author: Daniels, J. ;•

text:
    In the Matter of THE EQUITABLE RESERVE FUND LIFE ASSOCIATION OF THE CITY OF NEW YORK.

      Assessment Ufa insurance —a death fund is-subject only to death claims — disposition of a reserve fund — an assessment levied to pay a particular death claim, applied by a receiver to that claim — death after the dissolution of the corporation — an assessment levied after the appointment of a receiver is valid — effect of a failure to pay it after notice.

    The Equitable Reserve Fund Life Assoqiation of the City of New York was created under chapter 175, Laws of 1888, which act was amended by chapter 285, Laws of 1887. It had no capital, claims against it being provided for by assessments. Its constitution provided for the establishment of a death fund and also of a reserve fund. An assessment, when levied, was applied to the extent of about seventy per cent to the death fund; of five per cent to a pontingent fund, and of twenty-five per cent to the reseive fund. The certificate of membership, as well as the constitution of the association, set apart the death fund exclusively.for the. payment of death claims. The disposition of the reserve fund, in case the corporation was dissolved, was in no manner provided for. The constitution, however, gave to the trustees power to use the reserve fund to meet any want or necessity of the association that might arise by reason of unforeseen contingencies; but prohibited its use for the payment of expenses.
    In September, 1889, a temporary receiver of the corporation was appointed, and thereafter, under authority of the court, the trustees levied the last assessment ever levied upon the members. From this assessment a considerable sum was realized, by which the death fund profited to the extent of seventy per cent. In November, 1889, the receivership was made permanent and the corporation was dissolved.
    Upon an application to the court by the receiver, for instructions with reference to the distribution of the reserve fund,

      Held, that death claims were properly payable out of the death fund, including in that fund its share of the assessment levied after the appointment of the temporary receiver, and that no other claims could be paid from said fund.
    That, it appearing that the death fund was quite insufficient to pay in full the death claims, the holders of the latter were entitled to share pro rata with other members and creditors of the association in the reserve fund; the case being one where “an unforeseen contingency” might he said to have arisen.
    That this followed from the fact that the corporation was an assessment association, and that its reserve fund was, in case of its dissolution, in no manner disposed of by its charter, and hence must be distributed according to equitable principles.
    That where an assessment was levied, while the corporation was existing, to meet a particular death claim, and payment was postponed by reason of a dispute having arisen in regard to the claim, the receiver was bound to use the amount of such assessment to pay that claim.

      That a death claim, made on behalf of a member, who died after the corporation, was dissolved, was not entitled to payment from the death fund, but was a claim to be paid in like manner as that of a general creditor.
    That assessment companies stand upon a different fooling from those having a paid up capital in regard to assessments levied, after insolvency and before dissolution, by authority of the court, in conformity with their constitutions.
    That an assessment levied by the trustees after the appointment of the temporary receiver, and before the dissolution of the corporation, by direction of the court, was valid, and a failure to pay it, after notice duly served, forfeited a certificate of membership, as expressly provided in the certificate and in the by-laws of the association.
    Appeals by Theodore A. Liebler, Jr., and by certain others, members of the Equitable Reserve Fund Life Association, from various parts of an order, entered in the office of the clerk of the city and county of New York on the 7th day of January, 1891, confirming the report of a referee and overruling the exceptions of the several ■claimants filed to said report.

      A. B. Smith, De Laneey ffieoll, F. R. Minrath, Samuel II. Benton, Lueius Me Adam said Ilenry G. De Witt, for the appellants.

      Henry II. Whitman, for the respondent.
   Daniels, J. ;•

The Equitable Reserve Fund Life Association, of the city of New York, was created a corporation on or about the l7thof May, 1888, under the authority of chapter 175 of the Laws of 1883. It continued its business uninterruptedly from that time until the 18 th of September, 1889, a period of upwards of six years, when, upon the application of the attorney-general, John Yan Glalm was appointed temporary receiver of the assets and property of the corporation, lie continued in that capiacity until the 9th of November, 1889, when a decree was made dissolving the corporation and he was .appointed and became permanent receiver. As such, there came into his hands the sum of $78,953.99, or thereabouts. This sum was ■divided into two funds under the constitution and by-latvs of the association, one of which was designated the death fund, which was applicable alone to the p>ayment of beneficiaries in certificates of insurance upon the lives of piersons becoming deceased during the ■existence and force of the certificate. This fund amounted to the .sum of $18,401.35, which was very largely deficient in its ability to meet the claims made by beneficiaries under certificates issued to persons who had become members of the association and fulfilled all their obligations, and were deceased prior to the dissolution of the association. The other was denominated the reserve fund, and amounted to the sum of $63,614.79. And it is as to the disposition of this reserve fund that the principal controversy in this proceeding has arisen.

The receiver, being in doubt as to the manner in which this latter fund should be distributed, and the allowance of claims that were presented in favor of beneficiaries under certificates where the assured was deceased, applied to the court, by petition, for instructions, and a very comprehensive reference was directed, including these and other subjects of uncertainty or controversy arising in the case. And upon the hearing before the referee all points of a controverted character were presented to him, and he decided, as the constitution of the association required that to be done, as well as-the form of the certificate of insurance, that the persons in whose favor death claims existed were entitled to an exclusive preference to payment, so far as that could be made, out of this death fund, but that they had no legal claim whatever against the reserve fund for the amount' remaining unpaid, after the death fund was-exhausted. In this decision, that the beneficiaries having existing claims were entitled to payment out of the death fund, the referee is fully supported by the constitution of the association as well as the form of the certificates which were issued. The association had no capital whatever, but the claims arising against it were provided for by means of an assessment upon the persons holding certificates of insurance issued by it. And the amount realized through these assessments, as the constitution was finally amended, was applied to the extent of seventy per cent, to the creation of this death fund. Five per cent of it was applied to a contingent fund, created to-meet other expenses and liabilities of the association, and the remaining twenty-five per cent was devoted to the creation of the reserve fund. These assessments were, in the first instance, made as the claims arose in favor of beneficiaries under the certificates, but that was finally changed by an amendment to the constitution providing for the imposition of assessments on the second Tuesday of every other month in each year. And this proceeding was continued under the authority of the court by the receiver, through the intervention of the trustees of the association, in the month of October, 1889, which was the last assessment made upon the holders of certificates in this association. And from that assessment was realized the sum of $7,044.40 which formed a part of the aggregate death fund already mentioned. For the payment of claims of this character the constitution contained this provision:

“Sec. 1. Upon the death of a member during the continuance of his or her certificate or 'certificates in full force, the association shall, within three months after due notice and satisfactory proofs of such death, and the approval thereof by the executive commitdee, pay to the beneficiary named on the books of the association, if such beneficiary be living at the time of such member’s death, otherwise to the heirs or legal representatives of such deceased member, the -amount to which the same may appear entitled according to the books of the association and the terms of the certificate of membership, out of the death fund (hereinafter defined) of the association; or, if the death fund shall then be insufficient to pay the whole of any such claim, then pro rata with other claims out of the moneys to be realized to said death fund from the assessment to be made as hereinafter described; provided, however, that there shall be first deducted therefrom any counter-claim or indebtedness due from said member to the association, And no death claim shall become otherwise due or payable, except from the reserve fund as hereinafter provided.”

And it was further provided, by section 6 of article 7 of the con•stitution, that the death claims should bo payable from tlie death fund account. And this was conformable also to the certificates issued by the association for the insurance of its members. No other claim whatever was permitted to be made a charge upon this death fund, but it was exclusively limited to the payment of the ■claims of beneficiaries under certificates issued to deceased members. And so. far as the referee concluded that what are called the death claims maturing prior to the dissolution of the association were entitled to payment as a first charge upon this death fund, there seems to be no ground to doubt its correctness. In this respect the case differs entirely from People v. Security Life Insurance and Annuity Company (78 N. Y., 115). In that action the company, which was a corporation doing its business upon an actual capital, issued ordinary policies of insurance. And when it became insolyent tlie pei*sons insured were thereby absolved from the payment of further premiums, and entitled to a valuation of their policies at the time when the insolvency commenced to exist. And so it was also held in In re Albert Life Insurance Company (L. R., 9 Eq., 706); while in the present case the association depended wholly upon assessments, to be made to meet the claims arising against it. And it obtained the power and had the authority to continue such assessments as long, as the association legally existed, which included the assessment made under the application of the receiver in the month of October, 1889. But after the dissolution of the association no authority appears to have survived through which additional assessments could be made. And the result which followed this disability is that the death claims arising prior to the dissolution of the association have been paid much less than a moiety of their amount.

