author: Learned, P. J.:

text:
    SUSANNA FAULKNOR, Respondent, v. NICHOLAS H. SWART and Others, Appellants.

      Gounter-claim, acquired by a debtor after am assignment of the claim against him, may be set off against such claim in the hands of an assignee who has not giren notice of the assignment thereof.

    One Faulknor agreed to work for Nicholas H. Swart and others, defendants in this action, on January 81, 1887, from which time he worked until May 3,1887.
    On February 1, 1887, he agreed with his mother that she should have his earnings for this work, of which agreement Swart and his co-defendants had notice only by the commencement of an action begun in January, 1888, to recover the same.
    On May 13, 1886, Faulknor became indebted to the defendant Swart, and on August 17, 1887, Swart assigned to each of his two co-defendants one-third of his claim arising out of this indebtedness.
    In an action, brought by the mother of Faulknor under the assignment of his earnings:

      Held, tliat sucli agreement between Faulknor and bis mother did not operate as an assignment in law of the indebtedness, but was an equitable assignment which a court would enforce as operating upon the indebtedness, as it from time to time arose.
    That no notice having been given of this assignment prior to August 17, 1887, when the two-thirds of the claim against Faulknor were assigned by Swart to his co-defendants, such claim constituted a valid set-off in the hands of Swart and his co-defendants to the claim made by Faulknor’s mother under the prior assignment.
    If an assignee of a claim desires to protect himself against the purchase by the debtor, of claims against his assignor, he must give notice of the assignment to the debtor. If he neglect to do this, and the debtor purchase in good faith any valid claim against his original creditor, he may set it up as a counter-claim when sued upon such obligation, although such obligation may have been assigned prior to his purchase of the claim so set off against it.
    Appeal by tbe defendants from a judgment entered, after a trial before a referee, in tbe office of tbe clerk of tbe county of Montgomery, on tbe 14th day of June, 1889.
    Tbe complaint alleged, that on or about the 1st day of February, 1887, one Joseph S. Faulknor entered into an agreement with tbe defendants whereby tbe defendants agreed to pay said Faulknor tbe sum of three dollars a day as manager to operate and run the grist-mill and saw-mill at Mill Point, Montgomery county, New Fork, owned by tbe defendants; that pursuant to said agreement tbe said Joseph S. Faulknor, on or about tbe 1st day of February, 1887, entered upon tbe discharge of his duties, and so acted up to and including tbe 2d day of May, 1887, and that tbe services rendered and disbursements made, reached in tbe aggregate $424.16. That when said agreement was entered into between said Joseph S. Faulknor and tbe defendants it was agreed between tbe plaintiff, Susanna Faulknor, and said Joseph ’ S. Faulknor that all wages or salary earned by him, together with all moneys expended by him as manager, were to be tbe moneys of tbe plaintiff, and all claims for wages so earned and moneys expended were, upon tbe making of such agreement, duly assigned and transferred by said Faulknor to plaintiff.
    Tbe defendants, among other things, alleged that about tbe 10th day of February, in the year 1886, one Joseph J. Faulknor, since deceased, made bis promissory note, payable three months after date, which was duly indorsed by Joseph S. Faulknor, tbe payee therein named, and was delivered to Nicholas H. Swart for value, who thereupon became the owner thereof; that said note was presented for payment and payment refused, and the indorser, said Joseph S. Fauiknor, duly charged as such indorser; that on the 17th day of August, 1887, the said Nicholas H. Swart, who was then the owner of said note, assigned and transferred to the defendants Henry S. De Forest and James J. Bradshaw to each an equal undivided third part of the said note, and of all claims of Nicholas H. Swart against the maker and indorser thereof.
    It is important to notice the relative time of these transactions. J. S. Fauiknor agreed to do certain work for the defendants, January 31, 1887. Under that agreement he worked for. defendants from January 31, 1887, to May 2, 1887. He made an agreement with plaintiff, his mother, that she should have the earnings under this contract with defendant. This agreement was made February 1, 1887. The defendants had notice of this last agreement only by the commencement of this action, January, 1888. On the part of the defendants the facts are: J. S. Fauiknor became indebted to defendant Swart as indorser duly charged, May 13, 1886. Swart assigned to the two other defendants two-thirds of his claim against J. S. Fauiknor, August 17, 1887. On these facts the question is whether the counter-claim is good. The referee held it was not and the defendants appeal.

      S. W. Jackson, for the appellants.

      W. O. Moak, for the respondent.
   Learned, P. J.:

The agreement made by J. S. Fauiknor with the plaintiff did not operate at once as an assignment of indebtedness thereafter to arise. But it was an equitable assignment which a court would enforce as acting upon the indebtedness as it arose from time to time. (Field v. Mayor, 6 N. Y., 187; McLachlin v. Brett, 105 id., 396.) We cannot say, then, that the defendants never owed J. S. Fauiknor, but at once owed the plaintiff for whatever Fauiknor did. To say this would be to give a legal, and not an equitable, effect to the agreement made with the plaintiff by him. We must treat the matter as if J. S. Fauiknor assigned to plaintiff the indebtedness of defendant after, and as soon as, it accrued. The defendants had contracted with J. S. Faulknor and they could not be deprived of the terms of their contract. The plaintiff must take as an assignee of indebtedness which had previously been payable to J. S. Faulknor; that is, as an assignee of various dates, if the money was to be paid from time to time. If the money was to bejiaid at the end of the work, then the plaintiff must be considered as an assignee of the date of May 2, 1887.

Now, let us suppose for a moment that J. S. Faulknor had not assigned the claim, and that in January, 1888 (the time when this action was commenced), he had sued these defendants. Can there be any doubt that they could then have maintained this counter-claim under section 501, subdivision 2. In that state of affairs these defendants would have been owing J. S. Faulknor for his services, and he would have been owing them on the indorsement of the note, which at the commencement of the action would have belonged to all the defendants.

Then, how are the rights of the parties affected by Faulknor’s assignment to the plaintiff, taking effect (say) May 1887. Section 502, subdivision 1, provides for this case. It says that a demand existing against the original party to the plaintiff’s assigned cause of action (in this case against J. S. Faulknor) at the time of the assignment (in this case May 2, 1887, and the liability on the indorsement did then exist) and belonging to the defendant in good faith before notice of the assignment (and this demand belonged to the defendants August 27, 1887, before notice of the assignment, January, 1888), must be allowed as a counter-claim, if it might have been allowed against the original party (J. S. Faulknor,) while the contract belonged to him. This last clause refers to the nature and validity of the demand, and not to its ownership by the defendant before the assignment of plaintiff’s claim. Because the previous clause provides that it need belong to defendant in good faith cnl/y Toefore notice of the assignment of plaintiff’s claim.

That this is the correct meaning appears by section 1909. This provides that the transfer of a demand passes an interest which the transferree may enforce as the transferror might have done, subject to any countei’-claim existing against the transferror before notice of the transfer. The liability on the indorsement existed and was in the ownership of defendants against J. S. Faulknor, the transferror, before notice oí the transfer.

We think the language of the Code is plain on this point. And it is consistent with good sense. If an assignee of a claim desires to protect himself against the purchase by the debtor of claims against the assignor, he has only to give notice of the assignment to the debtor. If he neglects to do this, then it is reasonable to permit the debtor to purchase in good faith any valid claim against his original creditor and to use it as a counter-claim when sued. The debtor acts in good faith, supposing, in the want of notice to the contrary, that he still owes the original creditor. And against such creditor it is reasonable to make him pay his own debts when he is trying to collect a debt from others.

We have taken the facts in the way most favorable to the plaintiff. The testimony of J. S. Faulknor, relied on to show an assignment to plaintiff, is very questionable, and, taken in connection with the original complaint, in which the plaintiff swore to an assignment made to her December 12, 1887, the referee might well have doubted that the alleged agreement of February 1, 1887, was ever made.

Judgment reversed, new trial granted, referee discharged, costs to abide event.

Land on and Fish, JJ., concurred.

Judgment reversed, referee discharged, new trial granted, costs to abide event.


source: Caselaw Access Project

license: Public Domain

text:
    DANIEL PECK and HENRY F. PECK, Respondents, v. JOHN H. ORMSBY, Appellant, Impleaded with Others.

      Mortgage given upon exempt homestead property — how far ineffectual under section 1404 of the Code of Civil Procedure.

    Section 1404 of the Code of Civil Procedure, which provides that “a mortgage hereafter executed upon property so exempt is ineffectual,” does not render void a mortgage given upon a homestead exceeding in value $1,000.
    The object of the provision was to prevent any possible construction by which the mere execution of a mortgage upon homestead exempt property would be held to be a cancellation or waiver of the exemption, but it was not intended to prevent the mortgagor from mortgaging so much of the property as was not covered by the exemption.
    The word “ineffectual” was used to express that the mortgage was ineffectual to cancel the exemption.
    Appeal by the defendant John H. Ormsby from a judgment, entered, after a trial at a Special Term held in Warren county, in the office of the clerk of the county of Warren on the 26th day of January, 1889, in favor of the plaintiffs, for the foreclosure of certain mortgages mentioned therein.
    It was claimed by the defendants that the mortgaged premises, having been designated, as an exempt homestead, the mortgage was consequently invalid.

      J. M. Whitman, for the appellant.

      L. M. Brown, for the respondents.
   Learned, P. J.:

Section 1391 of the Code provides that a lot and buildings, not exceeding in value $1,000, occupied as a residence, designated as a homestead, shall be exempt from sale on execution. This exemption continues for certain times after the death of the owner, and ceases when the property is not used as a residence. (Sec. 1400.) The statute does not seem to forbid the owner to sell the property. Perhaps, too, he might sell the fee subject to the homestead exemption. Section 1402 provides for the case where the value exceeds $1,000, making the lien of a judgment attach to the surplus. But this lien is to be enforced in a creditor’s action. The reason for this, doubtless, is that in such an action the rights of the parties can be adjusted as provided in section 1403. These two sections show that the legislature intended that the privilege of exemption should not extend beyond the value of $1,000. And in the last section it is provided, that not only in such creditor’s action, but “in any other action affecting the title to an exempt homestead,” the court on a sale of the property must marshal the proceeds. Section 1404 provides the mode for'canceling the exemption and declares any other mode void. It then provides: “A mortgage hereafter executed upon property so exempt is ineffectual until the exemption has been canceled as prescribed in this section.”

