author: VaN Brent, P. J.:

text:
    The Holland Trust Company, Respondent, v. James A. Waddell, Appellant.

      Motion for a nonsuit improperly denied — when not a, ground for reversal — ■ evidence — certificate of deposit —• defense thereto — accommodation note — right of action thereon — cm accommodation certificate of deposit — renewal of note —• collateral security not released thereby — rights of the payee as to collateral security.

    Although the motion oí a defendant for a nonsuit at the close of the plaintiff’s case should have been granted, if the defect in the plaintiff’s proof be thereafter supplied by the defendant’s witnesses, a reversal will not be directed upon appeal on account of the denial of the motion for a nonsuit.
    The evidence considered and commented upon which is sufficient to authorize a court to direct a jury to find that a person was a bona fide holder for value of a certificate of deposit.
    The mere fact that the holder of a valid certificate of deposit knew that the person to whom it was given had no deposit with the bank giving the same, and that it was issued simply for his accommodation, is no defense to an action thereon.
    The holder of an accommodation note, issued for a particular purpose and used for that purpose, who has parted with value upon the faith thereof, has a legal claim to recover thereon.
    An agreement to accept as security for a loan a certificate of deposit issued by a certain bank, cannot be termed a request that such bank should issue such certificate to the proposed borrower for the accommodation of the proposed lender.
    The renewal of notes from time to time in no way extinguishes the original debt; it is simply an extension of the time of payment and a change as to the evidence of the debt, and all collaterals pledged for the payment remain as security, notwithstanding the extension of the time of payment.
    A promissory note contained a recital that the maker thereof had deposited with the payee as collateral security for the payment thereof, and of other demands, certain property as per a memorandum, and authorized the sale of the collateral in case of non-payment, with an authority to the payee to become the purchaser at such sale.

      Held, that the provision contained in such note was not a limitation upon the right of the payee in respect to the collateral, but was an expansion of its rights, giving to the payee a power of sale and a right to purchase independent of the rights which a pledgee of securities of the kind in question would otherwise enjoy.
    Appeal by the defendant, James A. Waddell, from a judgment of the Supreme Court, entered in the office of the clerk of the city and comity of New York on the 17th day of February, 1898, rendered upon the verdict of a jury in favor of the plaintiff for $22,797.23 by direction of the court after a trial at the New York Circuit, and also from an order entered in said clerk’s office on tlie 31st day of May, 1893, denying the defendant’s motion to set aside the verdict and for a new trial made on a case and exceptions.

      B. N. Harrison, for the appellant.

      G. H. Yeaman, for the respondent.
   VaN Brent, P. J.:

This action was brought to recover upon a certificate of deposit for §20,000 alleged to have been issued by the defendant, doing business at Key West, Florida, under the name of the “ John White Rank,” to one Oppenheim, of which the plaintiff claimed to be a holder for value. The answer admitted the issuance of a certificate of deposit to Oppenheim, but denied that such certificate was as declared upon in the complaint, and denied that the plaintiff was a holder for value, or that the plaintiff was the lawful holder or owner thereof. The answer then alleged that the certificate which the defendant issued was made and delivered to Oppenheim without consideration, which the plaintiff knew; and that the plaintiff held the writing without value and upon a fraudulent agreement that said writing should be kept merely to mislead and deceive the plaintiff’s board of directors and the New York State Banking Department, in the event of inquiry into and disapproval of the real terms of a transaction theretofore completed or agreed upon between Oppenheim and the plaintiff, by which the plaintiff either purchased from Oppenheim 100 municipal bonds of the city of Key West, Florida, for $1,000 each, or loaned and advanced $100,000 to the said Oppenheim upon his note for that amount with said bonds as collateral security to secure the payment of the note, the precise nature of the transaction being to the defendant unknown. The answer then alleged that there was nothing due from Oppenheim to the plaintiff upon said loan for which said writing could be held as security; and that there was nothing due from the defendant to Oppenheim.

Upon the trial of the issues thus framed, the court directed a verdict in favor of the plaintiff. A motion having been made for a new trial upon a case made and settled such motion was denied; and from the judgment entered upon the verdict, and from the order.denying said motion for a new trial, this appeal is taken.’ Upon tbe trial the plaintiff, having proved its incorporation, offered in evidence the writing declared on in the complaint, to which counsel for the defendant objected as not having been proved. This objection was overruled on the ground that the answer admitted it sufficiently to identify it, and the defendant excepted. Oppenheim’s indorsement was then proved, and demand and refusal of payment and plaintiff rested. Thereupon the defendant’s counsel moved to dismiss the complaint upon several grounds, among which was one that the certifícate of deposit had not been sufficiently proved, which seems to embrace all the other grounds stated. This motion was denied and an exception taken, and it is urged that this ruling was error. Whatever might have been our opinion of the question had no additional evidence been given, we think that the defendant supplied whatever defect existed in respect to the authenticity of the certificate of deposit. While upon the stand the defendant was asked: “ J8y the Court. Q. In whose handwriting is that signature ? ” (handing the witness the certificate of deposit declared on in the complaint). This question- was objected to as irrelevant and immaterial to anything as to which this witness had been examined, and as an improper question to be put by the court under the circumstances. This objection was overruled and an exception taken which we do not understand to be insisted upon on this appeal. “ A. That looks like mine.

By the Court. Q. Is it not ? A. I think it is. I signed a paper similar to this, and I thought it had certain restrictions or limitations.” ,

The latter part of the answer was directed by the court to be stricken out, and counsel for defendant excepted.

“ By the Court. Q. All I want to know is if that is your own handwriting — whose signature is that % A. That looks like mine. I thought there was a restriction of six months in the certificate, and, when I signed, that was talked of.”

It further appeared that when this certificate was presented to the plaintiffs they telegraphed to the John White Bank at Key West as follows :

“ Is B. G. Oppenlieim certificate of deposit twenty thousand dollars with you good ? Wire answer.”

On the next day an answer was received by the plaintiff from the John White Bank, “See Jas. A. ’Waddell, cashier at 10 "Wall St., New York.” James A. "Waddell is the defendant in this action.

On the day of the sending of the telegram by the plaintiff to defendant’s bank, Oppenheim asked defendant to go over with him to plaintiff’s office and be introduced to the plaintiff’s secretary. The defendant went there with Oppenheim, was introduced, and upon being shown the paper he had signed in Oppenheim’s office as hereinafter stated, he was asked by the secretary whether the signature was his, which he answered in the affirmative. This evidence clearly proved the certificate and cured whatever defect, if any, had previously existed in the proof.

The defendant, on being examined, testified as to his first acquaintance with Oppenheim in November, 1889, and to the remarkable and enduring effect which a letter from the plaintiff had upon him, asking Oppenheim if he saw any good municipal bonds he. could buy right, to do so, and they would divide the profits between them.

There was also introduced a letter from Oppenheim to the plaintiffs, dated March 8, 1890, announcing to them that he had made an offer to purchase $100,000 worth of the municipal bonds of Key "West, Florida, five per cent, thirty years, with the option of obtaining the entire issue of $400,000, and he made the proposition to the plaintiff to discount his note of $100,000, with these bonds as collateral security, and offered in this connection to employ the plaintiff to sell and dispose of the bonds of the city of Key "West at a price to be named and a commission to be agreed upon, the plaintiff, as it sold and disposed of the bonds, to place the cash received from such sale to the credit 'of Oppenheim’s note, and various other terms were stated. There was also introduced a letter from Oppenheim to Yan Siclen, the secretary of the plaintiff, dated the 17th of March, 1890, notifying him that the board, the next day, would pass a resolution giving him the sale of the bonds at ninety-seven and one-lialf and a commission to him of two and four-tenths.

There was also introduced in evidence a proposition, made by Oppenheim to the honorable board of city commissioners of Key "West, for the purchase of the bonds to be issued by the city of Key "West, and a contract entered into between the city of Key "West and Oppenheim, dated the 20th of March, 1890, for the sale of $100,000 of the bonds.

