author: O’Brien, J.: Yan Brunt, P. J.: Lawrence, J.:

text:
    THE PEOPLE OF THE STATE OF NEW YORK ex rel. EQUITABLE GAS-LIGHT COMPANY OF NEW YORK, Appellant, v. EDWARD P. BARKER and Others, Commissioners of Taxes and Assessments for the City and County of New York, and Others, Respondents.

      Taxation ef corporations — the ma/rkei-vaVue of shan'es of slock is not the proper basis of an assessment — an erroneous method of assessment is not a jurisdictional defect — its effect —the assessed hot the actual value of real estate to be deducted.

    The Equitable Gas-Light Company of New York obtained a writ-of certiorari to review an assessment of its capital stock, made by the commissioners of taxes, upon a petition which stated that the commissioners “have illegally and erroneously included in their valuation of the personal property of the said corporation on said roll for taxation the following: The then market-value of the capital stock of said corporation, to wit, 112 per cent upon the whole of said capital stock.”

      Held, that, within section 4 of chapter 269 of the Laws of 1880, the petition did not specify as a ground of illegality merely an over-valuation of the capital stock to the extent of twelve per cent, but fairly apprised the commissioners of the objection that their method of assessment was illegal and erroneous.
    That it was an illegal method and principle of assessment to assess stock upon its share value in the market, the proper method being to assess the capital and surplus at their true value.
    That the fact that the commissioners adopted a wrong method in fixing the value of the capital, did not oust them of jurisdiction for the reason that they had at all times jurisdiction to tax the capital.
    That, in the absence of proof that a party was injured thereby, the adoption of an erroneous principle in fixing the amount of an assessment did not render it void. That, in determining the value of the capital stock of a corporation it was not personal property alone which was to be considered, for the corporation might have large sums invested in real estate.
    That it was the duty of the commissioners to value its capital — which might properly be valued at par, where the deduction of its indebtedness from its gross-assets showed that the capital was unimpaired; that, from this result the only further deduction permitted by statute was to subtract the assessed value of its. real estate. ,
    That the commissioners had no power to deduct the actual value of the real estate, although it might be true that the real value was far in excess of the assessed value.
    Appeal by the Equitable Gas-Light Company of New York, the petitioner in the above-entitled proceeding, from that portion of an order of the Supreme Court, entered in the office of the clerk of the city and county of New York on the 12th day of July, 1892, which ratified and confirmed as modified thereby the proceedings of the commissioners of taxes and assessments for the city and county of New York, respecting the amount of the assessed valuation of the personal property of the petitioner liable to taxation for the year 1891. The order appealed from provided as follows:
    Ordered, That the sum of four hundred and eighty thousand dollars be deducted from two million nine hundred and ninety-six thousand dollars, the amount of the assessed valuation of the personal property, in the city of New York, of the relator hable to taxation for the year 1891, and the assessment for that year is hereby directed to be corrected accordingly by the said commissioners of taxes and assessments upon the service of a copy of this order upon them.

      F. R. Coudert, for the appellant.

      George 8. Ooleman, for the respondents.
   O’Brien, J.:

The relator, upon petition, obtained a writ of certiorari to obtain a reduction and cancellation of the assessment placed by the tax commissioners in taxing, the capital stock of the relator. The petition states that the commissioners “ have illegally and erroneously included in their valuation of the personal property of the said corporation on said roll for taxation the following: The then market-value of the capital stock of said corporation, to wit, 112 per cent upon the whole of said capital stock.”

The law provides (chap. 269, Laws of 1880) that this writ is allowable “ when the petition shall set forth that the assessment is illegal, specifying the grounds of the alleged illegality, or is erroneous by reason of over-valuation,” etc.; and “ if it shall appear * * * that the assessment complained of is illegal, erroneous or unequal, for any of the reasons alleged in the petition, the court shall have power to order * * * or the correction of such, assessment in whole or in part in such manner as shall be in accordance with law. (Sec. 4.)

It is insisted by the respondent that the ground of illegality specified in the petition was an over-valuation of the capital stock to the extent of twelve per cent. This, however, would be rather a limited and confined view to take of the relator’s objection. "We think it was intended to, and did, fairly apprise the respondent of the objection urged below, and urged here, that the method or principle upon which the assessment was placed was illegal and erroneous and resulted in an injustice to the relator.

Upon an examination of the record, we think it is placed beyond doubt that the method or principle adopted by the commissioners was erroneous and illegal under the decision of People ex rel. Union Trust Company v. Coleman (126 N. Y., 433). It was therein held : “ First. The subject of valuation and assessment is never the share stock, but always the company’s capital and surplus. Second. Such capital and surplus must be assessed at its own value, and when that is correctly known and ascertained no other value can be substituted for it.” And it appearing in that case from the statement of assets and liabilities of the company that there was nothing subject to taxation, it was held error for the assessors, for the purpose of determining the value of the capital of the corporation, to take as such the value of the share iu such corporation; and for these reasons the assessment was vacated and canceled.

Here we think the relator is sustained in the contention that in determining the value of its capital the assessors were guided principally, if not wholly, by a consideration of the market-value of the shares of the corporation, which, as we have shown, was an erroneous method or principle to apply. We do not agree, however, with the argument addressed to us by the appellant, that such facts show that the assessment has been levied upon the property of others, not upon the property of the corporation, and that, therefore, there was a total absence of jurisdiction; because, while this is specious, it is not sound, for the reason that what the commissioners did, having jurisdiction over the property of the corporation, was to adopt an erroneous method in fixing the value of the capital of such corporation — which did not take away their jurisdiction or power to act with respect to taxing such capital.

Assuming, therefore, that the commissioners, having jurisdiction, did adopt a wrong method or principle, the question presented is whether this would render the assessment void. This would leave the action of the commissioners subject, perhaps, to the criticism that they have never, acted and fixed the value of the capital and that, therefore, the assessment laid is illegal and void.

We have not, however, been referred to any authority which goes to the extent of holding that the adoption of an erroneous principle by commissioners, in fixing the amount of a tax, made the tax itself void, in the absence of evidence showing that the party was thereby aggrieved. And conceding the erroneous method adopted, we think that the test to be applied, as to whether it should be further reduced or canceled, is to be determined by the answer to the question whether or not the relator has been aggrieved. For this ptirpose we will assume that every item presented in relator’s statement upon which a claim for reduction could be based, if considered by the commissioners, would have been allowed. In other words, we will assume that, in respect to the actual value of the real estate as distinguished from its assessed value, it correctly appears in relator’s statement. And we will further assume that the indebtedness claimed to exist did exist and was a proper subject for consideration by the commissioners in determining the value of tbe capital of the corporation. And with these assumptions in relator’s favor, if it could be shown that it was aggrieved, then we should favor the reduction, if not the annulment and cancellation of the assessment.

For the purposes, therefore, of our examination, let us take the statement furnished to the department of taxes and assessments by the relator, and which is contained in the record, as follows:

Statement made and delivered to the commissioners of taxes and assessments of the city and county of New York for and in behalf of the Equitable Gas-Light Company of New York, showing its condition for the purpose of assessment on the second Monday of January, 189L:

Total gross assets............................. $6,740)666 52
Capital stock actually paid in,or secured to be paid in, 4,000,000 00
Amount of surplus earnings.................... 161,421 87
Rate of dividend for last year, or last annual dividend, 320,000 00
Is the company assessed by the State under chapter 361, Laws of 1881, and the amendatory acts ? Yes.
Liabilities in detail, as follows :
Capital stock........... $4,000,000 00
Certificates of indebtedness..................... 933,000 00
Bonds...................................... 1,000,000.00
Bills payable................................. 150,000 00
Purchase-money mortgages................... 400,000 00
Accrued interest on bonds, etc.................. 33,006 66
Deposits from consumers...................... 18,959 00
For supplies, etc.............................. 44,278 99
Cost of 125|^-§~§- miles of mains (including $18,000 paid for new pipes not laid) $1,291,427.78.
Assessed value of real estate (1891).
Describing particularly by ward numbers:
Assessed value of mains....................... $429,000 00
19th "Ward — 1st ave., E. 40th st., E. 41st st.; Nos. 1
to 20; 31 to 50............................. 300,000 00
19tli "Ward — 1st ave., E. list st., E. 12d st.; Nos. 1
to 20; 31 to 50............................ 350,000 00
21st Ward — 1st ave., E. 39th. st. and 10th st.; Nos.
1956 to 1981.............................. 200,000 00
22d Ward — S. E.' cor. 11th ave. and 59th st.; Nos.
61 to 61. 22d Ward — Eet. 10th and 11th aves.,
58th to 59th sts.; Nos. 5 to 20; 15 to 60....... 205,000 00
$1,181,000 00
Amounts invested in the stocks of other corporations
which are taxed upon their capital............
Amount invested in United States securities......
(If the stock of the company is worth less than par, state the actual value, and give the facts under oath which will justify such
estimate of its value.)
The market-value of stock, 1890................ $125 00
The market-value of stock, 1891................ 115 00

The commissioners started with a valuation of $1,000,000, or the par capital of the relator, to which was originally added the twelve per cent, which, however, we need not consider because it has since been stricken out; and, therefore, we have, as a starting point in determining the question now presented to us, $1,000,000, an amount equal to the par value of the capital of the relator. As shown above, the total gross assets were $6,110,666.52, from which, if we deduct the indebtedness as claimed by the relator, which aggregated $2,519,211, there still remains an amount in excess of $1,000,000, with which the commissioners had a right to start, and from which they were to deduct the amounts exempted by the statute. This they did by deducting the assessed value of the real estate.