In the present.case Ormsby mortgaged to plaintiffs his exempt homestead. On the foreclosure it was found, as a fact, that the property was worth over $1,200. It was adjudged that the land should be sold, but not unless the bid was more than $1,000; that, if sold, $1,000 should be paid to Ormsby before even fees and expenses of sale or amount adjudged to plaintiff. Ormsby appeals and claims that the section declaring the mortgage ineffectual, makes this mortgage void.

We think the decision was right. The object of the clause relied on by appellant was to prevent any possible construction that the mere execution of the mortgage was a cancellation or waiver of the exemption. It was not intended to prevent the mortgagor from mortgaging what was not exempt. Suppose the house and lot were worth $50,000, is there any reason why the mortgagor might not mortgage the value above $1,000?

If the plaintiffs were creditors on book account they could sue on the account, and after judgment could, by creditor’s action,-reach the surplus. But having a bond secured by mortgage, if they had sued on the bond they could not sell the equity of redemption (Code of Civ. Pro., 1432); and, therefore, perhaps, could not reach it by creditor’s action. Their only safe course, therefore, was to foreclose.

The word “ ineffectual ” seems to have been chosen to express that the mortgage was ineffectual to cancel the exemption. It is not equivalent to “ void.” For it will be seen that it is ineffectual only till the exemption has been canceled. Therefore, it is plainly only as to the exemption that it is ineffectual. And the judgment appealed from so treats it.

We need not consider what would be the effect of a mortgage expressed to be subject to the homestead exemption right of the mortgagor. Nothing of that kind is here. By mortgaging his land Ormsby has rendered it necessary, in order to do justice to all parties, that the land should be sold. As he has not canceled the exemption he retains his claim to $1,000 of the proceeds.

A suggestion is made that the instrument creating the exemption, was not in compliance with the Code. But the plaintiffs have not appealed.

The judgment should be affirmed, with costs.

Ingalls and Landon, JJ., concurred.

Judgment affirmed, with costs.


text:
    JOHN THOMPSON, an Infant, by JANE THOMPSON, his Guardian, Respondent, v. FREDERICK W. JONES, Appellant, Impleaded with ROBERT B. NOBLE.

      Assignment —judgment of foreclosure — bona fide purchaser.

    In an action brought to have a judgment of foreclosure adjudged to have been satisfied, it appeared that the mother of the mortgagor caused the amount of the judgment to be paid to the mortgagee, the plaintiff in the action, through one Noble, who took an assignment of the judgment to himself, and thereafter assigned it to one Jones, who purchased it for value and in good faith.

      Held, that although Jones was abona fide purchaser for value without notice, yet, as the judgment was not valid in the hands of Noble, Jones acquired no better title thereto by his purchase of it, the mortgage being a non-negotiable security.
    Appeal by the defendant, Frederick W. Jones, from a judgment in favor of the plaintiff, entered, after a trial before the court without a jury at the Supreme Court Chambers, in the city of Hudson, in the office of the clerk of the county of Columbia on the 1st day of June, 1889.

      L. F. Longley, for the appellant.

      Willa/rd Peek, for the respondent.
   Learned, P. J.:

This action was brought to declare satisfied a certain judgment of foreclosure rendered in February, 1879, in favor of one Smith against one "William Thompson, since deceased, the father of the infant plaintiff. The plaintiff’s claim is that Mrs. Jane Thompson, mother of William, caused the amount of the judgment to be paid to Smith through Noble, one of the defendants, May 24, 1879.

The defendants claim that Noble paid the judgment from his own money. Noble took an assignment to himself, and, on February 24, 1882, assigned the judgment to defendant Jones.

The learned court found that Mrs. Thompson put into Noble’s hand a certain note to be used for satisfying the judgment; that Noble obtained for said note from the makers a mortgage, which mortgage Noble negotiated; that out of the moneys thus received Noble paid to Smith the amount of the judgment, and that in so doing he acted for Mrs. Thompson. ■ ■

The first question raised by appellant is one of fact, viz., whether Noble was acting as Mrs. Thompson’s agent and paid Smith with moneys supplied by her for that purpose. The findings of the learned court on this question of fact should have great weight with us, even if we felt any doubt upon the examination of the evidence. But we think the findings are sustained.

It follows from this that, though there was an assignment executed by Smith to Noble, yet in Noble’s hands the judgment would not be good. He took it in violation of his duty as agent, and could not enforce the judgment.

Jones is admitted to be a bona fide purchaser for value without notice. And the remaining question is whether he acquired any rights as against the owner of the mortgaged land.

The general rule is that, as to n on-negotiable securities, the purchaser takes only such title as the seller had. (Bush v. Lathrop, 22 N. Y., 549.) An exception is made where the true owner has by assignment conferred the apparent absolute ownership. In such case a purchaser bona fide from such apparent owner holds a good title against the real owner. Because the real owner is estopped from denying the absolute ownership of the person to whom he has assigned. (Fairbanks v. Sargent, 104 N. Y., 117.) To apply that rule to this case, Smith could not, against Jones, assert that the assignment to Noble was not, in fact, absolute. But Mrs. Thompson has made no assignment which estops her. She has done no act on which Jones relied in making his purchase. If one of two innocent persons, Jones and Mrs. Thompson, must be the loser, there is no reason why the loss should fall on her. If she had recognized or consented to the making of the assignment to Noble,'then she might have been estopped from denying its validity. But it is found that she knew nothing about it.

If it should be urged that Noble was her agent, and therefore the taking of the assignment to him was her act, the reply is that Jones did not rely upon this as being her act. He relied on no act of Mrs. Thompson which could estop her from asserting that she had paid the mortgage. (Moore v. Metropolitan National Bank, 55 N. Y., 41.)

The question here, cannot be determined by reference to the rule as to fraudulent purchasers of real estate or of chattels. (Simpson v. Del Hoyo, 94 N. Y., 189, cited by appellant.) That was the case of a mortgage given by one who held the legal title to the land. Fraud in procuring title to the land could not be shown against a bona fide holder of the mortgage. But the court said that the rule as to the purchase of non-negotiable securities was not applicable. Ye think that the present case does not come within the exception, above mentioned, to the general rule as to non-negotiable securities, which is too familiar to require the citation of authorities. The mortgagor (or his mother on his behalf) paid the mortgage, and it should be adjudged satisfied even against the defendant Jones. Judgment affirmed, with costs.

Ingalls and Landon, JJ., concurred.

Judgment affirmed, with costs.


text:
    In the Matter of the Application of the COMMON COUNCIL OF THE CITY OF AMSTERDAM to take Lands for the Extension of Grove and Jay Streets.

      Notice to party assessed for opening streets in the city of Amsterdam, provided for in section 90, chapter 131 of 1885, insufficient. ,
    Under the provisions of the charter of the city of Amsterdam (§ 90, chap. 181, of 1885), relating to taking lands for public improvements, the assessment is not limited to the property abutting on the streets to be opened. As to such property, the notice required by the act is sufficient to notify the property owners that they are to be assessed; but as no notice is provided by which parties assessed, whose land does not abut upon the streets to be opened, are informed that an assessment has been imposed upon it, said act is unconstitutional.
    A reasonable notice, not necessarily a personal one, to the persons on whose land an assessment is imposed, must be given before the assessment can be laid.
    Appeal by the common council of the city of 'Amsterdam from an order made at a Special Term held in Montgomery county, and entered in the office of the clerk of the county of Montgomery on the 2d day of August, 1889, annulling the report of commissioners and referring back to them the matter of the appraisement and assessment of damages claimed by the owners and persons interested in the lands taken in the above-entitled matter.

      The proceeding was taken for the purpose of opening and extending Grove and Jay streets, in the city of Amsterdam, under section 90 of chapter 131 of the Laws of 1885, which provided as follows:
    § 90. Whenever the common council shall have determined to lay out, alter, widen, straighten or extend, make, open or construct any street, alley, lane, highway, public ground or sewer, and to take and appropriate the land necessary for the same, and shall have determined to assess the expenses of such improvement, or any part thereof, as hereinafter provided, they shall give notice of such determination to the owner or owners of and other persons interested in the lands, by publishing the same once in each week, for four successive weeks, in the newspapers printed in said city, designated by the common council for the publication of official notices; such notice shall specify in general terms the improvement to be made, and shall state that such owner or owners and all persons interested in said lands, on or before a day to be specified, may file their claim for damages, if any they have, on account of such taking or appropriation, with the clerk of said city, and that, in case any claim for damages shall be filed as aforesaid, the said common council will apply at a time and place tobe specified in said notice to a Special Term of the Supreme Court within the judicial district in which the said city is located, or the County Court of Montgomery county, for the appointment of three commissioners to ascertain and assess the damages so claimed. If any such claim shall have been filed as aforesaid, the said common council, at the time and place, in said notice specified, shall make application to said court for the appointment of such Commissioners, and any person who shall have filed such claim shall have a right to be heard on such application, and in case any person interested in or having a right to any lands sought to be taken shall not have filed a claim for damages, eight days’ personal notice of the time and place of such application shall be given to such person or persons, or when such notice cannot be served personally within the State, or such person or persons are infants or otherwise incapacitated from receiving personal notice, then service of such notice may be made in such manner as the court may direct, and the said court shall have power to adjourn the hearing and to exercise general authority over the proceedings in accordance with the rules and practice of said court, except as herein otherwise provided,; the said commissioners having been duly appointed, shall enter upon the performance of their duties without delay. * * * “After the determination and assessment of the commissioners shall be returned to said common council, they shall give notice of the same by publishing for two successive weeks in the newspapers printed in said city, designated by the common council for the publication of official notices,” a notice that such report has been filed with the city clerk, and may be examined by all the persons interested, and that at a time and place tojie specified in said notice the said report will be presented at a circuit or Special Term of the Supreme Court held in the judicial district in which the county of Montgomery is situated, or the County Court of Montgomery county, for confirmation, and that all persons desiring to object to said report shall file their objections thereto in writing, with the city clerk before the day specified in such notice. And any party who may have appeared in the proceedings shall be entitled to the notice of such motion for confirmation in accordance with the rules and practice of the court. On the-days specified in such notice, or on' such other day or days as the said court may designate, the court shall hear the parties in regard to said report, and confirm such determination and assessment, or annul the same,” etc

      Edward P. White, for the petitioner’ appellant.