On the 5th of April, 1890, Oppenheim, from Key West, addressed a letter to the plaintiff, stating:

“Referring to my letter to you, dated March 8th, 1890, 1 have to add that I have become the purchaser of 400,000 of the bonds of the city of Key West, Fla., and that I am to provide $100,000 on May 1st, 1890, balance on 60 days’ notice.
“ I desire to renew my proposition above referred to to you, and to say that I expect the assistance of the John White Bank of this place. * * *
“I hope to have a telegram from you on Wednesday next, April 9th, as I desire to leave for N. Y. on Thurs., the 10th instant.”

Van Siclen, on the ninth of April, telegraphed Oppenheim at Key West: “Will accept note ten thousand, two months, indorsed John White Bank.” Subsecpient to the entering into the contract for the purchase of the bonds by Oppenheim, the defendant saw a good deal of him, and on the 10th of April, 1890, was so impressed by his mention of Yan Siclen and the Holland Trust Company that he gave Oppenheim a general retainer of $5,000 a year as his attorney.

On the 29th of April, 1890, Oppenheim wrote the Holland Trust Company as follows:

“ G-ENTlemeN.' — I hereby make application for a loan of $100,000 which I propose to borrow on my two months’ note for that amount, with collateral consisting of one hundred thousand dollars in the municipal bonds of the city of Key West (all coupons attached), and as additional security to the Holland Trust Company I offer' a certificate of deposit for tire sum of ten thousand dollars. Said certificate of deposit is issued by the John White Bank of the city of Key West, and is dated April 1st, 1890, and has six months to run, with interest at 5 per cent per annum.”

On the 2d day of May, 1890, the Holland Trust Company, through Yan Siclen as secretary,'Wrote Oppenheim as follows :

“ DeaR SiR.— The executive committee of this company has accepted your application for a loan of $100,000, by discounting your note at sixty days for that amount, with $100,000 of the bonds of the city of Key West, Fla., and a certificate of deposit for $20,000 instead of $10,000 in the John White Bank of Key West, Fla., as collateral, upon approval, &c.”

On May third the plaintiff, through its secretary, wrote Oppenheim : “ The sum of $100,000 is here awaiting the bonds, &c., of Key "West, as indicated in my letter to you of May 1st.” The letter of May first was not produced.

On the same day Oppenheim wrote to the John White Bank, Key West, informing them that the Holland Trust Company had placed the $100,000 for the bonds at his disposal, or rather at the disposal of the treasurer of the city of Key West, and that formal notice had been sent to the treasurer. lie then states that this" letter was written simply to inform defendant that the Holland Trust Company required him to deposit with them, as collateral, a certificate of deposit for $20,000 and not $10,000 as they first informed him, and asking the defendant to make a certificate of deposit for the sum of $20,000, payable to Oppenheim, dated the 1st of April, 1890, and to have it run for six months, with interest at five per cent per annum. It is undoubtedly from this letter that the witness got the idea that the certificate of deposit which he signed had a six months’ clause in it, as testified to by him. This reference to the certificate of deposit to be made by his bank the defendant swore was the first time anything had been said to him about any certificate of deposit to be furnished by him for use in connection with the handling of the bonds; he had never heard such a thing before, and made no reply to the letter.

On the 5th of May, 1890, Oppenheim wrote to the plaintiff, reciting the terms of the proposed loan mentioned in the plaintiff’s letter of May second, and accepting the same, and asking that the cash might be ready for him against the completion of the bonds, which would be in ten or fifteen days from date.

Prior to the receipt at Key West of Oppenheim’s letter of May third to the John White Bank, the defendant had left for New York, wdrere he arrived on May sixth, and from New York-went to Newport, to which place Oppenheim’s letter was fox-warded, where it was received by him.

On the twenty-ninth of May the plaintiff wrote to Oppenheim :

“ As previously advised we have been holding for you the sum of $100,000 since Friday, May 23d. The intei-est on this amounts to $116.67, being 7 days at 6 per cent. Please send check so that we may get it in this month’s account.”

On the 2d of June, 1890, plaintiff also wrote to Oppenheim: “ As you have not paid the interest as per memorandum sent you on Thursday last, and as the bonds have not arrived, we hereby notify you that we cannot hold the $100,000 for you any longer.” On the fourth of June, Oppenheim wrote to plaintiff acknowledging receipt of these letters of May twenty-ninth and June second, and asking them to hold the $100,000 for a week longer, and informing them that the delay in the delivery of the bonds had been caused by an informality which he hoped would be rectified promptly, and further stating that he expected to have funds in a few days and promising to pay the amount due for interest on the sum held for him.

In the early part of June the defendant came to New York, saw Oppenheim and had a conversation with him respecting the issuing to him of the certificate of deposit, which at first defendant said he could not give as Oppenheim had no mone}r on deposit with defendant’s bank. Defendant further testified that Oppenheim urged that the certificate was only a matter of accommodation, and was so understood by Yan Siclen, and that the certificate did not mean anything except to accommodate him, and was intended to be held by the trust company as a satisfaction to any one who would examine the collaterals or the papers or assets of the Holland Trust Company. After several days, as a result of this conversation, the certificate was given dated May 1, 1890, and on the tenth of June Oppenheim wrote to Yan Siclen : “ I expect the bonds to arrive in the city this evening and they will be at your bank to-morrow morning ; I send herewith my note and the cert, of deposit as agreed.” It would appear to have been on the same day that Oppenheim axrd the defendant went to the Holland Trust Company and saw Yan Siclen, who produced the certificate which had been signed by defendant, and asked him if that was his signature as above stated, and immediately thereafter the plaintiff deposited to the credit of the defendant in the Western National Bank upon accouut of the bonds of the city of Key West, the sum of $91,500. On the twelfth of June the plaintiff received Oppenheim’s note payable two months after date for $100,000, which recited that it held as collateral security bonds of the city of Key West for $100,000 and a certificate of deposit for $20,000 by the John White Bank. It further appeared that these notes were renewed from time to time until finally, oil tlie lltli of November, 1890, a note was given in renewal whereby on demand he promised to pay the plaintiff $100,000, with interest at the rate of six per cent per annum, and six per cent per annum additional, having deposited with said trust company as collateral security for the payment of 'this note, and also of all other present or future demands of any kind of the said trust company against the undersigned, due or not due, the property, as per memorandum envelope herewith, dated November 11, 1890, and two envelopes were produced by the plaintiff dated November 11, 1890, evidently referring to this loan, upon one of which the collaterals mentioned were “100,000 bonds of City of Ivey West, Florida,” and upon the other was “ $98,000 bds., City of Key West, due 1920, 20,000 Otf. of Deposit in John White Bank.”

It is conceded that during this time two of the bonds had been paid, reducing the number held by the plaintiff to ninety-eight instead of one hundred. This note also authorized the sale of the collateral in case of non-payment and with authority to the plaintiff to become the purchaser at spell sale.

Upon these facts appearing the court directed a verdict for plaintiff as already stated.

. It is claimed upon this appeal that the evidence was sufficient to entitle tlie jury to find that the plaintiff was not a bona fide holder of tlie certificate for value, and,' therefore, could not recover in this action; and that plaintiff knew that Oppenlieim was not a depositor of $20,000 in defendant’s bank; and that tlie certificate was transferred to the plaintiff in violation of restrictions imposed by the maker as to the use it could be put to, and that the entire principal debt in the transaction in which the certificate came into the plaintiff’s hands was paid when it matured; and, also, that the certificate of deposit was not collateral to the note which the plaintiff now holds; and, further, that the plaintiff had no title to this certificate of deposit which authorized it to bring suit, the condition of the pledge being that it should be sold.

The objections as to the bona fides of the plaintiff depend largely upon the claim made by the defendant that the plaintiff and Oppen-heim were jointly interested in the speculation in the bonds. But we fail to find from the evidence any such unity of interest;.. It is true that the plaintiff expected to act as financial agent in reference to these bonds, and to receive a commission therefor, which expectation may have been the inducing cause for the loaning of the money to Oppenheim, but that loan to Oppenheim in no way made them jointly interested in the speculation, any more than where a customer places his stock in the hands of a broker, for sale upon commission, they are jointly interested in the - transaction because the broker receives a commission upon the sale.

