be presumed, in adopting the report, to have adopted it as printed, and not as read, has no force in the presence of competent and uncontradicted evidence showing a contrary result.

The finding of the trial court was, therefore, in accordance with the evidence.

The changes from the description of the district, as adopted and as printed in the official newspapers in the notice of the meeting of the common council to act upon the proposed sewer, were immaterial and deceived no one. They were erroi's merely that were obvious to any one reading the notice.

In the district as adopted the description was “ to the southwesterly corner of lot 145 Riverdale avenue; thence easterly on a line parallel with and twenty-five feet southerly from the southerly line of Ilerriot street.”

In the printed notice the words “ twenty-five ” were made to read fifty ” in one paper and fifty-five ” in another. But as the course started at the southwesterly corner of lot No. 145, and ran “ thence easterly on a line parallel with Ilerriot street,” it was of no consequence what the distance of that line from Ilerriot street was stated to be. It was controlled by fixed monuments, and the description in the notice did not vary the district from that fixed by the common council, and did not have the effect of including in it additional land.

The other change was of the same character. The description ran to the northwesterly corner of lot 13 Hawthorne avenue; thence along the rear line of lots fronting on the westerly side of Hawthorne avenue. In the printed notice it .ran to the northwesterly cornel* of lot 72 Hawthorne avenue, which was upon the opposite side of the street, and from which the course along the rear line of lots fronting on the westerly side of said street could not be run. The error was obvious to any one reading the description. But in considering the legal effect of the errors in the notice, assuming that they did change slightly the boundaries of the district, I fail to see how that fact is available to the plaintiffs. The object of making a description of the assessment district a part of the notice was that every landowner within the district should know that his land was liable to be assessed. It was not a part of the proceedings to fix the district. It was addressed 'to every person within the district as fixed, and its object was to afford to such persons the constitutional right of an opportunity to be heard before the assessment was imposed. (Stuart v. Palmer, 74 N. Y. 183.)

And if it fulfilled that purpose and met that constitutional requirement, the assessment cannot be held to be void, because the notice was addressed to or reached parties outside of the district.

The effect of describing the first course I have alluded to was apparently to include in the district two lots on Riverdale avenue. But the plaintiffs had no right to have the assessment spread on that property, and they suffer no loss because it has not been done. If ■the effect of the change was to leave out property lying in the district as fixed a different question would be presented. The plaintiffs’ complaint comes to this, that notice of the hearing before the common council was served upon persons whose land was not within the district as fixed and who were not liable to be assessed for the improvement. This clearly did not injure the plaintiffs. Every one within the district had notice, and all jurisdictional requirements to every person liable to be assessed have been complied with, and it is apparent without further argument that the error in ■ the notice as published did not affect, in the slightest degree, any of the plaintiffs’ legal rights.

The notice of the filing of the assessors’ report and fixing a grievance day substantially complied with the statute. The charter required a notice that the report had been' “ completed and so deposited.” The notice stated that the assessors had “ assessed, the expense” of extending the sewer, “made a report in writing,” which was the manner in which they were required to make it, and had “ deposited the same witli the city clerk,” the officer with whom the charter required they should deposit it.

The statute required a notice of the time and place to be fixed by them to “ review their l^iort.” The notice stated the time and place when and where the parties interested can be heard.”

No valid criticism can be made upon this notice as it contained the substance of all that the statute required. Literal compliance with the law was not necessary.

This being an action equitable in its character, it was incumbent upon the plaintiffs to establish some substantial error in the assessment proceedings by which they were actually prejudiced. Otherwise they are not entitled to be released from the assessment upon, their lands. (Morse v. City of Buffalo, 35 Hun, 613; In re Mutual Life Ins. Co., 89 N. Y. 530.)

And while an omission to assess ¡iroperty situated within an assessment, district is ground for declaring the assessment void (Hassan v. City of Rochester, 67 N. Y. 528 ; Elwood v. City of Rochester, 122 id. 236), that rule cannot be applied to this case.

None of the errors claimed here to exist affected the plaintiffs or prejudiced them in the slightest degree. And no land has escaped assessment that the common council or its committee ever intended should be included in the assessment district.

The judgment must be affirmed, with costs.

Pratt, J., concurred; Hyicman, J., not sitting.

Judgment affirmed, with costs.


text:
    Frank S. Benson and Others, Respondents, v. Austin Corbin and Others, Appellants.

      A devise to one in fee and, in ease of Ms death to another, refers to a death during the testator’s lifetime — when an estate in fee created by will, will not be reduced-by a subsequent clause. •
    Where there is a devise to one person in fee and in case of his death to another, the contingency referred to is a death during the lifetime of the testator, unless there is some language in the will indicating a different intention.
    An estate in fee created by a will will not be cut down or limited by a subsequent-clause, unless the intent to so reduce it is as clear and satisfactory as the words used in giving the estate, and such result will not be declared where there, exists a doubt as to the meaning of the subsequent clause.

      Appeal by the defendants, Austin Corbin and others, from a judgment of the Supreme Court in favor of the plaintiff^, entered in the office of the clerk of the county of Westchester on the 23d day of December, 1893, upon the decision of the court rendered after a trial at the Westchester Special Term.

      jK B. Hmsddle, for the appellants Corbin and Pratt.
    Dmies, Short & Townsend, for the appellant missionary society.

      Daly, Hoyt dk Mason, for the respondents.
   Brown, P. J.:

This action was brought to compel the defendants Corbin and Pratt to specifically perform a contract by which they agreed to purchase from the plaintiffs real estate situated on the eastern end of Long Island.

The defendants refused to accept the, deed tendered to them by the plaintiffs, upon the ground that they could not convey a marketable title to the land in question, for the reason that the Domestic and Foreign Missionary Society of the Protestant Episcopal Church had a contingent estate therein.

The plaintiffs are the widow and only son and daughter of Arthur W. Benson, who died in December, 1889, leaving a last will and testament, the ninth and tenth paragraphs of which are as follows:

Ninth. I give, devise and bequeath to my son, Frank Sherman Benson, and my daughter, Mary Benson, share and share alike, my house in Brooklyn, 211 Columbia Heights, and my house at Montauk, and all the contents of both, subject to the life occupancy of their mother; and also all my land in Easthampton, Amagansett, Napeag and Montauk, and any and all my other lands, wherever situated, subject to the dower right of their mother.