To meet this large deficit they were urged upon the attention of the referee as entitled to payment out of the reserve fund. But he rejected that view, and held the reserve fund to be only distributable proportionately among the holders of unforfeited certificates in the association at the time of its dissolution. This conclusion was considered to be supported by the peculiar language of the certificate and of the constitution of the association. And if that view is to be sustained,. then the case of Burdon v. Massachusetts Safety Fund Association (147 Mass., 360), seems to be an authority in favor of his conclusion. But this case differs very significantly from that authority, in the circumstance that no disposition of the reserve fund has been provided for by the constitution or by-laws in any manner after the dissolution of the association. In that case there was such a provision giving the safety fund to the persons holding certificates in the company. •

Neither the constitution, by-laws or certificate of insurance of this company has in any form prohibited the payment of the deficiency remaining in death losses out of the reserve fund. But the constitution has contemplated the fact of such payment in the discretion of the board of trustees. Eor it has invested them with authority to use the reserve fund to meet any want or necessity of the association that might arise by reason of unforeseen contingencies. And the unforeseen deficiency in the death fund seems to be fairly within the effect of this language. It has also been provided in the occurrence of another event, which never, in fact, however, was attained, that the excess in the reserve fund exceeding the sum of one hundred thousand dollars might be used towards making mp any deficiency then existing in the death fund. The constitution has also prohibited the reserve fund from being used for the payment of expenses. But it- has nowhere prohibited the use of this fund, after the dissolution of the association, to supply the deficiency in the death fund. Neither has it given, either directly or by implication, the reserve fund, in any event, to the holders of certificates in the association It is true that it was declared in the certificate that this fund should be deposited and invested, in trust, for the benefit of the members of the association. But the extent to which that benefit was provided for, or in any manner conferred, was through the issuing of bonds to members, under certificates issued to those who paid the assessments made against them, for the period of at least five years. In favor of such members or holders of certificates the constitution did provide for an apportionment of the reserve fund to their holders on such basis and principles as the board of trustees should deem safe and equitable. And to render the apportionment available, the members to be included in it were authorized, after ten years from the date of the apportionment, to apply the sum apportioned towards paying dues and assessments accruing on the certificate. But this was qualified by the further proviso that if the member in whose favor an apportionment was made should die, or otherwise cease to be a member, leaving the apportionment unapplied, that then it should be withdrawn and apportioned in like manner to the holders of other certificates at the expiration of the next five years in which the apportionment could by the constitution be made. The only advantage secured to the holder of the certificate by this apportionment was the right to use the amount apportioned, after the expiration of ten years from the time of making the apportionment towards the payment of future dues and assessments upon his certificate, and that never became available. This contemplated no advantage to the member under the apportionment after he ceased, by death or otherwise, to be a member of the association, but the benefit conferred was wholly to be realized while he remained a member, and the association itself continued to exist. If he ceased to be a member or the association should be dissolved, from that time, as there could be no further assessment, very manifestly under these provisions of the Constitution he could derive no benefit whatever from the apportionment. It accordingly did not affect the disposition of the reserve fund in any manner whatever, if the association itself should cease to exist. The regulations, on the other hand, were all made in contemplation of the continued existence and business ability of the association. When it should cease to exist no regulation or provision whatever was anywhere made controlling, directing or indicating what disposition should be made of this reserve fund, but it was left entirely to be disposed of under the rules and regulations to be applied by law to the distribution of the assets of the insolvent corporation. There was but one appropriation made from the reserve fund under this authority vested in the trustees, and that was in' August, 1889, amounting to no more than the sum of $8,204.72 ; and, as that became ineffectual by the dissolution of the association, the reserve fund remained unaffected by any action, direction or disposition on the part of the trustees of the association. And that fact seems to place the disposition of this fund under the authority of People v. Security, etc., Gompamy (78 N. Y., 114), which, in the main, has also been sanctioned by Attorney-General v. North American Insurance Company (82 N. Y., 172).

The provisions of the constitution of the association having failed to make any disposition of this fund, for the apportionment necessarily failed with the dissolution of the association, the fund remained the unqualified property of the association itself. It was not given to the members holding the certificates at the time of the dissolution, neither was any authority given to the trustees to bestow it on such members, nor has the constitution in any form created any power of that description. And the consequence seems to follow that this fund, as the property of the association itself, at the time when the permanent receiver was appointed, became available to meet all the unsatisfied debts and obligations of the association, and was not distributable, as that was directed to be done by the referee, among the holders of certificates of insurance. In this respect section 3 of chapter 285 of the Laws of 18S7, amending the act under which the association was formed, appears to contemplate a general application of the assets of the association among all the persons having claims or demands against it. For that purpose it has provided for the appointment of a receiver or trustee “ for the distribution of its assets among its members, certificate-holders, policy-holders and creditors,” which contemplates equality of disposition among these various persons in proportion to their final rights against the association. The provision has been awkwardly connected with the verdict of a jury on the disposition of the controverted right of the attorney-general to the appointment of a receiver. But it could not have been intended by the legislature that it should depend alone upon this event. There was no reason why it should be made to follow the verdict, and not generally to include the disposition of the assets of the association. And while the language employed has in form made this disposition dependent upon the verdict, it is still to be understood as the creation of a general authority conferred upon the court to distribute the assets of the association among the persons actually appearing entitled thereto. And that is conformable to the legal principles which have been applied to the distribution of the assets of insolvent corporations when they have been brought before the courts for distribution.

As the property of this association at the time when its affairs passed into the hands of the permanent receiver, this reserve fund became entitled to be used and appropriated to the satisfaction of all legal demands existing against the association. It was its property. And as its disposition had been no otherwise incumbered or declared by the authority of the association, it was subject to this obligation. And among the persons entitled to satisfaction from this fund are those in whose favor death claims accrued and have not been wholly paid by the amounts received by them from the death fund. For they were creditors of the association entitled to be satisfied, so far as the assets were sufficient for that purpose, equally with other creditors having demands against them. And among these, under the authorities which have been referred to, are to be included the owners of the certificates of insurance in force at the time of the dissolution of the association. For to them the association had become obligated to maintain its existence and ability to meet the certificates in the event of the decease of the persons upon whose lives they were respectively issued. The extent of this liability was fully considered in People v. Security Insurance Company, already referred to. And it was there held in the event of the company becoming disabled to continue the insurance as this association did when it was dissolved, that a liability arose in favor of the holder of its obligation to pay to him such a sum as would be sufficient to obtain a similar insurance at the same rate of premium or assessment in another similarly organized association. To that extent the holder of the certificate became a creditor of the association, equally entitled to payment with -the beneficiaries in the death claims left unpaid by the amount of the death fund. And in principle this has been followed in Darrow v. Family Fund Society (116 N. Y., 537), and O’Brien v. Home Benefit Society (117 id., 310). And . between them, after paying the expenses and any other superior liabilities, the reserve fund of this association should be distributed. All these parties are equally creditors of the association, entitled, as far as that may be done, to the satisfaction of their unsatisfied legal claims, by the application to them of this reserve fund. This obligation results from the necessities of the situation. Neither the contract made by the certificate, qualified as it was by the constitution and the by-laws, nor the constitution or by-laws, provided for any final disposition of this fund in the event of the dissolution of the association. And it consequently devolved upon the court to distribute it under the rules and dictates of the principles of equity. And they require its equal distribution among all the creditors of the company.