      Z. 8. Westbrook, for the contestants, respondents.
   Learned, P. J.:

The commissioners appointed pursuant to the act, after determining the amount of the damages sustained by the owners of land taken for the improvement, assessed this amount upon property which they deemed to be benefited. This property was not confined to that which was bounded on the extended streets, but included that which was on other streets, some of which would appear to be quite far distant, a mile or more, as is said.

The learned justice before whom the matter was heard at Special Term was of the opinion that this assessment could'not stand as to the property which was not bounded upon the extended streets. He thought, however, that the language of the act could be constnied to mean that the damage was to be assessed only on the land bounded on the extended streets. In that view it might be held that the notices which are required by the act were sufficient to notify these property owners that they would be assessed, and, therefore, an assessment on them might be held to be valid. The learned justice, therefore, set aside the assessment and sent the matter back lor a new assessment in accordance with his views.

¥e fully concur with him that the assessment should be set aside. But we are of the opinion that a fair construction of the act does not limit the assessment to the property bounded on the extended streets. Considering that not merely street improvements, but the making of sewers and the opening of places are provided for by this same section, we think that the act intended that the commissioners might extend the assessment as far as in their sound judgment the benefits should' extend.

Then arises another difficulty. The statute in no respect provides for notice to the persons who are thus to be assessed. Of course, we do not mean that personal notice is necessary. But we understand it to be settled law that some reasonable notice must be given to the persons to be affected before an assessment for damages occasioned by such improvements can be made.

The notice that the city proposes to extend such a street does not give the least notice to' the person who will be assessed. A man owning property a mile away cannot conjecture that he will be assessed for an improvement which, as he thinks, does not benefit him. The notice published only informs the citizens that the street is to be extended. And, as construed by the city, every owner of property within the city limits must, at his peril, attend and see that he is not unjustly assessed.

The necessity of notice before such special burden can be imposed was, perhaps, not as carefully laid down some years ago as it has been more recently. (Stuart v. Palmer, 74 N. Y., 188.) But the doctrine, when suggested, must commend itself as sound.

Ye are of the opinion that there must have been given, in some way, a reasonable notice, not necessarily, perhaps, a personal notice, to the persons on whose land the commissioners lay this assessment before tbe assessment can be laid. And we are clearly of the opinion tbat nothing wbieb the act directed, and nothing which was, in fact, done, constituted such notice. Of course, in such proceedings, a notice not authorized or directed by the act is of no effect to give validity to the assessment.

With these views, we affirm that part of the order which set aside the assessment, and reverse that part which sent the matter back for a reassessment. No costs of the appeal.

Landon, J"., concurred; Fish, J., not acting.

The part of the order setting aside assessment, affirmed; the part sending matter to new commissioners, reversed ; no costs.


author: Landon, J.:

text:
    THE THIRD NATIONAL BANK OF MALONE, Respondent, v. PATRICK H. SHIELDS, Appellant, Impleaded with DANIEL SHANE.

      Note secured by a chattel moi'tgage — right of the mortgagee to sue the indorsers on the note before foreclosing the mortgage — effect of the mortgagee taking the mortgaged chattels into his possession — practice— trial by jury — waiver.

    Tbe bolder of a note secured by a chattel-mortgage may, without .first exhausting his remedy under the mortgage, sue the indorsers upon the note, who, if they desire the benefit of any securities held by the holder of the note, must pay up the debt and thereby become subrogated to the rights of the creditor in respect to such securities.
    Where the holder of such a note takes possession of the mortgaged chattels and fails to sell them, the debt which they were hypothecated to secure is presumed to be paid in full, or to the extent of the proved value of the mortgaged chattels, and the only way in which the holder of the note can relieve himself from this presumption, is to sell the chattels at auction and thus ascertain the amount to be actually credited in extinguishment of the debt.
    Where, however, the right of the mortgagee to such mortgaged chattels is disputed by a third party, and the same have not been sold because his right to them remains undetermined, such presumption of payment of the debt does not arise, and, as between the mortgagee and the indorsers upon the note held by him, the latter may be called upon to pay the note and thus become entitled to be subrogated to the rights of the mortgagee, and to the risk of the validity of his title, to the mortgaged chattels.

      Plaintiff being ready for trial at the circuit, defendant objected, but finally consented that if the case might go over, it should be tried at Special Term, and it was so ordered. The same justice presided at both terms and enforced at the Special Term the agreement and order made at the Circuit.

      Held, that a trial by jury was waived in open court.
    Appeal by tbe defendant Patrick H. Shields from a judgment, entered, after a trial at a Special Term held in Franklin county, in the office of the clerk of the county of Franklin on the 28th day of December, 1888, in favqr of the plaintiff.
    The action was upon three promissory notes made by Lyman J. Folsom and indorsed for his accommodation by the defendants Shields and Shane, and discounted for Folsom by the plaintiff. The plaintiff knew that the defendants were accommodation indorsers. The notes were given at different dates in October, 1886, and the last one fell due February 28,1887. Default was made in payment of all the notes of which the indorsers had due notice.
    Folsom died March 1, 1887. In November, 1886, while the plaintiff held the notes, Folsom gave to it a bill of sale or chattel mortgage upon' thirty top carriages of Ilotchkin’s make, “ to hold as collateral security for any and all over-drafts or past-due paper that they may have or hold.” It was recited in the mortgage that these carriages were stored in “ Mechanics’ Hall ” on the fair grounds in Malone.
    In December, 1886, Folsom gave plaintiff another chattel mortgage on fifty other carriages of the same make, recited in the mortgage to be stored in the same hall. This mortgage was recited to be to secure the plaintiff in the sum of $3,500 and interest (the face of the notes), which Folsom owed plaintiff, and as security for any paper held by it indorsed by defendants. This mortgage gave the plaintiff a power of sale.
    Folsom, in January following, gave to Adams and Martin a chattel mortgage upon fifty carriages, recited in the mortgage to be stored in the said Mechanics’ Hall. This mortgage was given to secure Adams and Martin against their indorsements upon Folsom’s notes for $2,000, then past due and held by the People’s National Bank of Malone.
    ít was conceded upon the argument that the plaintiff’s mortgages had priority of lien over the mortgage of Adams and Martin. Folsom having died March 1, 1887, both the plaintiff and Adams and Martin, on March second, went to Mechanics’ Hall to secure the carriages covered by their mortgages. Plaintiff had the key of the building at the time of Folsom’s death. There were seventy-nine carriages in the building. Adams and Martin claimed the right to take forty of them under their mortgage, and did take them, the plaintiff interposing no objection. The plaintiff took the remaining thirty-nine. Folsom was a dealer in carriages, and whether the carriages found in the hall after his death were identical with those there when he gave the several mortgages, did not appear. The defendants knew that Folsom had given the plaintiff the two mortgages, and Shields, the appellant, was told by plaintiff, the week of the transaction, that Adams and Martin took forty of the carriages out of the hall under their mortgage, and that the plaintiff took only thirty-nine. Shields made no objection, and subsequently made a partial payment upon one note, and promised to pay the three in full. Mrs. Hotchkin, the manufacturer of the carriages, soon after Folsom’s death, claimed to own them and brought suits against the plaintiff and against Adams and Martin to recover the possession of the carriages respectively held by them. These actions are at issue and undetermined, Because of the action of Mrs. Hotchkin, the plaintiff has not sold the carriages. The defendants, by their answer, claimed credit upon the notes for the full value of the eighty carriages. The court found the carriages to be worth forty-five dollars each, or $3,600 in all, and found against the claim of the defendants, and directed judgment for plaintiffs for the full amount of the notes. The defendant Shields alone appealed.

      Kellas (& Munsill, for the appellant.

      JoJm I. Gilbert, for the resjsondent.
   Landon, J.:

The action was tried at Special Term without a jury. The appellant insists that the defendants seasonably demanded a jury trial and. refused to waive it. This presents a question of fact respecting which the case settled by the learned trial judge must be deemed conclusive.