Neither is the fact that the plaintiff knew (if it did know) that Oppenheim liad no deposit with the John White Bank, and that the certificate in question was issued for the accommodation of Oppen-heim, any defense to its claim. An accommodation note would be no accommodation unless it could be used to obtain credit upon it. It is issued for the particular purpose, and if used for that purpose the holder of the note who has parted with value upon the faith of it, certainly has a legal claim to recover upon it. There is no evidence tending to show that the plaintiff had any notice of any restriction which the defendant placed upon the certificate, nor of any false representations which were made to defendant, as he alleges, in order to obtain his signature to the certificate. Nor is there any evidence that the plaintiff knew that Oppenheim had no deposit with the bank in question.

The claim that the certificate was made by the defendant at the instance, and upon the request of the plaintiff, is not supported by the evidence. It is true that the plaintiff agreed’ to accept as security for the loan a certificate of deposit issued by the John White Bank. But that that is to be tortured into a request that the John White Bank should issue a certificate to Oppenheim to accommodate the plaintiff seems to require a considerable stretch of the imagination.

Our attention is called to the case of Produce Bank v. Bache (30 Hun, 351), decided by the General Term in the first department in 1883, in which it appeared that the respondent was a manned woman who had indorsed a draft drawn by another person, and, by the terms of the indorsement, had declared it to be a lien on her real and personal estate; her defense was want of consideration; the indebtedness for which the draft was given had originated in discounts made by the bank, but for the payment of which the respondent was not liable; that indebtedness was carried along by renewals until the draft in controversy was given.

It appears from the language of the court that the defendant indorsed the draft at the instance and request of the president of the bank, for the sole purpose of having the paper in the bank appear in form to be a proper and legal evidence of an existing indebtedness, and that the intention upon the part of the bank not to indorse the contract was communicated to the indorser.

We might refer to the case of Garfield Nat. Bank v. Colwell (57 Hun, 169) as being a much more recent authority in support of this proposition ; but it has no application to the case at bar. The plaintiff made no representation or promise to the defendant or to his bank. An offer was made of a certificate of $10,000 apparently, and the plaintiffs said they would take a certificate of $20,000. That was furnished; the money was loaned, and the defendant got the money.

Neither has the claim that the loan has been paid, and the collateral thereby released, any better foundation. The principle is too well settled to need the citation of authorities that the renewing of notes, from time to time, in no way extinguishes the original debt; it is simply ah extension of the time of payment and a change as to the evidence of the debt, and all collaterals pledged for the payment would remain as security notwithstanding the extension of the time of payment. It is apparent, from the manner in which this transaction was carried on, that there was no money except that which the plaintiff furnished, unless, perhaps, some interest which Oppen-heim paid.

The only remaining question is as to the authority of the plaintiff over the collateral, being limited by the provision for the sale thereof contained in the note of November 11, 1890. It seems to ' us apparent that this provision was not a limitation upon the rights of the plaintiff in respect to this collateral, hut rather an expansion of those rights, giving plaintiff a power of sale and a right to purchase independent of the rights which a pledgee of securities of this kind would otherwise enjoy.

Upon the whole case we think that no error was committed, and that the judgment should be affirmed, with costs.

O’BeieN and Pakkeb, JJ., concurred.

Judgment affirmed, with costs.


source: Caselaw Access Project

author: Per Curiam :

license: Public Domain

text:
    The People of the State of New York, Plaintiff, v. The Madison Square Bank, Defendant. In the Matter of the Petition of George T. Fitzgerald, Appellant.

      Money wrongfully received by a bank in part payment of a mortgage — when it must be turned over by the receiver of the bank to the holder of the mortgage.

    Wliere money was wrongfully received by a bank in part payment of a bond and mortgage after the bank had parted with such bond and mortgage, the person paying the same is entitled to be put in the same position -which he would have occupied had the bank held the mortgage at the time of the payment, and the receivers of the bank, appointed after such payment, must turn over such money so received by the bank to the holder of the bond and mortgage to be applied by him thereon.
    Appeal by tlie petitioner, George T. Fitzgerald, from an order of the Supreme Court, made at tlie New York Special Term and entered in the office of the clerk of the city and county of New York on the 27th day of November, 1893, denying his motion for an order directing the receivers of the Madison Square Bank to pay out of the funds in their hands, as receivers, and before any distribution of the assets of said bank is made, to the State Trust Company, the sum of $1,588.77, with interest from July 25, 1893.
    The petition of George T. Fitzgerald showed that on July 25, 1893, he paid to the Madison Square Bank the sum of $1,580 on account of the principal of the bond and mortgage referred to in the opinion, and $8.77 on account of the interest thereon, and that receivers were appointed of the Madison Square Bank on August 3 and 14, 1893..

      L. W. Reddington, for tlie appellant.

      Moses Weiman, for the respondent.
   Per Curiam :

The money paid by the petitioner in this proceeding having been wrongfully received by the Madison Square Bank after it had parted with the bond and mortgage upon which it was paid, the petitioner is entitled to be put in precisely the same position which he would have occupied had the bank held the mortgage at the time of the payment, which the bank or its receivers cannot be heard to object to. Tliis can only be done by directing the receivers to pay the money of the petitioner, which they have in their possession, to the State Trust Company to be applied upon the bond and mortgage in question.

The order should be reversed, with ten dollars costs and disbursements, and the motion granted, with ten dollars costs.

Present — Van Brunt, P. J., O’Brien and Parker, JJ.

Order reversed, with ten dollars costs and disbursements, and the motion granted, with ten dollars costs.


text:
    Henry D. Watson, Appellant, v. Boston Woven Cordage Company, Respondent.

      Action by a non-resident against a foreign corporation — jurisdiction of the Supreme Court — statement embraced in a note as to where it was made — when and by whom it may be relied on.

    The Supreme Court has jurisdiction of actions brought against foreign corporations by non-residents to recover damages for the breach of contracts made within the State of New York.
    A statement embraced in a note that it was made within a certain State is a representation upon which all innocent holders have a right to rely that the note was there made.
    Where parties acquiring a bill, for value, in the usual course of business, have no knowledge that it was not issued and delivered as a subsisting instrument at the place where it bears date, they are entitled to regard its ostensible as its real character, and it will not be permitted that they suffer by reason of the after-discovered fact that it was not there delivered.
    Appeal by the plaintiff, Henry D. Watson, from so much of an order of the Supreme Court, made at the New Tort Special Term and entered in the office of the clerk of the city and county of New York on the 20th day of November, 1893, as vacates an attachment and directs the delivery of certain property to the defendant.

      Daniel 8. Femsen, for the appellant.

      George F. Ditsoomi, for the respondent.
   Per Curiam :

This court has jurisdiction of actions against foreign corporations brought by non-residents to recover damages for the breach of a contract made within this State, and the question involved upon this appeal is as to whether the plaintiff upon talcing the note in question had a right to rely upon the representation contained in the note that it had been made in New York.

We think this point is not open to discussion since the decision in the case of Fifth Avenue Bank v. 42d St. & Grand St. Ferry R. R. Co. (137 N. Y. 231). The statement in the note that it was made in New York, such statement being embraced in its date, was a representation upon which all innocent holders had a right to rely that the note had been there made. There is nothing impeaching the good faith of the plaintiff, and in the bringing of this action, as has already been suggested, he had a right to rely upon the place of contract being that named in the note.

We think the law is well expressed in Daniels on Negotiable Instruments (§ 869), as follows:

Where the parties acquiring a bill for value, and in the usual course of business, have no knowledge that it was not issued and delivered as a subsisting instrument at the place where it bears date, it is but just that they should be entitled to regard its ostensible as its real character, and should at least not be permitted to suffer by reason of the after-discovered fact that it was not there delivered.”

The order appealed from should be reversed, with ten dollars costs and disbursements.

Present —Van Brunt, P. J., O’Brien and Parker, JJ.

Order reversed, with ten dollars costs and disbursements.


text:
    Old Staten Island Dyeing Establishment, Appellant, v. Skinner Engine Company and Another, Respondents.

      Equity — irrepwableinjwry, only in case of insolvency — absence of any allegation of insolvency.

    When the only ground upon which equity can he called upon to intervene in a case is that a person would suffer irreparable injury, which could only happen in case a certain person should he insolvent, and there is no allegation in the complaint that such person is insolvent, there is no ground for equitable interference.