But it is insisted — and this is the ground of the grievance claimed — that, instead of the assessed value of the real estate, the actual value thereof should have been deducted. Or, in other words, that if, for the purpose of fixing the value of the capital stock, we have regard to the total gross assets of the corporation, here stated to have been six millions and over, an examination by the commissioners would have disclosed the facts which are now presented to the court, namely, that five millions and over of these gross assets represented money invested in real estate, lands, buildings, mains, etc., separately taxed.

We think that the error into which the learned counsel for the relator has fallen is in assuming that, for the purpose of determining the value of the capital, only personal property is to be considered. As held in People ex rel. Butchers’ Hide and Melting Company v. Asten (100 N. Y., 597): It is not a controlling fact in the assessment of the capital stock of a corporation that the whole capital was originally invested in real estate. It is the duty of the assessors to ascertain the present value of the stock, and from this to deduct the assessed value of the real estate and such other items as are specified.” This case and that of People ex rel. Twenty-third Street Railway Company v. Commissioners of Taxes (95 N. Y., 554), we think, are authority for the view that for the purpose of ascertaining the value of the capital of a corporation it is competent for the commissioners to take the quantity or actual value of the real estate, together with the other property of the corporation, and after the value thereof is found, they are not required to deduct therefrom the actual value of the real estate which has been included in estimating the value of the capital, the exemption of the real estate being only to the extent that it has been assessed.

Therefore, if we assume here that all the property of the relator was real estate, that its gross assets consisted entirely of real estate, it would make the valuation of the capital stock, after deducting the indebtedness, exceed the par value thereof, namely, $4,000,000. And if the commissioners, under these circumstances, were to be obliged to deduct the actual value of the real estate, and not its assessed valuation, we concede that there would be nothing upon which an assessment could be laid or predicated. But as the commissioners were directed hot to deduct the actual value of the real estate, but only the assessed value thereof as exempted, it would be their duty to make only that deduction which the statute allowed.

We think the relator, upon the figures submitted, shows that the capital stock was unimpaired; that there remained a surplus of $161,421.87 after deducting an eight per cent dividend on the par capital for the preceding year, and that the commissioners were bound to adopt at least a par value of tlie capital as the actual valuation of the capital stock for the purposes of assessment. And upon examination, if the indebtedness, as claimed, and the assessed valuation are deducted before determining what amount is taxable, it will be found that the amount, as fixed by the commissioners, was not excessive.

For the reason, therefore, that we do not see that the relator was aggrieved, or could be aggrieved, by the method j^ursued, and the amount, after the deduction made by the learned judge at Special Term, having been fair and just to the relator, we are of ojfimon that the disposition made by the Special Term was proper and should be affirmed, without costs.

Yan Brunt, P. J.:

I concur in the result of the foregoing opinion, except to costs. I see no reason why an affirmance should be had without costs. I think we should affirm, with costs.

Lawrence, J.:

I think that the affirmance should be with costs.

Order affirmed, with costs.


source: Caselaw Access Project

author: O’Brien, J.:

license: Public Domain

text:
    REBECCA ELSBERG, as Executrix of ALBERT ELSBERG, Deceased, Appellant, v. SAMUEL D. SEWARDS, Respondent, Impleaded with Others.

      Life insurance policy —payable to a creditor as his interest nay appear)'— the creditor must p>'one Ms interest — a stipulation in a policy available only to the company.

    Rebecca Elsberg, as executrix of Albert Elsberg,' deceased, having brought an action against a life insurance company and others to determine conflicting claims existing between herself, as executrix, and Samuel D. Sewards, to the avails of certain policies, the company paid $2,500, the money due on the policies, into court.
    The complaint alleged that there was due Sewards only $1,500, while his answer claimed more than $2,500.
    The policies had been taken out to secure Sewards for a debt due him from Albert Elsberg, and were payable to him as a “creditor as his interest may appear,” and contained a clause that a claimant must show an insurable interest; that a creditor could not recover more than his low» fide indebtedness, with interest, and that as to all amounts in excess thereof the policy should be void.
    Upon the trial of the action the plaintiff produced the policies, but gave no sufficient proof of the state of the accounts between her as executrix and Sewards, and at the close of her case the defendant Sewards moved to dismiss the complaint and for a judgment for the full amount deposited, which was granted. Upon an appeal by the plaintiff:

      Held, that such decision was erroneous.
    That the plaintiff had made a prima facie case entitling her to the money, subject to Sewards’ claim as creditor as the same should be made to appear.
    That the clause in the policy, providing that in the case of a creditor it should be void beyond his Iona fide indebtedness, was a protection to the company forbidding the creditor to speculate upon his debtor’s life.
    That this provision was not available to the creditor, and its effect had been waived as to the company by its payment of the whole sum into court.
    That the question which remained was as to the rights of the executrix and of Sewards to the fund, and that the rights of the latter, by the terms of the policy, were only such as he made to appear.
    That as he had given no proof of his claim, it was error to award him the whole sum, or any sum, except upon proof that he was entitled thereto.
    Appeal by the plaintiff Rebecca Elsberg, as executrix of Albert Elsberg, deceased, from a judgment of the Supreme Court, entered in the office of tbe clerk of the city and county of New York on the 26th day of May, 1892, in favor of the defendant Samuel D. Sewards, dismissing the complaint, with costs, after a trial by the court at the New York Special Term.

      John Alexander Beall, for the appellant.

      W. W. Gage, for the respondent.
   O’Brien, J.:

This action was originally brought by plaintiff, as executrix of Albert Elsberg, deceased, against the Mutual Reserve Fund Life Association, David M. Koehler and Samuel D. Sewards, to determine the conflicting claims made to two life insurance policies issued by said association upon the life of Albert Elsberg, one for $2,000, and the other for $500. The life association made an application for leave to pay the money into court and for a discontinuance of the action as against it, which was granted, and the amount of the two policies was deposited and so remained, subject to the order or decree of tire court in this action. The defendant Koehler was not served, for the reason, which was made to appear upon the trial, that he had no interest in the policies, the same, after his indebtedness was ¡raid, having been assigned to the defendant Sewards, who alone answered and defended the action. It will thus be seen that, at the time of the trial, the question presented for determination was as to the conflicting claims of the plaintiff, as executrix, and Sewards, as creditor, of Albert Elsberg, to the money paid by the life association into the court.

The plaintiff, suing in her representative capacity as executrix, which was not denied by the answer, asserted that the amount due Sewards, for which the policies were assigned to him, did not exceed fifteen hundred dollars. The answer claimed that there was due a sum far in excess of the amount deposited, and that Sewards was entitled to the whole amount thereof.

According to the terms of the policies, which upon the trial were offered and admitted in evidence, it ajipeared that the same were issued to secure the payment to the defendant Sewards of an indebtedness due him by the plaintiff’s testator, and were made payable to “ Samuel D.« Sewards, creditor, as his interest may appear.” There was a further provision in the policies, as follows :

“An insurable interest existing, at the time of the assignment or transfer must be shown by all claimants at time of claim hereunder; and claims by any creditor as beneficiary or assignee shall not exceed the amount of the actual tona fide indebtedness of the member to him existing at the time of said death, together with any payments made to the association under this certificate, or policy of insurance, by such creditor, with interest at six per cent per annum, and this certificate or policy of insurance, as to all amounts in excesst hereof, shall be void.”

In addition, plaintiff’s counsel offered in evidence two letters, in the handwriting of the deceased, signed by him and bearing date six months before his death; also a memorandum made by him four months before his death, which, under objection, were, we think, properly excluded, because not shown to have been, in any way, communicated to the defendant; nor were they admissible as declarations against interest, having been offered by the plaintiff to establish, a claim by the deceased in the fund.

The plaintiff also offered in evidence a statement made by the defendant’s son, under his instructions, and which was shown to be a statement of notes held by defendant which he wished to have renewed by Elsberg, the deceased, furnished by defendant in answer to a request by letter from Elsberg to the defendant. When questioned in reference to this statement, as to whether it did or did not show the condition of the indebtedness between .the parties at the time, the defendant answered that this statement was only made for the purpose of showing the identity of certain notes, and did not embrace the account between the parties. While, therefore, only a partial account, we are inclined to think that it was admissible in evidence as tending, to show the way, or the circumstances, out of which the indebtedness arose. However, it in no way prejudiced the plaintiff, because, though admissible, it did not go to the extent of showing what was the condition of the account between the parties, and could not be regarded as an account stated, it but appearing to be what the witnesses stated with reference thereto, that it was a statement merely of notes due, in respect to which, arrangements looking towards renewals thereof were pending.

Such being the situation of the parties upon the pleadings and the evidence at the close of plaintiff’s case, the defendant moved to dismiss the complaint, and for a judgment in his favor for the full amount deposited, which motion was granted, and the decree subsequently entered from which this appeal is taken.

We are of opinion that it was error to dismiss the plaintiff’s complaint upon the proofs as they stood. She had made out a ¡prima facie case entitling her to the moneys realizied upon the policies, subject, however, to any claim of the defendant creditor as the same should be made to appear. No doubt the learned trial judge was influenced by the provision which we have quoted in full from the policies, that for any excess over such creditor’s claim the policy should be null and void, and, therefore, concluded upon the proofs that the defendant alone would be entitled to the amount, and that it would follow that the plaintiff had no interest therein. We think, however, that a consideration ot the parties to the suit, and of this provision of the policy thus invoked, will lead to the conclusion that it should be given no weight in an adjudication between the parties then before the court.