Tenth. It is my will that in case of the death of both of my children, leaving no issue, that all my property given and devised to such children and their issue, shall not pass to the branches of my family or the family of my wife, but that all of it, personal or real, which I have the power to will, and also the trust fund heretofore set apart for income to my wife, is hereby given, devised and bequeathed to the Domestic and Foreign Missionary Society of the Protestant Episcopal Church for the use of the society, to be expended for the current expenses within ten years.”

The question presented is the oft-recurring one, whether the event which gives effect to the devise over is the death of the primary devisee in the lifetime of the testator, or whenever that event happens. If the former is the true meaning, the gift over to the missionary society was substitutionary merely, designed to prevent a lapse, and the children, upon, the death of the testator, took an absolute fee. (Vanderzee v. Slingerland, 103 N. Y. 47; Mead v. Maben, 131 id. 259.)

The defendants do not question the general rule that where there is a devise to one person in fee, and in case of his death to another, the contingency referred to is a death during the lifetime of the testator ; and that this rule is uniformly applied in the construction of wills, unless there is some language in the instrument indicating a different intention.

But they contend that the intention of the testator, indicated by the will, was that the devise to the missionary society should take effect upon the death of the children without issue, whenever that event occurred.

This view cannot, in my opinion, be sustained. Little importance can be attached to the expression in the tenth clause, that it is the testator’s will that his property should not pass to the branches of his family, meaning thereby collateral heirs. Such would be the result of the death of his children, intestate, without issue, after his own decease; but such also would have been the' result of his own intestacy in case he left no children or issue of children surviving him.

By the third paragraph of the will the testator’s house .in Brooklyn, and his house at Montauk, were devised to his wife for life, and in case of the sale of either or both, with her consent, the income of the proceeds was to be paid to her. Clearly, he contemplated that it might be desirable to sell these properties, and as the will gives no power of sale, the only way that disposition could be made would be by a deed from his children and widow. The children were to have the fee subject to the wife’s life estate, and in this provision we have an indication that the phrase under consideration was intended to refer to a death in his own lifetime.

By tlie fifth paragraph one-third of the personal estate was given • absolutely to his wife, and by the sixth paragraph one-sixtli absolutely to his son.

By the seventh and eighth paragraphs he created two trust estates in his personal property, the income from which was to be paid respectively to his son and daughter during their lives, and upon their death the principal to go to their surviving issue with cross remainders to the surviving issue of the other, in case either died without surviving issue, and in case of the death of both without issue surviving them, then the whole of the principal of said trusts was bequeathed to the missionary society.

In these trusts the intention of the testator is clear that the missionary society should take upon the death of the children without surviving issue, whenever that event happens, and no reason is ' apparent why this direction should be repeated in the tenth clause. Nor is any reason apparent why the testator should have made two separate provisions for his son, one absolute in form, and the other in trust, if he intended that the whole should go to the missionary society in the event of his death without issue. If such was his-purpose, it is difficult to explain why he did not put all of the personal estate intended for his son in the trust. But the gift to the son is as absolute in terms as the gift of one-tliird of the personal estate to his wife.

Again, some light upon the testator’s intention can be drawn from the character of the real estate in question. It consisted of about 10,000 acres of land at Montauk and in Easthampton. It is not suitable for farming purposes. It has been used chiefly for grazing,, but the income derived from it is insufficient to meet the taxes and other expenses connected with its ownership. If it has any great value it is in its adaptability for the purpose of summer residences, and during his lifetime the testator had made some sales for that purpose. He must have known that it was burdensome to hold this-land, and it is not probable that he intended to prevent the sale of any of this property during the lifetime of his children. Yet, as the will contains no power of sale, it would, under the construction contended for by the defendants, be impossible to convey any title to the land while both of his children were living. This result would impose a severe burden upon them with little chance of profit. The inference and conclusion, drawn from tlie provisions of the will I have referred to, are all opposed to the defendants’ contention, and nothing appears from a consideration of the whole instrument or the general scheme for the disposition of the testator’s estate, to take the words used in the tenth clause out of the operation of the general rule which refers them to a death in the testator’s lifetime.

In support of this view we may also invoke the rule that an estate in fee created by a will will not be cut down or limited by a subsequent clause, unless the intent to so reduce it is as clear and decisive .as the words used in giving the estate. (Roseboom v. Roseboom, 81 N. Y. 356 ; Byrnes v. Stilkwell, 103 id. 453.) Such a result will not be declared because of a doubt arising from the meaning of the subsequent clause.

"We have in the sixth clause of the will before us an absolute gift of one-sixth of the personal estate to the son, and in the ninth clause .an absolute devise of all the real estate to his son and daughter as •tenants in common.

A doubt as to the intent of the testator in the use of the phrase ■“ death leaving no issue,” in the tenth clause, is not sufficient to cut down those absolute gifts.

In the reported cases where such a result has been worked, there has been in the clause giving the estate some reference to subsequent limitation thereon, or it has ajipeared from the scheme of the will that the testator did not intend an absolute gift. (Nellis v. Nellis, 99 N. Y. 505; Vanderzee v. Slingerland, 103 id. 47; Buel v. Southwick, 70 id. 581; Mead v. Maben, 131 id. 255.)

It cannot, therefore, be determined that the testator’s intention was to give to his children a life estate only in his real estate; and the death referred to in the tenth clause must be held to refer to death in the testator’s lifetime. The children took an absolute fee, .and the title tendered to the defendants was good.

The judgment must be affirmed, with costs.

Pratt, J., concurred; Dykman, J"., not sitting.

Judgment affirmed, with costs.


text:
    John Lynch, Appellant, v. The Village of New Rochelle, Respondent.

      Damages for personal injuries — contributory negligence as a matter of law.

    It cannot be held to be negligence, as a matter of law, for a person driving a buggy to attempt to cross a railroad track in a diagonal direction instead of at right angles, and whether it is or is not negligence is a question of fact for the jury to determine, nor is the fact that the driver of the buggy sat on the left side thereof necessarily evidence of negligence.
    Appeal by tlie plaintiff, John Lynch, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Westchester on the 18th day of December, 1893, upon the dismissal of the complaint after a trial at the Westchester Circuit before the court and a jury.