The case was upon the calendar of the Franklin Circuit in March, 1888, and the plaintiff pressed it for trial; the defendants objected and finally consented, that if it might go over, it should be tried at the Special Term to be held in the county in May following, and it was thereupon so ordered, and in pursuance of such order, subsequently tried at said Special Term. The same justice presided at both terms and enforced at the Special Term the agreement and order made at the circuit. The defendants having-asked the favor of a trial at the future Special Term, and their request being granted, were properly held to performance when the term arrived. We think it was a waiver in open court of the trial by jury. We have examined the other questions of practice presented by the appellant and think their disposition was at the discretion of the court, which was properly exercised. With respect to the merits, the defendants were liable upon their contract of indorsement, and the plaintiff could sue them upon that contract without first exhausting its remedy upon the carnages which the maker had transferred to it as security. (First Nat. Bank v. Wood, 71 N. Y., 105.) If the indorsers, being sureties, desire the benefit of any securities held by the creditor, they must pay-up the debt and. thereby become subrogated to the rights of the creditor as to the securities. (Id.) But the indorsers being sureties, and being known to be so by the creditor, the creditor cannot, without the consent of the sureties, release any hold which he has actually acquired upon the property or estate of the maker which might be made effectual for the payment of the debt. (Shutts v. Fingar, 100 N. Y., 539-546; Cory v. Leonard, 56 id., 494; Grow v. Garlock, 97 id. 81; Schroeppell v. Shaw, 3 id., 446; Smith v. Erwin, 77 id., 466.) To the extent that the indorsers are injured by such release of the securities, they have a defense against the plaintiff upon the notes. (Same cases; Vose v. Florida R. R. Co., 50 N. Y., 369.) The trial court refused to find that the forty carriages covered by the mortgage to Adams and Martin were the same carriages previously mortgaged to the plaintiff, but the finding made is to the effect that at least twenty of them were. The court refused to find that the carriages taken by Adams and Martin were taken from the possession of the plaintiff, or were in its possession when Adams and Martin took them.

The court did find that the defendants, during the week of Folsom’s death, “ were informed about the said chattel mortgages, and as to the possession of the said carriages; that they made no complaint as to what had been done in respect to them, but acquiesced in the same.” This latter refusal to find, and the finding itself, cover questions which were sharply contested upon the trial, and are, undoubtedly, supported by the evidence. The appellant Shields afterwards made partial payments upon one of the notes and promised to pay all of them.

We think the acquiescence of the defendants is fatal to the portion of the defense, resting upon the ground that the plaintiff relinquished its hold upon a portion of the carriages.

Although it is not disputed on this argument that the plaintiff’s mortgages were prior in lien to those of Adams and Martin, it is plain, from the attention given to the question upon the trial, that it was not certain which lien was prior, at the time the carriages were taken. The plaintiff did not withstand Adams and Martin’s pretensions, and Shields, upon being advised of the fact, did not insist that it should. If Shields had objected to plaintiff’s action, plaintiff might have retraced its steps, or, at least, have attempted to do so.

Mrs. Hotchkin, the manufacturer of the carriages, soon after Folsom’s death, claimed to own them and sued the plaintiff and Adams and Martin, to recover possession of such part of them as each party had taken. .These actions are at issue and undetermined.. Unless Folsom gave to plaintiff a title to the carriages, defensible against Mrs. Hotchkin, he gave to it no security. The defendants should have paid their notes at their maturity and taken the securities. If they can, by their default in their obligations, and notwithstanding their acquiescence when told of the taking by Adams and Martin of forty of the carriages, compel the plaintiff and Adams and Martin to try titles with Mrs. Hotchkin, and themselves escape costs or risk, and then reap the advantages of success, or, without regard to the title of Folsom, recoup in this action the full value of the carriages, they will be unconscionably favored.

The defense in this action is an equitable one, and we think, under the circumstances, the defendants have no equity to recoup against the plaintiff for the carriages taken by Adams and Martin. They have shown no actual loss to themselves; it does not yet appear that they would be better off than they now are if plaintiff had taken all the carriages. It remains to consider whether the defendants are entitled to be allowed the value of the thirty-nine carriages taken possession of by the plaintiff.

The defendant’s position is, that since the plaintiff took possession of the carriages under Folsom’s mortgages given to secure these notes, the debt which they were given to secure was thereby presumed to be paid, or paid to the extent of the proved value of the carriages; that the only way the plaintiff could relieve itself from that presumption was to sell the carriages at public auction, and thus ascertain the amount actually paid and the amount remaining unpaid, and that since the plaintiff has not sold the carriages the presumption of payment remains in full force, and thus defeats the right of recovery either in full or pro tanto. The following cases, among others, are cited in support of this position: Pulver v. Richardson (3 T. & C., 436); Case v. Boughton (11 Wend., 107); Stoddard v. Denison (38 How. Pr., 296); Vose v. Florida Railroad Company (50 N. Y., 369).

The presumption of payment, at least to the proved value of the mortgaged property taken possession of by the mortgagee after default, attaches when the mortgagee refuses to sell the property. He thus defeats the ascertainment of the exact sum the property could produce, and it is right that he should be charged with its fair value. Here Folsom’s rights against the plaintiff measure the defendants’ rights. The carriages have not been sold by plaintiff, because Folsom’s right to mortgage them remains to be determined. It is not plaintiff’s fault that the carriages have not been sold. It is either' Folsom’s fault or misfortune that his claim of title is disputed by Hotchkin; and whether fault or misfortune, it postpones the determination of the question whether he gave the plaintiff any security, and thereby postpones the question whether plaintiff should credit him with anything upon account of it. The defendants by paying the note can be subrogated to plaintiff’s rights against the carriages, and, as between the defendants and the plaintiff, they clearly ought to incur the risk of the failure of Folsom’s title.

The judgment should be affirmed, with costs.

Learned, P. J., and Ingalls J., concurred.

Judgment affirmed, with costs.


author: Tappan, J.:

text:
    LEVI BARTHOLOMEW, as Administrator of the Goods, etc., of SARAH A. BARTHOLOMEW, Deceased, Respondent, v. ASBURY MERRIAM, WILLIAM J. WOOD and BISHOP MERRIAM, Appellants, Impleaded with ROBERT J. ADAMS and Others.

      Legacy — when charged upon real property — not extinguished or paid by reason of boa/rd, etc., given to the legatee by the general legatee and devisee named in the will.

    A testator, by bis will, provided as follows: “I give and bequeath to my dear wife, Docia Ann Martin, all of my real and personal property of every name and nature whatsoever, with'this provision, however: My said wife is to pay to my niece, Sarah A. Bartholomew, the sum of one thousand dollars, without interest, at any time when my said wife chooses so to pay the same; but in case of the death of my said wife before the payment thereof, then, and in that case, the same is to be paid out of the personal property, if there shall be sufficient for that purpose; and if not sufficient personal property, then the sum remaining unpaid thereof is to be paid out of the real estate.”
    The wife was authorized to sell and convey the property, given her by the will, “ said one thousand dollars to be paid as provided, however.”
    Said Sarah A. Bartholomew resided with the widow until the death of the former, doing work in the house and about the barn and farm. After the death of Sarah A.' Bartholomew, the widow conveyed the premises by warranty deed, containing a reservation of possession during her life, and providing that, at her death, the grantees in the deed mentioned were to have full possession thereof. Said grantees executed to her a life lease of said premises; no consideration in money or property was actually paid at the time of this conveyance or lease.

      Held, that a claim that the legacy to Sarah A. Bartholomew was paid by board, care and clothing furnished to her daring her time of residence with the widow, could not be maintained, as, under the circumstances existing in this case, the law does not imply an agreement to pay, because it is not presumed that one party expected to charge, or the other to pay, for what was furnished.
    That the legacy to Sarah A. Bartholomew vested upon the death of the testator, and was then a charge upon the real estate, payable upon the death of the widow, which lien was not in any manner afEected by the deed and lease above mentioned.
    Appeal by tbe defendants, Asbnry Merriam, William J. Wood and Bishop Merriam, from a judgment, entered, after a trial at a circuit and Special Term held in Washington county before the court without a jury, in the office of the clerk of the county of Washington on the 18th day of September, 1889, in favor of the plaintiff, adjudging that certain lands, in said judgment referred to, were subject to a lien in favor of the plaintiff to the extent of $1,000, and interest thereon from August 15,1888, the amount of the legacy given to Sarah A. Bartholomew by the will of Joseph H. Martin.
    Affirmed on opinion of court below.

      J. Scmford Potter, for the respondent.

      A. P. Wait, for the appellants.
   Tappan, J.:

Plaintiff seeks to recover a legacy to Sarah A. Bartholomew, under the will of James II. Martin. The will was executed February 11, 1865. The testator died in March, 1868, and his will was probated and the executrix qualified on the 1st day of June, 1868. After providing for the payment of the testator’s debts, the will read as follows : “ I give and bequeath to my dear wife, Docia Ann Martin, all of my real and personal property of every name and nature whatsoever, with this provision, however : My said wife is to pay to my niece, Sarah A. Bartholomew, the sum of one thousand dollars (without interest) at any time when my said wife chooses so to pay the same; but in case of the death of my said wife before the payment thereof, then, and in that case, the same is to be paid out of the personal property if there shall be sufficient for that purpose; and if not sufficient personal property, then the sum remaining unpaid thereof is to be paid out of the real estate. My said wife is to have the power to will, sell and convey the property of which she will become seized by this will (said one thousand dollars), to be paid as above provided, however, and the avails thereof, in case of sale, is to be used or disposed of as my said wife may choose. It is my intention to give the whole of said property to my said wife, with power to control, sell and convey, trade or transfer said property wholly as she chooses, with the provision as to the said one thousand dollars.” When such will was made, testator was very sick, and did not expect to survive but a few hours; he left no children. His family then consisted of his said wife and the said Sarah A. Bartholomew, who was .then between sixteen and seventeen years old, who had resided with' him since she was seven years of age. He then owed debts exceeding the amount of his personal property; he was seized of the land described in the complaint, about nineteen acres in the town of Whitehall, and owned no other real estate. Said Sarah A. Bartholomew continued to reside in the family of the testator until he died, and afterwards with the said Docia Ann Martin, as a member of her family until the time of the death of the said Sarah A., September 15, 1872. During her whole life she was of feeble intellect, not qualified to do business, or to have the control or management of property independent of others; but she was of robust health, knew how to do 'the work required to be done in a house, and about a barn and farm, and was kind and obedient.

