text:
    THE NATIONAL STATE BANK OF ELIZABETH, Respondent, v. ELIJAH BRAINARD and Another, Appellants.

      National banks — purchasing paper before maturity is a discount — illegal interest taken upon such a purchase — when all interest upon the paper ceases — a subsequent payment must be applied to principal.

    The Revised Statutes of the United States (§§ 5197, 5198) provide that a national bank may discount drafts at the rate of interest which prevails in the State where the bank is located, but that if it exacts knowingly a greater rate, the entiro interest which the evidence of debt carries, or which lias been agreed to be paid thereon, shall be forfeited; that if such greater rate of interest has been actually-paid, then twice such amount may be recovered from such bank if an action therefor is brought within two years.

      Held, that where a bauk purchased drafts of a note broker before their maturity at a discount of fifteen per cent, the bank being located in New Jersey where the legal rate of interest is six per cent, it was a discounting by the bank at an illegal rate.
    That ns the interest, in such a transaction, is reserved, and not actually'paid, such interest is, by the terms of the statute, forfeited.
    That the drafts lost their interest-bearing capacity in such wise as not to draw interest, even after their maturity.
    After the drafts became the property of the bank the executor of the acceptor thereof, without giving any directions as to its application, made a payment .upon said drafts. The bank applied the moneys, in great part, to the payment of interest accrued upon said drafts.

      Held, that the usurious discount had destroyed the interest-bearing capacity of the drafts; that thereafter no interest could become due, and that any subsequent payment, in the absence of instructions from the party paying, would be applied by the law to the payment of the principal.
    Appeal by tlie defendants, Elijah Brainard and Morris F. Brainard, from a judgment, entered, in the clerk’s office of the city and county of New York on the 17th day of June, 1890, upon a verdict for the plaintiff for $13,077.45, after a trial at the New York Circuit before the court and a jury.
    It appeared upon the trial of the action that certain drafts were purchased by the plaintiff from a note broker in the city of New York. They were nine in number, drawn by the defendants to their own order, and were accepted by E. G. Brown. Their amount, $12,285.85, with interest, less $2,360,-was the amount of the verdict. One Ryder, executor of Brown, before the drafts had matured paid to the plaintiff $2,500 without giving any directions as to its application. Of this amount the plaintiff applied $139.61 to interest due on two other notes of Brown, and the balance, $2,360,39,'it applied to interest accrued upon the drafts in suit.

      J. Tredwell Richards, for the appellants.

      8. J. McOutcheon, for the respondent.
   Per Curiam :

There is no dispute as to the fact that the plaintiff discounted the drafts in suit at the rate of fifteen per cent per annum, while the rate allowed by the laws of the State of New Jersey, where the bank is located, was only six per cent. This act brought the bank within the operation of sections 5191 and 5198 of the Revised Statutes of the United States. Section 5191 provides that national banking associations may receive, reserve and charge on any loan or discount made, or upon any note, bill of exchange or other evidence of debt, interest at the rate allowed by the laws of the State, territory or district where the bank is located. Section 5198 provides as follows:

“ The taking, receiving, reserving or charging a rate of interest greater than is allowed by the preceding section, when knowingly done, shall be deemed a forfeiture of the entire interest, which the note, bill or other evidence of debt carries with it, or which has been agreed to be paid thereon. In case the greater rate of interest has been paid, the person by whom it has been paid or his legal representatives may recover back, in an action in the nature of an action of debt, twice the amount of the interest thus paid from the association taking or receiving the same, provided such action is commenced within two years from the time the usurious transaction occurred.” The effect of the provisions of the national currency act which are embodied in these sections was considered by the Supreme Court of the United States in the case of Barnet v. National Bank (98 U. S., 555), and it was there declared that the statute defined two categories and announced the consequences thus :
1. Where illegal interest has been knowingly stipulated for, but not paid, there only the sum lent without interest can be recovered.
2. Where such illegal interest has been paid, then twice the amount so paid can be recovered in a penal action of debt, or suit in the nature of such action, against the offending bank, brought by the persons paying the same or their legal representatives.”

In that case it was accordingly held that where usurious interest had been actually paid to a national bank upon a bill of exchange, such interest could not be.applied by way of offset or payment on the instrument.

Under this decision, the interest prior to maturity upon the drafts involved in the present suit was forfeited, if it was merely reserved but not paid. As was said in the case of the National Bank of Auburn v. Lewis (81 N. Y., 20): “When a note is discounted, the amount reserved for the discount is the interest reserved. In most cases it is not then paid. The borrower receives the sum. called for by the note, less the amount reserved for the discount. That is not paid until the note is paid. It is interest, and it is interest which the note carries with it. If it be a discount at a usurious rate, it is forfeited by reason of the Federal statute. In a suit on the note, it may not be recovered. It is to be held and adjudged forfeited.”

These views would necessarily result in an affirmance of the judgment if no other questions were presented by this appeal. The defendants, however, insist that it was error to permit any recovery, on account of interest accruing after the maturity of the drafts in suit, and that a payment of $2,360, made to the bank by the executor of the' acceptor, was erroneously credited on account of such interest, whereas it should have gone to diminish the amount of the principal debt. In both respects we think the contention of the ■appellants is correct.

The forfeiture prescribed by the Federal statute is not merely a forfeiture of the interest which has been agreed to be paid, but a forfeiture “ of the entire interest which the note, bill or other evidence of debt carries with it.” In other words, the reservation or acceptance of usury destroys the further interest-bearing capacity of the paper. It was so held by the Supreme Judicial Court of Massachusetts, in the case of the Peterborough National Bank v. Childs (133 Mass., 248), in an opinion with the reasoning and result of which we entirely concur.

As to the payment of $2,360, which has been mentioned, there was no competent evidence of any intention to apply it to the interest on the part of the person from whom the money was-received. The drafts having lost their capacity to draw interest, HO' interest was due, and the payment could properly be applied only on account of the principal. (See Adams v. Mahnken, 41 N. J. Eq. [14 Stewart], 332; Gill v. Rice, 13 Wisc., 549; Greene v. Tyler, 39 Pa. St., 361.)

The judgment must, therefore, be reversed and there must be a new trial, unless the respondent will stipulate to reduce the judgment by deducting the amount included therein for interest accruing since the maturity of the drafts, together with the $2,360 which should have been credited as a payment on the principal.

II this is done, the judgment, as modified, will be affirmed, without costs.

Present — Yan Brunt, P. J"., Barrett and Bartlett, JJ.

Judgment modified as expressed in opinion, and, as modified, affirmed, without costs.


source: Caselaw Access Project

author: Daniels, J.:

license: Public Domain

text:
    HENRY FERA, Respondent, v. DANIEL H. WICKHAM and Others, Appellants.
    Set-off— when a debt not due is a proper offset against a claim held by an insolvent’s assignee for creditors.

    A firm, known as D. II. Wickham & Co., became indebted to one Fera, upon a draft, drawn by him on March 8, 1890, payable eight months after date, and accepted by the firm. On October 0. 1890, Fera became indebted to the firm upon a note made hy him, on that day, payable at the end of eight months, and also on October twenty-second for goods sold to him by the firm. On October twenty-seventh D. II. Wickham & Co. made a general assignment for the benefit of their creditors.
    On the hearing upon a demurrer interposed to the complaint in an action brought hy Fera January 2,1891, after the draft matured, to secure a set-off of so much of said acceptance as was necessary to pay his indebtedness to said firm.