      Appeal by tbe plaintiff, Old Staten Island Dyeing Establishment, from an order of tbe Supreme Court, made at tbe New York Special Term and entered in tbe office of tbe clerk of tbe city and county of New York on tbe 6tb day of December, 1893, denying tbe plaintiff’s motion to continue a preliminary injunction/
    This action was brought for tbe purpose of restraining tbe prosecution by tbe defendant tbe Skinner Engine Company of an action in tbe City Court of New York against tbe plaintiff, and praying that tlie respective rights, claims and obligations of tbe parties be determined in tbe present action.
    The complaint contained, among others, the following allegations:
    That in July, 1893, tbe plaintiff made bis promissory note to tbe defendant William Barnhurst for $558.90 in payment of certain work to be thereafter completed by tbe defendant; that thereafter and about August 29, 1893, by reason of tbe defective work of Barnhurst, tbe plaintiff was damaged to tbe extent of $1,500 ; 'that on or about November 10, 1893, tbe defendant Skinner Engine Company commenced an action against the present plaintiff in tbe City Court of New York alleging tbe execution of such note by tbe plaintiff and' tbe transfer thereof for a valuable consideration, before maturity, to the Skinner Engine Company, to which complaint in tbe City Court, tbe present plaintiff put in an answer alleging that Barnhurst was not a party to tbe action in tbe City Court and that tbe present plaintiff did not claim to recover against tbe Skinner Engine Company tbe amount of tbe damages caused by tbe defective work of Barnhurst, but only claimed in tbe City Court action to set off against tbe claim of the Skinner Engine Company tbe plaintiff’s claim for damages caused by such defective work, and that in tbe City Court tbe plaintiff bad no full, adequate and complete remedy.
    The complaint in tbe present action further alleged that the Skinner Engine Company threatened and intended to continue in tbe prosecution of the action in tbe City Court, and that tbe plaintiff bad notified Barnbur,st of its damage by reason of bis defective work, and that it would claim tbe same against him; that be knew lie was liable therefor, and thereafter be fraudulently transferred tbe note to tbe Skinner Engine Company for tbe purpose of and intending to deprive tbe plaintiff of tbe benefit of its claim for such damages, by compelling it either to pay the note to tbe said company, or to extinguish said claim by setting it off; that the plaintiff liad no knowledge of his intention to transfer the note until after it had been transferred, of all of which the Skinner Engine Company had knowledge and notice.

      G. ZabrisMe, for the appellant.

      H. D. Ewing, for the respondent.
   Per Curiam :

The only ground upon which equity can be called upon to intervene under the circumstances disclosed by the papers upon this appeal is that the plaintiff will suffer irreparable injury unless the court of equity restrains the prosecution of the action at law. This irreparable injury can be suffered only in case the original holder of the note is unable to respond to a judgment for the damages alleged to have been sustained by his failure to comply with the contract out of which the note in suit in the court of law arose.

In the complaint in this action we have been unable to find any allegation that the original holder of the note, against whom the plaintiff claims to have a cause of action for damages for breach of contract, is insolvent. If he is capable of meeting any judgment which may be obtained against him because of his alleged breach of contract, then, by the payment of the note in question to its holders, the plaintiff sustains no irreparable damage.

'Without this allegation it seems to us the plaintiff fails to show any ground for equitable interference.

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

Present — VaN Brunt, P. J., O’BrieN and Parker, JJ.

Order affirmed, with ten dollars costs and disbursements.


author: Van Brunt, P. J. : Follett, J.

text:
    In the Matter of the Application of The East River Bridge Company.

      JRapid Transit Act — report of commissioners, when final — review by the Supreme Court — conditions imposed by the court — when confirmation should be refused — ■ evidence — issue of the stock of a corporation at less-than par.

    Under tlie provisions of the Rapid Transit Act, chapter 4 of the Laws of 1891, as amended hy chapter 102 of the Laws of 1892, a report of commissioners, appointed thereunder, against the construction of an elevated railway is final.
    The responsibility in respect to the construction of au elevated railway, under the provisions of chapter 4 of the Laws of 1891, rests with the Supreme Court, which is to determine, where the property holders have refused their assents, upon all the facts before the commissioners, and those of which it may take judicial notice, whether it should authorize the construction of the railroad notwithstanding the objection of the persons who would be injuriously affected thereby.
    The Supreme Court, if it gives its consent to the construction of such an elevated railway, cannot impose conditions in regard to the enterprise.
    It would seem that it is the duty of a court to deny an application to confirm the report of commissioners deciding upon the construction of an elevated rail- ' road, if the statute incorporating the corporation by which such undertaking is to be carried out affords no adequate assurance of sufficient capital to enable it to build the elevated railway, or to respond to the adjoining owners for the damages which would necessarily result from such building.
    Where the directors of a corporation under its act of incorporation (Chapter 101 of 1892) are authorized to issue the stock thereof at such time and in such manner and upon such terms as they shall deem proper, the only limitation being that at least ten per cent of the par value of the stock at the time of the first subscription thereto should be paid into the treasury of the corporation in cash, it would seem that such directors might issue stock of the corporation at less than the par value thereof.
    Applioation by tbe petitioner, Tbe East River Bridge Company, for an order confirming tbe report of three commissioners appointed by an order of tbe Supreme Court, made at tbe New York Special Term on tbe 12tb day of May, 1893, to determine whether a certain railway ought to be constructed and operated by tbe petitioner, under tbe provisions of chapter i of tbe Laws of 1891, as amended by chapter 102 of tbe Laws of 1892.

      F. Lauterbach and G. W. Wingate, for the motion.

      F. Morris, G. G. De Witt and G. Ferris, opposed.
   Van Brunt, P. J. :

By chapter 101 of the Laws of 1892 the East River Bridge Company was incorporated certainly with somewhat • extraordinary powers. By this act it was organized with a capital of $25,000,000, which it was authorized to increase or decrease at pleasure. It was also authorized to construct two bridges across the East river, one between a point at or near Broadway, in the city of Brooklyn, across the East river, to a point or place between Delaney and Rivington streets and Columbia and Cannon streets, in the city of New York, and the other commencing at a point between the pier line of East river and Fulton street, in the city of Brooklyn, across the East river to a point or place between Jackson and Scammel streets, in the city of New York. It was further provided that an approach to said first-mentioned bridge should be constructed and maintained from a point on said bridge at or about Cannon street, thence extending westerly over, through and along private property and across the intervening streets to the Bowery, and thence across the Bowery to Spring street, which extension might be extended if, in the judgment of a majority of the stockholders, it should be deemed foi public convenience so to do, from its termination at the Bowery and Spring street westerly above, through and along Spring street to or .near the Hudson river, in the city of New York. The company was also authorized to construct all necessary approaches other than those specified, and all necessary connections between said approach or approaches and bridges and any railroad or railroads in the city of New York, so as to enable passengers to be transported to and from the same.

By chapter 102 of the Laws of 1892, amending the Rapid Transit Act, the directors of any company incorporated to construct, maintain and operate a bridge or bridges connecting a city of more than 1,000,000 of inhabitants with another situate in the State, and by the act of incorporation by which authority should have been conferred or intended to be conferred to construct, maintain and operate, as a part of or in connection with this bridge, an approach or approaches thereto, extending generally in an easterly or westerly direction, may determine, in lieu of constructing such approach or approaches, to build, maintain and operate an elevated railway, the route of which shall be coincident with the route of said approach or approaches as defined by said act. The method of procedure of such bridge^ company in that behalf were by the amendatory act prescribed and regulated. The directors of the petitioner located file main cross-town approach above mentioned through a new street fifty feet wide, through private property to the Bowery, and from thence absorbing Spring street, through the same to West street, and thence turning to the south it continued along West street 1,200 feet to the Desbrosses Street ferry, connecting- with the ferries of the Pennsylvania railroad. An approach was also located to connect one bridge with the other, and to extend from such junction through Grand street to the East river. The directors of the bridge company determined to construct, in lieu of these approaches, an elevated railroad, and adopted a plan of which a copy is annexed to the petition. The consent of the local authorities to the construction was given, and the capital of the corporation reduced to $2,000,000, ten per cent of which has been paid in. The property holders along the proposed line of said elevated railroads having refused their consent to their construction, application was made to the General Term for the appointment of commissioners under the Rapid Transit Act, which commissioners were appointed, who reported in favor of the enterprise, and the question now presented is whether the court should confirm the same.