It is true that, had the association remained, a party and defended, making the point that the plaintiff had no interest in excess of what was the actual indebtedness, this condition in the policy as to such association might be available. We say advisedly “might be available,” because it is not entirely clear that, as against the plaintiff, resort could be had to this condition. Its evident purpose is to protect the company against a creditor’s speculating upon the life of a member beyond what is actually due him. Where, therefore, the assignment from the member to one claiming to be a creditor is absolute in form, thus leaving no claim in favor of the member, the company is only liable to the creditor to the extent of his tona fide debt. That this must be the correct view is apparent if we consider the results to the member of the payment to the creditor of his entire indebtedness before the policy matured by death or limitation of time. It could not then be held that because there was no indebtedness the association would be free from any obligation to pay the member. The true construction, we think, therefore, of this provision is, that it was intended to protect the company against creditors or other persons speculating in policies of the company issued to members.

But the company, by payment into court of the full amount of the policy, having waived not only that condition but all others, such condition was not available in the defendant Seward’s behalf to defeat the right which the plaintiff might have in the policies. In other words, the life association alone had the right to insist upon that condition, and its waiver and payment do not give the defendant the right to take the benefit of it and claim the surplus over his debt on the ground that plaintiff had violated or failed to perform any condition. That was a right in favor of the company which was not assigned to the defendant Sewards. And the effect of the payment into court by the company was not only a waiver of the condition, but an admission that it had no interest in the fund, which was deposited to the credit of the action, with a view of having the respective rights of the plaintiff here and the defendant Sewards thereto determined.

The question, therefore, presented, having in view the admissions in the pleadings, was, what was the extent of Sewards interest as creditor in such fund? We think that the burden of showing the extent of his interest was upon him, and that, after prima facie case made out by tbe plaintiff upon production of tbe pobcies of insurance, the affirmative of tbis issue was upon such defendant.

If, however, we assume that tbe affirmative was upon tbe plaintiff of showing tbe actual indebtedness to Sewards, and thus to establish her interest and title to tbe surplus, and that for failure of proof tbe complaint should have been dismissed, we are yet of opinion that it was error, in tbe absence of any evidence to support tbe defendant’s claim to tbe fund, to decree that tbe entire amount thereof belonged to bbn. Tbis, in effect, was to bold that, bécause tbe plaintiff’s complaint should be dismissed for want of proof, tbe defendant, without having given any proof, was entitled to a judgment upon, tbe merits for tbe whole amount. As we have seen, bis interest in tbe policies was as a creditor, as tbe same should be made to appear, and it could only be upon its having appeared that be was entitled to tbe whole amount that be could obtain a judgment upon the merits in bis favor.

Upon' tbe whole case, therefore, we think that tbis error alone requires that tbe judgment should be reversed and a new trial ordered, with costs to abide tbe event.

Van Brunt, P. J.¿ and Lawrence, J., concurred.

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


author: O’Bbien, J.:

text:
    THE HANOVER NATIONAL BANK OF THE CITY OF NEW YORK, Appellant, v. SARAH F. BLAKE, Respondent.

      Fraud — a composition with creditors — a secret agreement with a creditor as to part, avoids all his securities.

    In April, 1888, the firm of F. D. Blake & Co. became insolvent and made a general assignment. In June, 1888, their creditors signed a composition agreement consenting to take forty per cent of their respective claims, to be paid in four notes of the firm, payable at different dates, of which the two notes last payable were to be indorsed by Sarah F. Blake.
    The Hanover National Bank of the city of New York, a creditor, desired to have the security of Mrs. Blake’s name upon all the four notes given to it; and this was done without the knowledge of the other creditors who signed the agreement.

      In an action brought by tlie bank upon the third note, which was, under the agreement, to have been indorsed by Mrs. Blake, she defended upon the ground of the secret agreement and the giving of the further security thereunder, and recovered a verdict.
    Upon an appeal by the plaintiff:

      Held, that the corrupt agreement vitiated the whole series of notes held by the bank, and that it could not recover even upon the third note, although that note was required by the agreement to be indorsed by Mrs. Blake.
    That, to hold otherwise would encourage a creditor to seek an improper advantage by obtaining further security, because he could still rely upon holding his original security in any event, and would bo only in danger of losing that which he had wrongfully secured.
    Appeal by tlie plaintiff, tlie Iianover National Bank of tlie city of New York, from a judgment of tlie Supreme Court, entered in the office of tlie clerk of tlie city and county of New York on tlie 9th. day of May, 1893, after a trial before the court and a jury at the New York Circuit, where a verdict was directed for tlie defendant; and also from an order, entered in said clerk’s office on the 25th day of May, 1892, denying a motion by tlie plaintiff for a new trial.

      Thomas 8. Moore, for the appellant.

      O. Bainbridge Smith, for the respondent.
   O’Bbien, J.:

There is presented on this appeal a sole question of law upon admitted facts, from which it appears that, in the spring of 1888, Frederick D. Blake and Charles 'Waterman were partners, engaged in the dry goods business under the firm name of F. D. Blake & Co. They were deeply indebted to various creditors, including the plaintiff, and becoming insolvent executed a general assignment of all their property to James H. Thorp on the 24th of April, 1888. On tlie 4th of June, 1888, the creditors of F. D. Blake & Co. signed a composition agreement by which they agreed to take forty per cent of their respective claims, to be paid by four notes made by the members of the firm, each for ten per cent of the claim, two payable in six and twelve months, and two in eighteen and twenty-four months, the latter two indorsed by Sarah F. Blake.

The Hanover Bank, desiring to have the security of Mrs. Blake upon all the notes, asked that she indorse the first two as well as the last two, which she did. This was not known to the other creditors, and was a security additional to that provided by the terms of the composition agreement.

The note in suit is the third of the series, payable in eighteen months, and properly indorsed by Mrs. Blake in accordance with the composition agreement.

Upon these undisputed facts both counsel at the trial moved for judgment, which the court directed for the defendant, to which exceptions were duly taken, thereby raising the question of law presented on this appeal, which is: Did the secret agreement by which Mrs. Blake indorsed the first 'two notes invalidate the whole composition agreement, so that notes given in pursuance of its terms are not enforceable by plaintiff ?

We regard the law as well settled that, with respect to Mrs. Blake’s indorsement upon the first two notes, it was Aroid and inoperative. But it Avill be noticed that the note now in suit, the third note, is one which, under the terms of the composition, was to bear her indorsement.

Upon this question, Avhether the secret and fraudulent agreement under which the additional security Avas obtained upon the former notes extends to and invalidates the note in suit, it is impossible to reconcile either the authorities or dicta of judges Avriting opinions in analogous cases. Thus, White v. Kuntz (107 N. Y., 518); Breck v. Cole (4 Sandf., 79); and, in England, the case of Feize v. Randall (1 Esp., 224; 6 T. R., 146) are relied upon by .the plaintiff to support the vieAv stated in the opinion in Breck v. Cole [supra) that: “ Whenever a composition is made with creditors, every agreement or arrangement by Avliicli an advantage is secured to any one or more of the creditors, which is denied to others, is a fraud upon the creditors from Avliom it is concealed, although it neither has nor can liaArn the effect of depriving them of any portion of the amount which they had agreed to receive.”

On the other hand, the cases of Howden v. Haigh (11 Ad. & Ellis, 1033; S. C., 39 E. C. L., 539); Pendlebury v. Walker (4 Y. & C., 424); Higgins v. Pitt (4 Welsb., Hurl. & Gord. Exch., 312); Mallalieu v. Hogdson (16 Ad. & El. [N. S.], 690; S. C., 71, E. C. L., 689); Doughty v. Savage (28 Conn., 146); Frost v. Gage, 85 Mass. [3 Allen], 560), are referred to as authority for the rule laid down by Chitty on Contracts (9 Am. ed., by Perkins, 694; 11 id., 1050), as follows:

“ Where a debtor in embarrassed circumstances enters into an arrangement * * * with his creditors to pay them a composition upon their claims, * * * any private agreement between such debtor and one of the creditors, who professes to join in the general arrangement, that the former, or a third party for him, shall pay a further sum of money or give a better or further security than such as is provided for the other creditors, is void as a fraud on them. * * * Accordingly, if one creditor do make any such a stipulation in fraud of the other creditors, the effect thereof will be to destroy any security which may have been given to him, even for the legal amount of the composition. And it makes no difference that the stipulation in question did not originate with the creditor, but in the voluntary offer of the debtor himself, or of a third person on his behalf, or that the creditor has realized nothing under the agreement, for it is the mere fact of such an agreement having been made which constitutes a fraud.” (See, also, Leicester v. Rose, 4 East, 372; Sadler ex parte, 15 Ves. Ch., 52; Knight v. Hunt, 5 Bing., 432.)

With the exception of the case in Connecticut, and that in Massachusetts above referred to, all the cases expressing a view similar to that formulated by Chitty are English decisions ; and, so far as the decisions in the courts of this State are concerned, we can find no direct controlling, authority upon the question presented by this appeal.

As against the dicta in White v. Kuntz (supra), upon which plaintiff seemingly places great reliance, from certain expressions of the learned judge in writing the opinion, are counter expressions, which we think are of equal weight, to be found in the opinion of the same court in Solinger v. Earle (82 N. Y., 397).

In the absence, therefore, of authority, it remains for this court to determine which of these two contrary views finds most support in principle and reason. This note in suit was received as part of an agreement which was unquestionably fraudulent. And it is only upon a theory that the agreement is divisible, that the note in suit could be unaffected by the taint of fraud imbuing the transaction.