      Held, that the action could ho maintained.
    That, although the acceptance was not due when the assignment was made, it was in equity a proper set-off; inasmuch as the assignee, for the benefit of creditors, had paid no consideration therefor, and, as representative of the assignors, held the demand only for the benefit of their creditors.

      Semble, that if the assignment had been to one for value the rule would be otherwise.
    Appeal by Daniel II. Wickham, George S. Wickham, Samuel E. Turner and Nathan J. Newitter, as assignee for the benefit of creditors of D. II. Wickham & Co., from an order, entered in the office of the clerk of the city and county of New York on the 24th day of March, 1891, overruling their demurrer to the complaint in the above-entitled action, and also from an interlocutory judgment, entered upon said order in said clerk’s office on the 7th day of April, 1891.
    This action was commenced January 2, 1891.

      John J. Adams, for the appellants.

      Samuel J. Goldsmith, for the respondent.
   Daniels, J.:

Tlie action was brought to secure a set-off of the amount owing to the plaintiff upon the acceptance of a draft by the defendants D. II. Wickham & Co. The draft was drawn by the plaintiff on the 3d of March, 1890, and was due in eight months after its date. On the 6th of October, 1890, the plaintiff made and delivered his note for the sum of $536.25, to the order of the defendants, which was payable in eight months after its date. The firm of Wickham & Co. also sold and delivered to the plaintiff on the 22d of October, 1890, goods and merchandise for the price of seventy-nine dollars, which remained unpaid. After these obligations had in this manner been created, and on or about the 27th of October, 1890, Wickham & Co made a general assignment to the defendant Nathan J. New-witter for the benefit of their creditors, and after this acceptance became due this action was brought to secure a set-off of so much of it as was necessary for that purpose, for the satisfaction of the two debts which had been created against the plaintiff in favor of Wickham & Co. It was alleged in the complaint that Wick-ham & Co. were hopelessly insolvent, and were so prior to the 6th of October, 1890, and that 'by reason of such insolvency the plaintiff would be unable to secure the payment of this acceptance, which was for the sum of $1,390.60. The defendants demurred to the complaint, assigning in support of the demurrer that the complaint did not state facts sufficient to constitute a cause of action.

The precise point, which in this manner has been presented for determination, is whether the plaintiff is entitled in equity to set off so much of the amount due to him, upon the acceptance of Wickham & Co., as will satisfy the liabilities incurred by him in the manner already stated, although his debt liad not matured and become payable at the time of the general assignment. This question was considered by the General Term of the fifth department in Rothschild v. Mack (42 Hun, 72), and it was the conclusion of the court that such a set-off might be secured. This case was afterwards before the Court of Appeals for its consideration and is reported in 115 New York, 1.

In the decision then made the court concluded that the plaintiffs had a present demand against their debtor which was enforceable in this manner, and, therefore, sustained the judgment recovered in the Supreme Court. But, in making the decision, nothing was said in any form tending to impair or strengthen the effect of the decision of the General Term. It -was, on the contrary, stated in the opinion that the correctness of the decision was not intended to be denied, and that it was left without either affirming or disaffirming the view expressed by the General Term. Accordingly the decision first made stands at the present time in full force and effect upon this disputed point. And it may be considered, inasmuch as the assignee for the benefit of creditors advanced nothing whatever as a consideration for the assignment, but stood m the position of the assignors holding the property for the benefit of tlieir creditors under their assignment, that the views of the General Term were sound and should be followed in the disposition of this case. If the assignment made by the papers had been to some person for a present consideration, there the right, of set-off would probably be defeated. But where, as the fact is here, the assignee takes no interest in'the demands for himself, but continues to hold them for the advantage of the assignors and the benefit of their creditors, a different rule appears to be proper. For there is no substantial reason justifying the conclusion that any rights whatever have, by the assignment, been brought into existence inconsistent with this right of set-off in favor of the plaintiff. This subject was also considered in Chenault v. Bush (84 Ky., 528). And it was held by the court, as against an assignee for the benefit of creditors, and a receiver subsequently appointed to collect in the debts and demands owing to the assignors, that this right of set-off in equity existed, although the plaintiff had. no present demand due to him at the time when the assignment was made. There he had joined with the assignor in a joint obligation for the payment of an indebtedness. This obligation was created prior to the assignment, but he paid nothing until after the assignment had been made. And the court held that he was entitled to insist upon this equitable right of set-off on account of that payment, although it was made after the execution and delivery of the assignment. This case is substantially like the case now presented upon this appeal. And incidentally the principle seems to be approved by Schuler v. Israel (120 U. S., 507, 510). And while the subject has been discussed in other authorities, and views not entirely harmonious have been expressed, there is sufficient in the equities of the case supported by these decisions, not only to require, but to render it the duty of the court to sustain this judgment.

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

Van Brunt, B. J., concurred.

Judgment affirmed, with costs.


text:
    THE MAYOR, ALDERMEN AND COMMONALTY OF THE CITY OF NEW YORK, Respondent, v. THE CUNARD STEAMSHIP COMPANY (Limited), Appellant

      Whiwves and bulk-heads in New Yorkeity- — lease of one side of a pier for the erection of a ferry rack and the water for ferry purposes — building of a shed on piles in the slip — an action will lie to abate the nuisance — that the city has permitted such erections in other slips is not a defense.

    An action can be maintained by the city of New York for the removal of a shed constructed upon piles sunk in a slip between piers in the Hudson river; and in such an action the defendant may be restrained from maintaining the shed, and he directed to remove it.
    A resolution of the dock department of the city of New York, passed April 26, 1876, agreeing to lease the northerly side of a pier to be constructed by it for the purpose of erecting a ferry rack, and the use of the water upon said side for ferry purposes, does not confer a right upon the lessee to erect a shed in the slip upon that side, covering a space therein of some fifty by ninety feet, and supported upon piles.
    If, from the terms of such a resolution, it could he assumed that the department intended to grant sucha privilege, it would he an act unauthorized, and in conflict with section 6 of chapter 574, Laws of 1871, relative to changing- the bulkhead line upon the western side of said city, and to the construction of an exterior street.
    The plans for the improvement to he made under said act did not contemplate the appropriation of any part of a slip between piers for driving- piles into the earth and erecting a shed upon said piles. •
    The theory of said act is consistent with former legislation upon this subject, as appears from chapter 80, Laws of 1798, and chapter 763, Laws of 1857.
    The fact that both the city and its dock department had permitted ferry companies using other slips to incumber them by similar structures is not a defense to an action brought to secure the removal of such a shed as an illegal structure. The statute of 1871 is imperative.
    In such an action the court will not inquire whether, if the above rule he enforced, it will prevent the operation of any ferry from the western shore of said city.

      Appeal by tlie defendant, the Cunard Steamship Company (Limited), from a judgment, entered in the office of the clerk of the city and county of New York on the 13th day of February, 1890, which forever restrained and enjoined the said defendant from using, occupying or maintaining a shed, now existing between Piers 40 and 41 (new numbers), in the North river, immediately to-the westward of and adjacent to the wharf or bulk-head between said piers, and to the northward of and adjacent to the northerly side of pier (new) No. 40, North river, and directing the said defendant to remove the same in order to afford free access for vessels to the wharf or bulk-head between said piers, to which it is now adjacent.
    The trial of the action was had at the New York Circuit before the court.

      George Be Forest Lord, for the appellant.