The learned counsel for the petitioner seems to have a rather exalted idea of functions and the dignity of the determination of the commissioners appointed in this proceeding. It is urged that the determination of the commissioners that the construction of the proposed road is a public necessity will not be reviewed by this court except fraud or manifest error on their part be averred, which is not the case, and that the conclusions arrived at by them upon all matters of fact'are the same as the verdict of a jury as far as this court is concerned. And our attention is called to the case of In re Nassau, Cable Co. (36 Hun, 272) where the commissioners having reported adversely to the building of the proposed road, it was held that, in the absence of fraud or mistake in the proceedings, the General Term had no power to send the case back or to appoint a new commission, but that the determination of the commissioners was final. This conclusion was evidently in accordance with the law. There is no provision in the Rapid Transit Act for any action upon the part of the court unless the report of the commissioners is in favor of the construction of such railroad. Hence, by the very terms of the act, if the commissioners report against the enterprise it is final. And for that reason the commissioners, in proceedings of this nature, have always resolved questions iii regard to which there may be any possible doubt in favor of the applicant, in order that it may be finally determined by the court as to whether their conclusion should be confirmed or not. Our attention is also called to the case of In re N. Y. Elevated Railroad Co. (70 N. Y. 357) where the Court of Appeals say that they cannot or, at least ought not, to interfere with the findings of the commissioners upon questions of fact. Upon an examination of the act it is difficult to see where the Court of Appeals have any authority or jurisdiction to interfere with the question as to whether the benefits arising from the construction of an elevated railroad are of such a character as to counterbalance any damage which will be done to private interests from its operation.

This court is of opinion that the responsibility in respect to this matter of construction finally rests with it, and it is to determine, where the property holders have refused their assents upon all the facts before the commissioners, and those of which they majr take judicial notice, whether it should authorize the construction of the railroad notwithstanding the objection of the persons who would be injuriously affected thereby.

It is not at all necessary to discuss any of the constitutional questions which have been raised upon this application, because, as we understand it, the court of last resort has practically swept away all the limitations which have been attempted to be placed upon private and local enterprises affecting private interests. In The Matter of Church (92 N. Y. 1) it has been held that a law relating to particular persons or things as a class was general, while one relating to particular persons or things of a class was deemed local or private; and that an act which under no possible circumstances could apply to but a single county of the State, because it created a class consisting of one, and did not refer by name to the individual composing this class of one, was not local, but general, and, therefore, constitutional. Under this decision all that it is necessaiy to do to’ evade the constitutional provision is to use general language, qualified, however, by particular descriptions which can make it applicable only to the particular thing in respect to which there is an intent to legislate.

An objection has also been raised that the petitioner has not sufficient means or capital to complete the enterprise, or to compensate the property owners for the damage which will result in case the proposed railroad should be built, which, from the nature of the charter of the applicants in this proceeding is a very serious objection. It is true that the capital of this corporation is now $2,000,000, which itself seems to be rather a small amount for the undertaking of an enterprise which, it is conceded, will cost from $30,000,000 to $35,000,000. But there is no certainty that capital to this amount will ever be paid in, because, under the act of incor.poration of this corporation, the amount of the capital stock may be diminished by the board of directors with the consent, in writing, of the stockholders holding a majority of the stock then issued and outstanding at any time. Hence, the security of these $2,000,000' of capital does not seem at all certain. And further, under section 9 of the act, it would seem that the directors might issue these $2,000,000 of stock upon the receipt of less than the par value thereof, because it is provided that the directors may issue stock at such time, and in such manner, and upon such terms as they shall deem proper, the only limitation being that at least ten per cent of the par value of the stock at the time of the first subscription thereto shall be paid into the treasury of the corporation in cash.

If the views expressed are well founded, it would seem to follow that it is the duty of the court to deny the present application, on the ground that the statute affords no adequate assurance of sufficient capital to enable the applicant to built the elevated railway and bridge or to respond to the adjoining owners for the damages' which would necessarily result from such building.

But even this peculiar character of the organization which is seeking to exercise these extraordinary privileges does not seem tO' be the strongest objection against the granting of the privileges asked for.

It is proposed, under the guise of an approach to a bridge crossing the East river, to build an elevated railroad completely across the city, entirely absorbing one of its streets from tbe Bowery to West street, and tben going down West street to Desbrosses street, and there spread out and use West street for tbe purposes of a terminal station in connection with tbe ferry of tbe Pennsylvania railroad.

It lias been urged by tbe opponents of this application that it is impolitic for tbe city of New York to afford facilities to get beyond tbe boundaries of tbe city.

We do not think, however, that this position is well taken, because, by providing means whereby clerks and other persons employed in tbe city of New York may reach, within reasonable time, places where they can procure homes more cheaply than could be done within the city limits, provision is thereby made for the more economical transaction of business in the city of New York. And by thus affording an opportunity to persons so employed within the city of New York to procure cheap and comfortable homes within a reasonable distance, the business interests of the city are advanced, and the morale of those employed improved. It seems to us, therefore, that there is nothing in this objection.

There is another point which ought to cause the court to hesitate before granting the power sought by these applicants, and that is that there does not seem to have been any substantial progress made towards the construction of the bridge to which this elevated railroad is claimed to be an approach. And as tliis railroad may be finished within a short period of time, compared to that which would be required for the construction of the bridge, and as the court, its consent once given, cannot -impose, conditions, the whole enterprise might stop with the building of this elevated cross-town railroad, to the great detriment of the city of New York at large, and with none of the advantages which are claimed to justify the court in granting such consent.

And it seems to us that a cross-town road, connecting merely the ferries from New Jersey with those of Brooklyn, would not be of sufficient value to this municipality to justify the blockading, of its streets, the interfering with its present and future means of transportation, and the injury which would necessarily result to the owners of adjoining property.

There is a further objection to the granting of the application at this time, which we deem important. It is a matter of common knowledge tliat a commission acting in pursuance of authority are, and for sometime have been, engaged in an effort to solve the problem of rapid transit.

Tlie question submitted to them, in the hope that a successful scheme of rapid transit would result, is one of the greatest importance to this municipality. The benefits, if any, which would result to it from the building of a cross-town road such as is now proposed, would be incomparably less than the other, and for that reason the. right of the applicant to take the public streets should not be granted, at least until the present attempt to obtain a rapid transit system lengthwise of the island, other than underground, shall be substantially abandoned, because the building of this road, or even the granting of the right to occupy the streets, might prove of serious embarrassment to the plans which may ultimately be formed.

In short, the objections to the court at the present time giving its consent to the acquisition by the applicants of the privileges sought are so numerous, and seem to us so obvious and so grave that it is our plain duty to refuse to confirm the report of the commissioners.

PaRKice, J., concurred.

Follett, J.

(dissenting):

_ I am unable to concur in the result reached by the majority of the court. One of the principal grounds upon which 'the report of the commissioners is rejected is that the corporation “has not sufficient means or capital to complete the enterprise.” The 2d section of chapter 101 of the Laws of 1892 (the statute under which the corporation is organized) fixed its capital stock at $25,000,000, divided into shares of $100 each, and it provides that the capital may at any time be increased or diminished by the board of directors with the consent, in writing, of stockholders holding a majority of the shares then outstanding. Before these proceedings were begun the capital stock was reduced to $2,000,000, all of which has been subscribed for at par, and ten per cent thereof paid in cash to the treasurer of the corporation. The estimated cost of the bridges and roads proposed to be constructed is from $25,000,000 to $30,000,000.