Said Docia Ann used and occupied the said property devised and bequeathed to her' by said will, until her death, August 15, 1888. After the death of said Sarah A., and on the 25tji of March, 1873, she conveyed said premises by warranty deed to the defendants, Asbury Merriam, William J. Wood and Bishop Merriam, which deed recited a consideration of $2,500, and contained a reservation of the possession of said property during her life to the said Docia Ann, and provided that at her decease the said parties were to have full possession. At the time this deed was executed, said parties executed to her a life lease of said premises, which contained a covenant by the lessors that in case the said Docia Ann should need for her use, support and comfort more than the annual rents and profits of said property, then said lessors, on request, would pay to her such sum or sums, and at such time and times as she should require and request for her comfort, use and support. No consideration in money or property was paid upon the making of said deed or said lease; said Docia Ann was in possession of said property under said will at the time the said deed and lease were made, and so continued up to the time of her death, August 15, 1888.

The object of said deed and said lease was to perfect the title of said premises in said grantees and lessors upon the decease of the said Docia Ann, and the only actual consideration therefor was the said covenant in said lease. Said Docia Ann left a will, whereby she devised and bequeathed all the remainder of her real and personal ■property, after payment of her debts and liabilities, to the defendants, Robert J. Adams, Betsey Ann Reed and Rachael A. Weaver; and the defendant Asbury Merriam is named in said will as sole executor thereof. Under the will and said deed, defendants claim interests adverse to the plaintiff. It is contended by the defendants that the legacy was paid by board, care and clothing furnished to said Sarah A. from the time of the death of the testator in March, 1868, to the time of her death, September 15, 1872.

During that time she resided with said Docia A. as a member of her family. It was not claimed that any agreement was made by said Sarah or any one having authority in her behalf, to pay for board, lodging or clothing. She had money from her father’s estate that was sufficient to pay for her clothing, that was probably used for that purpose. She performed work about the house which was of some value. Under the circumstances, the law does not imply an agreement to pay, because it is not presumed that one party expected to charge or the other to pay for what was furnished. The defendants have the burden of showing payment, and have failed to show that what Sarah A. received was of more value than her labor and services rendered for, and while she -was a member of, the family of said Docia Ann. No claim was made by the defendant that payment of the legacy had been made in any other way.

It is contended by defendants, however, that the legacy was only to be paid to Sarah A\, either during the life of Docia A. Martin, in case the latter should choose to pay, or in case said Sarah A. survived her, then it was to be paid out of the personal property of testator, and, in case of deficiency, then out of the real estate; that Sarah A. having died before said Docia A., before the legacy was paid, and before it was due, it was merged and did not pass to the plaintiff as administrator; it is argued that it is to be fairly inferred, from the mental condition, age and relationship of said Sarah A. to the testator and his wife, that the legacy was intended for her personal use and protection only, and the postponement of its payment was in her interest, for her benefit, and not for the benefit of testator’s wife, or of the estate given to her. The wife is given property with the provision and condition attached that she is to pay this sum of $1,000 to Sarah A. Having received the property, she became liable to fulfill the condition attached to its devise to her. (Brown v. Knapp, 79 N. Y., 136; Fowler v. Mut. Life Ins. Co., 28 Hun, 195; Harris v. Fly, 7 Paige, 421.)

Postponement of payment operated to increase the amount which she would receive, to an amount equal to the interest of $1,000, which would have belonged to Sarah A., had the legacy been payable immediately. There is- no condition or provision as to how the legacy was to be used, as would have- been the case if it had been intended for support and maintenance only; neither is there any condition as to payment; no contingency which would excuse payment. Care seems to have been taken to preserve the lien upon the testator’s property for the payment of the legacy, and allow Docia A., the widow, to dispose of the property in any manner, at any time, subject to such lien. For these reasons, I think the legacy vested upon the death of the testator, and was then a charge 'upon the real estate, payable upon the death of the widow; that the deed and lease do not in any manner affect such lien. (Paterson v. Ellis, 11 Wend., 259; Marsh v. Wheeler, 2 Edw. Ch., 156; Birdsall v. Hewlett, 1 Paige, 32; Loder v. Hatfield, 71 N. Y., 93; Bushnell v. Carpenter, 92 id., 270.) The defendant’s title is referred to the will, and is subject to its provisions. (Harris v. Fly, 7 Paige, 421.) A decree should be entered that plaintiff is entitled to receive said legacy, and that the same is a lien upon said premises; that the same be sold and the proceeds'be applied to pay plaintiff’s costs and the expenses of sale, and the said sum of $1,000 and interest from August 15, 1888, and directing the surplus, if any, to be paid to the defendants, the grantees in said deed.

Judgment is ordered accordingly.

Present — Learned, P. J., Ingalls and Landon, JJ.

Judgment affirmed, with costs, on opinion of court below.


author: Barrett, J.:

text:
    In the Matter of the Application of JOHN SULLIVAN for a Writ of Mandamus Against THOMAS F. GILROY, Commissioner of Public Works of the City of New York.

      Bight of veteran soldiers and sailoi's to enfoixe chapter 464 of 1887 by mandamus — the act does not limit the employment to business positions ■ — • it is constitutional.

    Chapter 464 of the Laws of 1887 constitutes a legislative command directed to the heads of departments of municipal corporations, requiring the performance of a particular duty in a particular manner relative to the employment of honorably discharged Union soldiers and sailors in preference to others.
    The duty is a public one; and individuals, who have a clear right to a preference under the provisions of the statute, have a right to apply for a writ of mandamus to secure and enforce their rights.
    The act is sufficiently comprehensive to embrace ordinary laborers, and the use of. the words “business capacity necessary to discharge the duties of the position involved ” does not limit the employment of veterans to business positions. •
    The act is free from constitutional objections. It does not abridge rights guaranteed by the Constitution, nor does it discriminate as to eligibility to or qualification for office, as the legislature may lawfully provide for the doing of public work in such maimer and with such agencies as it deems proper.
    Appeal by Thomas F. Gilroy, Commissioner of Public Works of the city of New York, from an order made at a Special Term held in the city of New York on July 23, 1889, requiring and commanding the said Thomas F. Gilroy, as Commissioner of Public Works, to reinstate, within two days after the service upon him of the peremptory writ of mandamus directed to be issued thereby, the relator, John Sullivan, a laborer, in the repairing and repaving of streets, from which the said Gilroy had removed him on the 29th day of May, 1889, in violation of chapter 464 of the Laws of 1887.

      Thomas P. Wiclces, for the appellant.

      Jeroloman c& Arrowsrmth, for the respondent.
   Barrett, J.:

"We concur in the views expressed by Mr. Justice Andrews at Special Term. It will be unnecessary to repeat the principal statements of fact and law contained in his careful opinion. The only doubt which we entertained upon the argument was as to the remedy.

Upon that head two views of the statute (Laws 1887, chap. 464) may be taken. In one view, the act is simply a general instruction to public officials, which can only be enforced by discipline or punishment; in the other a specific duty is imposed, and a specific right conferred upon individuals. Upon full consideration the latter view seems more in consonance with the legislative intent. It is impossible to read this act without a realizing sense of the legislative determination to secure to “ honorably discharged Union' soldiers and, sailors,” the contemplated preferment. All public officials “ are charged with the faithful compliance with its terms, both in letter and spirit,” and a failure therein is declared to be a misdemeanor. The veterans are not to be deemed disqualified by age, loss of limb or other physical impairment ‘‘provided they possess the business capacity necessary to discharge the duties of the position involved.”

This amounts substantially to á legislative command, directed to the heads of departments, requiring the performance of a particular duty in a particular manner; and it brings the case within one of the principles peculiarly applicable to mandamus. The duty is a public one, and individuals who have a clear right to its performance are without adequate remedy at law to secure such performance or to enforce their right. It cannnot be that the legislature, after making such minute and rigid provisions as to the right, meant to leave the objects of their very special consideration without a direct remedy for the practical enforcement of such right. It stands to reason that the application of ordinary remedies against derelict officials will not suffice adequately to enforce this law, as it is required to be enforced both “ in letter and spirit.”

Take the present instance. No one doubts Mr. Gilroy’s good faith in the construction which he has placed upon the act. He could neither be removed nor indicted upon the facts presented by this application, yet he erred to the detriment of the relator. Even if a different case had been presented, a case, let us suppose, of willful evasion, of what avail would the punishment of the official be to the suffering, and perhaps hungry, veteran % The legislature has guaranteed employment to the capable veteran where there is need of service, and the courts should treat that guarantee as vital, and as importing an active right to be enforced in favor of the individuals embraced within the class, in the same broad and untechnical spirit as that imposed by the act itself upon the officials charged with its execution.

The facts are not in dispute. It is true that Mr. Gilroy in his opposing affidavit says that he has “no knowledge or information sufficient to form a belief whether John Sullivan is an honorably discharged soldier, having served as such in the Union army during the war of the rebellion.” This, however, is no answer to the following facts stated in Sullivan’s affidavit, and nowhere denied:

“ I further say that I am an honorably discharged Union soldier of the late war, having enlisted in Company ‘ F ’ of the Sixty-ninth New York Regiment of Infantry Volunteers, on September 25, 1862, for three years, and was discharged after the close of the war, on July 15, 1865, and that I am a member of Michael Corcoran Post 427, and a comrade in good standing.”
“ I further say that one Mr. Blauvelt, connected with the Water Purveyor’s Bureau, in the Department of Public Works, was designated, by direction and authority of the Commissioner of Public Works, as I am informed and believe, to make a list of all persons in the employ of the said Department, in any way connected with or under the supervision of the Water Purveyor’s Bureau, who were honorably discharged Union soldiers and sailors of the late war, and that I prockoced my discharge to said Blauvelt, who directed one Tyler to make a memorandum of my enlistment and discharge, which he did in my presence, and placed my name upon the list of honorably discharged Union soldiers in the Department.”