      D. J. Dean, for the respondent.
   Daniels, J.:

The action was brought to secure the removal of a shed erected upon the northerly side of new pier No. 40, extending from the westerly side of West street a distance of about 570 feet into the Hudson river. The easterly end of the shed was upon the new bulk-head line, forming the westerly line of W est street, and being 250 feet west of tire easterly line.of that street. The shed extended about fifty feet westerly along the pier line from the bulk-head, and in a northerly direction for a distance of about ninety feet, occupying in that manner one-half the space between pier Nos. .40 and 41. It was erected upon piles driven in the slip west of the bulk-head, and was used by the defendant as a depository or warehouse for goods received to load upon its steamers, and also1 for goods unladen from those steamers. Its right to maintain the shed in this manner was derived under a resolution of the dock department of the city of New York passed on the 26th of April, 1876. This resolution provided:

“That the Central Railroad of New Jersey be, and they are hereby informed that this department will grant a lease to the said corporation for a term of ten years, of the northerly side of a pier-to be built, wholly or in part, upon the premises now occupied by Pier 48, N. R., for the purpose of erecting thereat a ferry rack, as ■soon as the pier shall be constructed or completed by this department, in conformity with the new plans adopted, or to be adopted, for the improvement of the water front, at a yearly rent of $7,500, but it is understood that the said corporation shall have no right to the use of any portion of the surface of said pier; the department reserves the right to rebuild the said pier and the bulk-head wall contiguous thereto, at such time as it may by said department be deemed expedient; and, further, that until the department shall take possession of the said Pier 48, for the purpose of rebuilding, the said Central Railroad of New Jersey shall pay to this department for the use of the whole of the L on the north side of said pier, and for the use of the water adjacent to said north side, for ferry purposes, rent at the rate of $5,000 per annum; but it is understood that the said corjioration shall have no right during such period to the use of any portion of the surface of the said pier, excepting that of the said L provided that the said Central Railroad of New Jersey shall, within five days after the receipt of this notice, file in this office its acceptance in writing of the terms hereof, and agree to execute a lease containing the usual covenants and conditions, and iii conformity with the terms herein set forth, for the northerly side of the pier when so rebuilt and ready for occupancy.” An additional resolution was adopted on the 21st of June, 1876, by the same board, giving permission to the Central Railroad Company of New Jersey to drive piles in this slip adjacent to the north side of the old pier, then known as Pier 48, and to erect thereon a platform and ferry-houses, together with such other structures, racks, bridges, etc., as might be necessary for use of a first class ferry, and then in the course of erection. The company continued to use the slip for the purposes of its ferry until sometime in the year 1878. And on the 1st of November, 1880, the railroad company and its receiver executed an. assignment to the defendant by which “the parties of the first part, in consideration of the sum of one dollar to them in hand paid, and other good' and valuable considerations, have ■granted, bargained, sold, assigned, transferred and set over, and by these presents do grant, bargain, sell, assign, transfer and set over to the said party of the second part, all rights and privileges to which they the said parties of the first part, or either of them are in any way entitled under or by virtue of a certain resolution of the board of commissioners governing the department of docks, passed at a meeting of said board, held 011 the twenty-sixth day of April, one thousand eight hundred and seventy-six, a copy of which is hereto annexed; and also any lease made by the said department of docks, to the said parties of the first part or either of them, pursuant to said resolution, and the said parties of the first part hereby request the said the department of docks to substitute the said the Cunard Steamship Company (Limited), as lessees in any lease to be made under or pursuant to said resolution.”

And on the tenth of the same month the dock department, by a resolution, assented “ to such substitution, and hereby agrees to grant a lease of the premises referred to above, and now known as the northerly side of Pier (new) 40, North river, but no right to the use of any portion of the surface of said pier for a term of 8 years and 6 months from November 1st, 1880, to the Cunard Steamship Company (Limited), at an annual rent of $7,500, payable quarterly in advance, and to contain a covenant for a renewal term of ten years at an annual rent of $7,625, provided that the said steamship company shall, within ten days from the receipt hereof, file in this office its acceptance in writing of the .terms hereof, and agree to execute a lease containing the usual covenants and conditions, and in conformity with the terms herein set forth, when notified so to do by this board; ” the terms of which were accepted by the defendant on the fifteenth of the same month. After the resolution of the 20th of April, 1876, the department removed the shed which had been erected by the railroad company and rebuilt the pier as well as the bulk-head, loéating the bulk-head about one hundred and eighty feet westerly of the preceding bulk-head, which was seventy feet westerly of the easterly side of West street. And after the removal of the shed and the completion of the new pier, it restored so much of the shed as still stands upon the piling, and is occupied and used by the defendant.

In support of the action it was alleged that this shed was an illegal structure, and that the plaintiff, under its title and authority, was entitled to a judgment securing its’removal for the purpose of enabling shipping to reach (and use the bulk-head without obstruction. An'd tlie court adopted that view at the trial, and enjoined the defendant against maintaining the shed and directed its removal. And People v. Vanderbilt (26 N. Y., 287) is a precedent, approved by the Court of Appeals, for this judgment in case the plaintiff is entitled to maintain the action.

By the resolution of the 26th of April, 1876, the northerly side of the pier to be built was leased for the purpose of erecting thereat & ferry rack, and for the use of the water adjacent to the pier for ferry purposes. But the resolution contained no express authority permitting the railroad company to erect the structure now in controversy. That authority was, in terms, given to it for the first time .by the resolution adopted on the twenty-first of June of the same year. But there was no assignment by the railroad company to the defendant of the rights or privileges which it was proposed by that resolution to secure to the railroad company. The assignment, on the contrary, was exclusively restricted to the interest intended to be created by the resolution of the 26th of April, 1876, -which contained no provision for putting up or maintaining this structure. And the fact that this liberty or right was not secured by the first resolution, but was in terms intended to be delegated by the second resolution, is quite a decisive indication that it was understood by the dock commissioners and the Central Railroad Company that the latter possessed no authority to'erect or maintain the structure under the first resolution. If that had not been the fact, then there certainly was no reason whatever for passing the additional resolution of the twenty-first of June. And by the assignment, which was limited to the first resolution, and the lease therein mentioned, the same intention appeal’s to have pervaded the acts of the parties. And that was to give to the defendant the rights and privileges of maintaining the ferry rack and operating the ferry, but nothing substantial beyond that.