      Isaac M. Mills, for the appellant.

      CJalwm Frost, for the respondent.
   Brown, P. J.:

This action was brought to recover for personal injuries received in being thrown from a wagon while driving in the defendant village, and which were alleged to be due to a defective highway.

The complaint was dismissed on the ground of the plaintiff’s negligence.

The condition of the highway was not contested, and there was ample evidence from which the jury might have found that its defective condition was due to the defendant’s neglect.

I am of the opinion that the case was, in all its aspects, one for the jury, and that the court erred in dismissing the complaint.

The accident occurred on Washington street. There was a railroad track through the street-, and upon the north side for 100 feet from Webster avenue there was a covered drain having its eastern end open for the water to enter it. The road descended toward the mouth of this drain, and near to it the water which flowed down the street in large quantities had washed out a large part of the street between the track and the north sidewalk, making a deep hole. The plaintiff was in a one-horse buggy in company with a lady, who was driving. They were upon the north side of the street until they reached a point near the washout, when they attempted to cross the track in a diagonal direction. The left front wheel slid along the track and the wagon went into the hole, upsetting it and throwing the plaintiff and his companion out, and inflicting injuries-which were the subject of this action.

The horse, at the time of the accident, was upon a walk, and I fail to see how, under the circumstances, any lack of care is imputable to the driver. There is nothing to indicate that she was not a competent person. The plaintiff said she had horses of her own and was accustomed to and knew how to drive. The fact that she sat upon the left-hand side opposite to the hole is not necessarily evidence of negligence. Under a rule requiring travelers meeting on a highway to turn to the right that is regarded by many persons as the proper side for the driver to sit upon.

It cannot be held to have been negligence in law to have attempted to cross the track in a diagonal direction instead of at right angles. That was a question of fact which the jury should have been permitted to pass upon.

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

Pratt, J., concurred; Dykman, J., not sitting.

Judgment reversed and new trial granted, costs to abide the event.


author: Brown, P. «T.:

text:
    Abram R. Kelsey, Appellant, v. The Staten Island Rapid Transit Railroad Company, Respondent.

      Damages for personal injuries — care required of a trameler at a railroad crossing — contributory negligence.

    In an action brought to recover damages for personal injuries sustained by reason of the collision of a wagon, in which the plaintiff was driving, with a locomotive on the defendant’s railroad at a highway crossing, the evidence must show that the plaintiff used that degree of care and caution which prudent persons of ordinary intelligence usually exercise under like circumstances.
    It is only when it clearly appears that the party’s own act or neglect contributed to his injury that the case can be withdrawn from the jury, and it is not enough to show that it was possible for the injured party to have discovered the locomotive with which he collided before attempting to cross the defendant’s railroad tracks.
    While the vigilance of a traveler at a railroad crossing must be in proportion to the known danger, it is also limited by the usual and ordinary signals of danger, and it cannot be said, as a matter of law, that a person about to drive over a railroad crossing should stop his horse or get out of his wagon and go upon the railroad track and look for an approaching locomotive before attempting to cross the track; whether such actions are necessary is, under the circumstances of each case, a question of fact for the jury to determine.
    Appeal by tbe plaintiff, Abram R. Kelsey, from a judgment of tbe Supreme Court in favor of tbe defendant, entered in tbe office of tbe clerk of the county of Richmond on the 22d day of May, 1893, upon tbe dismissal of tbe complaint directed by tbe court on a trial at tbe Kings County Circuit before tbe court and a jury, with notice of an intention to bring up for review on such appeal said judgment and tbe order dismissing the plaintiff’s complaint.

      Edelbert E. Ga/rroll, for tbe appellant.

      Tracy, Boardman & Platt, for tbe respondent.
   Brown, P. «T.:

This action was brought to recover for injuries received in a collision with a train on defendant’s road at a highway crossing. There was evidence which would have permitted tbe jury to have found negligence upon tbe part of tbe defendant.

Tbe complaint was dismissed upon tbe ground that it also showed contributory negligence on tbe plaintiff’s part.

Tbe law required of tbe plaintiff that degree of care and caution which prudent persons of ordinary intelligence usually exercise under like circumstances. (Parsons v. N. Y. C. & H. R. R. R. Co., 113 N. Y. 355.)

And it is only when it clearly áppears from the evidence that tbe party’s own act or neglect contributed to bis injury that tbe case can be withdrawn from tbe jury.

It is not enough to show that it was possible for tbe injured party to discover tbe train, but the question always is whether the care exercised was that which an ordinary, prudent and intelligent person would exercise under similar conditions.

I think the case should have been submitted to the jury.

The accident occurred on September twelfth, between seven and eight o’clock in the morning.

The plaintiff was driving a milk wagon, having a wooden top with sliding side doors, which were open at the time of the accident. He was familiar with the crossing, knew its dangerous character, and knew that a train was due about the time of the accident.

He was going north towards the track and the colliding train was approaching from the east. For 1,320 feet east of the crossing the track x’axx through a cut' fifteen feet in depth at the crossing, and xmnning out until it reached the level grouxxd. The street ran through a cut for 300 feet south of the crossing, and for that distance a view of the track was obstructed to a pex’son approaching from the soxxth until within thirty feet of the tx’ack, when he could see 350 feet to the east.

The plaintiff testified as to the accident as follows : “ When I was up the road just between the woods where we could see I looked out of the wagon to see if I could see the train; I could not see it nor hear it; I listened and my horse walked slowly down the hill; very slow; I listened all the way down the hill for the train ; I did not hear it whistle nor ring a bell; wheix I got down within a few feet of the track, a short distance, I listened with my head out on the side of the wagon; I did not hear any sound of a train; then I started my horse x*iglit on the track; I was struck by the train; * * * until the horse’s head was on the crossing the obstructions was such that no one could see an approaching locomotive at all.”

The seat occupied by the plaintiff was in the rear of the wagon, back of the doors, and the horse was on a walk.

It is apparent from this evidence that when the plaintiff reached a point within thirty feet of the track, where, from his seat, he could look up the track to the east, his horse’s head was within a few feet of the rails. The horse crossed the track and the engine collided with the wagon.