Tlie material fact is that Sullivan is an honorably discharged, soldier. This is clearly sworn to, and the facts with regard to it are stated' in detail. The respondent below neither denied the fact nor controverted the proof of the fact. The veteran’s right to preferment depends upon the fact, not upon the official’s willingness or unwillingness to credit the fact. In The People ex rel. Carleton v. Board of Assessment (52 How. Pr., 140) it was distinctly held by this General Term that Mr. Gilroy’s form of denial was unauthorized, and that it really amounted to nothing. This is conceded in the appellant’s points, the denial being supported only upon the contention that the Commissioner’s hnowledge or information sufficient to form a belief is the material fact to be proved in a case like the present, a contention which we conceive to be entirely inadmissible. The true rule is, as was said in The People ex rel. McMackin v. Board of Police (107 N. Y., 236), that, to justify the withholding of the peremptory writ, there must be “ an honest dispute as to material facts to be determined.” Clearly there is no such dispute in this opposing affidavit. (See, also, Matter of Petition of N. Y., L. and W. R. R. Co., 99 N. Y., 12, and R., W. and O. R. R. Co. v. City of Rochester, 46 Hun, 149.)

We also think that the act is sufficiently comprehensive to embrace ordinary laborers. There are no words of limitation, and we fail to see in the expression “ employment upon all public works of the State of New York, and of the cities, towns and villages thereof” anything to justify the idea of exclusion by implication. It would be strange if “employment upon the public works” did not include the workers who do most of the work. The opposite construction is contended for because of the use in the proviso of the words “ business capacity necessary to discharge the duties of the position ■involmedP

We do not think that this proviso had the effect of limiting the employment of veterans to business positions. The purpose is rather to qualify them for such positions when, in spite of “ age, loss of limb or other physical impairment,” sufficient capacity exists to discharge the duties.

It would be absurd to say that age, loss of limb or other physical impairment should not be deemed to disqualify for duties requiring health, strength and stout arms. Clearly what was meant was that physical incapacity, compatible with the due performance of nonphysicial duties, should not disqualify for non-physical employments.

Lastly, we think that the constitutionality of this act is reasonably free from doubt. It does not seek to abridge rights guaranteed by the Constitution. It does not discriminate as to eligibility to or qualification for office. It simply regulates the agencies for service upon the public works of the municipality. “We suppose that this entire subject is under legislative control. The legislature may lawfully provide for the doing of public work in such manner and with such agencies as it deems proper. And we ' know of no provision of the Constitution which confers upon any citizen a right to-appointment or employment upon such work or which limits the legislative choice as to the appropriate means of performance.

Finally, the nntmclamms will be precise and effective. The papers show that there is work to be done, and that to do it others have been really preferred over the relator. This is the truth, however the act may be colored. The scheme of the statute cannot thus be reversed, and the course adopted in the department should not be permitted. With questions of original preferment, where others than the veterans are already employed, we have nothing at present to do. The relator here had already secured his preferment.

Upon evidence satisfactory to an agent of the present commissioner or of his predecessor, Sullivan’s name had been placed upon the list of honorably discharged Union soldiers in the department. Without questioning this fact, the relator was summarily deprived of his vested preferment. That preferment should be restored to him as summarily as it was taken away.

The order appealed from should, therefore, be affirmed, with costs.

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

Order affirmed, with costs.


author: Van Brunt, P. J.:

text:
    WINSTON JONES, as Assignee of the Bank of Mobile, Respondent, v. THE MERCHANTS’ NATIONAL BANK OF THE CITY OF NEW YORK, Appellant, and the BANK OF MOBILE.

      Dank holding securities, and stating in writing that they a/re held subject to the order of another bank, is not precluded from showing that it holds them as anindemnity unden• a prior agreement for advances made — certainly not if its written statement be not acted upon.

    In an action, brought by the assignee of the Bank of Mobile against the Merchants’ National Bank for the recovery of certain bonds and coupons alleged to be in the possession of the defendant and belonging to the plaintiff, and also for an alleged balance of account, the defendant admitted the possession of the bonds, and also the balance due upon account, but claimed a lien upon both, because of certain transactions between such defendant and the Bank of Mobile, by reason of which it was entitled to hold these securities and this money as an indemnity for advances made.
    Upon the trial of the action a letter of July 13, 1883, written by the cashier of the Bank of Mobile to the cashier of the defendant, was received in evidence as follows:
    “ Dear Sir. — Please give me a list of bonds and securities now in your hands belonging to us, stating' particulars and descriptions of securities, and very much oblige.”
    To which the following answer, under date of July 16, 1883, was returned by the assistant cashier of the defendant:
    “Dear Sir. —We hold, subject to your order, $35,000, M. & O. R. R. bonds, Cairo Ex.” Following which was a description of the bonds.
    It appeared by the evidence of the president of the defendant that the two banks had had dealings with each other, the defendant collecting paper for the Bank of Mobile, which drew drafts upon it, and that during all this time the defendant had in its hands securities belonging to the Bank of Mobile, consisting of paper for collection, exchange, bonds and cash, checks and sight drafts. The witness was asked: “For what were these securities held by you?” Which question was objected to and the objection sustained. He was then asked: “State anything which you recollect to have taken place between you and these parties in regard to the securities in your hands, and the right of your bank to hold them? ” • Whereupon the court ruled that the defendant could not rely upon any arrangement or agreement made prior to the date of the letter of July 16, 1883. The witness was subsequently asked: “Was there, prior to July 1,1883, any arrangement between the Merchants’ Bank and the Bank of Mobile in regard to the former bank holding the bonds which are referred to in controversy as security for loans, over-drafts and discounts made by your bank for the benefit of tbe Bank of Mobile?” To which he replied, “Yes, sir.” He was then asked: “ Please state what that arrangement was and when it was made? ” Objection was taken to this question, which was sustained, as was also an objection to an offer by the defendant to show what had been the course of dealings between the Merchants’ Bank and the Bank of Mobile prior to July, 1883.

      Held, that these rulings Were clearly erroneous; that even if the letter of July 16, 1883, had been written by one of the officers of the hank, it could not have the force of depriving it of any arrangement or agreement under which it held these bonds, unless the same was acted upon by the Bank of Mobile, or the latter refrained from doing some act upon the faith of the letter.
    That there was no estoppel, if the defendant was mistaken in regard to the rights it had in respect to these securities, as the Bank of Mobile did not appear to have been in any way injured thereby.
    That while the securities held by the defendant might have been held subject to the order of the Bank of Mobile, it did not follow that that hank would have the right to withdraw these securities until it had satisfied its indebtedness to the defendant;
    Appeal by the Merchants’ National Bank of tlie city of New York from a judgment, entered, after a trial at tbe New York ■Circuit before tbe court and a jury, at wbicb a verdict was rendered in favor of the plaintiff, in the office of tbe clerk of tbe county of New York on tbe 4th day of February 1887, and from a judgment ■entered on tbe 30tli day of March, 1887, mmo pro tunc, as of the ■4th day of February, 1887, and also from a judgment entered in tbe office of the clerk of tbe county of New York September 23, 1887, mmo pro tuno, as of February 4, 1887.
    By tbe judgment of February 4,1887, it was adjudged that tbe plaintiff recover of and from the defendant, tbe Merchants’ National Bank of the city of New York, tbe possession of certain personal property, bonds and securities therein mentioned, and also certain sums of money particularly specified therein.

      John E. Burrill and George Edbrishie, for the appellant.

      Burton N. Harrison, for the respondent.
   Van Brunt, P. J.:

This action was brought by the plaintiff, as assignee of the Bank of Mobile, against tbe defendant, a banking corporation existing and carrying on business in the city of New Fork, for tbe recovery of possession of certain bonds and coupons alleged to be in the possession of the defendant and belonging to the polaintili, or for the value thereof in case a delivery could not be had, and, also, for the sum of $6,181.48, an alleged balance of account. The defendant by its answer admitted the possession of the bonds, and, also, the balance of account, but claimed a lien upon the bonds and money because of certain transactions had between the Bank of Mobile, of which the plaintiff is assignee, and the defendant; and that under an agreement between the defendant and the Bank of Mobile, the defendant had a right to hold these securities and money as an indemnity for any advances which might be made by way of discount or otherwise, which might at any time exist in its favor against the said Bank of. Mobile.

The defendant further alleged, that at the request of the Bank of' Mobile, it discounted certain commercial paper in the daily course-of business, and that said paper liad become due and was unpaid, and that there was due thereon, from said Bank of Mobile, the face thereof, with interest, which the defendant claimed and insisted was a lien upon the bonds and the balance in money in the complaint mentioned.

Upon the trial, the court directed a verdict in favor of the plaintiff for said bonds and coupons, and also for the balance on account, amounting to nearly $6,000. And from the judgment thereupon entered this appeal is taken.

It appeared from the evidence introduced upon the trial, that long prior to the year 1883, the Bank of Mobile and the defendant had been in the habit of having mutual dealings with each other, and that the bonds forming the subject-matter of the first cause of action set out in the complaint, had been deposited in the course of these-dealings by the Bank of Mobile with the defendant.

In the disposition of this appeal, it is not necessary to rehearse in detail, the evidence given as to these transactions. Among other-evidence offered upon the part of the plaintiff, it appears that on the 12th of July, 1883, the cashiér of the Bank of Mobile addressed a letter to the cashier of the defendant in the following language :

“Dear Sir.— Please give me a list of bonds and securities now in your hands belonging to us, stating particulars and descriptions of securities, and very much oblige.”

To tliis an answer was returned on tlie 16th of July, 1883, by one McDonald, the assistant cashier of the defendant, in the following language:

“ Dear Sir.— We hold, subject to your order, $25,000 M. & O. R. R. bonds, Cairo. Ex.” And here follows a description of the bonds.