But if it had been intended by the resolution of the twenty-sixth of April to permit the erection and maintenance of this structure in the slip, then it was so far unauthorized for the reason that it then came in conflict with section 6 of chapter 574 of the Laws of 1871. This act has since undergone changes by which portions of it have been repealed, but this section was in force at the time when this resolution was adopted, and appears to have so remained to this time. And it provided for and empowered the department to adopt plans, subject to the approval of the commissioners of the sinking fund, for this exterior or westerly line of the city, and the extension of this and other piers into the river. And soon after the passage of this act such plans were adopted and approved by the commissioners of the sinking fund. And subdivision 3 of this section in that event declared, that the plan so adopted should “be the sole plan according to which any wharf, pier, bulk-head, basin, dock or slip, or any wharf structure, or superstructure, shall thereafter be laid out or constructed within the territory or district embraced m and specified upon such plan, and be the sole plan and authority for solid filling in waters surrounding said city, and for extending piers into, said waters and erecting bulk-heads around said city.” And it was further directed in the same subdivision that, “ From the time of the adoption of said plan, no wharf, pier, bulk-head, basin, dock, slip or any wharf structure, or superstructure, shall be laid out, built or rebuilt within such territory or district, except in accordance with such plans.” And -by subdivision 5 of the same section, “ The said board of the department of docks shall proceed, according to said plan or plans, to lay. out, establish and construct wharves, piers, bulk-heads, basins, docks or slips in the territory or district embraced in such plan or plans.” And by subdivision 6 of the section it was, in substance, provided that the bulkheads and slips erected according to the plan, should be used only for the purposes of commercial business by vessels approaching and secured to them in the transaction of ' that business. In the plans which were adopted and followed in constructing the bulk-head and the pier, there was no appropriation of any part of the slip between the piers for driving piles into the earth, and erecting and maintaining a shed or structure of this description upon those piles. But the spaces between this and other piers included in the plan were left open, unobstructed and free to be used by water-craft in the transaction of their business. And the erection of this shed over the water of a slip standing upon these piles was not only in violation of the plan itself, but in contravention -of the provisions of the statute already mentioned, forbidding any other use of the water front than that mentioned in the statute. The theory of the act in this respect characterized the preceding legislation adopted for the location and regulation of the water front of the city of New York. . An act upon this subject was passed on the 3d of April, 1798, which is known as chapter 80 of the laws of that year. And by that act a similar declara tion was made, “That no building of any kind or description whatsoever (other than the said piers and bridges), shall, at anytime hereafter, be erected upon the said streets or wharfs, or between them respectively, and the rivers to which they respectively shall front and adjoin.” Another act upon the same subject was enacted in April, 1857, and is known as chapter 763 of the laws of that year. And by section 2 of that act it was declared that it should “not be lawful to fill in with earth, stone or other solid material, in the waters of said port beyond the bulk-head line, or line of solid filling hereby established. Nor shall it be lawful to erect any structure exterior to the said bulk-head line, except the sea wall mentioned in the first section of this act.” And these acts exhibit the policy of the legislature to have been, prior to the enactment of the law of 1870 and 1871, to exclude the permanent or even transient occupation of the waters of the slips, or beyond the bulk-heads, by structures of this description. And that polic3r has been maintained and followed with uniformity in the enforcement of the legislation of the State. (People v. Vanderbilt, 26 N. Y., 287; Commissioners etc., v. Clark, 33 id., 251.)

Where it was said by Denio, Oh. J., that “ the language and the obvious policy of the statute is, that these piers and bulk-heads should be kept wholly clear of incumbrances, and it will not answer for parties permanently to engross portions of their area, and then ask a jury to'speculate upon the degree of inconvenience which the public would suffer, and whether it was not fairly balanced by the advantage of the structure which constituted the incumbrance.” (Id., 265.) And this rule of construction was also applied in People v. Mallory (46 How., 281). And so it was under this statute of 1871 in Kingsland v. Mayor, etc., (45 Hun, 198; affirmed, 110 N. Y., 569). And this restrictive policy of the statute has been no farther departed from than by chapter 249 of the Laws of 1875, allowing sheds, under specified circumstances, to be erected on leased piers.

The fact that both the dock department and the city itself has permitted ferry companies using other slips to be incumbered by structures of a similar description, both before and after the passage of this act of 1811, will not legalize this structure. For the authority conferred upon the board was in no respect discretionary. It was absolute and positive, forbidding the waters of the slips to be obstructed or incumbered by such a structure beyond the bulk-head line. If they could be obstructed to the extent to which this structure has reached, the same authority would permit the waters of the slip to be wholly occupied, and the slip in that manner, for all practical purposes, destroyed. And that certainly could not have been intended to be authorized by the legislature. And, therefore, the action of the department of docks in permitting, or even sanctioning such erections, affords no legal foundation for permitting their maintenance, when, as in this case, an action has been brought to secure the removal of the offensive structure. The provisions of the statute are imperative, rendering this an illegal obstruction of the waters of the slip. "Whether a ferry can be maintained under the application of this rule it is not necessary to inquire. For if it cannot be, then further legislation for the relief of those enterprises may be required from the legislature. Or, as was considered in Jordan v. Metropolitan, etc. Company (65 How., 255), the necessary buildings required for the convenient prosecution of the ferrying business may require to be extended into the street itself. It is not, however, necessary now to express any opinion upon that subject. For the disposition of this case, it is only necessary to observe and carry into effect these provisions of the law of 1811.

And under that act, as it has already been construed and enforced, the judgment recovered by the plaintiff is correct, and should be affirmed, with costs.

Tan JBrunt, P. J., concurred.

Judgment affirmed, with costs.


text:
    CHARLES P. McCarthy, Respondent, v. WILLIAM J. INNIS, Appellant.

      Costs — where the plaintiff recovers upon one cause of action, hut his complaint is dismissed as to another, the defendant cannot ta/x costs.

    'Tlie complaint, in an action for libel, charged in separate counts two different publications of articles in a newspaper as libelous. Issue was taken on each <of such alleged causes of action. The plaintiff recovered upon the first cause of ■action, and the complaint was dismissed as to the second cause of action.

      Held, that, under section 3234 of the Code of Civil Procedure, in order to entitle a defendant to costs he must recover upon one or more of the issues.
    That as the defendant did not recover upon either issue he was not entitled to costs.

      Blashfield v. Blashfield (41 Ilun, 249) not followed.
    Appeal by the defendant William J. Innis from an order, entered •in the office of the clerk of the city and county of , New York on the 6th day of June, 1891, denying the defendant’s motion for an order directing said clerk to tax the costs of the defendant upon the dismissal of the second cause of action ■ set forth in the complaint herein.

      JE. II. Berm, for the appellant.

      Charlas P. McCarthy, respondent, in person.
   Daniels, J.:

The action was brought to recover damages for the publication of articles alleged to have been libelous. Two different articles were ■set forth, each in a separate division or count of the complaint.' Issue was taken by the answer on each cause of action. And on the trial so much of the complaint was dismissed as contained a statement of the second cause of action. The issue as to the first was submitted to the jury, and a verdict returned upon it for the ■sum of $400 for the plaintiff. The defendant on this disposition of the action claimed to be entitled to costs. But the clerk refused to adjiist his bill of costs, and that was affirmed by the order of the Special Term, from which the appeal has been taken.

To entitle a defendant to costs under section 3234 of the present Code of Practice he must recover upon one or more of the issues. But tlie defendant did not recover on either issue. "What he did was to defeat a recovery on the second issue by the plaintiff. And as there was no recovery in his favor this section of the Code did not entitle him to costs.

The case of Blashfield v. Blashfield (41 Hun, 249), has been presented as in conflict with this construction. And apparently that is the fact. The action there was upon two notes, and the evidence as to one was stricken out for the reason that a recovery upon it was barred by the statute of limitations. And in an opinion which contains a special reference to the previously decided cases, it was held that this disposition of one of the causes of action entitled the defendant to costs, although the recovery on the other note by the plaintiff, entitled him to costs. And that was affirmed by the General Term. But as there was, in fact, no recovery by the defendant and no more than a successful defense as to one of the notes, this decision is not in entire harmony with this section of the Code, or with the construction given to it in the earlier case of Cooper v. Jolly (30 Hun, 224). There the complaint contained a statement of twenty-three causes of action for so many different penalties; and the plaintiff recovered for two only. The defendant claimed costs under the same section, but they were denied him. And that was sustained on appeal to the Court of Appeals. This decision is directly applicable to the present appeal, and is not compatible with the defendant’s claim of costs.