It is entirely credible, therefore, that plaintiff did not see the train when he listexxed with his head out of the side of the wagon 'at the point thirty feet from the track, and that, while his horse walked the distance of thirty feet, there was time for the train to reach the crossing.

It cannot be said as a question of law that tbe plaintiff should have stopped bis horse or gotten out of bis wagon and gone upon tbe track and looked before attempting to cross.

"While the vigilance of a traveler must be proportioned to tbe known danger, it is also limited by usual and ordinary signals and evidence of danger. ( Weber v. N. Y. C. & H. R. R. R. Co., 58 N. Y. 454-456.)

Tbe defendant bad created a dangerous crossing and then omitted ' all notice of tbe approach of trains. Tbe plaintiff bad listened for tbe usual signals while be passed slowly over a distance of 300 feet and beard none. He looked at tbe first point where be bad a view of tbe track and saw no danger. It was possible for him to have discerned tbe train if he bad gotten out of tbe wagon and gone upon the track, but whether it was negligent for him to omit that precaution was a question for tbe jury, not for tbe court. Whether bis conduct was that of an ordinary, prudent and cautious man was a fact to be determined by inference drawn from tbe evidence, and the question was for the jury.

Tbe judgment should be reversed and a new trial granted, with costs to abide the event.

Pratt and Dykman, JJ., concurred.

Judgment reversed and new trial granted, costs to abide tbe event.


author: Bkown, P. J.:

text:
    In the Matter of the Probate of the Paper Propounded as the Last Will and Testament of Mary Snelling, Deceased.

      When the decision of a surrogate admitting a will to probate will not be disturbed on appeal.

    ■When, in proceedings brought for the probate of a will, the weight of evidence is in favor of the conclusion that when the testatrix executed the will she understood the character of her act and comprehended its consequences, the determination of the surrogate that she was competent to execute the instrument will not be disturbed on appeal.
    Appeal by tbe contestants, John H. Lewis and others, from a decree of tbe Surrogate’s Court of tbe county of Suffolk, entered in tbe office of tbe clerk of tbe Suffolk County Surrogate’s Court on the 9th day of October, 1893, admitting to probate the instrument offered as the last will and testament of Mary Snelling, deceased, and also from an order entered in said clerk’s office on the 9th day of October, 1893, denying the contestants’ motion for a new trial made upon the minutes, and also from the facts, exceptions and rulings taken upon the trial.

      L. 8. BecJcley, for the contestants, appellants.

      Thomas Yovmg, for the proponents, respondents.
   Bkown, P. J.:

When this case was before the Court of Appeals on a prior appeal the conclusion of the surrogate that the will was not the product of undue influence, and that the decedent possessed the necessary testamentary capacity to execute it, was not disturbed.

The decree then before the court was reversed for the erroneous admission of improper testimony.

Some new testimony was introduced upon the last hearing, but, after a careful examination of the whole case, I do not think it is changed in any essential feature from that presented on the first appeal. The evidence would not permit the conclusion that Mr. and Mrs. Cook exerted any undue influence upon Mrs. Snelling.

The important question is whether she possessed testamentary capacity.

That her mind was weak and that she was at times insane is clearly shown. But the periods of her insanity were generally of short duration and existed when she was sick. When she recovered from her sickness her mental powers returned and she was capable of taking care of herself and her property.

The will in question was executed on June 24, 1890. For about a year prior to that date she had resided with Mrs. Denton, and her mode of life and her physical and mental condition during that period have been fully described by that witness. During that time she had no sickness requiring the attendance of a physician, and her memory was fairly good, and she attended to and transacted her own business.

She appears to have understood the nature and condition of her property and the disposition which, by will or otherwise, she had made of it. She was, during this time, a near neighbor of Mr. .and Mrs. Cook, and on terms of intimacy with them, and regarded and treated them as her nearest friends.

The weight of evidence is in favor of the conclusion that when she executed the will she understood the nature and character of her act and comprehended its consequences, and the determination of the surrogate that she was competent to execute the instrument cannot be disturbed.

The decree must be affirmed, with costs to be paid by the contestants.

Pratt and Dykman, JJ., concurred.

Decree affirmed, with costs to be paid by contestants.


text:
    The Farmers’ Loan and Trust Company, as Trustee, Respondent, v. The New York and Northern Railway Company and Others, Respondents; and Artemas Holmes and Another, Appellants.

      Mortgage foreclosure — a misapplication of its ea/i'nings by the mortgagor is not a defense thereto — rights of stockholders of a corporation, as bondholders thereof— rights of a competing corporation as a bondholder — a provision for default in a mortgage construed — allegation as to request to foreclose — duties and rights of the majority stockholders in a corporation.

    In an action brought to foreclose a mortgage given by a railroad corporation a defense was interposed that tbe earnings of the mortgagor had been misapplied in order to bring about a default.

      Held, that such fact did not constitute a defense as against the trustee named in such mortgage or any bondholder ;
    That it was not a ground of complaint to the mortgagor or its stockholders that there had been a misapplication of the mortgagor’s earnings.
    It is in no respect illegal for a stockholder in a corporation or its officers or directors to purchase and hold its bonds or to enforce the payment thereof in the usual way.
    A corporation holding bonds of a competitor has the right, so long as it violates no duty owing to a corporate mortgagor or its stockholders, to avail itself of all the stipulations of the contract contained in such bonds and the mortgage given as collateral thereto, although its object may be to cause a foreclosure of such mortgage and to become the purchaser of the property at the sale; such purpose is not illegal, affords no ground of complaint to stockholders of the mortgagor, and is not available as a defense to an action brought to foreclose such mortgage.
    A mortgage given by a railroad company contained the following provision: “In the event of any of the defaults mentioned in the next preceding article, the party of the second part may, and upon the written request of the holders of |2,000,000 * * * of said bonds * * * shall, apply to any court having jurisdiction * * * for a foreclosure and sale of the mortgaged premises.”