A special preference was claimed in favor of the beneficiary John Hurley under the certificate of insurance issued on the life of. Johanna Hurley, who died on the 23d of April, 1889. It appeared by the evidence that the assessment following the decease of the person named in the certificate, was specially made to pay the death claim asserted in favor of this beneficiary, together with others which had then accrued against the association. And under the assessment an amount was realized more than sufficient to satisfy all the death claims which at that particular time were required to be provided for. But the amount payable to this beneficiary was not paid ovex-; for the reason that a dispxxte afterwards arose concerning the liability of the association to make the payment. And the fund realized for this purpose passed into the hands of the receiver and became a part of the amount of the death fund of the association. The referee considered, that this beneficiary was not entitled to the payment of the claim existing in her favor out of this balance which was paid over to the receiver. In that he seems to have been in error, for the money was raised to pay this and the other claims allowed at the time by the trustees. It was a special fund received by them,which it was their duty to pay over, inasmuch as it turned out that there was no substantial ground for denying the validity of the claim. And the.receiver, having this money specially charged with this obligation, should apply it to the payment of this demand.

It was also claimed in behalf of Benjamin J. Kleme that he was entitled, as the beneficary named in the certificate issued to J ohn P. Schulte, to participate m the division of the death fund. But is appeared that Schulte died on the 12th of November, 1889, after the association had become dissolved and the rights of the partier had been fixed by that event. lie was at the time of its occurrence the holder of a certificate alone entitled to no further compensation than such an amount as would enable him to secure another insurance in a similar company at the same rate of liability to assessment; There was,, therefore, no error in rejecting the claim made by him to satisfaction out of assessments so' far as they have been appropriated to the creation of the death fund. The claim made by Martin and Johnson as the beneficiaries of Mrs. Johnson, who died on the 4th of July, 1889, has been sufficiently disposed of by what has been said concerning the disposition which should be made of the reserve fund. And so,- also, has that made by Maggie C. Lewis as the beneficiary of J. C. Lewis, who died on the 10th of May, 1889. And the same is true as to the claim presented in favor of Theodore A. Liebler, Jr.

This leaves alone to be considered the claims presented by John B. Foley and others, who failed to pay the last assessment made in October, 1889, and were, therefore, held by the referee to.have forfeited their certificates. It appeared by the evidence that the notices which were required to be served of the making of this assessment were served upon these persons, and they failed tq pay the amount assessed against each of their certificates. And in that event, not only the certificate itself, but the by-laws of the association, provided for the forfeiture and termination of the certificate of the person in that manner in default. Within the express language employed for this object, therefore, these certificates were forfeited. It has been insisted that the assessment made in October, 1889, and which is known as the thirty-fifth assessment, was made without authority, for the reason that a temporary receiver had been appointed for the corm pany and had entered upon the discharge of his duties prior to the time of the making of this assessment. But that fact did not terminate the ability or the obligation of the trustees.to make the assessment-On the contrary, it was provided by the constitution, as it had been amended, and subject to the right to make which the certificates were expressly issued, that the assessment should be made on the day in October in which it was made. The receiver applied to the court for liberty or authority to have it made, and that was accredited to him, and under that the trustees made the assessment. And in all respects they appear to have proceeded regularly in so doing. Associations or corpoi’ations of this description are distinguished as to the exercise of this authority from life insurance companies carrying on their business upon designated as well as contributed capital. Their insolvency puts an end to the right to demand the payment of premiums on the policies. But the business of this company was carried on solely upon contributions expected to be obtained from its members through the instrumentality of these assessments. And both the right and ability to make the assessment and require its payment from the holders of the certificates continued as long as the association retained its corporate existence. This subject was considered in McDonald v. Ross-Lewin (29 Hun, 87); and so it was in Vanatta v. New Jersey, etc., Insurance Company (31 N. J. Eq., 15); and in Commonwealth v. Massachusetts, etc., Insurance Company (112 Mass., 116). And the exercise of this authority has been further sanctioned in New Hampshire Mutual Insurance Company v. Rand (24 N. H., 428) and Sterling v. Mercantile Mut. Insurance Company (32 Penn., 75). Both upon principle and authority this assessment, therefore, appears to have been regularly as well as legally made. And as the parties failed to pay their proportionate parts of it, after they had been regularly notified of it, and payment required, their certificates were forfeited and became void under the language forming a part of each certificate, as well as under the by-laws of the association. And because of this default there seems to have been no error in the disposition of this part of the case as it was submitted to and decided by the referee.

In this and the other respects, in which the referee is considered to have rightly disposed of the claims submitted to him, the exceptions to his report were correctly overruled at the Special Term, and the order to that extent should be affirmed. But in the conclusions reached by him that the death claimants were restricted to the death fund for the satisfaction of their claims, and were unauthorized to participate in the distribution of the reserve fund upon an equality with the holders of certificates in force at the time of the dissolution of the corporation, for the residue remaining unpaid to them after exhausting the death fund; and as to the claim made in behalf of John Hurley the order should be reversed and the report of the referee set aside. And as to those matters a further hearing should be provided in conformity to the conclusions which have been indicated in this investigation to determine the value of the certificates, and apportion the fund between them and the other creditors of the association. And this disposition of the case, in each respect, should be without costs to either party.

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

Order modified as directed by opinion, and, except as modified, affirmed, without costs to either party.


source: Caselaw Access Project

author: Daniels, J.:

license: Public Domain

text:
    JAMES PORTER, Respondent, v. THOMAS J. DUNN, as Surviving Executor of PATRICK H. KENNEDY, Deceased, Appellant.

      Husband and wife — husband entitled to services of the wife — wife not a pa/i'ty in interest under Code, section 839— a claim restricted to a sum fixed by will for the services.

    A husband agreed to take care of a consumptive, who in return promised to compensate him for his services by making pro rision therefor in his will. The wife, with her husband’s assent, rendered services to the consumptive, from time to time, as a nurse. Upon the hearing of a claim arising out of this transaction the wife testified as to the terms of the contract.

      Held, tliat the husband was the sole owner of the cause of action.
    That as the services were rendered by the wife, in subordination to and with the authority of the husband, her evidence as to the contract not being that of a party in interest was competent under section 839 of the Code of Civil Procedure.
    It appeared that a fixed sum to be bequeathed for said services by the invalid had been agreed upon by the parties. The invalid failed to give such legacy by his will.

      Held, that it was error to allow a recovery, beyond the sum agreed upon, based upon what the services were reasonably worth.
    Appeal by the defendant Thomas J. Dunn, as surviving executor of Patrick IT. Kennedy, from an order dated March 12, 1891, and entered in the office of the clerk of the city and county of New York, confirming the report of a referee in favor of the plaintiff; also from a judgment, entered in said office March 12, 1891, in proceeding taken under the statute relating to the reference of claims against a decedent’s estate.

      W. W. Westervelt, for the appellant.

      Eugene S. Ives, for the respondent.
   Daniels, J.:

The plaintiff made a claim against the estate of the testator for services performed by his wife, between the 20th of December, 1877, and the 5th of November, 1888, in caring for and attending to him as a consumptive invalid, and for expenses paid on his account, and also for cream furnished to him, between the 4th of July, 1886, to the same time in 1888. By the consent of the parties and the. approval of the surrogate, the ease was referred to a referee for trial and determination, and he reported in favor of the claimant for the sum of $7,599.52, with Interest. By his report he allowed for the services rendered to the executor in this manner the sum of $8,404.28, which was reduced by $500 paid by the executor and a legacy of $500 more given by the will of the testator. The wife of the claimant was the principal witness upon the trial, and she testified that her husband was the lessee of the premises known as 959 Third avenue, and that the testator lived at that house. Her testimony was, that in 1877 he rented a room of them and that he continued to occupy this room until his decease in 1888, taking lus meals at, or provided from, the restaurant kept in the same building by her husband.