In Ackerman v. De Lude (36 Hun, 44), the action was for the recovery of the possession of personal property. And upon the trial the plaintiff recovered a verdict for the possession of part of the property, while the defendant had a verdict for the recovery of the residue, as that may be proper in an action of replevin. And that presented a case which was within this section, and entitled the defendant to costs, without affording any sanction to the claim of this defendant. The case of Kilburn v. Lowe (37 Hun, 237), is also an authority against the defendant. And so very plainly are Heath v. Forbes (18 Civ. Pro. Repts., 207); Crosley v. Cobb (42 Hun, 166); Barlow v. Barlow (35 id., 50); and, in its reasoning, the case of Reed v. Batten (6 N. Y., Supp., 708).

The weight of decided authority is against the right of the defendant to costs, and so is the language of this section' of the Code, rendering it dependent upon a recovery in his favor, which is something beyond defeating the plaintiff upon a separate and distinct cause of action when lie is successful in the residue of the action. The order should be affirmed, with ten dollars costs and the disbursements.

Yan Brunt, P. J., concurred.

Order affirmed, with ten dollars costs and disbursements.


author: Patterson, J.:

text:
    WILLIAM R. NEWELL and Another, Appellants, v. THE MAYOR, ALDERMEN AND COMMONALTY OF THE CITY OF NEW YORK, Respondent.

      A release under seal cannot be good as to one cause of action covered by it, and, bad as to another — if fraud is shown as to one matter, the release is void as to all.

    An action was brought by certain contractors against a city upon two causes of action, one for certain inspectors’ fees withheld, and the other for alleged interference with the work upon the part of the municipal authorities; causing additional expense to the contractors in the performance of their contract.
    A release under seal by the contractors to the city was pleaded and proved, which the plaintiffs attacked on the ground of fraud, in that when it was signed the city officer stated that no deduction had been made from the plaintiffs’ claim for inspectors’ fees, when, in fact, such a deduction had been made.
    The court held that the release was not conclusive upon the question of inspectors’ fees, but was a complete bar to the second cause of action.

      Held, that such ruling was erroneous.
    That if a misrepresentation, amounting to fraud, had been made as to any matter embraced in the release, it vitiated the whole instrument.
    That an instrument, successfully attacked for fraud, cannot be good as to one matter covered by it, and bad as to others.
    Appeal by tlie plaintiffs, William R. Newell and John W. Freleigh, from a judgment, entered in the office of the clerk of the city and county of New York on the 6th day of May, 1891, upon a verdict for the plaintiffs for $110.09, after a trial before the court and a jury at the New York Circuit.
    The claim with reference to the item of inspectors’ fees, alleged by the complaint to have been withheld, was put upon the ground that as the city had, as alleged, delayed the plaintiffs in the perfonnance of tlieir work, tlie fees of tlie city’s inspectors' for over time were chargeable to the city,- and not to the plaintiffs.

      L. L. Kellogg, for the appellants.

      Edward H. Ilawke, Jr., for the respondent.
   Patterson, J.:

The plaintiffs, on December 24, 1888, entered into a contract with the city of New York to regulate, grade, curb and flag One Hundred and Seventieth street, from Tenth to Eleventh avenues, in that city. They bring this suit, alleging two causes of action: First, that the department of public works has wrongfully detained from them a certain amount as inspector’s fees for twenty-nine days, at the rate of three dollars and fifty cents a day; and, second, that by reason of wrongful acts and interferences on the part of the municipal authorities in suspending the work and preventing its due performance and proper completion within a reasonable time, and in a right way, the plaintiffs were compelled to incur great expense in transferring their work from one kind of excavation to another, and that they sustained great loss in other respects, and for which they now attempt to hold the city liable. The original answer is not before us, but at the trial an amendment was allowed and assented to, and the affirmative defenses of payment, of all that was due under the contract, and a release under seal were set up, and the cause was tried on those defenses. The main subject now requiring consideration is the effect of the release. A receipt was given by one of the plaintiffs for the amount due according to the strict terms of the contract, and in giving that receipt he acted for himself and under the sanction of a power of attorney which he received from his copartner. The learned judge, before whom the cause was tried, held tnat the receipt of itself was not an obstacle to a recovery; that it might be explained, and he undoubtedly at one stage of the case recognized the settled rule that where work is done by a contractor, necessitated by the wrongful acts or omissions, or even- mistakes of the municipal authorities, its cost may be recovered in an action for damages, and that such contractor is not limited simply to the eon-tract-price (Mulholland v. Mayor, etc., 113 N. Y., 631); but when the answer was amended, and the release put in evidence, he held tliat such release was an absolute bar to all claims, except those for inspector’s fees, or, in other words, he limited the right of recovery to the first cause of action. The condition of the proof under which the question of the effect of the release arose is as follows, viz.:. Under the ruling as to the receipt the whole ease was opened on-both counts of the complaint, and some evidence was given to sustain the second cause of action. When the release was put in, it was at once attacked by the plaintiff on the ground of fraud, the specification of that fraud being, that it was procured from the-plaintiff by misrepresentation of the officer of the city, to whom,, and when, it was given, on payment being made of the ostensible-balance due the contractors under the contract.

The only evidence of the alleged misrepresentation was that at the time the paper was given the plaintiff Freligh asked whether or not any deduction had been made for inspector’s fees, and the-answer of the representative of the city was that no such deduction was made. A witness called on behalf of the city, who had the conversation with Freligh, testified that no such conversation occurred ;. but on his cross-examination it was apparent that he testified not from an actual recollection of the particular conversation, but from his general course of doing business in like matters. The learned judge submitted to the jury on this testimony the single question as to whether or not any misrepresentation had been made that would affect the validity of the release on the question of the inspector’s fees, and he declined the request of the counsel for the-plaintiffs to submit to the jury any other question relating to-the liability of the city for anything more than those fees. That a release of the character given in this case is ordinarily an absolute-discharge of the city from liability; and that it must be taken in its widest and most comprehensive sense, and according to its full tenor- and effect, was distinctly decided by the Court of Appeals in the case-of Phelan v. The Mayor, etc. (119 N.Y., 86). But that case, of course,, does not go. to the extent — nor, indeed, could it be well assumed on any ground — that such a release cannot be attacked on the claim-that it was given by misrepresentation or fraud on the part of the-city. The learned judge on the trial assumed that it was open to-attack (as it certainly was) so far as the inspector’s fees were concerned ; but if it were open to attack on that ground the effect of determining that it was procured by fraud would necessarily be to-avoid the whole instrument, and not merely as to the particular subject concerning which the misrepresentation was made. It was left to the jury to say, on the whole evidence, whether or not any misrepresentation had been made. The necessary 'effect of that misrepresentation would have been to avoid the whole instrument, and not merely quoad a particular subject. That fraud which will vitiate an instrument absolutely .nullifies it, takes it out of the scope of judicial consideration and leaves the case precisely as if no such instrument liad been executed.

It was evidently in the mind of the learned judge below that inasmuch as the only subject then under discussion between Mr. Freligh and the representative of the city was the inspector’s fees, that the effect of the release should only be considered with reference to that one particular topic. But there can be no limitation as to the effect of a void instrument. It is either void or valid, and if it is void, it is beyond judicial cognizance as being a factor in the case. The jury found, under the instructions of the judge, that the instrument was void. Their verdict cannot be supported on any other hypothesis, and that release being void, the case necessarily was relegated to the situation in which it stood as upon a simple receipt given for the amount due, which receipt, of course, as the learned judge held, was open to impeachment. We do not intend to pass upon or intimate, in any way, an opinion as to the sufficiency of the proof, or the effect of that proof, relating to the second cause of action, but we think it was error not to submit to the jury the whole case on this release. It was really (by the ruling made), a submission of only one question to the jury, and the other* was eliminated from the case; and, as said before, the release was either good or bad. If it were ineffectual as to the inspector’s fees, it was equally so as to the second cause of action. Therefore, we think, the judgment should be reversed and a new trial ordered, with costs to abide the event.