      Beld, that two cases were provided for, in one of which the trustee might act upon his own motion, and in the other of which his action could be coerced ;
    That it was not necessary for the trustee, in an action brought by him to foreclose such mortgage, to allege in his complaint or to prove that he had been requested to foreclose the same.
    The holders of a majority of the shares of stock of a corporation owe to the minority stockholders thereof much the same duty which the directors of a corporation owe to all of the stockholders therein, and they may not use their power to obtain an advantage for themselves at the expense of the minority, and when that is done equity will interfere to restrain the wrongful acts.
    All the stockholders of a corporation must be permitted to share equally in the benefits of its management, and the law requires both from the officers of a corporation and the majority of the stockholders thereof the utmost good faith in the management and control of the corporate business and property; but between themselves stockholders owe no duty to each other, and in the purchase and control of stock or of any of. the corporate obligations each stockholder acts for himself and is in no sense a trustee for others.
    Appeal by the defendants, Artemas IT. Holmes and another, from a judgment of foreclosure and sale of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the .county of Westchester on the 2d day of December, 1893, upon the decision of the court rendered after a trial at the Westchester Special Term • and also from an order made at the Westchester Special Term and entered in the said clerk’s office on the 2d day of November, 1893, denying the defendants’ motion to change the place of trial from the county of Westchester to the county of New York; and also from an order made at the Westchester Special Term and entered in said clerk’s office on the 2d day of November, 1893, denying the defendants’ motion for a reference; and also from an order made at the Westchester Special Term and entered in said clerk’s office on the 2d day óf November, 1893, denying the defendants’ motion for a postponement of the trial of the action, with notice of an intention to bring up for review on such appeal the aforesaid orders.

      Simon Sterne and Holmes c& Adams, for the appellants.

      Hamid McClure, Ashbel Creene and Thomas Thatcher, for the respondents.
   Brown, P. J.:

This action was broitght to foreclose a mortgage made 'by the New York and Northern Railway Company to the plaintiff, as trustee, to secure the payment of bonds amounting to the sum of $3,200,000.

The railway company did not defend, but the defendants Holmes and Pick were permitted by the court to intervene, and serve an answer to the complaint, and they have appealed from the judgment.

Prior to January, 1893, the majority of the bonds and stock of the Northern road were owned by the New York Loan and Improve- ■ ment Company. About January twenty-eighth bonds to the amount of $1,700,000 and a majority of the stock were sold by that company to Drexel, Morgan & Co., who in April, 1893, sold them to the New York Central and Hudson River Railroad Company. On July 11, 1893, the Central Company entered into an agreement with Louis ,Y. Bell and Henry K. McHarg for the purchase of upwards of $700,000 of the bonds secured by the mortgage in suit, which agreement provided that the bonds might be used by Drexel, Morgan & Co. for the purpose of reorganizing the Northern Company, either by foreclosure or otherwise, according to such plan as they should deem proper.

The mortgage in suit was dated October 1, 1887, and the interest upon the bonds was payable semi-annually on December first and June first. Up to December 1,1891, the interest was payable from net income only, subject to the right of the company to use the income for betterments, improvements and other purposes.

No interest was ever paid on the bonds. Coupons falling due June 1, 1892, and payable absolutely, were presented for payment, and protested. Default was also made in payment of coupons due December 1, 1892, and June 1,1893.

The mortgage provided that if default in payment of principal or interest should continue for twelve months after presentation of the bonds or coupons for payment, the plaintiff might, and upon request of the holders of $2,000,000 of bonds then outstanding and unpaid should, apply for a foreclosure and sale of the mortgaged property.

On July 20, 1893, Drexel, Morgan & Co., holding $1,700,000 of the said bonds, and being authorized thereto by the Central Company, and also representing the owners of the Bell and Mcliarg bonds, requested, in writing, the plaintiff to take proceedings for the foreclosure and sale of the mortgaged property, and thereafter, on July twenty-seventh, this action was commenced.

The first defense alleged is that the earnings of the Northern Company had been misapplied in order to bring about a default. This defense involves neither the plaintiff or any bondholder. If there was any misapplication of the earnings prior to June 1, 1892, it was the act of the mortgagor alone. It had the right to apply all the net earnings prior to December 1, 1891, to the improvement of the road, and the action of the directors was approved by the stockholders at their annual meeting, and if the just and proper limitation of that authority was exceeded, the loss fell upon the bondholders, and it does not lie with the mortgagor or its stockholders to complain of this action. From the date of the mortgage until the foreclosure the appellant Holmes was a stockholder and attended the annual meetings, and had knowledge of the manner in which the income of the road was applied by the directors, while the appellant Pick purchased his stock after the default in the payment of the coupons.

The second proposition asserted as a defense is that the Central Company acquired a majority of the bonds and stock of the Northern Company for the purpose of destroying it as a competitor and securing its property, and to that end so managed its business that its obligation should not be met or its default repaired. Nothing appears in the evidence to support this claim. Defaults on two coupons had occurred before the Central Company became the owner of any of the stock or bonds, and it exercised no control over the management of the Northern Company after it acquired the stock. As a stockholder it was in no respect illegal for it to purchase and hold the bonds, or to enforce their payment in the usual way.

Officers and directors of a corporation may own its bonds and enforce their payment. (Dumcomb v. N. Y., H. & N. R. R., 84 N. Y. 190 ; 88. id. 1; Harpending v. Munson, 91 id. 652.)

The Central Company had a right, so long as it violated no duty owing to the mortgagor or its stockholders, to avail itself of all the stipulations of the contract contained in the bonds and mortgage, and although its object may have been to cause a foreclosure and to become the purchaser of the property at the sale, that purpose was not illegal and afforded no ground of complaint on the part of the appellants, and is not available as a defense to this action. It certainly was under no obligation to advance money to repair the default which had occurred before the purchase of the bonds.

•> Evidence was offered and excluded upon plaintiff’s objection, which, it is claimed, would have tended to show a diminution of revenue of the Northern road subsequent to the purchase of the stock by the Central Company.

This evidence was not pertinent to any issue in the case, and had no proper tendency to show any unlawful-action upon the part of the Central Company as a stockholder. Its rejection was not error.

The third defense is that the request of holders of $2,000,000 of the bonds was requisite to the commencement and maintenance of the action; that the Central Company had no power to purchase bonds and stock of another railroad corporation, and that an action instituted upon its request could not be proceeded with.