The giving of the four notes, however, was unquestionably the result of a single fraudulent agreement, and, as fraud vitiated the agreement icself, it is difficult for us to determine upon what principie it could be applied to the first two notes, which were concededly incapable of enforcement, and stop at this the third note, because the amount herein provided and the security attached thereto were precisely what was intended by the composition agreement. Where fraud enters into an agreement like this, which is single and, as we think, indivisible, it must permeate the entire agreement, and one who is a party to such fraud cannot, after he lias retained the fruits and results of his fraud, sustain a recovery for some portion of it which may have connected with it an element of a good and valid consideration. We are inclined, therefore, to adopt the view taken by the learned trial judge, among others, for the reason urged by the respondent, that if the rule that an additional security given “ to a creditor, hi violation of the terms of the composition, rendered the whole transaction with that creditor fraudulent and void, did not obtain, it would create one of the most alluring inducements to an unscrupulous creditor to commit a fraud not only upon the unfortunate debtor, but his other creditors, who signed the composition upon the faith that all were to share alike, for, in taking such-security, the only risk he would run would be to lose' the additional security while he wduld be assured of enjoying with the other creditors the amount secured under the composition. Such a doctrine is repugnant to common honesty, and instead of making the cunning contriver the victim of liis clandestine agreement, as was said by Judge Story in his work on Equity Jurisprudence (1 id., par. 379), it would place him in a position where he would have everything to gain by his fraud and nothing to lose. The same principle was involved in Baldwin v. Short (125 N. Y., 553), and the observations of Einoh, J., in delivering the opinion of the court, are apt and appropriate to the case at bar, he said: ‘ The contention that the conveyance to Mrs. Short may be sustained, to the extent of the adequate and honest part of the consideration, is fully answered by the authorities, which hold that where the deed is fraudulent against creditors it is wholly void and cannot stand to any extent as security or indemnity ’ (citing several authorities). “ A different rule would put a premium upon fraud. Almost invariably some honest consideration is made the agency for floating a scheme of fraud against creditors, and if that may always be saved nothing is lost by the effort, and the temptation to venture it is increased.”

We are of opinion, therefore, that the judgment should be affirmed, with costs and disbursements.

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

Judgment affirmeu, with costs and disbursements.


author: O’BbieN, J.:

text:
    THE JEWELERS’ MERCANTILE AGENCY (Limited), Respondent, v. THE JEWELERS’ WEEKLY PUBLISHING COMPANY and Others Appellants.

      Bill of particulars — it must not be sought for, to obtain evidence.

    In an action orougnt by a mercantile agency to enjoin a corporation from printing certain matter, the complaint alleged, in a clear and definite manner, that the corporation printed matter which was taken from reference books and confidential sheets of the mercantile agency.
    On appeal from an order denying a motion made by the printing corporation to compel the.agency to furnish a bill of particulars, specifying in detail all of the information alleged to have been appropriated and used by the defendant:

      Held, that no case was made for a bill of particulars, the allegation of the complaint being definite.
    That it was not the office of a bill of particulars to furnish, to his adversary, the evidence by which the other party may prove his claim, but only to limit the charges which the adversary must meet and thus prevent surprise.
    That the issuable fact in the case was not whether the same errors appeared in plaintiffs books and sheets, and also in the defendant’s newspaper, although the fact that the same errors appeared in each might be evidence that the defendant had wrongfully circulated information which belonged exclusively to the plaintiff.
    Appeal by the defendants, The Jewelers’ Weekly Publishing Company, Alonzo Rothschild and Albert Ulmann, from an order of the Supreme Court, entered in the office of the clerk of the city and county of New York on the 13th day of April, 1892, denying a motion made for an order requiring the plaintiff to furnish a bill of particulars.
    It appeared from the complaint that the allegation, in regard to which a bill of particulars was sought, was as follows:

      Eighth. That defendant corporation has appropriated and used, and is continuing to appropriate and use, in violation of plaintiff’s rights and greatly to its damage, information taken from plaintiff’s said reference books, and also from its said confidential sheets and reports, which information was and is wrongfully and unlawfully obtained by the defendants through plaintiff’s subscribers, or otherwise, and that the defendant corporation has published and circulated, and is publishing and circulating, said information from time to time in the form of “A Complete Directory of the Jewelry Trade,” which is substantially similar in form and substance to plaintiff’s reference books hereinbefore referred to.

      Leopold Sondheim, for the appellants.

      Henry H. Howlmds, for the responden
   O’BbieN, J.:

The action is brought by the plaintiff to restrain and enjoin the defendants from apprropriating, printing, publishing or issuing, in any way, or for any purpose whatever, information contained in plaintiff’s reference books, weekly correction sheets and reports. The plaintiff carries on the business of a jewelers’ mercantile agency, which consists in obtaining, from various sources, information as to the places of business, business addresses, details of the business, commercial standing and credit of individuals, firms and corporations engaged in the jewelry trade throughout the country, and in furnishing such information confidentially for the use of subscribers. The defendant, The Jewelers’ Weekly Publishing Company, isa corporation engaged in printing and circulating a weekly publication called The Jewelers’ Weekly. In addition to such weekly the defendant corporation publishes and sells a directory called “ A Complete Directory of the Jewelry Trade.”

Plaintiff’s grievance, upon which it relies for the relief demanded, is that the defendant corporation has ajipropriated and used, and is continuing to appropriate and use, in violation of plaintiff’s rights, and greatly to its damage, information wrongfully and unlawfully taken from the plaintiff’s reference books, and from the confidential sheets and reports, and publishing and circulating such information in the form of “ A Complete Directory of the Jewelry Trade. ”

The motion made by the defendants was to compel the plaintiff to furnish a bill of particulars specifying, in detail, all of the information alleged to have been appropriated and used by the defendant corporation. This motion was denied, and, we think, properly so. The defendants fail to apprehend the office of a bill of particulars under our practice. It was never intended by it to furnish to an adversary the evidence which a party might have to prove his claim. The purpose was to limit and define the charges or issuable fact which an adversary would have to meet, with a view to preventing surprise upon the trial. The theory upon which the bill of particulars here was sought, was that it would be necessary for the plaintiff, in order to sustain its cause of action, to prove the errors which, appearing in the plaintiff’s books and proofs, likewise, appeared iu the defendant’s directory, and which would be available to plaintiff as evidence tending to show the appropriation by defendant as alleged. It should be remembered, however, that pointing out such errors is but evidence to sustain the allegations of the complaint, and it would not be either necessary or essential to maintain plaintiff’s cause of action to point out many such errors. If the plaintiff can show, by the evidence of those who copied from the plaintiff’s books, or from witnesses who saw others copying from plaintiff’s books, then resort to the similarity between the two books would be unnecessary, nor would it be essential to establish the plaintiff’s cause of action to point out similarity in errors existing in the respective publications of the parties. There is no indefiteness or uncertainty about the charge made, and to maintain its action the plaintiff must establish the wrongful taking of the information alleged against the defendant.

The issuable fact between the parties is not whether errors which appear in the plaintiff’s books aj>pear likewise in the -defendant’s publication; the question at issue is whether the defendant has wrongfully taken and circulated information which belonged exclusively to the plaintiff. This the plaintiff is at liberty to establish either by pointing out the errors which have been copied from plaintiff’s into the defendant’s publication, or by any other competent proof, and we think sufficient has been said on-this point to show that these are not particulars of any claim that is made, but are to be resorted to as evidence by the plaintiff to prove its case against the defendant.

The cases of Newell v. Butler (38 Hun, 104) and Ball v. Evening Post Publishing Company (Id., 11), we think, point out the true ground upon which the granting or denial of a motion of this bind should be placed. As said in the former ease (Newell v. Butler): “ Where the original pleading itself states the propositions or facts relied upon so specifically and particularly, as that to require the party pleading to give further information in reference thereto would be to force him to disclose the evidence which he expects to produce to support them, a bill of particulars is uncalled for.”

And in Ball v. Evening Post Publishing Company: “ I think it may be laid down as the result of the adjudications on the subject that the only proper office of a bill of particulars is to give information of the specific proposition for which the pleader contends in respect to any material and issuable fact in the case, but not to disclose the evidence relied upon to establish any such proposition.”

To summarize, therefore, we think that the charge made against the defendant is sufficiently explicit; that the complaint itself specifically states'from what source the information claimed td have been purloined by the defendant is taken, its character, and how and where the defendant is publishing it. The effect of requiring the plaintiff to specify the particular information which the defendant is charged with having taken and published in the directory-would be to compel plaintiff to disclose the evidence upon which, in part or in whole, it may rely upon the trial.

In a case like this, where the charge is distinctly made which the plaintiff is obliged to establish, if, upon the trial, the plaintiff can prove that the defendant has appropriated its information, it would necessarily follow that no surprise could result to defendant, because such proof should be possible only from the fact that the defendant liad been engaged in doing the very thing with which it is charged by the plaintiff.

We are of opinion, therefore, that the order should be affirmed, with costs and disbursements.

Tan Brunt, P. J., concurred.

Order affirmed, with costs and disbursements.


author: O’Brien, J. O’Brien, J. Yan Brunt, B. J.,

text:
    MICHAEL BOWEN, Respondent, v. MICHAEL SWEENY and Another, Appellants, Impleaded with Others. MICHAEL BOWEN, Respondent, v. MICHAEL SWEENY Appellant, Impleaded with Others.
    (Appeal No. 1.) (Appeal No. 2.)

      Costs — when imposed as a condition of an amendment being allowed, they must be paid in any event although previously ordered at General Term to abide the event — trial fee.