It has not been the policy of this State to require corporations engaged in .the construction of internal improvements to procure sufficient capital to be subscribed to complete tbe work, and as a condition precedent to tbe right to commence tbe work or to acquire, by tbe exercise of tbe right of eminent domain, lands necessary for tbe enterprise. Corporations for tbe construction of steam roads may be originated on a capital stock equal to $10,000 per mile for each mile proposed to be constructed, of which ten per cent in cash must be paid in. (Chap. 565, Laws 1890, § 2.) Under this act when $1,000 per mile has been paid in, representing a subscription of $10,000 per mile, construction may be begun, and the right of eminent domain exercised. Ten thousand dollars per mile is a very small part of tbe sum necessary to be expended to construct and equip a modern railway. I doubt if tbe history of internal improvements in this country shows a single instance in which all or a considerable part of the capital required to construct a railroad of any great length, or important canal, or a bridge for railways over any of our great rivers has been subscribed before the corporation entered upon the work of construction. When the work of construction has progressed and the enterprise is shown to be feasible capital is attracted and invested in the form of stock or bonds. It seems unreasonable to require that sufficient capital should be subscribed to complete an undertaking requiring the expenditure of $25,000,000 or more before the right to undertake its construction has been acquired. Sufficient should be subscribed to show that the application is made in good faith and that there is reasonable probability that capital will be secured to complete the undertaking. It is said that sufficient capital has not been subscribed to pay the damages which will be occasioned to the owners of lands upon the route. A sufficient answer to this is found in the Constitution, which provides: “ Nor shall private property be taken for public use without just compensation.” The corporation could not take any private property without first making just compensation to its owner.

I concur in the proposition “ That a cross-town (elevated) road, connecting merely the ferries from New Jersey with those from Brooklyn, would not be of sufficient value to this municipality to justify the blockading of its streets, the interfering with its present and future means of transportation, and the injury which would necessarily result to the .owners of adjoining property.” And it seems to me apparent tbat tlie earnings of such a line would be so insignificant that its construction would not be entered upon by capitalists without it connected with a bridge or bridges crossing the East river, and that the danger that the road may, and the bridges may not, be constructed is quite remote.

I fail to find any evidence in the record showing that the construction of the lines proposed would interfere with the operation of any one of the elevated roads now constructed, or of such as may hereafter be constructed, if such rights and possibilities are to be taken into account.

This proceeding is taken under the following provision of section 4 of chapter 4.of the Laws of 1891, which is substantially a copy of section 18 of article 3 of the Constitution of this State: “ Provided that the consent of the owners of one-lialf in value of the property bounded on and the consent also of the local authorities having control of that portion of a street or highway upon which it is pro-" posed to construct or operate such railway or railways be first obtained, or in case the consent of such property owners cannot be. obtained, that the determination of three commissioners appointed by the General Term of the Supreme Court in the district of the proposed construction, given after due hearing of all parties interested, and confirmed by the court, that such railway or railways ought to be constructed or operated, be taken in lieu of the consent of such property owners.”

Is the right which is vested in the property owners to refuse assent to the .construction of a road simply for the protection of their own private interests, or is it for the purpose of protecting public interests as well ?

It will be observed that in case the consent of one-half of the property owners cannot be obtained, that the approval of three commissioners, confirmed by the General Term, maybe taken in lieu of -their consent. "Whether property owners may raise, and this court consider, objections of purely a public nature, or such as may affect the rights of existing street or elevated railroad corporations, or of such corporations yet to be organized, which in no way affect the private rights of the contesting property owners, cannot be profitably considered in a dissenting opinion, and especially in view of the fact that the question has not been discussed.

I find no evidence which shows that the construction of this road will more seriously affect the rights of owners of property on its Kne than the construction of existing elevated railroads has affected such rights on many of the streets in this city, or that it will more seriously affect the rights of such owners than will the construction of elevated railroads in the future, if any are to be constructed. It seems to me that this judgment is a dangerous precedent and substantially denies the right to construct new elevated roads.

Upon the question whether the proposed bridge and railway will be a great public benefit, I rely upon: (1) The approval of the common council of this city; (2) the approval of the War Department of the United States; (3) the unanimous approval of a strong commission appointed by this court, which has not contented itself with giving a perfunctory report, but has supported its decision by cogent reasons. Gentlemen of distinction, who have given great attention to the question of rapid transit, testified before the commission, among them the mayor of the city of Brooklyn and ex-Mayor Hewitt of this city. Mr. Hewitt testified: “ I think an elevated railway crossing the island in the general neighborhood specified there, and connected with the various existing lines of transportation, would be a very great advantage to the city of New York and to its inhabitants. * * * ' I think a connection between the ferries and the existing lines of transportation, the elevated lines, would be very advantageous to the city. Q. By such a railway as is proposed? A. By such a railway as you have sketched on that map. Q. An elevated railway ? A. Yes; I think it would be still more advantageous if it connected with all of the ferries below Desbrosses street; I think the defect of it is that it does not go far enough.”

Other witnesses testified to the same effect. And it seems to me that the evidence sustains and justifies the conclusion reached by the learned commissioners, and that their report should be confirmed.

Application to confirm the report of the commissioners denied:


author: Van Brunt, P. J.:

text:
    In the Matter of the Judicial Settlement of the Account of Caroline E. Perkins, as Executrix, etc., of John Perkins, Deceased.

      Surrogate’s decree — made by a surrogate loithout jurisdiction, is no protection to an executor — jurisdiction to constr ue a will— Code Civ. Proo. § 2624 — when an executor is protected.

    An appeal from a decree of tile Surrogate’s Court upon an accounting cannot be beard where no findings were requested of tbe court, and there were no exceptions filed to the rulings of the court, and no decision in writing was filed, stating separately the facts found and the conclusions of law, and the mere fact that there was injected into the accounting a motion to set aside previous decrees in no way changes the nature of the proceeding nor obviates the necessity of the findings, exceptions and decisions.
    A decree, made by a surrogate absolutely without jurisdiction to make the same, is no protection to executors imtlie administration of the estate. ■>

    Upon an accounting, a surrogate has jurisdiction to construe a will where the construction thereof is necessary to determine questions arising upon the accounting; and where all the parties in interest are present a surrogate may construe the provisions of a will and determine the validity of the same whenever such determination is necessary in order to enable him to make a decree as to a distribution of the estate.
    In every case of the construction of a will by a surrogate in proceedings for an accounting, he may be said to be without jurisdiction if his construction is contrary to the will of the testator, but where the right of appeal does not exist, until that decree is modified by some aflirmative action upon the part of the surrogate such a decree is a protection to an executor acting thereunder, and although the surrogate may have misconstrued the will upon an' accounting, his decree is not absolutely void for want of jurisdiction.
    Appeal by the legatees, George W. Angelí and Azariah C. Angelí, from certain portions of a decree of the surrogate of the county of New York, entered in the office of the clerk of the New York Surrogate’s Court on the 4th day of October, 1893, namely, from so much of the decree herein entered on the 4th day of October, 1893, as denies the motion of Azariah 0. Angelí to vacate the decree entered herein on the 5th day of April, 1877, and the 2d day of May, 1883, and approves and confirms the accounts as finally settled and allowed by said former decrees; and also from so much of said decree entered on the 4th day of October, 1893, as overrules and sets aside the objections of the said George ~W. Angelí and Aza-riali C. Angelí, filed on the 5th day of May, 1893, and finds the state and condition of the said account, as stated in the summary and as finally settled and adjusted; and also from so much of said decree entered on the 4th day of October, 1893, as finally and judicially settles and allows the account as filed and adjusted.

      George O. Lay, for certain legatees, appellants.
    E 8. Rwpallo, for the executrix, respondent.
   Van Brunt, P. J.:

' It appeared that one John Perkins died leaving a last will and testament whereby he appointed his brother, George R. Perkins, trustee of his will, and made certain provisions for his widow and other persons. In August, 1816, the executors filed an account, upon which citations were duly issued and served upon all the parties interested in the estate, including the appellants, and such proceedings were had that upon the 5th of April, 18 77, a decree was entered, settling the accounts of the executors, and a provision made for settling the trust of which the trustee was appointed, an'd directing the payment out of the estate of a sum equal to the semi-annual interest upon the said trust fund. The appellants, although cited and duly served upon this accounting, did not appear. On the 2d of May, 1883, a second accounting was had. The accounts of the executrix were settled, and a second decree entered containing the same provisions, the record showing that the appellants were duly served by publication, and served by mail with the citation to attend such accounting. On the 31st of January, 1893, the executors filed a third account, which claimed credit for payments pursuant to the decrees of the surrogate. The appellants appeared and filed objections to such items in said account, and also objected to portions of the former decree entered April 5, 1877, on the ground of want of jurisdiction, and on the further ground that such provisions were inconsistent with the terms of the will, and operated to dissipate the principal, to their detriment. They also made a motion to set aside so much of said decree entered upon said accounting as related to this trust upon the same grounds as those upon which objections were filed to the accounts. The surrogate, after bearing the parties, granted the application to declare null and inoperative as to the future administration of the estate so much of the former decrees as related to the trust fund, but declined to affect the validity of the former accountings,' or the subsequent payments made pursuant to said decrees, and from this decree the present appeal is taken. The ground of the appeal is that the surrogate had no jurisdiction to make the decrees of April, 1877, and May, 1883, as they were contrary to the provisions of the will, and deprived the plaintiffs of their rights as remaindermen.