This contention rests upon a misconception of the mortgage.

The provision applicable to the case is as follows: In the event of any of the defaults mentioned in the next preceding article, the party of the second part may, and upon the written request of the holders of $2,000,000 * * * of said bonds * * * shall, apply to any court having jurisdiction * * * for a foreclosure and sale of the mortgaged premises.”

Two cases are provided for. In one the trustee may act upon his own motion. In the other his action may be coerced.

It was not, therefore, essential that plaintiff should have alleged in its complaint that it had been requested to foreclose, and it is not essential to the support of the judgment that that fact should have been proven upon the trial. (Morgan’s S. S. Co. v. Texas Central Railway Co., 137 U. S. 171; Guaranty Trust Co. v. Green Cove & M. R. R. Co., 139 id. 137.)

If the fact be that there was any informality in the request made, the plaintiff may upon this appeal avail itself of the provision of the mortgage quoted, as it would be a useless proceeding to reverse the judgment upon this ground, when upon a new trial the plaintiff would be entitled to the same relief without proof that any request, was made.

It is of no importance, therefore, to this case whether the Central Company’s act in acquiring its bonds and stock was authorized or not.

Ownership of the bonds is not in question, and the validity of that act may be left to be decided when it shall be questioned by some person interested in its determination.

The main argument, however, which the learned counsel for the appellants has addressed to us is based upon the assumption that the Central Company became an owner of a majority of the stock of the Northern Company. As the disability of the Central Company would apply equally to the ownership of stock and bonds, we shall assume, for the purpose of this appeal, that it had the power to purchase these securities.

The meaning of section 40, chapter 688, Laws 1892, is, we think* hardly debatable; and power existed under that statute to acquire ownership of the stock and bonds in question. If we are wrong* however, in this, the argument addressed to the court, and which I shall now briefly consider, has no force and no application to the case, as it rests solely upon the ownership by the Central Company of a majority of the stock in the Northern Company.

The argument is, that the Central Company, as the owner of the majority of stock, occupied a sort of trust relation towards the minority stockholders, which in some way is available to them as a defense to this action. I have been unable to learn from the appellants’ written or oral argument what is the practical application to this case of the relation that he claims to exist between majority and minority stockholders. If it is intended to assert that the Central Company could purchase bonds of the Northern road only in trust for all stockholders, the answer is that there is no such rule of law.

Undoubtedly the holders of the majority of the shares of a corporation owe to the minority much the same duty which directors owe to all the stockholders. They may not use their power to obtain advantages at the expense of the minority, and when that is done equity will interfere to restrain the wrongful acts. All must be permitted to share equally in the benefits, and the law requires, both from the officers of the corporation and the majority stockholders, the utmost good faith in the management and control of the corporate business and property. But between themselves stockholders owe no duty to each other. In the purchase and control of his stock or any of the corporate obligations each stockholder acts for himself, and he is in no sense a trustee for others. (Gamble v. Queens County Water Co., 123 N. Y. 91.)

The Central Company purchased the bonds after default in payment of the coupons. It had a right to hold and enforce these obligations and was subject to no restraint in so doing', except such as flowed from the terms of the contract.

As a stockholder it was not responsible for the default and was under no obligation to contribute money to pay the interest or relieve the Northern Company from the effects of the default.

It could remain passive until foreclosure and become a purchaser of the mortgaged property, or receive payment of its bonds from the proceeds of the sale, without trespassing upon any right of the other stockholders.

But assume that it intended to compel a foreclosure, and for that purpose entered into the contract with McHarg and Bell for the purchase of additional bonds, so that it should control an amount sufficient to make the request of the trustee necessary to compel its action, there is nothing in the act of purchase which violated any legal duty which it owed to the corporation or the other stockholders. It had a right to purchase the bonds, and having the bonds it had a right to enforce their payment. But had it not also the right to request the trusteq to foreclose if such request was essential to the enforcement or protection of its rights as a bondholder ? Clearly, it had a right to avail itself of every stipulation in the mortgage, and no duty to any other stockholder required it to forego or surrender any of the rights annexed to the bonds. But, as I have already pointed out, this question is not of the slightest consequence to the appellants, as no request was necessary to institute this action, and the absence of such would not lead to a reversal of the judgment.

There.is no error in the judgment and it must be affirmed.

We have examined the questions arising upon the appeals from the orders denying motions for a change of the place of trial, for a reference and for a postponement of the trial; no error appears upon any of the appeals and the orders are affirmed.

Judgment and orders are affirmed, with costs to be paid by the appellants.

Pratt, J., concurred; Dykman, J., not sitting.

Judgment and orders affirmed, with costs to be paid by appellants.


text:
    Hester A. Tompkins, Respondent, v. William H. Tompkins and Another, Appellants.

      General denial — jproof which is competent under it.

    Under a general denial contained in an answer, the defendant in the action may contradict any evidence given by the plaintiff in support of the cause of action alleged in the complaint, and he is not confined to a simple denial of the facts testified to on behalf of the plaintiff, but he may introduce any evidence which tends to show the transaction between the parties to have been different from what the plaintiff claims.
    Where the complaint in an action alleges, and testimony upon the trial is introduced to show, that a transaction with the defendant was a loan of money, under a general denial set up in the answer, the defendant is entitled to show what the agreement was under which he claims to have received the money.
    Appeal by the defendants, William H. Tompkins and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Westchester on the 7th day of October, 1893, upon the verdict of a jury rendered after a trial at the Westchester Circuit, and also from an order entered in said clerk’s office on the 14th day of October, 1893, denying the defendants’ motion for a new trial made upon the minutes.-

      Francis Larlcin, for the appellants.

      William P. Fiero, for the respondent.
   Brown, P. J.:

The complaint in this action set forth as a cause of action a loan of a sum of money by the plaintiff to the defendants, and non-payment thereof after demand.

The answer was a general denial of the complaint, except as to the allegation of demand and non-payment.

Upon the trial, upon cross-examination of the plaintiff and upon the direct examination of the defendants, questions were asked for the purpose of showing that the money was given to the defendants under an agreement, by which they were to board and take care of the plaintiff and her sister, who were, respectively, the mother and aunt of the defendant 'William H. Tompkins.