    Michael Bowen brought an action of partition against Michael Sweeny and others, upon the trial of which the plaintiff, who was allowed to amend his complaint upon the payment of costs to date, obtained a verdict and recovered judgment. The defendants thereupon appealed to the General Term, which granted a new trial, with costs to the defendants to abide the event.
    In the opinion at General Term it was intimated that it was error to have allowed the amendment of the complaint at the circuit. In consequence of which, the plaintiff moved at Special Term to amend the complaint, which application was granted upon condition that the plaintiff pay to each of two attorneys for several defendants “a full bill of costs and disbursements to date to be taxed.” Upon such taxation the clerk disallowed all costs at General Term, but allowed the disbursements in that court.
    Upon an appeal by the defendants from an order denying a motion for a retaxation of costs, and also from an order striking out of the hill as taxed the disbursements at General Term:

      Held, that each attorney was entitled to the costs and disbursements at General Term, costs and disbursements having been imposed as a condition of the amendment. *
    That, in such a situation, the court had a right to consider whether the amendment constituted a new cause of action, and might compensate the defendants for the waste of time and labor expended in connection with the trial and appeal under the complaint as originally drawn.
    That the direction in the order of the General Term granting a new trial, with costs to the defendants to abide the event, had no bearing upon a case where, upon a motion for leave to amend, costs were directed tc be paid as a condition of its being granted.
    That a trial fee could not be taxed where a case, though upon the calendar, was not ready for trial because of the fact that some of the parties had not yet been served and some had not answered.
    Appeal in the first above-entitled action by the defendants, Michael Sweeny and Catharine Gallagher, from an order of tlie Supreme Court, entered in the office of the clerk of tlie city and county of New York on or about the 8th clay of April, 1892, denying their motion to retax costs in the first-above entitled action.
    The order appealed from recited that the defendant Michael Sweeny and the defendant Catharine Gallagher had moved this court for an order directing the clerk to retax the costs herein, which were adjusted by him on the 29th day of March, 1892, under the order made and entered herein, dated at Special Term on the 25th day of March, 1892, granting leave to the plaintiff to serve an amended complaint, so as to allow to said defendant Michael Sweeny the following items:
    Term fees......................................... $50 00
    Proceedings before and after granting new trial......... 25 00
    Appeal to General Term before argument.............. 20 00
    Appeal to General Term for argument................. 40 00
    And allowing to said defendant Catharine Gallagher:
    Term fees......................................... $50 00
    Proceedings before and after granting new trial......... 25 00
    Appeal to General Term before argument.............. 20 00
    Appeal to General Term for argument................. 40 00
    Appeal in the second above-entitled action by the defendant Michael Sweeny from so much of an order of said court, entered in said clerk’s office on the 2d day of May, 1892, as reads: “ Save and except as to the General Term disbursements, which should on retaxation be disallowed by the clerk.”
    The latter order was made, upon a motion by the plaintiff, that certain items of costs theretofore allowed by the clerk should be disallowed. It appeared that, upon the trial of the action at the circuit, the court allowed the plaintiff to amend, upon payment of costs to each of the defendants, Michael Sweeny and Catharine Gallagher, to date. The plaintiff there recovered judgment.
    It appeared by the affidavit of the plaintiffs’ attorney that when the attorneys for the defendants, Michael Sweeney and Catharine Gallagher, applied to have their two bills of costs adjusted, the plaintiffs’ attorney objected to the following items, all of which were allowed, by the clerk, to which the plaintiffs’ attorney excepted.

      The items in tbe bill of Michael Sweeney, as follows':
    ■Costs before notice of trial............................ $10 00
    Costs after notice of trial............................ 15 00
    Trial fee issue of fact at circuit....................... 30 00
    Affidavits and acknowledgments...................... 5 00
    Judge’s charge..................................... 5 00
    Printing 'points..................................... 51 00'
    Copy stenographer’s minutes......................... 85 00
    Copy Special Term opinion..........■................ 2 00
    Copy General Term, opinion.......................... 3 15

    Stenographer’s minutes, Common Pleas................ 20 00
    The items in the bill of Catharine Gallagher, as follows:
    Costs before notice of trial........................... $10 00
    Costs after notice of trial............................ 15 00
    Term fee issue of fact, two trials ..................... 60 00
    That subsequently the defendants, Michael Sweeney and Catharine Gallagher, applied to this court, at Special Term, at chambers, for a retaxation of said costs on their behalf, and for an order directing the clerk to allow to them certain of the items which he had disallowed, which motion, after argument, was in all things denied, and during the argument of that motion deponent called the attention of the learned justice that in each of the said two bills of costs the clerk erroneously included an item for two trials, when, in fact, there was but one trial, to which the said learned justice assented, he having presided at the one trial had in this action, and then stated, in substance, in open court that at least thirty dollars should be deducted from each of two said bills of costs, but objection being made that deponent had not given notice of retaxation, the court directed that deponent should give formal notice of retaxation, if he desired to have those items and the other items which he complaimed of disallowed, and acting on that suggestion of the court these papers have been prepared.

      William II. Arnoux, for the appellants.

      Flamen B. Ga/ndler, for the respondent.

       Claiming that that item should have been only thirty dollars as there was but one trial.

   O’Brien, J.

(Appeal No. 1):

The action in which the motion is made was brought in partition, and, after one amendment of plaintiffs’ complaint, was brought on for trial and resulted in a judgment in plaintiff’s favor, from which ah appeal was taken to this General Term, where it was reversed and a new trial ordered, with costs to defendants to abide the event. The right to amend the complaint upon the'trial having been questioned in the opinion of the General Term, the plaintiff moved at Special Term to again amend, which motion resulted in the making of the following order by Mr. Justice Andrews : “ Ordered, that said motion be and the same hereby is granted, and that plaintiff have leave to serve such second amended complaint on condition that within ten days after the adjustment by the clerk of the costs hereinafter mentioned, etc., the plaintiff to pay to Francis C. Devlin, attorney, etc., and to Wm. H. Arnoux, attorney, etc., each a full bill of costs and disbursements to date, to be taxed by the clerk of this court.”

The clerk, upon the taxation, disallowed all the General Term costs, and thereafter defendants moved for a retaxation, which was denied; and from such denial this appeal is taken.

It was -no part of the clerk’s duty, no more than it was of the learned judge who heard the motion for retaxation, nor is it our duty, to determine the terms which should have beén imposed; the question being, what is the true construction of the judge’s order allowing the amendment, which has never been modified or appealed from? We think it reasonably free from doubt. It meant to award to the defendants exactly what it states. “ a full bill of costs and disbursements to date.” The judge had undoubted power, as a condition of granting the favor, to include the costs which, by the General Term, were made to abide the event, because he had a right to consider whether the effect of the amendment was to make a new cause of action, and thus to conclude that the failure to serve a proper complaint had caused the appellants the waste of time, labor and expense incident to the preparation of a trial, the judgment thereon and the subsequent appeal.

Costs are so imposed as a condition for the amendment, and cannot be regarded as being.a payment of the costs of the action, and the effect of compelling, as a condition, an amount of costs to be paid equal to those which, by order of the General Term, were made to abide the event, in no way affects or overrides the disposition made by the General Term of the appeal. In other words, the learned judge allowing the amendment did not attempt to change the direction made by the General Term, with respect to what should be done with costs which were ordered to abide the event. And should the appellant finally succeed in the action he will be entitled to tax the costs over again, pursuant to the order of the General Term. This latter order, moreover, affected the costs at Special as well as those at General Term; and to be consistent, if it was thought that the order of the General Term, requiring the costs to abide the event, in any way restricted the right to allow costs as a condition of the amendment, then the Special Term costs should have been excluded as well as the General Term costs.

The question as stated, however, is simply what terms did the judge, allowing the amendment to the complaint, impose as a condition? His order as shown, says, “ a full bill of costs and disbursements to date.” In Havemeyer v. Havemeyer (44 Sup. Ct., 170), it was held that the phrase on payment of costs of the action to the present time,” as the consideration of an amendment, meant such costs as W'ould go to the party against whom the amendment was allowed, in case there had been a determination favorable to him at the date of the order granting leave to amend.

We think, therefore, it was an erroneous construction of the judge’s order to hold that thereunder the General Term costs were to be excluded.

In addition to these the clerk disallowed fifty dollars term fees, this item being disputed on its merits. It would appear tliat at the first term, after all the defendants were served, and the case was ready to be tried, it was reached and disposed of. We do not think the fact that one or all of the defendants placed the cause on the calendar and noticed the same for trial before the same was in condition to be tried gave them any right to term fees, because the cause was not properly on the calendar until all the parties were served and had answered. And it would appear that as soon as the cause was thus ready it was reached and tried; and the clerk’s ruling excluding the item of fifty dollars term fees we think was correct.

We think, however, that so much of the order as sustains the clerk in disallowing tlie General Term costs should be reversed, with costs and disbursements.

In view of the fact that the terms imposed by these orders seem to be very stringent and onerous, this disposition of this appeal is without prejudice to any application which respondent may make to Mr. Justice Andrews to modify the terms of the original order.

Yan Brunt, P. J., concurred.

Order reversed as directed in opinion, with costs and disbursements.

O’Brien, J.

(Appeal No. 2) :

The facts necessary to present the question urged on this appeal have been referred to in the opinion in Bowen v. Sweeny herewith handed down. This appeal is from so much of the order of May 2, 1892, as reads as follows: “ Save and except as to the General Term disbursements which should, on retaxation, be disallowed by the clerk.”

It is insisted, with respect to these disbursements, as it was insisted in regard to the costs, that when the General Term ordered a new trial, with costs to appellant to abide the event of the action, it ordered that the appellant should only become entitled to those costs, and to the disbursements which formed a part of them, when and if the defendant should finally succeed in the action. The error in this reasoning we have endeavored to point out in the former appeal, and it will be seen that we would agree with the respondent if it could be held that the order of the General Term in any way controlled the right of the judge granting the amendment to impose such terms as he thought proper and just. It remains for us only to construe his order, which stands unappealed from and unmodified. The plaintiff was asking a favor of the court which was granted on certain conditions, namely, that the costs and disbursements should be taxed by the clerk. As to what costs and disbursements were intended, we have already pointed out.