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

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


author: Bartlett, J. : Barrett, J.:

text:
    THE LANCASHIRE INSURANCE COMPANY and Others, Respondents, v. ROBERT A. MAXWELL, Superintendent of the Insurance Department of the State of New York, Appellant, Impleaded, etc.

      Foreign insurance company — deposit of bonds with the insurance department in excess of the $200,000 required by law — the excess is held upon the same trust as the $200,000 — the compa/ny is not entitled to its return.

    A foreign insurance company began business in the State of New York in 1872, and, pursuant to section 23, chapter 460, Laws of 1853, as ainended.it deposited, as a condition of being allowed to do business in that State,with the Superintendent of the Insurance Department thereof, $200,000 It thereafter also deposited with him from time to time further sums,amounting to $579,500, “for the further benefit and security of their policyholders in the United States.”
    It is provided by section 2, chapter 888, Laws of 1871, that the capital stock of a foreign insurance company shall “be the aggregate value of such sums ox-securities as such company shall have deposited in the insurance and other departments of this Stale, and of the other States of the United States,” and all bonds and mortgages taken pursuant to law, provided such bonds, mortgages, assets and property shall be held in the United States by trustees, citizens of the United States, approved by the insurance superintendent of this State, for the general benefit of all the policyholders and creditors of the company.
    In 1886 a corporation executed a trust deed, in alleged conformity to the last-above cited statute, to certain parties, who demanded of said superintendent the securities in excess of two hundred thousand dollars, which demand was refused.
    Upon the hearing of a demurrer interposed to a complaint, stating, in substance, the foregoing facts, in an action brought by the corporations and such trustees to recover such excess:

      Ifekl, that the action could not be maintained.
    That the Superintendent of the Insurance Department received said securities, in excess of two hundred thousand dollars, in his official charactei-, “for the benefit and security of policyholders residing in the United States,” and upon the same trust as that described in the said act of 1853, as amended.
    That he was in no sense a voluntary trustee of such excess.
    That the language of the act of 1853, as amended, requiring the deposit of “ a sum not less than $200,000,” indicated that such a deposit might exceed said sum.
    That both funds were held by the superintendent, by force of said statute, and that there was no ground for any distinction which would hold that the $200,000 was held by the superintendent officially, and that the excess was held by him as a private trustee.
    Appeal by the defendant Robert A. Maxwell, as Superintendent of the Insurance Department of the State of New York, from an ■order or judgment, entered in the office of the clerk of the city and county of New York on tlie 22d day of January, 1890, upon an order overruling a demurrer of the defendant to the plaintiffs complaint.
    The Lancashire Insurance Company, of Manchester, England, was duly incorporated under the laws of Great Britain. The plaintiffs, other than it, are Cornelius N. Bliss, Horace J. Eaircliild and Donald Mackey, to whom said company executed a deed of trust, bearing date Qctober 28, 1886, which deed was executed in supposed compliance with section 2 of chapter 888, Laws of 1871, relative to trustees who are to hold the assets of a foreign insurance company doing business in the United States. The persons named were ■citizens of the United States. By section 2 of the last-mentioned act, it is provided that the capital stock of a foreign insurance company shall “ be the aggregate value of such sums or securities as such company shall have deposited in the insurance and other departments of this State, and of the other States of the United States,” and all bonds and mortgages taken pursuant to law, provided such bonds, mortgages, assets and property shall be held in the United States by trustees, citizens of the United States, approved by tlie insurance superintendent of this State, for the general benefit of all the policyholders and creditors of tlie company. The total of the securities on deposit with the Superintendent of the Insurance Department, at the time of the commencement of this action, J une 30, 1888, was the sum of $779,500, $200,000 of which was deposited when, in 1872, the company began business in this State. The complaint alleged that the trustees under said trust deed of October 28, 1886, demanded and requested the said superintendent to assign and deliver to them said bonds, less $200,000 thereof, of such character as he might select, and that he declined to do so.
    Chapter 466, Laws of 1853, is the general act relating to fire insurance companies. Section 23 thereof required an agent of a foreign insurance company to furnish evidence satisfactory to the comptroller that such company had invested in securities, approved by law in this State, an amount equal to tlie capital required by section 6 of said act from companies organized under said act; also evidence that “such securities and investments are held in trust byt citizens of the United States for the benefit and security of such as may effect insurance with him or them.” Section G of said act required a State company organized in New York county to have a capital of $150,000.
    The State Insurance Department was organized by chapter 36G, Laws of 1859; and the superintendent was substituted for the comptroller as to all existing laws.
    Section 23, chapter 466, Laws of 1853, was amended by chapter 367, Laws of 1862, in such wise that the capital required by section 6 of the former act for a New York county company was increased by the latter act from $150,000 to $200,000, and a foreign insurance company wa'S required to deposit with the Superintendent of the Insurance Department, “for the benefit and security of policyholders residing in the United States, a sum not less than $200,000.”
    It was under this latter provision that the superintendent held the securities in dispute.
    Section 23, chapter 466, Laws of 1853, was further amended by chapter 555, Laws of 1875; but this amendment did not alter the terms and conditions upon which such deposits are to be held by the said superintendent, nor their amount.

      Isaac II. Maynard, for the appellant.

      George De Forest Lord, for the respondents.
   Bartlett, J. :

This action cannot be maintained without holding that, when the Superintendent of the Insurance Department receives securities from a foreign fire insurance company in excess of the $200,000 prescribed by the act of 1853 (Laws of 1853, chap. 466, § 23;. 2 Birdseye Statutes, p. 1639), he takes them as a voluntary trustee, and not in his public or official character. “As to the surplus of the funds held by the defendant Maxwell, over $200,000,” says the learned counsel for the respondents, “ he is a mere voluntary trustee; ” and the court below adopted this view, declaring the excess to be a mere voluntary deposit, as to which the superintendent did not stand in the attitude of a trustee appointed by the statute, with the exclusive right to be continued as such. The fund in the hands of the superintendent was treated as being divisible into two parts : One, consisting of securities to the amount of $200,000, which he holds as a statutory trustee under the act of 1853 ; and the other made up of the additional securities deposited with him by the Lancashire Insurance Company, which he holds as a private trustee, and not in pursuance of any duty devolved upon him by law.

It does not seem to me that this construction of the statute is correct. The act of 1853 (§ 23, as amended by chap. 361 of 1862), requires a foreign fire insurance company doing business in this State to deposit with the Superintendent of the Insurance Department, for the benefit and security of policyholders residing in the United States, a sum' not less than $200,000 in stocks of the United States or of the State of New York, in all cases to be, or to be made to be, equal to a stock producing six per cent per annum.” The act does not say precisely $200,000, or not more than $200,000, but not less them $200,000. The company must deposit as much as that, and may deposit a great deal more, as the Lancashire Insurance Company has done. But I find no warrant in the language of the law itself for distinguishing between the trust upon which the Superintendent of the Insurance Department holds the first $200,000 which ho receives and the trust upon which he holds the rest. The deposit is to be made for the benefit and security of policyholders residing in the United States. The complaint in this case alleges that the first sum of $200,000 was so deposited for the benefit and security of such policyholders, and then proceeds to say that the company, “ from time to time, deposited other stocks of the United States with the successive Superintendents of the Insurance. Department of said State, to be held by them, and their respective successors in office, for the further benefit and security of their policyholders in the United States.” This is the precise trust contemplated by the act of 1853, and the aggregate securities constitute the sum not less than two hundred thousand dollars, of which the superintendent is the statutory trustee.