When it was proposed to prove the contract or arrangement made for the performance of these services by the wife of the claimant, it was objected that she was incompetent under section 829 of the Code of Civil Procedure. But it appeared from her testimony that in what she did for him she was acting in subordination to, and with the authority and approval of, her husband. The testator was living in the building, and from his bodily illness required the services and attentions of a nurse, and, at his request, they were given to him by the wife of the claimant, and with his assent. And the testator continued to live in the building in this manner during the entire interval through which the services were rendered, and these attentions were given to. him. It was not the understanding of the wife that she was acting for herself in any respect, but that she was aiding and assisting her husband in his business. And when expenditures were required to be made for the testator, she obtained the money expended from her husband. And she made no personal claim against the testator or against the estate on her own account, but that was made by her husband, the claimant. Prom this evidence, it is quite clear that she was acting, not for herself, but in the service of, and subordinate to, her husband, and, within what was held in Reynolds v. Robinson (64 N. Y., 589), the claim'for compensation accrued to him, and not to her. That case was very much, in its leading circumstances, similar to the present controversy, and the court held that the husband, and not the -wife, was the person entitled to recover for the services rendered. And, in substance, the same thing was also held in Birkbeck v. Ackroyd (74 N. Y., 356). The case, in its leading features, was quite different from that of Brooks v. Schwerin (54 N. Y., 343), as was also the first case which has been here referred to, in which the judge writing the opinion clearly distinguished the one from the other, and maintained the legal principle sanctioning the right of the claimant in this case to recover for these services.

In the disposition of the case by the referee and the confirmation of his report by the court at the Special Term, the claimant was allowed to recover for what the services were stated to be reasonably worth. But from the evidence of his wife it appears that tliese services were rendered under an agreement on the part of the testator that for them he would provide the wife a legacy of $5,000 in his will. This he failed to do, giving her a legacy only of $500 which, when it was received, was paid, over with the other $500 to the husband as the person entitled to the money. There was no dissent from the proposal of the testator that he would compensate the rendition of the services by this sum of $5,000 to be bequeathed by his will. The services were rendered and the attentions were bestowed upon him by the claimant’s wife, with the understanding that they should he compensated in this manner. And the omission of the testator to make that provision in the will, and thereby perform the obligation of his contract, was not attended with any increase of liability on his part or on the part of his estate. For the sum of $5,000 was all that was to be paid for the services and attention -which it was understood would be required by him. And they were rendered upon the understanding that this sum should form a complete remuneration on the part of the testator. And nnder this state of the facts the claimant was not at liberty to recover for the value of the services themselves, but should have been restricted to this sum of $5,000, which the testator agreed to provide by his will, but in the end failed to do.

It has been objected that the allowance of $146 for cream furnished to the testator should mot have been allowed by the referee, or by the court at the hearing when the exceptions to the report were overruled. Rut it appears from the testimony of the wife that cream was required by the testator, and was furnished to him for such a period of time as in all probability would amount to this sum of $146. The other items allowed by the referee were for moneys necessarily expended on account of the testator. And the report and judgment accordingly appear to be correct except in the amount allowed for the services and attention performed and bestowed for him during this period of his illness. For those services the amount exceeded that which should have been allowed by the sum of $3,404 28. And the judgment should be reversed and a new trial ordered before another referee, with costs to the appellant to abide the result, unless the claimant within twenty days after notice of this decision shall deduct this amount, with the interest upon it, from tlie 5tli of November, 1888, from tlie judgment. If that stipulation shall be given, then the judgment will be modified by making that deduction, and as modified affirmed, without costs of the appeal to either party.

Yan Brunt, P. J., concurred.

Judgment modified as directed in opinion, and as modified affirmed, without costs of the appeal to either party.


text:
    HERBERT CECIL PELLY, Respondent, v. WILLIAM M. ONDERDONK, Appellant, Impleaded with Others.

      Bills and notes — proof by the maker that the note was obtained by fraud — the testimony of the holder may be disregarded when, he alone testifies to his good faith.

    In an action upon a promissory note made by one Onderdonk to his own order, and by him delivered to one Griffiths, a deposition of Pelly, tlie holder, was produced upon the trial in which he stated that he purchased the note before maturity for value and in good faith. Onderdonk then offered to show that before he made the note Griffiths made representations to him as to the value of certain processes for making paint and pyrodene owned and invented by Griffiths, which were false and the processes useless; that these representations induced him to make the note.

      Held, that the evidence was proper.
    That where the defense is that a note has been obtained fraudulently the burden is thrown upon the plaintiff to establish that he is a bona fide holder.
    That as the deposition of the plaintiff, an interested party, was the only evidence-upon this point, the maker still had the right to show that the note was procured through fraud.
    That such evidence was competent for the consideration of the jury in deciding-upon the credibility of the plaintiff.
    Appeal by tlie defendant William M. Onderdonk, impleaded with others, from a judgment in favor of the plaintiff, entered in the-office of the clerk of the city and county of New York on the 27th day of January, 1891, after a trial at the New York Circuit before the court and a jury, at which a verdict was rendered in favor of the plaintiff for $3,697.58.

      JSdwcurd S. Olineh, for the appellant.

      Luden Birdseye, for the respondent.
   Daniels, J.:

The verdict was recovered for the amount of a promissory note made by the defendant, William 1VI. Onderdonk, on the 23d day of August, 1889, for the sum of $3,553, and payable to the order of the defendant, who indorsed it to the order of Thomas Griffiths, and by him it was indorsed to the plaintiff. The making and delivery of the note were not denied by the defendant, but it was alleged, by way of defense, that Griffiths claimed to be the owner and inventor of processes for the manufacture of different articles of paint, and also for the manufacture of a liquid called pyrodene. These articles of paint and this liquid are stated in the answer to have been falsely represented to the defendant, as to their quality, utility and the profit that could be derived from their manufacture and sale. And it is alleged that these representations were fraudulently made for the purpose of inducing the defendant and others to associate together and form a corporation, which was to become the purchaser of these inventions or processes, and to issue its stock to Griffiths for the right to manufacture and sell the articles ; and that the defendant, with his associates, were to purchase from Griffiths 315 shares of the capital stock of the corpoiation, and execute and deliver notes to him, with a cash payment for the par value of the shares. It was further alleged that the corporation was formed in this manner on the 27th of July, 1889, and the stock issued to Griffiths; and that the defendant received from him eighty-four shares of the stock, and delivered the note in suit, together with two others, and a cash payment for the price of such shares; that machinery had been obtained and a manufactory established to manufacture these different articles, which had proved to be useless by reason of the articles not being of the kind or quality represented by Griffiths, and that the stock had become worthless. And the answer contained an offer to surrender the eighty-four shares sold by Griffiths to the defendant, and demanded a surrender of this note, the other two having previously been paid, and before the discovery of the fact that these representations were false.

II pon the trial the note was produced and read in evidence, and also the deposition of the plaintiff, in which he testified that he had purchased this note from Griffiths on the 20th day of March, 1890, “for value given by me on the said date in good faith.” And he-repeated again that he gave value for the promissory note. And this is all the evidence that was given upion the trial to establish the fact that the pilaintiff had acquired the title to the note in suit in good faith and for value parted with by him. The case on the part of the pilaintiff was then rested. And the defendant, by 1ns own evidence and that of William Onderdonk, proposed to pirove that these representations had been made by Griffiths before the note was made aud delivered. This piroof was objected to by the plaintiff, and the objection was sustained and exceptions were taken to the exclusion of the evidence. The objections were general, and the decisions of the court, in the exclusion of the offered evidence, apparently proceeded upon the ground that the plaintiff had been piroved, to be a bona fide holder of the note for value. The decision, accordingly, was to the effect that the statement of the pilaintiff in his deposition that he had given value for the note was conclusive against the defendant, and pirecluded him from giving evidence to pirove that he had been induced to make and deliver the note to Griffiths by means of false and fraudulent repiresentations.