We think, therefore, that the appellant is right in the construction given -to the order of the learned judge, and that the order appealed from must be reversed, with costs, and the clerk directed to restore to such bill of costs all the items of disbursements disallowed, and to retax the same accordingly.

In view of the fact that tlie terms imposed by these orders seem to be very stringent and onerous, this disposition of this appeal is without prejudice to any application which respondent may make to Mr. Justice Andrews to modify the terms of the original order.

Yan Brunt, B. J.,

concurred.

Order reversed, with costs, and the clerk directed to restore to such bill of costs all the items of disbursements disallowed, and to retax the same accordingly. This disposition of this appeal is without prejudice to any application which respondent may make to Mr. Justice Andrews to modify the terms of the original orders.


author: Lawrence, J.:

text:
    PATRICK SHEAHAN, Appellant, v. THE NATIONAL STEAMSHIP COMPANY (Limited), Respondent.

      Malicious prosecution — want of probable cause — burden of proof — demanding too much by mistake in a replevin suit does not show malice.

    Patrick Sheahan, who was employed, in and prior to 1876, by a steamship company as a general passenger agent, being in default in making returns, as alleged by the company, was sued by it in replevin for the recovery of possession of certain tickets.
    The sheriff, having certified that the tickets had been eloigned, the company, about March 1, 1876, procured an order of arrest in the replevin action, by virtue of which, for want of bail, Sheahan was imprisoned for sixty-nine days. Subsequently the order of arrest was vacated.
    The replevin action was decided in Sheahan’s favor, but in another action for an accounting, brought Dy the company against Sheahan, it recovered a large sum of money for tickets received by him as agent and not accounted for.
    Subsequently Sheahan brought an action for malicious prosecution, wherein the court dismissed the complaint upon the ground that the facts did not show a want of probable cause.

      Meld, that, there being no dispute as to the facts, the question whether there was a want of probable cause was one for the court and was correctly decided.
    That, as the action for an accounting determined that Sheahan was largely indebted to the company for moneys received in a fiduciary capacity, this went far towards showing that there was no malice upon the part of the company in bringing the replevin action.
    That the burden was on the plaintiff to show affirmatively that the company had no ground for commencing its action.

      That as it was conceded that Sheahan had tom up a large number of prepaid tickets, the company was justified in bringing replevin for their retention; and that the fact that the company might by mistake have demanded too many tickets did not show malice.
    Exceptions of the plaintiff Patrick Sheahan, taken upon a trial had at the New York Circuit before the court and a jury, at which the complaint was dismissed and the exceptions were directed to be. heard in the first instance at General Term; and also an appeal by said plaintiff from an order of said court, made on the 9th day of March, 1891, dismissing the complaint.
    It appeared, upon the trial of the action, that the order of arrest was granted in the replevin action under section 179 of the Code of Procedure.

      B. Doran Killian and Denis McMahon, for the appellant.

      John Oheimood, for the respondent.
   Lawrence, J.:

The plaintiff, prior to the 26th day of February, 1876, had been for a long time in the employ of the defendant as a general passenger agent for the selling of tickets for passage on the steamships of the the defendant, entitling the persons named in said tickets to passage. His employment was by parol, and in the course of such business he employed a number of sub-agents, and received from the defendant a certain commission for the tickets so sold. He alleges, that on the 26th of February, 1876, the defendant maliciously, intending and contriving to injure him without just or probable cause, caused and procured a certain civil action in which the said defendant was plaintiff and this plaintiff was defendant, to be commenced in this court, and in said complaint falsely, maliciously and without just and probable cause alleged that the plaintiff detained 3,816 passage tickets, which were its property, and demanded judgment for the possession of the same, and that in truth, and in fact, at the commencement of said action he did not detain any of the property of the defendant.

He avers that the said prosecution was terminated in plaintiff’s favor by a judgment dismissing the complaint on the merits with costs. He further alleges that on or about the 1st of March, 1876, the defendant further maliciously intending and contriving to injure the plaintiff with malice and without just or probable cause, procured and caused to be procured, and made by several of its officers, agents and servants, several affidavits in said action, in which it was falsely, maliciously and without probable cause alleged that certain property belonging to the steamship company was wrongfully detained by the plaintiff, and that in said affidavits an order of arrest was issued against him, whereby the sheriff of the city and county of New York was directed to arrest him, and that his bail was therein fixed at $10,000, and that thereunder his arrest was procured, and that he was imprisoned in jail for the space of sixty-nine days in default of said bail. Then follows an allegation that all this was done by the defendant, its agents, etc., without probable cause, and that the plaintiff was compelled to, and did, until the determination and judgment in his favor, expend large sums of money and incur great liability to pay money in the necessary defense against said arrest, and in procuring the annulment of the same.

The defendant in its answer, admitting that it commenced the action referred to in the complaint, and that it procured the order of arrest therein stated, avers that the plaintiff neglected to make weekly reports, which, by the terms of his agreement with the defendant he was required to make, of the sale of said tickets intrusted to him, and that after his discharge in October, 1875, he continued to sell and dispose of such tickets without the defendant’s knowledge or consent. It alleges that in the action brought for the recovery of the tickets a requisition was issued to the sheriff of the county of New York to take the same from the plaintiff and deliver them to the defendant; that the said sheriff certified and made return that said tickets had been eloigned, removed, concealed or disposed of, so that he could not find the same; and that thereupon the order of arrest referred to in the complaint was made, which said order of arrest was eventually vacated. It is further averred . that said action was brought and said order of arrest obtained on advice of counsel; and that in another action in the Superior Court ■of the city of New York, brought by the plaintiff against the defendant for the settlement and adjustment of the matters and accounts between the parties, judgment was rendered in favor of the defendant against tlie said plaintiff for tlie sum of $8,915.16, which said judgment was affirmed by the General Term of the said Superior Court, and that an appeal taken therefrom by the plaintiff was finally dismissed by the Court of Appeals.

It was stated by the counsel for the plaintiff upon the trial of this action that it is an action for malicious prosecution, and after lieanng a large amount of testimony, and having received much documentary evidence, the court finally dismissed the plaintiff’s complaint on the ground that there-was not sufficient evidence of want of probable cause for the bringing of the replevin suit to sustain an action for malicious prosecution. To the ruling of the court dismissing the complaint the plaintiff duly excepted, and the case comes before us upon that exception and certáin exceptions taken during the course of the trial to the rulings of the court upon questions of evidence.

For the successful maintenance of an action of this character it is essential that the plaintiff should establish that the suit claimed to have been malicious was instituted without probable cause, and that there was malice in its institution, and that such suit had been terminated in the plaintiff’s favor. It is shown in this case that the action of replevin brought by the defendant against the plaintiff was terminated in his favor, and the remaining question, therefore, is, whether that suit was instituted maliciously and without probable cause.

It is elementary that the question as to what facts and circumstances amount to probable cause is a purely legal question, and if there is no controversy about the facts, the question whether the facts proven show want of probable cause is exclusively for tlie court.

The record in this case upon the conceded facts clearly establishes, to our satisfaction, that there was probable cause for the institution of the action of replevin, and that the defendant was not actuated by malice in bringing it. The plaintiff, for many years, was the agent of the defendant. He was behind in his returns. The defendant had been unable to obtain a settlement of his accounts, or a return of the tickets intrusted to him, and supposed by it to be in his possession. "When the sheriff returned that the tickets had been eloigned, removed, concealed or disposed of, and that he could not find or take the same, the defendant, we think, was justified in obtaining the order of arrest, and had probable cause for applying for the same, and the mere fact that the order of arrest was finally vacated does not show that the defendant, in obtaining that order of arrest, was actuated by malice. The record shows that in another action in the Superior Court, brought by the plaintiff to obtain an accounting, judgment for a large amount was rendered in favor of the defendant. That judgment necessarily establishes that, at the time of the commencement of the replevin suit, and of the obtaining of the order of arrest, the plaintiff in this action was largely indebted to the defendant for moneys which had been received by him in a fiduciary capacity, and goes very far to show that there was no malice on the part of the defendant in instituting the replevin suit.

We, therefore, think that the plaintiff has failed to establish the want of probable cause, which is the essential ground of the action for malicious prosecution.

The burden of proof in such cases is upon the plaintiff to prove affirmatively that the defendant had no ground for commencing the prosecution, and in that respect it seems to us that he has failed.

The counsel for the appellant, in his points, has only argued, after discussing the general question of the liability of the defendant, four exceptions to the ruling of the learned justice who presided at the circuit, in regard to the admission or rejection of evidence. It is claimed that the justice erred in admitting in evidence the findings of the referee in the Superior Court suit between these parties. The plain answer to that proposition is, that before the admission of those findings the plaintiff had himself read in evidence one of the findings of the referee.

It was but just, therefore, to allow the defendant to read in evidence the remaining findings.

The next exception relates to the exclusion of an answer to the question as to what were the violations of • the laws, of what was called “ the conference,” and what was the conference.

We regard the question as immaterial and find no error in the ruling of the court in respect thereto. In fact, it appears at a later stage of the case that the plaintiff’s counsel subsequently objected to any proof in regard to these rules, on the ground that they were in writing. Whether they were or not, we do not think that the evidence had any materiality upon the question of probable cause. In our view, too, it was immaterial as to what was the oldest prepaid ticket out of the 3,858 claimed, which the defendant demanded of the plaintiff. The fact was conceded that there had been a demand for 3,858 tickets, -and, even if the ruling was erroneous, it appeared at a subsequent stage of the case that the plaintiff had received prepaid tickets to the number of 550 from his agents, which he iad torn up and thrown into the waste-basket. The retention of those tickets alone would have justified the action of replevin, and, ■even if there was a mistake in the number of the tickets claimed by the plaintiff, we do not think that that mistake indicated malice ■on the part of the plaintiff in bringing the replevin suit, nor that it tended to establish want of probable cause.