In order to make him an unofficial trustee of a voluntary trust, so far as the securities in excess of $200,000 are concerned, it is necessary to ignore the true nature of the transactions between the Lancashire Insurance Company and the various superintendents of insurance. The plain import of the allegations in the complaint is that the so-called additional securities were turned over to the respective superintendents as public officers, and received and accepted by them as such. There was nothing private or personal about the deposit. If there liad been, and a mere voluntary trust had been contemplated, non-official in its character, the securities would have been taken and held by each recipient as an individual trustee, and not in his public capacity at all, and he would have retained the securities after he went out of office instead of turning them over to his successor. The idea of the divisibility of the fund, and of a voluntary trust, as to the so-called surplus, does not appear ever to have been suggested until it became important to the Lancashire Insurance Company to withdraw a portion of the securities from the custody of the superintendent; but however desirable or unobjectionable such withdrawal may be, no consideration of convenience should blind us to the time nature of the deposit. The circumstances under which the securities were put into the hands of the superintendents, as disclosed by the complaint, leave no doubt in my mind that the only trust in contemplation between the parties at any time was the statutory trust provided for in the act of 1853. The head of the insurance department became and continued and remains officially responsible for the safe-keeping and proper management of the whole fund, and not merely for the $200,000 first paid in, as would be the case if the respondents were correct in their contention that the trust is purely voluntary as to the balance. If it is voluntary, it cannot be in any sense official, for the assumption of a voluntary trust in this matter by the Superintendent of the Insurance Department is not authorized by law.

The case of Ruggles v. Chapman (59 N. Y., 163; 64 id., 557), and the Matter of the Guardian Mutual Life Insurance Company (13 Hun, 115), are authorities for the proposition, which is well stated in the opinion of the learned judge at Special Term, “ that the court has no power to interfere with the possession or administration of securities or funds in the hands of a statutory -trustee for possession and administration (the question of misconduct being eliminated), because the trusteeship is made and governed exclusively by the terms of the statute itself.” Having reached the conclusion that the Superintendent of the Insurance Department is an official trustee as to the entire fund deposited by the Lancashire Insurance Company, it follows that he cannot be deprived of tlie custody or control of any part of it, on any of the grounds set out in the complaint; and lienee that the complaint does not state facts sufficient to constitute a cause of action.

For these reasons, I think the judgment should be reversed.

Van Brunt, P. J., concurred,

Barrett, J.:

I concur. The judgment should be reversed, with costs, and the demurrer sustained, with costs of the Special Term and of’ this appeal.

Judgment reversed, with costs, and the demurrer sustained, with costs of the Special Term and of this appeal.


author: .Ingraham, J.:

text:
    In the Matter of the Opening of ONE HUNDRED AND SIXTY-THIRD STREET, in the City of New York.

      Municipal corporations — report made by commissioners to open a street — the court has power to relieve from his defcmlt one who files objections too late.

    The consolidation act relative to the city of New York (chap, 410, Laws of 1882, §§ 984, 986), in substance, provides for the publication by the commissioners of estimate and assessment, in proceedings for the opening of streets in said city, of a notice of their intention to present their report thereon to the court. It also requires persons interested to file their objections to said report within thirty days from the first publication of said notice.

      Held, that, under section 3834 of the Code of Civil Procedure, such a proceeding was not an action, but a special proceeding, wherein the final judgment was a conclusive adjudication upon the rights of all persons interested.
    That the court had power to relieve from his default one who had filed objections to such a report one day too late.
    That section 724 of the Code of Civil Procedure, giving the court power to relieve a party in default through mistake, inadventure, surprise or excusable neglect, was applicable to such a case.
    Appeal by tlie Board of Street Opening and Improvement of the City of New York from an order, entered in the office of the clerk of the city and county of New York on the 19th day of May, 1891, granting the motion of Martin B. Brown for permission • to file objections to the report of the commissioners of estimate and assessment herein, and to present oral and written testimony, and to be heard in person or by counsel in support thereof.

      Garroll Berry, for tbe City of New York, appellant.

      James A. Veering, for Martin B. Brown, petitioner, respondent.
   .Ingraham, J.:

The respondent omitted to file liis objections with the commis•sioners until the day after the time required by the notice published by them, and this is an appeal from an order made at Special Term granting leave to file such objections.

The first question presented is, whether or not the court had power .to allow the respondent to file the ob j ections after the time had expired.

It seems clear that this is a special proceeding within the pro.visions of section 3334 of the Code. By section 3333 it is provided that an action is an ordinary prosecution in a court of justice by a party against another party for the enforcement or protection of a right, or the redress or prevention of a wrong, or the punishment of a public offense. And by section 3334, every other prosecution by a party for either of the purposes specified in the last .section is a special proceeding.

This proceeding was instituted by the mayor, aldermen and commonalty of the city of New York for the purpose of acquiring the title to certain real estate for use as a public street. Such a proceeding is instituted by the municipal corporation applying to the court, on notice to those interested, for the appointment of commissioners of estimate and assessment, who report to the court, but whose report possesses no validity until confirmed by the court, and by the confirmation of such report, it becomes the judgment of the court, conclusive in its character. In the Matter of Arnold, (60 N. Y., 27); Dolan v. The Mayor, etc. (62 id., 474), where Raparlo, J., says: The Supreme Court “acquired jurisdiction of the matter by the application of the city for the appointment of commissioners, and all the parties interested had "an opportunity then to litigate the validity of the resolution ordering the improvement. * * * That proceedings for such assessments are conducted before the court, and its confirmation of the report of the commissioners is a judgment pronounced on a full hearing of the parties, and conclusive in its character as to all questions litigated, or which might have been litigated in the proceeding.” And it was held that this principle precludes a review of the regularity of such a proceeding in an action by the party assessed, unless, perhaps, in case of such a fraud or other circumstance as would authorize an action to set aside .an ordinary judgment.

This proceeding, therefore, being a proceeding before the court in which its final judgment is a conclusive adjudication upon all persons interested, it clearly falls within the definition of a special proceeding as defined by section 3334 of the Code before cited, and all the proceedings, either before the court or before the commissioners appointed by the court, are in court and subject to its control.

That the court has inherent power over its own judgments and proceedings to make such order as iustice requires to relieve a party from a default or a mistake, and that such power is not limited by the Code is well settled. (See Hatch v. Central Nat. Bank, 78 N. Y., 489, and cases there cited.) But if express authority for such an order was necessary, it is found in section 724 of the Code, where the court has power to relieve a party from a judgment, order or other proceeding taken against him through his mistake, inadvertence, surprise or excusable neglect, and may supply an omission in any proceeding.

In the Matter of One Hundred and Eighty-first Street, this court, at Special Term set aside the order confirming the report of the commissioners, and allowed a property owner to come in and file objections to the award.' There the court not only allowed the petitioner to file his objections, but set aside the report and order confirming the report so as to allow him an opportunity to be heard.

This order was affirmed by the General Term (see 35 N. Y. St. Rep., 548); and by the Court of Appeals (126 N. Y., 641); and is ample authority for the order of the court below.