It is no doubt, the law, as the counsel for the pilaintiff insisted upion the argument and in his brief, that if there had been a failure ■of consideration the burden would not have been upion the pilaintiff to pirove that he had become the holder of the note in good faith and for value. This-general pirincipile was affirmed by the court in Evertson v. National Bank, etc. (66 N. Y., 14), and Dutchess Co. M. Insurance Company v. Hachfield (73 id., 226); Hays v. Hathorn (74 id., 486). But the defense in this case did not depiend upion a failure of consideration, but it ivas pilaced upion the ground that Griffiths had .fraudulently obtained the note from the defendant. And where that is the defense relied upion, there the burden is pilaced upion the pilaintiff to establish the fact that he became a holder of the note in good faith and for value before its maturity in order to depirive the defendant of the benefit of this defense. (Vosburgh v. Diefendorf, 119 N. Y, 357; Canajoharie, etc, Bank v. Diefendorf, 123 id., 191; First National Bank v. Green, 43 id., 298 ; Hale v. Shannon, 32 N. Y. St. Rep., 1079; Stewart v. Lansing, 104 U. S., 505.)

The testimony of the pilaintiff in his depiosition that lie obtained the note for value, general as it was in its terms, was not conclusive evidence against the defendant of the existence of that fact. He still had the right to submit the question of the plaintiffs credibility to the jury, and to insist upon it that this evidence did not establish the truth of the statement made. That is the rule in all cases where a vital fact may depend upon the testimony, either of a party or an interested witness. (Elwood v. Western, etc., Tel. Co., 45 N. Y., 549; Kavanagh v. Wilson, 70 id., 177; Brooklyn, etc., Co. v. Strong, 75 id., 591 ; Rochester, etc., Co. v. Loomis, 45 Hun, 94; Honegger v. Wettstein, 94 N. Y., 252, 261.) And as the evidence of the plaintiff upon this subject was not conclusive in his favor, but, at most, presented a question of fact to be considered and decided by the jury, the defendant, notwithstanding that evidence, still had the right to prove that the note had been obtained from him by means of fraudulent representations on the part of the indorsee Griffiths. And 'after that evidence had been given, then the jury would be at liberty to give full effect and force to it, notwithstanding this statement of the plaintiff that he had paid value for the note, for they would be at liberty to discredit his statement on the ground that he was a party, and interested in the result of the litigation. The evidence which was offered to prove that the note had been obtained by false and fraudulent representations from the defendant, should, therefore, have been received by the court. It was error to exclude it. And the exceptions to the rulings resulting in that exclusion were well taken. The judgment should, therefore, be reversed and a new trial ordered, with costs to the defendant to abide the result.

VaN BRUNT,. P. J., concurred.

Judgment reversed and new trial ordered, with costs to the defendant to abide result.


author: PATTERSON, J : Barrett, J.:

text:
    GEORGE H. ADAMS and Another, as Executors of ALICE C. BARLOW, Deceased, Appellants, v. STEPHEN H. OLIN and Another, as Executors of SAMUEL L. M. BARLOW, Deceased, Respondents.

      JSntries in bodies — statute of limitations — payment — satisfaction of a debt by a legacy, when presumed — the rule not favored.

    .A lawyer entered, in 1864, in his books of account, a credit to his wife of her share of a gift made to himself and to her. Tie invested the moneys for her, and entries were thereafter made on both sides of the account until a balance was struck in her favor of $23,187.42 on December 31, 1879. No further entries were made in the account until April 26, 1886, when three items were credited therein to her and certain amounts were charged, leaving a balance, as shown by the books December 31, 1886, of $22,771.12 In October, 1888, the wife was credited with $100, which sum was disbursed within a few days.
    The husband having died, and the wife’s claim being disputed by his executors, a reference of the matter was agreed upon under the statute relating to disputed claims against decedents’ estates:

      Held, that the defense of the statute of limitations, interposed upon the ground that more than six years had elapsed between the balance of 1879 and that of 1886, could not be maintained.
    'That the entries of 1886 and of 1888 showed the existence at those dates of a running account, and were in extension of it.
    That the fact that subsequent to 1864 the husband drew many checks in favor of the wife, which were carried by him to his “expense account,” did not, unexplained, raise a presumption that such moneys were payments to her on account of the gift in his hands.
    The husband executed his will in 1872, to which certain codicils were added, the last codicil being made in 1880. He stated in his will that its provisions in favor of his wife were intended “to be in lieu and in bar of all dower or other her interest in my properly and estate.”

      Held, that, in view of his statement in his books of a balance in her favor as late as December 31, 1886, he did not intend that the indebtedness created by said gift should be discharged by the clause “ in lieu of dower or other her interest ” -in his property.
    That the rule that a testator intends that a debt shall be satisfied by a legacy is not favored in the law, and the court will seize upon slight circumstances, repelling the presumption, to hold otherwise.
    Appeal by the plaintiffs, George II. Adams and Peter T. Barlow, as executors of Alice 0. Barlow, deceased, from a judgment made at a Special Term, held in and for the county of New York on the 20th day of May, 1891, confirming the report of a referee dismissing the plaintiffs’ claim and awarding costs against them, with notice of an intention to bring up for review upon such appeal an order entered at said term on the same day, esjiecially in so far as it ordered costs against them, and denied their motion to set aside said report.

      George II Adams, for the appellants.

      George I. Rives, for the respondents.
   PATTERSON, J :

This is an appeal from a judgment entered on the report of a referee, appointed under the statute on the consent of parties, to deter mine a disputed claim against the estate of S. L. M. Barlow, deceased. The learned referee held that the executors were justified in rejecting it and found against the claimant. The claim was presented by the executors of the will of Mr. Barlow’s widow, and was based upon an apparent balance on his books showing on his ledger, upon a separate account standing in her name, as due her on December 31, 1886, the sum of $22,771.12. This account was opened in March, 1864, with a credit of cash $19,862.50. In Mr. Barlow’s cash-book of the same date the same amount is credited to Mrs. Barlow. The origin of this account is given in the evidence. A client of Mr. Barlow, appreciating the professional services of that gentleman, in addition to paying his charges therefor, presented to Mr. and Mrs. Barlow certain' securities, which being sold through a broker, part of the avails, viz., the amount with which the account is started, were credited by Mr. Barlow to his wife, seemingly as her proportion of the gift. He immediately proceeded to invest this money for his wife. lie purchased a house and from time to time changed the investment, and there were entered. in both his cash-book and ledger the proper charges relating to the changes of investment, and also of other items of money received and disbursed for her. Such entries were made by his bookkeepers from the time the account was opened until December 31, 1879, when there was a balance struck in her favor on the ledger of $23,187.42.

Looking at Exhibit No. 1 (defendant’s), which is a statement made up from the cash-book, there appear to have been but two items •charged directly against Mrs. Barlow in 1879, and they, being posted in the ledger and deducted, make the above-mentioned balance at the date last named. From that date no entry is made in this special account of Mrs. Barlow’s, either in the books of original entry or the ledgei1, until April 26, 1886, an interval of over six.years, when she is credited with an amount received from Hamilton, executor, etc., of $2,476.07, and two small items of cash. On the debit side, in that year, she is charged with various sums exhausting the $2,476.07, and leaving a balance struck December 31, 1886, of $22,771.12. No other item appears in the ledger account after that date until October 22, 1888, when Mrs. Barlow is credited with $100, and, two days afterwards charged with its disbursement. During the currency of this account Mr. Barlow drew a great many checks to the order of his wife, which are not entered in it, but which are charged in his boohs to expense account. They are more than sufficient, if applicable to Mrs. Barlow’s special account, to extinguish it. In his will Mr. Barlow made a bequest to his wife of certain personal property of great value and the income for life of one-lialf of his residuary estate, and declared that the provisions of his will in that regard were “to be in lieu and bar of all dower or other her interest in my property and estate.” This will was executed in 1872, but republished by codicils, without change in the provision for his wife, the last being dated July, 1880. Two other accounts on Mr. Barlow’s books were made the subject of examination on the trial, one with the country house at Glen Cove, called “ Elsinore,” and the other “ Library Account,” but we fail to see any connection between those accounts and the special account of Mrs. Barlow, or how they can affect the result.