The objection is raised that this appeal cannot be heard because no findings were requested to be made by the court, no exception filed to the rulings of the court and no decision in writing filed stating separately the facts found and the conclusions of law as required by the practice. We would think that this objection was well taken, as this whole proceeding arose upon an accounting before the surrogate, his rulings related to the matters contained in that account, and in the settlement of the account he had jurisdiction to construe the will; such being the proceeding before the surrogate, the mere fact that there was injected into it a motion to set aside previous decrees in no way changed the nature of the proceeding. It was an accounting over which the surrogate had jurisdiction, and for the review of which the well-settled rules of practice require the procedure which has already been intimated. But it is not necessary to limit our disposition of this case to this point.

There is no question but that if the surrogate was absolutely without jurisdiction to make the decrees in question such decrees are no protection to the executors in the administration of the estate. But it has been well settled by numerous adjudications that upon an accounting the surrogate has jurisdiction to construe the will, where the construction is necessary to determine questions arising upon the accounting, and that with all the parties in interest present the surrogate may construe the provisions of a will and determine the meaning and validity of any of them, whenever such determination is necessary in order to make his decree as to distribution. To sustain the contrary of this proposition the case of Johnson v. Lawrence (95 N. Y. 154) is cited. But it was there held that the surrogate had no authority to construe the effect of the will upon the future attitude of the executors, because no questions of distribution bad been reached, and no separate or distinct trust fund settled, and fixed, no trust had been judicially constituted and the order obeyed. But the authorities are uniform that where a question of distribution arises, and the constitution of the trust fund is necessary to he presently done, the surrogate has jurisdiction to provide for those things and to determine as to the method and manner of distribution. In these previous accountings the question was presented to the surrogate in regard to the rights of the beneficiaries in this trust fund directed to be constituted by the will. The surrogate made a decree in reference thereto, construing the will in that particular; the executors made disbursements in accordance with that construction, the surrogate approved of those disbursements, and. clearly his decree was within his jurisdiction although it may have been erroneous.

In every case of the construction of a will by the surrogate in proceedings for an accounting he may be said to be without jurisdiction, if his construction is contrary to the will of the testator. But where the right of appeal does not exist, until that decree is modified by some affirmative action upon the part of the surrogate, certainly such decree is a protection to the executor acting thereunder, precisely the same as though such decree had been made upon the probate of the will where the validity, the construction or the effect of any disposition of personal property contained in the will, offered for probate, is put in issue. Prior to 1870 the surrogate had no jurisdiction to entertain any such question upon probate; but, in order that the executor might, from the commencement of his duties, be protected in the administration of the personal estate of a deceased, power was conferred upon the surrogate to pass upon the validity, construction or effect of any disposition of personal property if the same was put in issue; and these questions the surrogate must determine upon rendering his decree admitting the will to probate. (Code, § 2624.)

Now, it is clear that all that this legislation intended to do was to confer upon the surrogate, upcin the probate of a will, the power to do that which he could do upon an accounting. In the case at bar, when these decrees were made, this question of construction came up, and as has been already stated, although the surrogate may have misconstrued, tbe will, yet bis decree was not absolutely void for want of jurisdiction.

We think, therefore, tliat the decree should be affirmed, with costs;

O’Brien and PARKER, J.J., concurred.

Decree affirmed, with costs.


text:
    Henry P. Rogers and Others, as Executors, etc., of Nathaniel P. Rogers, Deceased, Respondents, v. Nathaniel P. Rogers, Appellant, Impleaded with Frank J. Maguire.

      Demand for relief considered in deciding whether cm action is at law or in equity — action by an executor against his co-executoi' — maintainable in equity only — allegations arpqwopriate to an equity action.

    The form of relief demanded in a complaint, though proper to consider, is not controlling in determining whether an action is one in equity or at law.
    An action at law cannot he maintained hy one executor against another, hut an action in equity may he maintained hfetween them to establish a debt owing hy the defendant executor to the testator, and to determine the disposition to he made of the fund thus created.
    When the necessities of a case require a party to come into a court of equity, allegations which, in an action between other persons, -would he held to he an action at law', will he treated as belonging, and appropriate, to an equity action.
    Appeal by the defendant, Nathaniel P. Rogers, from an interlocutory judgment of the Supreme Court, entered in the office of the clerk of the city and county of New York on the 10th day of November, 1893, upon the decision of the court rendered at the New York Special Term overruling the defendant’s, Nathaniel P. Rogers’, demurrer to the plaintiff’s complaint, with notice of an intention to bring up for review upon such appeal the decision of the court entered in said clerk’s office on the 9th day of November, 1893.
    The following is the opinion of the Special Term :

      “ Andrews, J.:
    “It was held in McGregor v. McGregor (35 N. Y. 218), c That one co-executor may maintain an action in equity against another co-executor to compel the payment of a debt owing by him to the estate.’

      “ The learned counsel of the defendants, as I understand it, concedes that this decision has never been overruled nor questioned, but his contention is that the action at bar cannot be regarded as one in equity.

      " Under the authorities this contention is not well founded. It is true that, leaving out of consideration the prayer for relief, the complaint sets forth a cause of action at law to recover money alleged to have been loaned by the plaintiffs’ testator to the defendants. It is to be noticed, however, that the complaint does not ask for any money judgment against the defendants. The prayer for judgment is as follows : £ Wherefore, these plaintiffs pray judgment, adjudging that the defendants are indebted to these plaintiffs and the amount of such indebtedness, and granting to these plaintiffs such other or further relief as may be just and equitable, together with the costs of this action.’

      “ The reason for the rule of the common law, that no action lies by an executor or administrator against his co-representative, and the reason why courts of equity entertain jurisdiction of actions of that character, is clearly stated in Smith v. Lawrence (11 Paige, 206), in which case the chancellor said: 1 In the common-law courts one executor or administrator cannot bring a suit against his co-executor or co-administrator,- to recover a debt Avhich was due from the latter to the testator or intestate, for each has the same right to the possession of the fund which belongs to both as the representatives of the estate, of which they are joint trustees, and the effect of a common-law judgment in favor of one against the other would be to give to the former the right to issue an execution and transfer the whole fund to his own exclusive possession. A court of equity, however, from its peculiar mode of administering justice, can settle the questions as to the fact of indebtedness and as to the amount due from one of the executors to the estate of which both are trustees, whenever the- decision of this question becomes necessary, without changing the possession of the fund. And when the amount of such indebtedness is ascertained the court may make such disposition of the fund as justice and equity shall then require.’
    “ In that case, one executor cited his co-executor to account before a surrogate, and the latter objected to the jurisdiction of the surrogate to' call upon him to account upon the application of his co-executor. The surrogate sustained the objection, but his decision was reversed by the chancellor.
    “In Decker & Tyson v. Miller (2 Paige, 150) an action in equity was maintained which was brought by two of the executors of one Egbert against their co-executor to compel payment of two bonds given by the defendant to the testator. Of course,- action upon the bonds would have been an action at law, and under the rule above mentioned could not have been maintained by two executors against their co-executor. A case which, if possible, is still more clearly in point, is that of Wurtz and Jenkins, executors, against Jenkins (11 Barb. 546). This was an action in equity brought by two executors agaipst their co-executor to compel the defendant to pay the sum of $1,345, which it was alleged he owed the testator at the time of his death for goods sold and delivered. The defendant demurred to the complaint upon various grounds, and among others, upon the ground ‘that the plaintiffs have not legal capacity to sue, being co-executors with the defendant.’
    “ Harris, J., speaking for the court, delivered an opinion which was concurred in by his associates, reviewing the authorities and expressly deciding that although the plaintiffs could not maintain an action at law to recover said áum of $1,345 for goods sold and delivered, they could maintain an action in equity to have the question determined, whether the defendant was indebted to the estate in that sum, and to obtain such other relief as a court of equity could give under those circumstances. These authorities are decisive of the present case, for they conclusively establish the doctrine that where there are several executors of an estate and it is claimed that one of their number is indebted to the estate, while part of the co-executors cannot maintain an action at law, which, if successful, would result in the transfer of the possession of the fund in dispute from the defendant to the plaintiff, they may maintain an action in equity to have the question determined whether the defendant co-executor is indebted to the estate, and to obtain such other relief as may be appropriate to the case.