This evidence was excluded upon plaintiff’s objection, on the ground that it was inadmissible under the pleadings, and the exception to this ruling presents the question upon this appeal.

Under a general denial the defendant may contradict any evidence given by the plaintiff in support of the cause of action alleged in the complaint. (Milbank v. Jones, 141 N. Y. 340, and cases cited; Roemer v. Striker, 142 id. 134.)

He is not confined to a simple denial of the facts testified to on behalf of the plaintiff, but he may introduce any evidence which tends to show the transaction between the parties to be different from what the plaintiff claims it to be. '

The plaintiff alleged and testified that the transaction with the defendants was a loan of money. Under a general denial defendants were entitled to show the agreement under which they claimed to have received it.

The cases cited by the respondent have no application. Bassett v. Lederer (1 Hun, 274) and McKyring v. Bull (16 N. Y. 297) were cases where defendants sought to prove payment under a general denial. This defense- must always be pleaded. (Lent v. N. Y. & M. R. R. Co., 130 N. Y. 504-511.)

Weaver v. Barden (49 N. Y. 294) was an action to compel the transfer of stock to the plaintiff. The court held that under a general denial defendant could not prove he was a bona fide purchaser of the stock, for the reason that that fact had no tendency to contradict any thing which plaintiff was bound to prove to sustain his case. These cases do not conflict with the rule here applied.

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

Pbatt, J., concurred; Dykman, J., not sitting.

Judgment reversed and new trial granted, costs to abide the event.


author: Bbown, P. J.: Pratt, J.:

text:
    Annie Foley, Appellant, v. The Royal Arcanum, Respondent.

      Verdict — when properly directed — life insurance policy — application and answers made to the medical examiner construed together, if untrue the policy void — waiver of objection to the testimony of a physician — statutes construed to be pi'ospeative — • a change of a rule of evidence must not impair contract rights — date of liability upon a life insurance policy.

    If the weight of evidence upon the trial of an action is so decidedly in favor of either party that a verdict against such party would be set aside upon appeal, it is proper for the judge to direct a verdict.
    By the express language of d certificate given upon an application for a policy of life insurance, statements made in the application therefor and those certified to the medical examiner of the insurer, were made a part of the contract between the insurer and the assured. Their truthfulness was warranted, and it was agreed that if they were untrue, the applicant, his family and dependents, should forfeit all benefits under the policy.

      Seld, that the two papers should be considered as a single instrument; and that the statements contained in the application and the answers made to the medical examiner were made warranties, and must be substantially true or the policy would be avoided. (Per Brown, J.)
    When upon the trial of an action brought upon a life insurance policy it appears that prior to the amendment of section 886 of the Code .of Civil Procedure in 1891, there was an express waiver by an assured of the provisions of the Code, and a consent that any physician otherwise disqualified might testify concerning his health and physical condition, the testimony of the attending physician of the assured is properly admitted in evidence.
    Laws must be construed so as to be prospective and not retrospective in their operation unless they are specifically made applicable to past transactions. (Per Brown, J.)
    The Legislature has the power to change a rule of evidence, but it cannot mate the new rule applicable to a past transaction if its effect is to impair the obligation of a contract. (Per Brown, J.)
    Where a contract of life insurance was delivered and thereafter the assured died, the liability of the insurer must be adjudged upon the agreement as it stood at the time of the decedent’s death. (Per Brown, J.)
    Appeal by tbe plaintiff, Annie Foley, from a judgment of tbe Supreme Court in favor of tbe defendant, entered in tbe office of tbe clerk of tbe county of Orange on tbe 21st day of April, 1892, upon tbe dismissal.of tbe complaint directed by tbe court after atrial at the Orange Circuit before the court and a jury, with notice of an intention to bring up for review on such appeal the order of tbe court dismissing the complaint and all the exceptions taken on tbe trial.

      John M. Gardmer, for the appellant.

      8. M. lindsley, for the respondent. '
   Bbown, P. J.:

This action was brought to recover upon a benefit certificate issued by the defendant to Jeremiah B. Foley and made payable upon his death to the plaintiff, who was his wife.

By the terms of the certificate the statements made by Foley in his application for membership in one of the defendant’s councils and the statements certified by him to the medical examiner, both of which were filed in the supreme secretary’s office, were made a part of the contract.

The application contained the following: “ I * * * have no injury or "disease which will tend to shorten my life; am now in good health * * *: I do hereby warrant the truthfulness of the statements in this application, and consent and agree that any untrue or fraudulent statement made therein or to the medical examiner * * * shall forfeit the rights of myself and my family * * * to all benefits.”

To the medical examiner he stated that he had never had any serious illness or injury, or undergone any surgical operation, and never had been subject to or had difficulty in urinating, excessive or scanty secretion of urine; never, had hemorrhoids or any disease-of the genital or urinary organs, and he warranted the truthfulness of the statements so made.

The defense was that these statements were false. And upon the trial it appeared by the testimony of the physicians who had treated and prescribed for Foley prior to the application for membership in the council of defendant, and by other witnesses who knew him intimately and saw him frequently, and to some of whom he had made statements as to his health, that for some months prior to his application he had hemorrhoids, also a disease of the urinary organs and difficulty in urinating.

That he suffered severely from these diseases was clearly established if the testimony of the defendant’s witnesses were to be believed, and the inference was also permitted from the evidence that he had been a patient in Roosevelt Hospital in the month of November, 1889.

The application for membership was made in March, 1890. The certificate was issued on the fifth of April following, and in June following he became a patient in the New York Hospital, where a surgical operation was performed upon him, and where, a few weeks later, he died.

The learned trial judge held that the falsity of the statements made in the application was established by uncontradicted evidence, and as a result the plaintiff could not recover.

The appellant asks to have the judgment reversed on the following grounds:

First. That the statements referred to were not warranties, but representations, and the question of their materiality was thus presented, and should have been determined by the jury.

Second. That there was a conflict of testimony upon the question of their truth or falsity.

'Thwd. That evidence of physicians who had attended Foley in a professional capacity was admitted contrary to the provisions of the Code of Civil Procedure.

It is, I think, of no importance on this, appeal whether the statements be regarded as representations or warranties. Their materiality to the risk is apparent, and if untrue the policy was avoided.