Three defenses were urged before the referee: First, the statute of limitations; second, payment; and, third, the satisfaction of the debt by the provisions of Mr. Barlow’s will in his wife’s favor. The referee found that the statute barred the claim and that the debt Avas paid. He did not pass upon the effect of the provisions of the will. We think the ■ decision 'of the learned referee was erroneous.

It cannot well be contended that entries in Mr. Barlow’s books do not furnish prima facie the basis of an action against his estate. They are the books of account of a man who, according to the stipulation of the parties made part of the record, “had large and varied business interests. He held fiduciary relations to many different people, and at various times received, for liis clients, very large sums of money. During the greater part, if not the whole of his professional life, he kept complete books of account, consisting of cash-books, journal and ledger. These books were very carefully kept in respect to the amounts of receipts and payments, but in many instances are deficient in the matter of explanations of the character of amounts received. In most cases the entries of receipts contain merely the name of the person from whom received, and hence require reference to bis correspondence and other sources to determine any question as to the basis of such receipts.” As snowing the extent of the bookkeeping of his private business, it appears that, at the time of his death (1889), there were 115 accounts open on his own personal books. He examined such books, from time to time, but not very frequently. His bookkeeper generally made entries in the accounts from the stubs of the check-book, on which were indicated the nature of the payment from which was inferred the account to which it should be charged, but in cases of doubt it was the habit of the bookkeeper to apply to Mr. Barlow for instructions. This was done, at times, with reference to the expense account, and there is nothing to show that Mr. Barlow was not cognizant of all that was entered, and when it was entered in the special account, or that he was ignorant of the balance struqk from year to year, or the fact that it was continued as a current account, notwithstanding the gap of six years, or that when the entries in and after 1886 were made, he did not intend them to be in continuation of that account. The account has all the force of an admission of an indebtedness to his wife arising out of his charge and administration of the moneys, with the balances of which she was credited at the respective dates of such balances. "While account books of a party are not evidence in his favor, except under the limitation of well-known rules, they are evidence against him, and, whether kept by himself or his clerks, the presumption arising from them when he appears by them to be a debtor, is that the entries are correct, for he would not record or allow to be recorded so distinct a statement unless it were correct. If there is an error he must show it. It is about as deliberate an admission as can be made. Its very purpose is to make a record to be preserved. We regard, therefore, this ledger balance resulting from entries corresponding witli and taken from tbe cash-book entries, according to the bookkeeper’s (Heppenstall) testimony, as sufficient to support the action, unless either of the sjiecific affirmative defenses is to prevail.

The plea of the statute of limitations is based on the fact that more than six years elapsed between the striking of the balance of December 31, 1879, and the entry to Mrs. Barlow’s credit of the payment made by Hamilton, executor, April 26, 1886. The referee held that the six-years bar applied, the entries subsequent to April, 1886, having been merely of the receipt and disbursement of a particular amount under exceptional circumstances. He also held that the account in its nature was such as exists between debtor and creditor merely. The entries explain themselves to this extent, at least; they show it was a running account of moneys belonging to Mrs. Barlow.'. Mr. Barlow was plainly treating and caring for the moneys the subject of this account, as held and paid out by him, separately from everything else. There is no evidence of a loan or that he paid interest. He regarded that account on December 31, 1886, as being one on which he was indebted to his wife in the balance then appearing, and in that balance there was included the amount brought down from 1879, and there is also a credit of that balance, as of the date of January 1,1882. Let us assume that the six-years bar is that applicable to accounts of this character; even then the entries of 1886 and the striking of the .ledger balance of December thirty-first, of that year, clearly showed the continuation of the account in such a way as to prove that Mr. Barlow considered himself as still holding the amount of that balance as then <due his wife. The entries in 1886 are manifestly payments on account of the antecedent admitted balance of 1879, increased by the Hamilton check credited on the same account. They are in extension of an open account. Partial payments to keep alive a liability must he “ the conscious and voluntary act of the debtor, explainable only as a recognition and confession of the existing liability.” (Blair v. Lynch, 105 N. Y., 636.) But what better recognition or confession could be asked than that found in the debtor’s own hooks in entries which he has directed to be made in the particular account, as he did those on the debit side in 1886.

The burden of proof was cast on the defendants to make out the defense of payment. It was not established. There is not sufficient evidence that the checks drawn to the order of Mrs. Barlow and entered in the stubs of the check-book and carried to expense account were either intended by Mr. Barlow to apply to or were received by his wife on the special account. The referee has presumed they were and has, in effect, transferred them from one account to another. The presumption is just the other way. The course of business relating to these checks was that they were all drawn by direction of Mr. Barlow and were entered in expense account by bookkeepers, from a certain diary or from the check-book stubs. There is nothing to show that these checks ought to have been debited to the private account of Mrs. Barlow, except in 1886, and they were then so entered. We know, from the testimony of Mrs. Moore, that about 1886 there was an understanding between her brother (Mr. Barlow), and his wife that certain bills of the latter should be paid from her own moneys. Mr. Barlow’s books were balanced from time to time; kept by his clerks, open to his inspection, and presumably eorrectEvery elieck charged on those books to another account and now claimed to be in reduction of the special account must be proven to be applicable to that account. Mr. Barlow gave the instructions, as to charging the items in 1886, and this -would show that he then knew the exact situation of the account, and the bookkeeper says he would have charged them to expense account still had it not been for the specific instructions.

Under the facts as they appear before us in the record, and assuming that this claim is a debt merely, we do not regard the testamentary provisions for Mrs. Barlow a satisfaction of the claim. The testator does declare that such provisions “ are intended to and are to be in lieu and bar of all dower or other her interest in my property and estate,” hut whether a legacy shall satisfy a debt is always a matter of intention. (Boughton v Flint, 74 N. Y., 476.) It is said in Williams v. Crary, Executor (4 Wend., 443): “The rule on this subject seems to be that a legacy shall not be deemed a satisfaction of a pre-existing debt, unless it appears to Time leen the intention of the testator that it should so operate ; ” and it is also said in Eaton v Benton (infra): “ It will be seen, on looking into the books, that the courts have never been cpiite satisfied with the doctrine; and they have been ready to seize upon slight circumstances for the purpose of repelling the presumption, if, indeed, there be any — that the legacy was intended as a satisfaction of the debt.” In the Williams case, in another court (5 Cow., 368), it is remarked : Where there are any circumstances in the case to repel the presumption that such was the intention of the testator, courts have always eagerly seized upon them to prevent the application of the rule.” (See, also, Eaton v. Benton, 2 Hill, 576.) In this case what is relied on to support the defendant’s contention, it is true, is not a mere presumption, but the language of the tenth clause of the will; but the foregoing citations show with how little favor such a rule is regarded, and that we must look for the intention of the testator. The clause of the will referred to is, as has been well remarked, merely the ordinary clause to bar dower, but there are circumstances extrinsic of the will which would indicate the testator did not intend the claim or debt to be satisfied by the legacy. Certainly a debt arising after the date of the will would not be merged in the legacy. (4 Wend., 443 ; Kedf. on Surrogates, 578.) Mr. Barlow’s will wras made in 1872, and the last codicil republishing it in 1880; but we find on his books an express recognition of the balance carried down to December, 1886, and this is sufficient, we think, to show there was no intention to have the debt discharged by the gifts in the will.

The judgment must be reversed and a new trial ordered before another referee, with costs to abide the event.

Barrett, J.:

I concur. There is, however, an additional consideration which strengthens the conclusion arrived at by Mr. Justice Patterson. The amount in Mr. Barlow’s hands was not in the nature of an ordinary debt. It represented property belonging to Mrs. Barlow, originating partly in a gift to her from one of Mr. Barlow’s clients and partly from her father. The property (or its proceeds) was held by Mr. Barlow throughout as hi's wife’s trustee or agent, and he managed it for her from the time of its receipt until his death. It never became part of his estate, nor could he have deemed it such. It was always her separate estate, though in his hands for investment and reinvestment. Mr. Barlow could not well have looked upon this separate estate of his wife, thus intrusted to him for management, as part of bis own estate, nor could be have taken it into consideration when he provided for Mrs. Barlow in his will and spoke of such provision as made i/n lieu of her interest in his property and estate. That clearly left her own property in his hands unaffected.