      “ Nor is it necessary that the defendant should be described as executor. What was said in McGregor v. McGregor is applicable to the present case: As the co-executor is made a defendant to the suit and is brought in by actual service, it is not necessary that lie be described as executor. Indeed, it may be questioned whether such description would hare been proper, as the object of the suit is to revive an action in which relief was sought against him in his individual character only.’
    “ In the case at bar no relief is sought against the defendant as executor. The object of the action is to have it determined whether the defendant as an individual is indebted to the estate of which he is an executor, and if he is so indebted, to obtain such relief against him individually as a court of equity can give under the circumstances.
    “ The demurrer must be overruled, with leave to the defendants to answer on payment of costs.”

      J. F. Miller, for the appellants.

      T. D. Eenneson, for the respondents.
   Van Brunt, P. J.:

The complaint in this action alleges the death of one N. P. Rogers at the city of New York, leaving a last will and testament wherein he appointed the plaintiffs and the defendant Nathaniel P. Rogers as' his executors ; that said will was duly admitted to probate and letters testamentary issued thereon to the plaintiffs and the defendant N. P. Rogers; that the defendants Prank Y. Maguire and N. P. Rogers were at the times mentioned in the complaint co-partners doing business in the city of New York under the firm name of Maguire & Rogers; that the deceased N. P. Rogers loaned to said Maguire & Rogers as such co-partners divers sums of money, amounting in the aggregate to the sum of $50,000, which said several sums théy promised and agreed to pay to the testator; that at the time of the death of said testator the defendants Maguire & Rogers wholly failed to repay such sums or any portion of the same, although such sums were at such time and ever since have been wholly due and owing by said defendants to the testator, and judgment was prayed adjudging that the defendants were indebted to the plaintiffs, and the amount of such indebtedness, and for such' further and other relief as might be proper.

The defendant Rogers demurred to the complaint upon the ground that it appeared upon the face of the complaint that there was a defect of parties plaintiff in tlie omission of N. P. Rogers as an executor of tlie last will and’ testament of N. P. Rogers, deceased.

We think the decision of this appeal might very well be left upon the opinion of the learned court below. Rut such opinion is criti-cised in that it is claimed that error was committed by the court in considering the prayer for relief together with the other allegations of the complaint in determining whether the action was one in equity or an action at law. And the cases of Hale v. Omaha Nat. Bank (49 N. Y. 626), and Bell v. Merrifield (109 id. 207), are cited in support of that proposition. But all that was decided in those cases was that the form of the relief asked in the complaint is not. controlling, in determining the nature of the action — a very different thing from holding that in determining what might be the form of action which was intended to be brought, it was improper to consider the prayer for relief.

In the case at bar the learned court held that an action at law cannot be maintained by one executor against another, but that an action in equity may be maintained by one executor against another to establish a debt owing by the defendant executor to the testator, and to determine the disposition of the fund thus created.

The defendant executor, together with his co-partner, is alleged to have been indebted to the testator. This debt the defendant executor was bound to pay to the estate of the testator, and the only way in which his liability could be determined is by an action such as this, in which the debt may be established and its proper disposition adjudicated upon.

It is undoubtedly true that similar allegations in an action between other persons would be held to be an action at law. But where the necessities of the case require a party to come into a court of equity those allegations will be treated as belonging and appropriate to that class of actions, as was held in the court below.

We think that the principles declared in the case of McGregor v. McGregor (35 N. Y. 218) authorize the bringing of such action.

The judgment should, therefore, be affirmed, with costs.

O’BRIEN and Pareer, JJ., concurred. •

Judgment affirmed, with costs.


author: Parker, J. :

text:
    First National Bank of Jersey City, Respondent, v. Emilie Huber et al., Appellants.

      Motion for a new trial — judgment put in evidence, subsequently reversed on appeal.

    The circumstances considered and commented upon under wliicli an order was properly directed denying a motion for a new trial made upon tlie ground tliat a judgment introduced in evidence on tlie trial by the successful party was thereafter reversed upon appeal.
    Appeal by tlie defendants, Emilie Huber and others, as executors of the last will and testament of Otto Huber, deceased, from an order of tlie Supreme Court, made at tlie New York Special Term and entered in the office of the cleric of the city and county of New York on the 21th day of October, 1892, denying the defendants’ motion for a new trial.

      Guggenheimer & Untermyer, for the appellants.

      Wilson dc Wallis, for the respondent.
   Parker, J. :

The trial had in the above-entitled action resulted in the direction of a verdict in favor of the plaintiff, defendants’ exceptions being ordered to be heard at the General Term in the first instance.

We have determined at this term of the court that defendants’ exceptions should be overruled and judgment ordered for the plaintiff upon the verdict.

The order now under review denies a motion made by the defendants for a new trial upon the ground that a judgment introduced in evidence by the plaintiff was thereafter reversed by the General Term. It is not contended that there was any error on the part of the trial court in receiving it and the executions issued tliereou and returned unsatisfied in evidence. Indeed, if it were error, it would have been a subject for correction on a review of the case and exceptions. But whether this motion was addressed to the judicial discretion of the court, and whether it was properly exercised, we shall now briefly consider.

Defendants’ testator, Otto Huber, was a member of the firm of P. Lenk & Co. when it became insolvent some time during the year 1888.. The firm was composed of Peter Lenk, Carl P. Lenk, Rudolph Lenk, John Lindemnyer and Otto Huber, the last two claiming to be special partners.

After their insolvency, an action ivas begun against the members of the firm by this plaintiff, alleging that they were all general partners. Lindemnyer and Huber answered; the Lenks suffered default. Before the action could be tried Huber died, leaving a last will and testament, by which these defendants were appointed his executors. The will was subsequently probated, and his executors duly qualified as such. An effort was then made by this plaintiff to join these defendants in the original action, which ivas denied on the ground that the plaintiff should first exhaust its remedy against the other members of the firm. The action then abated as to Huber, but continued against the remaining partners, resulting in a judgment against them for $50,014.44; executions were issued thereon to the .proper counties, and returned wholly unsatisfied. Upon the trial of this action, the judgment and the executions with the returns indorsed thereon were introduced in evidence for the purpose of showing the insolvency of the partnership, and that plaintiff had exhausted its remedy in that direction. Proof of the indebtedness of the firm of P. Lenk & Co. to this plaintiff was made independently of the judgment, so the granting of a new trial, as requested by the defendants, could only be supported upon the ground that the plaintiff ought to make further proof of its inability to make the amount of its judgment, or some portion thereof, out of Lindon-myer, for the judgment stands unreversed as to the Lenks, who were held out as the general partners in the firm.

The representatives of Lindemnyer as to this cause of action occupy the same relation towards the plaintiff as do the representatives of Huber.

Against either, the plaintiff can maintain an action to recover the claim in coiitroversy, on proof of the insolvency of the surviving partners, and that the alleged special partners are liable as general partners. So, if a new trial should be granted, plaintiff would only have to prove that there was no partnership property out of which the executions could be made, and that the surviving partners are insolvent, and this would be prima facie established by the introduction in evidence of the judgment, which as to them stands unre-versed, and the executions with the indorsement thereon.

As the record of the trial had contains such evidence, the court properly denied the motion.

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

Van BruNt, P. J., and Pollbtt, J., concurred.-

Order affirmed, with ten dollars costs and printing disbursements.