But the trial court properly held that the statements were warranties.

By the express language of the certificate the statements made in the application and those certified to the medical examiner were made a part of the contract. Their truthfulness was warranted, and it was agreed that if they were untrue the aq>plicant and his family and dependents should forfeit all benefits thereunder. The two papers were, therefore, to be construed as a single instrument, and all the statements contained in the application and the answers made to the medical examiner were thus made warranties and must be substantially true or the policy will be avoided. (Foot v. Ætna Life Ins. Co., 61 N. Y. 571; Cushman v. U. S. Life Ins. Co., 63 id. 404; Phœnix Life Ins. Co. v. Raddin, 120 U. S. 183.)

There was no substantial contradiction of the testimony introduced by the defendant. The plaintiff’s evidence was drawn chiefly from the friends and associates of Foley, and showed nothing more than that they had not observed, in his daily conduct, indications of the sickness for Avlfich physicians had treated him. The certificate of Dr. Taylor, the medical examiner of the defendant, spoke only of his examination at the time of the application, and had no necessary tendency to sIioav a condition of health during the year 1889. All this evidence Avas negative in its character and raised no question for the jury to consider.

The testimony .of Foley’s attending physicians Avas properly admitted under the conditions and stipulations of the contract. (Matter of Coleman, 111 N. Y. 220 ; Alberti v. N. Y., L. E. & W. R. R. Co., 118 id. 77.)

There was an express waiver by the assured of the provision of the Code and a consent that any physician otherwise disqualified might testify concerning his health and physical condition.

The amendment of section 836 of the Code of Civil Procedure ih. 1891, providing, in substance, that the provisions of the three prior sections could only be Avaived on the trial, assuming it has the effect claimed for it by the appellant, lias no application to this case.

Laws must be construed so as to be prospective, and not retrospective, in their operation, unless they are specifically made applicable to past transactions (People ex rel. Newcomb v. McCall, 94 N. Y. 587), and there is no evidence that this amendment was intended to apply to old cases.

Moreover, at the time of its enactment the rights of all parties were fixed. The contract was made effective by delivery in April, and the insured died in July, 1890. The defendant’s liability must be adjudged upon the agreement as it then stood. Tt was entirely competent for the parties to stipulate what evidence should be received as to any fact upon which the defendant’s liability was made conditional, and the Legislature could not change or impair the obligation.

To exclude the right to avail itself upon the trial of the evidence of the attending physicians Avould be to destroy the contract made by the parties and impose an obligation upon the defendant which it had not assumed.

The Legislature could change the rule of evidence, but it could not make the new rule applicable to a past transaction if its effect was to impair the obligation of a contract.

No other question needs consideration.

The judgment must be affirmed, with costs.

Pratt, J.:

The rule is well settled that upon the trial of a case at Circuit, if the weight of evidence is so decidedly in favor of either party that a verdict against such party would be set aside, it is proper for the judge to direct a verdict.

In this case the weight of evidence was so decidedly against the plaintiff that a verdict in her favor would have been immediately set aside, and the judge very properly dismissed the complaint upon the merits.

The action was upon a mutual or fraternal certificate or policy issued by the defendant to the husband of the plaintiff. Prior to the issuance of' the certificate there was an application and medical examination which, by the terms of the certificate, were made a part of the contract.

Under the questions and answers contained in the examinations and signed by the deceased was the following clause: “ I hereby warrant the truthfulness of all the answers given to the above questions.” The court was clearly right in holding that this was a warranty. (Ripley v. Ætna Ins. Co., 30 N. Y. 151; Clemans v. S. A. R. S. of G. F., 131 id. 485; 1 Biddle on Ins. § 543, and other cases too numerous to refer to.)

It was proved beyond question that these answers, in many paiticulars, were false and fraudulent. 'These matters avoided the certificate. It is immaterial whether the answers made by the assured were considered as warranties or representations to obtain the certificate; if false they equally avoid the contract. (Cushman v. U. S. Life Ins. Co., 63 N. Y. 408; Higbie v. Guard. Mutual Ins. Co., 53 id. 603 ; 1 Biddle on Ins. § 531.)

The weight of evidence was so clearly in favor of the defendant that no other course was open to the court, except to dismiss the complaint. (Dwight v. Germania L. Ins. Co., 103 N. Y. 341, and cases there cited.)

"What I have now stated is upon the assumption that the court was right in permitting the doctors to testify as to the information they acquired while attending the insured in a professional capacity.

We think the court in this respect committed no error, as the privilege contained in section 834 of the Code of Civil Procedure had been expressly waived by the insured. ■

In the application for insurance, which is made a part of the contract, are the following words : “ And for myself and for any person accepting or acquiring any interest in any benefit certificate issued on this application, I hereby expressly waive any and all provisions of law now existing, or that may hereafter exist, preventing any physician from disclosing any information acquired in attending me in a professional capacity, or otherwise, or rendering him incompetent as a witness in any way whatever, and I hereby consent and request that any such physician testify concerning my health and physical condition, past, present or future.”

There can be no doubt that such a waiver was effective and had reference to a trial upon the policy after the death of the insured, as there could be no occasion to use it until such time. (Matter of Coleman, 111 N. Y. 220, 228; Alberti v. N. Y., L. E. & Western R. R. Co., 118 id. 77; Rosseau v. Bleau, 131 id. 177, 184; Cahen v. Ins. Co., 41 N. Y. Super. Ct. 296; Grand Rapids, etc., R. R. Co. v. Martin, 41 Mich. 671; Adreveno v. Mutual Reserve Fund Life Assn., 34 Fed. Rep. 870, U. S. Cir. Cir. E. D. of Missouri.)

This agreement to waive the privilege was an essential part of the contract, as much so as the payment of the premium.

The defendant was not prevented from showing what were the real facts by the production of the medical certificate of its own medical examiner any more than it would have been from showing that any witness it put upon the stand was mistaken or incorrect upon some point in his testimony, so long as it was not done to impeach him.

No point is made by the plaintiff as to change of beneficiary, or that the declarations of the insured were not properly received in evidence.

There are no other points raised that require notice.

The judgment should be affirmed, witlj costs.

Dykman, J., concurred.

Judgment affirmed, with costs.