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


author: Bartlett, J :

text:
    JACOB MARK, Appellant, v. ELIZABETH A. L. HYATT and Another, Respondents.
    Torts— action against persons for procuring an injunction from a court homing no jurisdiction — when it will lie.

    An action was brought against a woman and against her husband, who had assisted her, for a wrong alleged to have been committed by them, in that they procured in another action against the plaintiff an injunction, which the court, to which application was made therefor, had no power to grant.

      Held, that the action would not lie in the absence of proof that the husband and wife knew that said court was without jurisdiction.
    Appeal by the plaintiff Jacob Mark from a judgment, entered in the office of the clerk of the county of New York on the 26th day of May, 1890, in favor of the defendants for costs and an allowance, after a trial before the court at the New York Circuit, at which the complaint was dismissed, with costs.

      JEdwm'd D. McCarthy, for the appellant.

      George W Van Slyclc, for the respondents.
   Bartlett, J :

This controversy grows out of a suit in the Superior Court relating to certain patents of Elizabeth A. L. Hyatt, under which she had granted licenses to the firm of Ingalls & Mark, consisting of Joshua K. Ingalls and Jacob Mark. In that suit Mrs. Hyatt alleged that Ingalls & Mark had broken their agreement with her and she sought a rescission of the license, an accounting for the royalties and injunctive relief, all of which were awarded her by the judgment. Mr. Mark was served with a copy of the judgment containing the injunction against any further use, manufacture or sale of the articles protected by the patents; and acting under the advice of counsel he obeyed it, thereby suffering some pecuniary injury, although the case does not disclose how much. He instituted the present action against Mrs. Hyatt and her husband, who assisted her in the Superior Court suit, to recover damages for the wrong which he alleges, they committed against him in procuring an injunction which the Superior Court had no jurisdiction to grant.

The proposition of the learned counsel for the appellant that the Superior Court had no authority to take cognizance of the case of Iiyatt v. Ingalls at all, is not open to discussion since the decision of the Court of Appeals to the contrary. (Hyatt v. Ingalls, 124 N. Y., 93.) The most that can be claimed is that the part of the judgment which enjoined the use, manufacture or sale of the-patented articles was in excess of the jurisdiction of the State court. At the circuit Mr. Justice Barrett refused' to hold, as matter of law, that this injunction was null and void; but he expressed the opinion that even if it were so the plaintiff was not entitled to maintain the present action, inasmuch as he was in no wise injured by the restraining order, which there never was any attempt to enforce, and which, if made without jurisdiction, amounted to-nothing more than a futile judicial threat. ITe, therefore, dismissed the complaint.

While it is clear that the injunction in the Superior Court was-erroneously. granted, it is not clear that it was granted without, jurisdiction. The Court of Appeals speaks of the injunctive part, of the decree as “unnecessary or improper, because on the judicial rescission of the license the defendants' could not further proceed under it, and the court had no power to restrain the defendants from acts of mere infringement of the plaintiff’s patent.” (Hyatt v. Ingalls, supra) This language indicates that if the purpose of the-injunction was simply to restrain any further action on the part of the defendants under the rescinded agreement, the injunction would not be deemed void, although it was needless.

But, however this may be, the dismissal of the complaint may be-sustained on the ground that even if the Superior Court did act without authority in granting the injunction, the parties who procured it cannot be held liable, in a suit of this character to charge them as wrong-doers, without proof that they were aware of tlie lack of jurisdiction. Such is the rule laid down by the General Term of the fourth department in Eldred v. Fawdrey (16 N. Y. St. Rep., 83). That was a suit to recover damages for a prosecution for libel alleged to have been maliciously instituted in the court of a justice of the peace, and it was held that the burden was upon the plaintiff to show that the defendant knew that the Justice’s Court had no jurisdiction to try the action for libel which he brought in that tribunal. In the case at bar not only did the plaintiff fail to establish his allegations of malice, but the entire course of the defendants in prosecuting the Superior Court suit shows that they must have sincerely believed that the court had jurisdiction.

I think the judgment should be affirmed.

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

Judgment affirmed.


author: Barkktt, J.:

text:
    THE PEOPLE OF THE STATE OF NEW YORK, Appellant, v. ALEXANDER MEAKIM and Others, Respondents.

      Criminal Procedure — acquittal became of a variance between the proof and the indictment — not' a bar to a second indictment —the defendant cannot, on the trial of the second indictment, claim that there was no variance— Code of Criminal Procedure, sec 340.
    A second indictment was found for tlie same offense as that charged in a prior indictment, upon the trial under which first indictment the court had directed an acquittal upou the ground of a variance between the proof and the facts charged in the indictment.
    Upon the trial under tlie second indictment tlie defendants urged that, in fact, there was no material variance between the proof upon the former trial and the allegations of the first indictment; that, therefore, the defendants had been once put in jeopardy, and that, consequently, the second indictment was within the constitutional prohibition. (Const., art. 1, § 6.)

      Held, that tlie defendants having once insisted upon the existence of a variance between the proof and the first indictment, and their claim having been sustained, they could not, upon the trial under the second indictment, change their position and be permitted to go behind the record of the first trial.
    That the first acquittal was not upon the merits, and that their jeopardy ceased when, at their request, the court held that a material variance existed.
    Appeal by the People of the State of New York from an order made in the Court of Oyer and Terminer, on the 29th day of April, 1891, and entered in the office of the clerk of the city and county of New York, arresting judgment upon a verdict in favor of the people upon the trial of a plea of former acquittal interposed by the defendants to the indictment herein.
    The first indictment charged the defendants with willful neglect in failing, within a reasonable time, to decide, as excise commissioners of the city of New Pork, upon a charge against one Ahrens of selling liquors on election day within the statutory distance of* the polls. It also charged that the defendants were the excise commissioners who had issued the license. It appeared that it was issued by their predecessors in office. This was held, upon the trial of the first indictment, to be a material variance.
    Except as regards this allegation the second indictment was substantially the same as the first.

      Henry B. B. Stapler, assistant district attorney, for the People, appellant. '

      Bichard S. Hewcomibe, A. J. Bittenhoefer, Edgar M. Johnson and Edioard Browne, for the respondents.’
   Barkktt, J.:

Upon the face of the record the plea was properly overruled. The verdict rendered upon the trial under the first indictment was not on the merits. It was directed by the learned Recorder, because of his opinion that there was a variance between the proof and the indictment. The verdict as recorded reads as follows:

“The jury, without leaving the-bar, say they find the defendants not guilty on the ground of variance between the proof and the indictment.”

Upon the face of the record, therefore, the case is brought within section 310 of the Code of Criminal Procedure, which provides that, “ If the defendant were formerly acquitted on the ground of a variance between the indictment and the proof, * * * it is not deemed an acquittal of the same offense.” This section was a substantial re-enactment of the law as it existed under the Revised Statutes (2 R. S., 101, § 21).

If the case stood upon the record alone, there would, therefore, be no difficulty with regard to the result. We would only have to follow the plain terms of the statute, as was done in Canter v. The People (1 Abb. Ct. of App. Cases, 305). There the plea presented the ground of acquittal on the former trial in the very words of the Revised Statutes, namely, “On the ground of a variance between the indictment and the proof.” Upon this the court said: “We are, therefore, admonished by this clear and explicit declaration of the statute, that an acquittal upon such ground forms no bar to a trial and conviction upon a subsequent indictment for the same ■offense. This plain provision of the statute law of the State disposes of the plea in bar interposed by the prisoner and shows it was properly overruled.”