The plaintiff having rested his case the defendant then examined the president of the Merchants’ National Bank, the defendant, as a witness on its own behalf, who stated that he had been connected with the bank as an officer since 1858, as cashier up to 1868, and ¡subsequent to that time as president; that the two banks had had dealings with each other during all the time he had been connected with the bank, except during the war; that their transactions at times had been very large; that sometimes the Bank of Mobile had a large balance, and sometimes owed the defendant considerable money; ■that the defendant collected paper for the Bank of Mobile, and the Bank of Mobile was accustomed to draw drafts upon the defendant, and a regular banking account was kept between the two banks .and that during the time of his connection with the defendant it lias had in its hands securities belonging to the Bank of Mobile; that the nature of the securities was paper for collection, exchange, bonds .and cash checks on various banks, and drafts at sight.

The witness was asked “ For what were these securities held by ■you?” This question was objected to unless it was limited to the particular securities in question, which objection was sustained and •.an exception taken. The witness was then asked to state the arrangement under which his bank held the securities. This was objected to on the same ground, the objection sustained and defendant--excepted. The witness was asked: State anything which you ¡recollect to have taken place between you and these parties in Regard to the securities in your hands and the right of your bank to hold them.” The witness was going on to answer when the court interrupted the witness by the statement that it would rule that the -defendant could not rely upon any arrangement or agreement made prior to the date of the letter of the 16th of July, 1883, but only upon some subsequent arrangement or agreement, and that it would "try the case upon that theory. To this ruling the defendant duly -excepted.

Subsequent to this time the president of the defendant was recalled and was asked the following questions: “Q. Was there, prior to July 1, 1883, any arrangement between the Merchants’' Bank and the Bank of Mobile in regard to the former bank holding-the bonds which are referred to in controversy as security for loans,, over-drafts and discounts made by your bank for the benefit of the Bank of Mobile? A. Yes, sir. Q. Please state what that arrangement was and when it was made ? ” The plaintiff’s counsel objected to the witness testifying as to'the .nature of the arrangement or as-to what it was. The objection Nvas sustained and- the defendant excepted. The defendant then offered to show what had been the-course of dealings between the Merchants’ Bank and the Bank of Mobile prior to July, 1883. This evidence was objected to and excluded under exception. And then the question was reiterated. “ Prior to July 1, 1883, was there any, and if so what, arrangement, between the two banks in regard to these bonds Í ” This was objected to on the ground that what happened prior to the 16th of' July, 1S83, was immaterial and irrelevant. The objection was-sustained and defendant excepted.

These rulings were clearly error. Even if the letter of July 16,1883, had been written by one of the officers of the bank, yet it could not have the force of depriving it of any arrangement or agreement, tinder which it held these bonds unless the same was acted upon by the Bank of Mobile or they refrained from doing some act upon the-faith of this letter.

There was no estoppel if the defendant was mistaken in regard to the rights it had in respect to these securities. The Bank of Mobile does not appear to have been in any way injured, and it. evidently was not intended to alter, change or vary the relations-which had existed between the banks. Even if the letter is taken in its most literal terms, the securities held by the defendant may have been subject to the order of the Bank of Mobile. But it does-not necessarily imply that the Bank of Mobile should have the right, to withdraw these securities until they had satisfied their indebtedness or obligations to the defendant. These securities were not. withdrawn; they were allowed to remain with the defendant, presumably upon the same understanding and agreement upon which they had been deposited prior to July 16,1883. There was-no intention expressed by either party in this correspondence to alter the relations which existed between the banks. Even if the bonds, which formed the subject-matter' of this suit, had been held as collateral to the indebtedness of the Bank of Mobile to the defendant, they were still the property of the Bank of Mobile; and when they wdre spoken of by the defendant as their property it in no manner affected any lien which the defendant had upon the property; and there does not appear to have been any intention upon the part of either party to change or alter, as already stated, any business relations existing between the two. At most, after the defendants had proven the arrangement under which they were entitled to hold the money or securities belonging to the Bank of Mobile as security upon the general account, this letter could be used, perhaps, as evidence, that such agreement did not exist. But it was clearly a question for the .jury to determine as to whether this letter was in conflict with the claim made upon the part of the Bank of Mobile, that no such arrangement existed.

It is clear that this correspondence could not operate as an estoppel. In the absence of evidence that the Bank of Mobile had either done, or refrained from doing some act, because of the representations of the officers of the defendant, no estoppel could possibly arise ; and the only pertinency and value of that evidence, in the absence of evidence creating an estoppel, would be in case the correspondence could have the effect of impairing the credit of the evidence upon the part of the defendant that an arrangement had been made with the Bank of Mobile prior to this time, such as they claim.

It is- urged, upon the part of the respondent, that there is no> conflict in the evidence as to any of the questions at issue. This is undoubtedly true, because, under the ruling of the court, all the evidence upon the part of the defendant was excluded, and the direction upon the part of the court upon the case as it now stands, of a verdict, was undoubtedly correct.

But the case was tried and the rulings were made as to the admission of evidence upon the erroneous theory that, by the correspondence of July, 1883, a change was made in the relations between these parties; that the agreement which had-been made prior to that time was thereby abrogated, and that from that time forward, tbe course of business between these two banks was changed. Under the ruling of the court the defendant was required to show an arrangement made subsequent to July 16, 1883. This the defendant was unable to do. It offered to prove, that prior to that time arrangements bad been entered into sucli as they claim.' This proof was excluded, as already stated, upon tbe theory that the letter of July sixteenth altered the arrangement which had been previously made, and that the course of business between these banks was thereby changed, and that tbe defendant bad no right to rely upon tbe previous arrangements or understandings or course of dealing which had been established during the number of years in •which these institutions had been doing business together.

For this error the judgment should he reversed and a new trial ordered, with costs to appellant to abide the event.

Daniels and Barrett, JJ., concurred.

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


text:
    LOUISA O. W. BUTLER, as Executrix, etc., Trustee, and ALLIE L. SPERBECK, an Infant, by her Guardian ad litem, Respondent, v. STATE MUTUAL LIFE ASSURANCE COMPANY OF WORCESTER, Appellant, Impleaded, etc.

      Insurance policy — payable to one pm'ty in trust for another — right of the pm'ty, whose life is insured and who pays for the policy, After delivery thereof to the trustee, to home a power inserted to substitute a new ti'ustee — effect of paying the loss, after the death of the original trustee, to a substituted trustee — right of the legal representatives of the original trustee to recover the a/mount from the company.

    In an action brought to recover upon a policy of life insurance upon the life of Andrew H. Adams, it appeared tliat, in bis application therefor, Adams answered the question “For whose benefit is this insurance ?” as follows: •“ Rev. Jeremiah Butler of Fairport, New York, in trust for Allie Lee Sperbeck.” The policy insured the life of Andrew H. Adams “for the use of Rev. Jeremiah Butler of Fairport in the State of New York, in trust for Allie L.Sperbeck of Fairport aforesaid, to the amount of $2,000 for the term of his life.” Adams delivered the policy to Butler shortly after its receipt by him, hut about a year afterwards had it again in his possession for a short timfe, and at that time applied to the company for a change therein which would authorize him to appoint a new trustee in ease of tlie death of Jeremiah Butler. Adams then delivered the policy to the agent of the company who procured the application to he sent to him by the defendant, and, with the consent of Adams, added to the answer to the question “For whose benefit is this insurance ? ” the following : “Or in the event of the death of the said trustee during the lifetime of the insured, he shall appoint a trustee to fill the place of the deceased.” Thereupon the application and policy were returned to the home office of the defendant, and thereafter the policy was again delivered to Adams, who delivered it to Butler, who retained it until his death in July, 1880, when his executrix finding the policy, by Adams’ direction, returned it to him. Adams thereupon applied to the company for a substitution of Miss Sperbeck’s mother as trustee in Butler’s place, and requested defendant to make such substitution, which it did.-
    Adams died in June, 1881, and thereupon the substituted trustee claimed the insurance money. A law suit ensued which was compromised by the payment of $1,872 in full. Thereupon the policy was surrendered to the company by Mrs. Adams for cancellation.
    The executrix of Jeremiah Butler, who knew of Adams’ death immediately after it occurred, but never made any claim to the insurance until after the payment to the substituted trustee, in making which the defendant acted in good faith, brought an action, nearly five years after this settlement, to recover the amount of the insurance upon the theory that the appointment of the substituted trustee after Jeremiah Butler’s death was unauthorized.

      Held, that upon the delivery of the policy to the beneficiary designated therein, the contract was executed; the beneficiary’s interest became vested; the appointment was irrevocable, and the company’s obligation fixed, and it could not be thereafter altered without the consent of the beneficiary.
    That the beneficiary was not bound by any act of Adams done after the delivery of the policy to the beneficiary, unless such act was in violation of some condition of the policy.
    'That, as there was no reservation in the policy of the right to make a fresh appointment upon the death of the trustee named therein, Adams’ power in this respect ended upon the delivery of the jiolicy to Butler.
    That, as the statute of Massachusetts provided that the insurance money should, in the event of Butler’s death, be paid to his personal representatives, it was not necessary to appoint a new trustee.
    Arrear by tlie defendant from a judgment entered, after a trial before tlie court at a Special Term held in tlie county of New York, in the office of the clerk of the county of New York, on the 27th day of July, 1889, by which judgment it was determined that the surrender or attempted surrender. by the defendant, Amelia B. Rapier, of policy No. 10983, mentioned and described in the complaint, and made and issued by the defendant, State Mutual Life Assurance Company of "Worcester, on the life of Andrew H. Adams, was unauthorized and void; and that said policy was in full force and effect, and that plaintiff recover of defendant, State Mutual Life Assurance Company of Worcester, Massachusetts,, $2,697.38, the amount of said policy, including interest, besides costs.

      Edward E. Sprague, for the appellant.