The last exception is as to the overruling of the objection of the plaintiff to the reception in evidence of the letter dated July 1, 1875, addressed by Hurst, the general manager of the defendant, to the plaintiff. As that letter was a simple request to the plaintiff to send the balance of the outward accounts to the end of J une twenty-sixth, for the reason that the defendant was waiting for the plaintiff’s reports to close its books, it may have been material as showing a demand by the defendant upon the plaintiff, but even if erroneously .admitted it could have no effect upon the final result which was reached by the court in dismissing the complaint.

On the whole record we are of the opinion that the plaintiff failed to establish upon the trial of this action either malice on the part of the defendant or that there was a want of probable cause in the bringing of the action, and it follows that the exceptions of the plaintiff should be overruled and judgment rendered for the defendant, with costs and disbursements.

Yan Brunt, P. J., and O’Brien, J., concurred.

Exceptions overruled and judgment rendered for defendant, with ■costs and disbursements.


text:
    IDA F. CROW, Plaintiff, v. THE GREENWICH INSURANCE COMPANY, Defendant.

      Mre insurance — two policies issued to the owner at the same time, one only payable to the mortgagee, with a mortgagee and contribution clause — its effect upon contribution.

    Ida F. Crow brought an action against an insurance company to recover for a loss upon a policy for $750, payable to her as mortgagee of the insured property, the owner and insurer of which was Madeline S. Roome. Upon the same day on which this $750 policy was issued Roome had taken out as owner another policy upon the same premises in the same company for $1,250; the issuing of the two policies constituting, in fact, one transaction.
    The $750 policy in suit was the New York standard policy, containing the usual mortgagee clause and a clause relative to contribution, which was as follows:. "In case of any othey insurance upon the within-described property this company shall not be liable under this policy for a greater proportion of any loss or damage sustained than the sum hereby insured bears to the whole amount of insurance upon said property issued to or held by any party or parties having an insurable interest therein, whether as owner, mortgagee or otherwise.” The loss was adjusted at $800.
    The insurance company defended the action brought by Crow upon the ground that as there was on the premises other insurance to the amount of $1,250, the plaintiff could only recover that portion of the whole loss which the $750 insurance bore to the whole amount of insurance.
    The plaintiff recovered judgment for the full amount of the policy, $750.

      Held, that the judgment below was correct.
    That the issuing to the mortgagor of two policies at the same time had the same-effect as though the company had issued one policy for $2,000, loss to the extent of $750 to be payable to the mortgagee.

      Semble, that the case would have been different had the mortgagor taken out. insurance in another company without informing the defendant of the fact.
    That the object of the mortgagee clause was to protect the mortgagee; and as it did not appear that Crow knew that Roome had secured the other policy, and as the defendant did know this, it would not be allowed in this way to defeat the mortgagee’s claim.
    Exceptions of the defendant, the Greenwich Insurance Company, taken upon a trial had at the New York Circuit before the court and a jury, at which a verdict was directed for the plaintiff for $765.37, and the exceptions of the defendant were ordered to be heard in the first instance at General Term.

      George W. Stephens, for the plaintiff.

      flenry Galbraith Ward, for the defendant.
   Lawrence, J.:

On the 20th of November, 1890, the defendant, the Greenwich Insurance Company of the city of New York, issued a policy of insurance for $1,250 for three years to Madeline S. Roome, the owner of certain premises and buildings erected thereon in Rock-land county, New York. On the same day the defendant issued a second policy for $750 for three years to Madeline S. Roome upon the same premises, loss, if any, payable to Ida F. Grow, mortgagee, who is the plaintiff in this action. On September 21, 1891, a fire occurred on the premises, resulting in a loss fixed and adjusted by the plaintiff and defendant at $800. This action is brought upon the second policy by the mortgagee, which policy contained a clause in the following words :

“ Loss or damage, if any, under this policy, shall be payable to Ida F. Crow, as mortgagee, as interest may appear, and this insurance, as to the interest of the mortgagee only therein, shall not be invalidated by any act or neglect of the mortgagor or owner of the within-described property, nor by any foreclosure or other proceedings or notice of sale relating to the property, nor by any change in the title or ownership of the property, nor by the occupation of the premises for purposes more hazardous than are permitted by this policy; provided, that in case the mortgagor or owner shall neglect to pay any premium due under this policy the mortgagee shall, on demand, pay the same.

“ Provided, also, that the mortgagee shall notify this company of any change of ownership or occupancy, or increase of hazard, which shall come to the knowledge of said mortgagee, and, unless permitted by this policy, it shall be noted thereon, and the mortgagee shall, on demand, pay the premium for such increased hazard for the teim of the use thereof; otherwise this policy shall be null and void.

“ This company reserves the right to cancel this policy at any time, as provided by its terms, but in such case this policy shall continue in force for the benefit only of the mortgagee for ten days after notice to the mortgagee of such cancellation, and shall then cease, and this company shall have the right, on like notice, to cancel this agreement.

“In case of any other insurance upon the within-described property, this company shall not be liable under this policy for a greater proportion of any loss or damage sustained than the sum hereby insured bears to the whole amount of insurance upon said property, issued to or held by any party or parties having an insurable interest therein, whether as owner, mortgagee or otherwise.

“ Whenever this company shall pay the mortgagee any sum for loss or damage under this policy, and shall claim that, as to the mortgagor or owner, no liability therefor existed, this company shall, to the extent of such payment, be thereupon legally subrogated to all the rights of the party to whom such payment shall be made, under all securities held as collateral to the mortgage debt, or may, at its option, pay to the mortgagee the whole principal due, or to grow due on the mortgage, with interest, and shall thereupon receive a full assignment and transfer of the mortgage, and of all such other securities ; but no subrogation shall impair the right of the mortgagee to recover the full amount of her claim.”

We are of the opinion that the circuit judge was right in directing a verdict for the plaintiff for the sum of $750, the full amount insured b}r the second policy. It seems clear that the issuing of the two policies by the defendant at the same time, constituted but one transaction, the object of which was to secure the mortgagee in the first instance, and secondly, the owner; and that, as is claimed by plaintiff’s counsel, the result was the same as though a single policy had been issued for $2,000 by the terms of which the loss to the extent of $750 was payable to the mortgagee.

After the execiftion of the mortgage the interest remaining in the mortgagor was an equity of redemption merely, and the only insurable interest which the mortgagor had was in that equity of redemption after the mortgage had been deducted from the value of the land. We do not think it can be successfully argued that the defendant intended to allow the mortgagor to take out an insurance which would jeopardize or lessen the amount agreed to be paid by the mortgagee policy in case of a loss. If a policy of insurance had been taken out by the mortgagor on the same day in another company, without that fact being communicated to the defendant, there might be force in the argument that the defendant would be obliged to pay to the mortgagee, under its policy, only that proportion which the amount of its policy bore to the whole amount insured. But in this case, as already stated, we think the transaction is to be regarded as one, and that tbe defendant, having, with full knowledge of all the facts, issued a policy by which the loss, if any, was incurred, up to the sum of $750, was payable to the mortgagee, cannot claim under the other policy contribution from itself. The object of the policy which contained the mortgagee clause was to secure to the mortgagee full indemnity, and as there is nothing to show that the mortgagee knew of the issuing of the first policy of insurance to Roome, the mortgagor, the defendant, it seems to us, cannot claim that it should be permitted to stand in the position which it would occupy in case a policy of insurance had, without its knowledge, been procured by the mortgagor from another company.

For these reasons we are of tbe opinion that the exceptions should "be overruled, and that judgment should be ordered in favor of the plaintiff upon the verdict, with costs.

YaN BRUNT, P. J., and O’Brien, J., concurred.

Exceptions overruled and judgment ordered in favor of plaintiff upon the verdict.


author: LawbeNoe, J.:

text:
    THE BOWERY SAVINGS BANK, Plaintiff, v. ELIZABETH T. BELT and Others, Defendants, Impleaded with Others, Appellants.

      Foreclosure — a conditional sale — when it is not a mortgage — a misapprehension of legal rights —jurisdiction of all the parties in interest.

    Elizabeth T. Belt having executed mortgages upon certain premises to the Bowery Savings Bank and to several other parties respectively, and then conveyed them to Elizabeth M. Delabarre, the latter, in 1890, conveyed the premises, by a deed abso lutein form, to Hamilton H Salmon for $8,100, and he at the same time delivered ■ to her a separate contract, by which he agreed to sell the premises to her upon payment by her of the sum of $3,100 on or before a day named. Both these instruments were recorded as deeds, the deed having been recorded two days before the contract.
    About a month later Delabarre conveyed the same premises to James W. Purdy, for the expressed consideration of $1,100, by a deed which was duly recorded. The Bowery Savings Bank foreclosed the mortgage given by Beit to it, and the referee in that action, after paying the other mortgages given by het decided that the surplus proceeds of sale belonged to Salmon and not to Purdy, although the

      latter claimed the same upon the theory that Salmon’s deed was. in effect, a mortgage, while he, Purdy, was a bona fide purchaser for value and without notice. It was further claimed by Delabarre that Salmon had brought an action which was pending against her, in which he asked, as relief, that her deed to him be declared a mortgage, and that the referee erred in ignoring that action. Held, that the decision of the referee was correct.
    That, upon its face, the transaction between Delabarre and Salmon was a conditional sale and not a mortgage.
    That if, in fact, it was a mortgage the burden of showing this was upon those asserting it, and that they had failed to do so.
    That the action brought by Salmon against Delabarre to have the deed declared a mortgage, did not affect his right to have the deed adjudged to be a deed in this action, for the reason that a party did not forfeit his legal rights by misapprehending them.
    That as all the parties in interest were before the court their rights could be determined in this action.
    Appeals by the defendants, James W. Purdy, Jr., Elizabeth. M. Delabarre and Hugh R,. Garden, from an order of the Supreme Court, entered in the office of the clerk of the city and county of New York on the 11th day of June, 1892, confirming the report of a referee in a foreclosure action, and overruling exceptions, taken to it.