In this case the objections of the respondent were tendered to the commissioners one day too late, and the affidavits upon which the motion was granted excuses the omission so as to justify the court in relieving him from the default.

We think, therefore, the court below had power to grant the •order appealed from, and that, under the circumstances, such power was properly exercised. Order appealed from should, therefore, be affirmed, with ten dollars costs and disbursements.

Daniels, J., concurred; Yan Brunt, P. J., concurred in the result.

Order affinned, with ten dollars costs and disbursements.


author: Yan Brunt, P. J.:

text:
    CYRUS SCOFIELD, Respondent, v. SAMUEL KREISER, Appellant.

      Witness — privileged from arrest while returning from examination in supplementary proceedings — right to unconditional discharge.

    A judgment creditor instituted supplementary proceedings against his debtor, and while the latter was returning home, after an examination had in such proceedings, the creditor caused to be served upon him an execution against the body Held, that the debtor was absolutely entitled to be discharged from custody, being privileged from arrest under such circumstances by sections 860 and 861 of the Code of Civil Procedure.
    That it was error to make his discharge conditional upon his stipulating to waive . all claim for damages by reason of such arrest.
    Appeal by the defendant Samuel Kreiser from so much of an order, entered in the office of the clerk of the county of New York on the 12th day of May, 1891, as imposed as a condition of granting said order (which set aside an execution against his person and discharged him from arrest thereunder) that he stipulate to waive any claim for damages by reason of his said arrest.

      A. Kbing, for the appellant.

      Mg Adam <& MoCrea, for the respondent.
   Yan Brunt, P. J.:

On the 11th day of December, 1891, judgment was rendered against the defendant in favor of the plaintiff in an action of conversion, and on January 11, 1891, an execution against the defendant’s property was issued to the sheriff, who returned the same unsatisfied January 20,1891, of which return plaintiff had no notice until February 20, 1891. On the 25th day of February, 1891, plaintiff instituted proceedings supplemental to execution against the defendant; such proceedings continued until April 10, 1891, to which time the same had been adjourned.

The defendant appeared on that day before the court, and while he was in such attendance the plaintiff issued to the sheriff an execution against his person, and after he had left the court and gone to his attorney’s office, on his way home, he was taken into custody. The defendant thereupon moved that the execution against his person be superseded, vacated and set aside, and himself discharged from custody upon the following grounds :

[ 1.) That the plaintiff had neglected to issue said body execution within ten days after the return of the execution against the defendant’s property, or within three months after the entry of judgment.

( 2.) That the said execution against the person had been issued while proceedings against the defendant’s property were pending, and before same had terminated.

(3.) That the defendant had been arrested while returning to his home from attendance upon this court, pursuant to its lawful mandate, in a case where his attendance could have been compelled, and while he was privileged from arrest.

The court granted this motion upon all the grounds moved upon, on condition' that the defendant stipulated to waive any claim for damages by reason of his arrest, and from that part of the order imposing this condition this appeal is taken.

It is undoubtedly true that the defendant was not absolutely entitled to have the execution set aside because not ^issued within ten days after the return of execution against his property, or within three months after the entry of judgment. If reasonable excuse be given, the application may be denied. But he was absolutely entitled to be discharged from arrest, and that without condition, because the provisions of section 860 of the Code had been violated, which the judge below must have found to be the fact, as he granted the motion upon that ground. It is true that the counsel for the plaintiff swears that the defendant voluntarily submitted to arrest. Of this he concededly only speaks from information received, while every person present who makes an affidavit denies that the facts are true because of which a voluntary surrender is claimed. Under such circumstances the court, pursuant to the provisions of section 861 of the Code, was bound to discharge the defendant, and could not deprive him of the right given by-section 863.

The order appealed from should, therefore, be modified by striking therefrom the clause exacting the stipulation, with ten dollars costs and the disbursements of the appeal.

Daniels and Ingraham, JJ., concurred.

Order modified as directed in opinion, with ten dollars costs and disbursements of this appeal.


text:
    NATHANIEL HOOPER and Others, Respondents, v. CHARLES McCULLOCH BEECHER and HENRY P. BARTLET, as Assignee, etc., Appellant, and WALTER S. BAILLIE, Appellant.

      Assignment for the benefit of creditors■ — an assignee must pay as the assignment directs — the court will not interfere upon a summary application.'
    Certain moneys of an assigned estate were deposited by an assignee for tlie benefit of creditors, under an order of tlie court, with, a trust company to await the determination of an appeal involving the validity of the assignment.
    The appeal was decided in favor of the assignee, and after a new trial, on which the assignee succeeded, the fund was, by order of the court, turned over to him. The assignee then applied for an order directing the payment of the fund to the creditors first preferred in said assignment.

      Held, that the application was properly denied.
    That the assignee held the moneys under the assignment and must pay them as it directed, and not otherwise.
    That while, upon the settlement of his accounts, the court might, pursuant to the statute, direct the distribution of moneys, no such direction could be obtained upon a summary application therefor.
    Appeal by the'defendants, Henry 'P. Bartlet, as assignee for the benefit of creditors of the firm of Charles McCulloch Beecher & Co., and by the defendant Walter S. Baillie, from an order, entered in ■the office of the clerk of tlie city and county of New York on the 29th day of May, 1891, denying their motion to amend an order which directed tlie United States Trust Company to return to said Bartlet, as such assignee, $5,316.40, deposited by him with said company on the 2d day of June, 1886, to the credit of this action, ,so that said order should direct said Bartlet, as such assignee, to pay said sum to Drexel, Morgan & Co., the creditors first preferred-in the assignment to said Bartlet.
    Tlie said firm of Beecher & Co. made an assignment for the benefit of creditors to Henry P. Bartlet. An action was brought by the above-named plaintiffs to set aside said assignment and was -taken by appeal, to the Court of Appeals, which sustained the assignment. {Hooper v. Baillie, 118 N. Y., 113.) A new trial was lad, in which the defendants succeeded, and judgment dismissing the complaint therein was entered on the 21th day of March, 1891.

      Bangs, Stetson, Tracy dé Me Veagh, for the appellants.

      Franldin Bien, for the respondents.
   Daniels, J.:

The money affected by this appeal was deposited by the assignee with the United States Trust Company during the pendency of an appeal involving the validity of a general assignment for the benefit of creditors. The deposit was made under an order of this court, subject to its further order. The assignee was successful in his appeal to the Court of Appeals, and, as no further object was to be subserved by retaining the deposit after that, it was directed to be returned to the assignee. ITe now desires to pay it over to the first preferred creditors, and applied for an order directing that to be done. But if that should, under the present circumstances, be paid over to such creditors, it must be under the authority of the direction contained in the assignment. The assignee does not hold the money subject to the order of this court on motion, but he holds it subject only to the direction contained in the assignment. If the case were before this court for the settlement of Ins accounts and the distribution of the estate under the authority conferred by the statutes relating to general assignments, a very different question would then be presented. But that is not its condition. Neither has an action been brought for the recovery of the money by the creditors. But the appeal to the court is by a summary application to order the assignee to do an act which the court in this proceeding has no authority to control. If the assignment directs the assignée to make this disposition of the money, that is the authority under which he must act. He cannot, by a mere motion, invoke the decision of this court on the point whether he shall or shall not conform to the direction contained in the assignment.

The order denying the motion was rightly made and it should be affirmed, with ten dollars costs and disbursements.

Yan Brunt, P. J., concurred.

Order affirmed, with ten dollars costs and disbursements.