      Oliver P. Buel, for the respondent.
   Barrett, J.:

Andrew H. Adams applied to the defendant’s agent for insurance upon his life. In his application he answered the question “ For whose benefit is this insurance?” as follows: “Rev. Jeremiah Butler of Fail-port, New York, in trust for Allie Lee Sperbeck.” Miss Sperbeck was and still is an infant, not related to Adams. He described her in the application as “protegé.” Upon this application, the policy was issued and delivered to Adams.

This policy reads as follows: “ This policy of assurance witnesseth,, that the State Mutual Life Assurance Company of Worcester, in consideration of the representations made to them in the application therefor, and of the sum of seventy-six dollars and ninety-two cents-to them paid by Andrew H. Adams of Chicago, in the county of' Cook, and State of Illinois, and of a like sum to be paid to them or-their agent duly authorized on or before the first day of May at noon, in each year during the term of this policy, do insure the life of Andrew II. Adams of Chicago, in the county of Cook, and State of Illinois, for the use of Reverend Jeremiah Butler of Fair-port, in the State of New York, in trust for Allie L. Sperbeck of Fairport, aforesaid, to the amount of two thousand dollars, for the-term of his life.”

Shortly after the receipt of the policy, Adams delivered it to Butler, but about a year afterwards, Adams again had it in his possession for a short time, and while it was so in his possession, he-applied to the company for such a change therein as would give-him the right to appoint a new trustee upon Butler’s death. Upon this head the learned judge at Special Term found as follows:. “ That in May, 1879, the said Adams applied to the defendant, through its agents at Chicago, for such a change in the policy as-should give to said Adams the right to appoint a new trustee in case of the death of said Jeremiah Butler during the lifetime of said Adams; and the said Adams thereupon delivered the said policy to-the said agent for the purposes of such change; that said agent procured said application to be sent to him by defendant from its-home office in Worcester, and with the knowledge and consent of' said Adams, added to the answer to the question, ‘For whose benefit is this insurance ? ’ the following, ‘ of in the event of the death of' said trustee during the lifetime of the insured, he shall appoint, a trustee to fill the place of the deceased.’ That said agent thereupon returned said application, together with the original policy, to-the home office of the defendant, and the said policy was again delivered to the said Adams from the home office.”

After this change was made, Adams again delivered the policy to-Butler, in whose hands it remained rintil his (Butler’s) death, hdiich occurred in July, 1880. The plaintiff, Mrs. Butler, was, on the= 2Jth of September, 1880, appointed Butler’s executrix. She found the policy among her husband’s papers. • She subsequently wrote to Adams, “ What shall I do with that life insurance policy ? ” He replied, “ Return it to me,” and she did so. Thereupon, in March,. 1881, Adams applied to the company for a substitution of Miss Sperbeck’s mother (whom he had previously married) as trustee in Butler’s place. Upon this the learned judge found as follows : “That upon the death of the said Jeremiah Butler the said Adams appointed Amelia B. Adams as trustee in place of Rev. Jeremiah Butler, deceased, and notified defendant of such appointment, and requested defendant to make such substitution; and defendant thereupon, by resolution of its board of directors, did substitute said Amelia B. Adams in place of Jeremiah Butler, deceased, as such trustee. That at the time of such substitution said Andrew H.. Adams had possession of said policy.”

Adams died in June, 1881, and thereupon the substituted trustee, Mrs. Adams, claimed the insurance money. The company disputed the claim upon grounds other than her right to sue. A law suit ensued which was compromised in September, 1882, by the payment of $1,3J2 in full, and thereupon,tbe policy, which in the-meantime had been in Mrs. Adams’ hands, was surrendered to the company for cancellation.

The plaintiff Mrs. Butler knew of Adams’ death immediately after it occurred, but never made any claim to tlie insurance until after the payment by the defendants to Amelia B. Adams, nor did she know of such settlement and payment until subsequently informed thereof by the company. The defendants acted in good faith in making this payment. It was made without actual knowledge of the plaintiff’s claim, and the settlement with Mrs. Adams was a just and fair compromise of a disputed claim. Nearly five years after that settlement the plaintiff brought this action, and she has recovered upon the theory that the appointment of Mrs. Adams as a new trustee after Butler’s death was unauthorized, and that the company is still bound, under the terms of the policy, to pay the insurance money to the “legal representatives” of Jeremiah Butler intrust for Allie L. Sperbeck, and thus to the plaintiff as Butler’s executrix. The plaintiff is also the general guardian and guardian ad litem of the beneficiary.

We concur in the conclusion arrived at by the Special Term upon these facts. The contract of insurance was undoubtedly with Adams. He insured his own life for the benefit of this child. Tlie ■child had no insurable interest in Adams’ life, and consequently neither she nor Butler, in trust for her, could have taken out a valid policy upon Adams’ life. It was entirely competent for Adams, lrowever, to insure his own life and thereupon to assign the policy to a designated beneficiary. He could either do this or he could designate the beneficiary in the policy itself. In the latter case, upon delivery of the policy to such designated beneficiary, the com tract was executed, the beneficiary’s interest became vested, and the appointment was irrevocable. The company’s obligation reads as follows:

“ And the said company do promise and agree to pay to Reverend Jeremiah Butler aforesaid, in trust as aforesaid, his legal representatives, at their office in Worcester, in lawful money of the United States, the said sum of two thousand dollars, in sixty days after presentation of satisfactory proof of the death of said Andrew H. Adams, any indebtedness to this company on account of this policy being first deducted therefrom.”

Upon the delivery of the policy to Butler the contract took effect as an agreement between the company and Butler in trust, and it ■could not thereafter be varied in any particular without the consent of tlie beneficiary. And here such consent could not have been given as the beneficiary was an infant. The effect of the transaction was precisely the same as though the policy had in its inception run to Adams alone, and upon an assignment thereof by Adams to Butler, in trust, the latter had procured the company’s promise to pay him, to be indorsed upon his assignment. It has been authoritatively held that where a person takes out a policy of insurance upon his own life, and the amount is made payable to another having no interest in the life, or where the insured assigns his policy to one-having no such interest, the beneficiary or the assignee may hold and enforce the policy. (Olmsted v. Keyes, 85 N. Y., 593.)

In the case at bar, the company had notice of their own agreement to pay Butler as trustee, and in case of his death to pay his legal representatives. That was before them upon the face of the contract when Adams asked them to alter their obligation, so that, upon Butler’s death, they should pay to some one other than Butler’s legal representative. They could not thus affect the beneficiary’s vested rights. The beneficiary was not bound by any act of Adams done by him after the delivery of the policy, unless, indeed, such act was in violation of some condition of the policy. (Fitch v. Am. Pop. Life Ins. Co., 59 N. Y., 573.) The promise to pay Butler’s “ legal representative ” was nothing more than a promise to pay as required by law. For, before the act of 1882, it was well settled that a trust of personal property devolved (on the death of the-trustee) upon the trustee’s personal representative. (Wetmore v. Hegeman, 88 N. Y., 72; Bunn v. Vaughan, 5 Abb. Pr. [N. S.], 269; Boone v. Citizens’ Savings Bank, 84 N. Y., 83.) As there was no reservation in the policy of the right to make a fresh appointment upon the death of the trustee named therein, Adams’ power in this-respect ended with the delivery of the policy to Butler. Thereafter the legal effect of the transaction was left to the law. Even Butler could have made no agreement, after his acceptance of the trust, which would have affected the vested rights of the beneficiary. Any attempt to do so would have been a violation of his trust. There can be no estoppel in such a case. The defendants knew what their legal obligation was. They knew that they had agreed to-pay to Butler in trust for Allie Sperbeck. They knew, also, that in case of her death, they had agreed to pay to his legal representafives. Tliey were also bound to know that that was their legal duty, even if they had not expressly so covenanted. The possession of the jiolicy by Adams thus had no legal significance. It was entirely natural that he should have it and that he should pay the premiums thereon from time to time. The company knew from the very terms of the instrument that the gift was executed and irrevocable.

They were certainly put upon -inquiry as to whether the policy had been delivered to the contract ajipointee before permitting Adams to change the legal process of devolution. .But, upon the facts appearing in the record, it is not necessary to place our judg■ment upon the latter proposition, for the defendants admit that they caused the policy to be delivered to Butler. This appears from the absence of any denial, in the answer, of the fourth paragraph of the -complaint, which reads as follows:

TV. That thereupon the defendant corporation caused said policy to be delivered, and it was duly delivered through said Adams to said Jeremiah Butler, and was thereafter held by said Jeremiah .Butler, in his possession as trustee as aforesaid, until his death.

Thus the defendants permitted the change in question, and because of that change made the payment to Mrs. Adams, with full knowledge that the policy had been delivered to Butler; that the rights of the beneficiary thereunder had vested, and that, consequently, Adams’ subsequent- possession of the instrument was transient and incidental, having no relation to personal ownership and conferring no right to vary the precise terms of the obligation. Such payment can have no bearing upon their obligation to'pay in accordance with the terms of their contract.

The claim that a new trustee should have been appointed in Massachusetts is without force, for two reasons: First. Because adequate provision is made in the policy “for supplying the vacancy,” to quote the Massachusetts statute, caused by Butler’s death, namely, that the insurance money should be paid in that event to his personal rejiresentative; and, second, because the question relates to the remedy and is governed by the lew fori. Here, too, the cestui que trust is the real party in interest, and she is before the court by her guardian ad litem. The trust is a mere naked trust, and the trustee has no duty thereunder save to receive the insurance money and pay it over to tbe guardian of tlie infant beneficiary for tlie latter’s benefit.

In our judgment, tbe defendant is now, for the first time, lawfully called upon to perform its contract, and tbe judgment requiring such performance was right and should be affirmed, with costs.

Van Brunt, P. J., concurred.

Judgment affirmed, with costs.