      E. JET. P. Squire, for the defendant Purdy, appellant.

      Samuel B. Paul, for the defendants Delabarre and another, appellants.

      William J. Laay and W. IT. Reagan, for the defendant Salmon, respondent.
   LawbeNoe, J.:

Elizabeth T. Pelt, after executing a mortgage to the plaintiff for $27,500 m 1889, and a second mortgage of $4,500 to J. E. Kernochan, and a further mortgage of $2,150 to A. White, conveyed the premises No. 44 West Twenty-second street to her daughter, Elizabeth M. Delabarre.

On September 20, 1890, the defendant, Elizabeth JJ. Delabarre, then the owner of the premises, sold in this action, made a deed of the same to said Hamilton H. Salmon for the consideration'of $3,100, which deed was recorded on the same day in Liber 2258 of Conveyanees, page 79. At the same time tbat said deed was ihade, said Salmon executed and delivered a contz’act to said Elizabeth M. Delabarre, by which he agreed to reconvey the said premises to her upon the payment of $3,100 on or before January 22, 1891. This contract was recorded two days after the recording of the deed in Liber 2308 of Conveyances, page 497.

On October twenty-seventh said Eliza M. Delabarre made a deed of the same premises to the defendant James W. Purdy, Jr., the consideration expressed therein being $1,100. This instrument was recorded in the sdid registrar’s office December 2,1890, in Liber 2334 of Conveyances, page 79. After paying the plaintiff’s claim from the proceeds of the sale under the judgment in this action, and the amounts due to Iiernochan and White, there remained a surplus, to all of which the referee has reported the defendant Hamilton H. Salmon is entitled.

The Special Term has confirmed that report, and from the order of confirmation this-appeal is taken. It is claimed by the appellant Purdy that the deed to Salmon was a mortgage, and that as such it -was improperly recorded in the Book of Conveyances, and that Purdy was a bona fide purchaser without notice and entitled to the surplus.

It is claimed by the appellant Delabarre that the referee should not have ignored the existence of the action brought by Salmon, and that to award him the surplus until that action had been determined was error.

It is further claimed by her that Salmon’s deed, and the agreement executed simultaneously therewith, constituted a mortgage, and that the two instruments should have been recorded as such. We are of the opinion that the referee was right in the conclusion which he reached.

The transaction between the defendant Salmon and Mrs. Delabarre, was a conditional sale. The deed is absolute upon its face, and contains the usual full covenants of warranty. The agreement on the part of Salmon dated September 20, 1890, is to sell to Mrs. Delabarre for the sum of $3,100. Her agreement is to purchase for, and to pay that sum on January 22, 1891. Salmon agrees, on receiving such payment, to execute and deliver to her a full covenant warranty deed.

Tliese provisions in the agreement are inconsistent with the position tliat the deed and instrument were intended to operate as a mortgage.

We have not overlooked the fact that a deed, absolute upon its face, may be shown by parol to have been intended by the parties as a mortgage, but the burden of proof in such case is upon the party seeking to establish that the transaction equitably amounted to a mortgage. (Fullerton v. McCurdy, 55 N. Y., 637.)

In our opinion, the parties opposing Salmon’s claim to the surplus in this case have failed to prove that the relation between him and Delabarre was, in reality, that of mortgagor and mortgagee.

The action brought by Salmon for the purpose of having the deed in question declared a mortgage, does not affect his right to have that instrument adjudged to be a deed. A party does not forfeit his legal rights by misapprehending them. (Morrison v. Brand, 5 Daly, 42; S. C., affirmed, 56 N. Y., 657.) And as all the parties whose interests are involved are before the court, it is competent, in this proceeding, to ascertain the nature and extent of those interests. (Bergen v. Carman, 79 N. Y., 146.)

These views lead to an afirmance of the order below, with costs and disbursements.

YaN BeuNT, P. J., and O’Beien, J., concurred.


text:
    WILLIAM WATERS, Individually and as Administrator of JAMES WATERS, Deceased, Respondent, v. THE MANHATTAN RAILWAY COMPANY and Another, Appellants.

      Practice — entry of an order of reference in ignorance of the death of a necessary pa/rty and before the revival of the action.

    William Waters and James Waters, having brought an action against the elevated railroads of New York city to restrain them from operating their road in front of the plaintiffs’ premises, and also to recover past damages, James Waters, in January, 1891, died.
    Before any revival of the action, and in ignorance of his death, the defendants consented to a reference. Subsequently, upon the application of William W aters, the action was revived by an order of the court. The defendants then moved to vacate the order of reference upon, the ground that by the death of James. Waters the action was suspended in the same manner as though it had abated, and that all proceedings before revival were void.
    Upon an appeal from an order denying this motion.

      Held, that the motion to vacate the order of reference should have been granted.
    Appeal by the defendants, the Manhattan Railway Company and the Metropolitan Elevated Railway Company, from an order of the Supreme Court, entered in the office of the clerk of the city and county of New York on the 15th day of March, 1892, denying their motion to vacate an order of reference.

      Julien T. Jamies and Herbert Barry, for the appellants.

      George William Hart, Jr., for the respondent.
   O’BbieN, J.:

This action was originally brought by the plaintiffs, James Waters and William Waters, to restrain the defendants from maintaining and operating their railway in front of plaintiffs’ premises, with an accompanying demand for incidental relief by way of past damages. On January 2, 1891, James Waters, one of the plaintiffs, died. On April 10,1891, and before any steps were taken to revive the action, the cause appeared ttjron the day calendar, and the attorneys, in ignorance of the fact that one of the plaintiffs had died, consented to the entry of an order directing the issues to be heard and determined by a referee.

On January 16, 1892, the plaintiff, William Waters, served notice of a motion to revive the action, which was withdrawn, but subsequently, and on February IS, 1892, renewed. After the entry of the order upon this motion to revive, the defendants moved to vacate the order of reference upon the ground that, by the death of James Waters, the action was suspended in the same manner as though it had abated, and all proceedings in the action taken prior to the revival were irregular and should be set aside. The learned judge below refused to vacate the order of reference upon the ground that, “ as tinder the decisions of the Court of Appeals, defendants never had a right to a trial by jury, and would not have such right now if the order of reference was vacated; ” the defendants were in no way injured or prejudiced, and that, therefore, the motion to vacate the order of reference should be denied.

Although we should agree with the learned judge that no substantial injury resulted from the order, and though the motion itself was a purely technical one, still the question remains, whether the defendants were not legally correct in the position which they took.

By various sections of the Code provision is made for the continuation. of actions which do not abate upon the death of one of the parties in favor of the surviving-parties, plaintiff or defendant. (§§ Y58, Y59.) Thus section Y58 provides: “ In case of the death of one of two or more plaintiffs, * * * if the entire cause of action survives to or against the others, the action may proceed in favor of or against the survivors.” And section Y59 provides for a contingency where death occurs, and part only of the cause of action survives.

If, therefore, William Waters, upon the death of James, could, without reviving the action, have proceeded, then undoubtedly the order of reference should not be disturbed, because as to his rights as against the defendants they could be determined upon such reference. The original plaintiffs were tenants in common, and upon the death of James, unmarried and intestate, his interest in the property descended to his heirs-at-law, and it was made to appear upon the motion to revive the action that William Waters was the only heir-at-law and next of kin. It thus happens in this case that the interest in the fee of the property of the person dying descended to the surviving plaintiff, and, therefore, with respect to the action for trespass affecting the fee, it could be maintained by him. But even in such a case the better practice seems to be that a suggestion on the record should be made of the death and the devolution of interest, even though the entry of a formal order be necessary.

As to the incidental relief relating to the demand for past damages, it was found necessary by plaintiff to revive the action in his own name individually and as administrator for liis brother James.

The fact that an order to revive the action was necessary, with a view to have all the interests before the court, seems to us to be the crucial test to apply to the question as to whether the order of’ reference was regularly made. If tíre plaintiff could have proceeded with the action alone, and no order to revive or continue the action was necessary, then the respondent’s position would be the correct one. But if, upon the death of James Waters, a necessary party to the action was absent, then, while the action itself did not abate, there resulted, under well settled rules of practice, a suspension of the action until such time as a motion was made to revive or continue, and the persons succeeding to the interests of the party dying were brought in. In such a case any order entered in ignorance of the fact of death, made between such death and the time when a motion is made to revive the suit, is a nullity. A consent signed by the respective attorneys, in ignorance of thé fact that a necessary party to the action had died, and in a case where the presence of those upon whom his interests had devolved was necessary, cannot be regarded as either valid or binding, because unauthorized on behalf of the party dying, and, therefore, lacking in its character of mutuality, and an order purporting to be entered thereon woulcl be irregular.

We think, therefore, that the position of the appellants is. correct; that upon the death of James Waters a necessary party was absent from the action, and that all proceedings were suspended until his properly certified representative should be brought before the court; that the consent was not .valid and binding because given in ignorance of the fact of death during this period when all proceedings were stayed; and that, by reason of the fact of the order of- reference entered thereon being irregular and unauthorized, the motion to vacate it should have been granted.

Our conclusion, therefore, is that the order appealed from should be reversed and the motion granted, with ten dollars costs and disbursements.

YaN BeüNT, P. J., and LawbeNce, J., concurred in the result.

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