The distinction between that case and the preseut lies in the fact that the defendants here dispute the ground of acquittal as expressed in the record, and insist that there was no material variance between the indictment and the proof. Their contention is that the learned Recorder erred in this regard, and that consequently they should now have the advantage of a general verdict of acquittal upon the merits. Whether the variance referred to was or was not material, we think the defendants cannot now be permitted to question the position which they took upon that head on the former trial. The record of that 'trial distinctly shows that the defendants there claimed that the variance was material; that, because of its substantial character, certain evidence offered by the people tending to show that a license had been duly issued to one Ahrens was inadmissible, and that an ■amendment which would let in such evidence was not within the power of the court to grant. Having requested the court to rule in their favor in these particulars, and the court having thereupon directed an acquittal upon these very grounds, they cannot now be heard to say that there was no material variance; that the evidence offered should not have been excluded upon their objection, and that the people should have been permitted to proceed with their case. In other words, they must, under such circumstances, take the acquittal as it was directed and recorded, and they cannot now be permitted to go behind the record as it was thus made up. As matter of fact, they were not acquitted upon the merits, and, as matter of law, their jeopardy ceased when the court held, at their request, that there was a material variance between the indictment and the proof offered.

The precise question does not seem to have been presented in any-adjudged case, but the general principle is well settled that, in criminal as well as in civil eases, a defendant must be held to the position which he assumes, and upon which he requests and secures a favorable judgment or other personal advantage. This principle, of course, is subject to the limitation that consent cannot confer jurisdiction or waive the procedure required by the Constitution. In illustration of this general principle Mr. Bishop says (1 Grim. Lav/ [7th ed.], § 1000) that, “ When the indictment is good, yet the court, supposing it not good, erroneously arrests judgment on the defendant’s application, if the prosecutor may have this judgment of arrest reversed for the error, he cannot maintain a new indictment; because his prisoner is still in jeopardy under the old, which is liable to be. revived by a reversal of the judgment of arrest. But in States where the erroneous judgment of arrest cannot be called in question, the prisoner’s jeopardy has ceased, at his own request and for his own benefit, therefore he may be proceeded against anew.” So in Gerard v. The People (3 Scam. [4 Ill], 364) Treat, J., observed that, In civil cases, parties are never permitted to assign for error decisions of the Court made at their instance, or with their consent; and we are aware of no good reason why the rule should not be applied to criminal cases, except in cases where jurisdiction is sought to be conferred on the Court by consent.” And in King v. The People (5 Hun, 300) this language was used by Boardman, J.: “ If the irregularity was not fatal to any conviction that might be had, and the prisoner yet insisted upon the defect and objected to further proceedings upon the trial, that was equivalent to asking for the discharge of the jury and consenting thereto. The general opinion is that the consent of the prisoner to the discharge of the jury will obviate any objection founded on his constitutional privilege.” (See, also, People v. Casborus, 13 Johns., 351; Croft v. The People, 15 Hun, 486, 487; Commonwealth v. Guild, 12 Gray, 171.) We think, therefore, that the plea of former acquittal was properly overruled, and that the motion in arrest should have been denied.

The other'question raised upon this appeal, namely, whether the indictment states facts sufficient to constitute a crime, does not appear to have been presented upon the motion in arrest of judginent. The sole question, then before the court, so far as appears, from the record, was whether the defendants had been twice put in jeopardy. AVe, tliink, However, that the facts alleged in the. indictment sufficiently state a crime, within section 117 of the Penaj^ Code, and that no special discussion on that head is required. AVe concur with Judge Martins in the opinion which he delivered upon overruling the demurrer interposed by the defendants to the-first indictment. (See, also, People ex rel. Welling v. Meakim, 56 Hun, 626; affirmed, 123 N. Y., 660; People v. Jones, 54 Barb., 311; People v. Brooks, 1 Denio, 457.)

The order appealed from should, therefore, be reversed.

Patterson, J., concurred.

Order reversed.


author: Yan Brunt, P. J.:

text:
    In the Matter of Proving the Last Will and Testament of VIRGINIA S. KAUFMAN, Formerly VIRGINIA S. DILLON, Deceased.

      Will — when a widow is “an unmarried woman” within the meaning of Revises Statutes, part 2, chapter 6, title 1, article 3, section 44 (to. p. 64) — her mil is-revoked by her subsequent marriage.

    A testatrix executed her will in 1886, being- at the time the widow of one Dillon. She was again married in 1888 to one Kaufman. In 1890 she died leaving a. husband and a child of the first marriage.

      Held,, that although a widow when she made her will, she was none the less “an unmarried woman,” within the meaning of 2 Revised Statutes (chap. 6, tit. 1, art. 3, § 44, m. p. 64), and that as such her will must be “ deemed revoked by her subsequent marriage.”
    Appeal by Adolph L. Sanger, the person named as executor in the alleged last will of Virginia S. Kaufman, formerly Virginia-S. Dillon, deceased, from a decree of the Surrogate’s Court of the county of New York, entered in the office of said court, and dated on the 31st day of July, 1891, adjudging said will to have been revoked by the marriage of said Virginia subsequent to its execution and declaring it to be null and void.

      L. Marshall, for the executor, appellant.

      M. S.'Wise, for the contestant, respondent.
   Yan Brunt, P. J.:

On the 5th of March, 1886, the testatrix was the widow of one David Dillon, and on that day duly executed her last will and testament. On the 25th of January, 1888, the said testatrix married one Jackson S. Kaufman, and in December, 1890, died, leaving her surviving her husband, the said Jackson S. Kaufman and one Mildred Dillon, a daughter by her former marriage. The will above mentioned having been offered for probate, such probate was refused by the surrogate upon the ground that the marriage of the testatrix subsequent to the execution of the will revokes the same, and from the decree thereupon entered this appeal -is taken.

Section 44, 2 Revised Statutes, page .64, is as follows : “ A will executed by an unmarried woman shall be deemed revoked by her subsequent marriage.”

It is claimed by the appellant that the testatrix, being a widow at the time she executed this will, was not an unmarried woman upon the theory that the statute meant a woman who had never been married. Although the counsel, both for appellant and respondent, have devoted much time to the discussion of this proposition, we do not see that there is any room for argument, ■ as a widow is certainly not a married woman; and if she is not the statute applies.

None of the authorities cited have the slightest application to such a condition of affairs, and the court cannot either amend or repeal the statute because of legislation in respect to the status of married women which has come into existence since the j>assage of the Revised Statutes.

The decree should be affirmed, with costs.

Daniels and Ingraham, JJ., concurred.

Decree affirmed, with costs.


author: Daniels, J : Ingraham, J.:

text:
    EDWARD R. LADEW and Another, Respondents, v. THE HUDSON RIVER BOOT AND SHOE MANUFACTURING COMPANY. WILLIAM M. KETCHAM, Receiver, Appellant.

      Attachment — a sale by a corporation of its property to a third party to raise money does not constitute fraud — fraud is not presumed — Code of Oivil Procedure, sec 636.
    The affidavits upon which an attachment was granted alleged that the president of the defendant corporation had stated to one of the parties bringing the action within a week prior to the issuing of the attachment, that the corporation had in its store, in the city of New York, merchandise of the value of $25,000. It further stated that other attachments had issued which the sheriff had been prevented from serving by statements that all the merchandise had been sold to one Bates.
    A further affidavit stated that the attorney of the corporation had admitted that the corporation had transferred all its property in New York city to Bates for the purpose of raising money.

      Held, that as the sale to Bates was not shown to be fraudulent or for an inadequate consideration, the affidavits were insufficient and the attachment should be set aside.
    That a sale to Bates to raise money was not improper, and in itself was not evidence of fraud.
    Fraud is never presumed, and when asserted the assertion must be supported by facts justifying it.
    Appeal by William M. Ketcliam, the .temporary receiver of the property and effects of the Hudson River Root and Shoe Manufacturing Company, the defendant herein, from an order, entered in the office of the clerk of the city and county of New York on the 20th day of August, 1891, denying a motion, made in belialf of said receiver, to vacate a warrant of attachment heretofore granted in this action.

      George S. Ilast'mgs, for tlie appellant.

      George A. Strong, for the respondents.
   Daniels, J :

The attachment was issued on the ground that the defendant had assigned, disposed of and secreted, and was about to assign, dispose of and secrete property with intent to defraud its creditors.. It was issued on tlie 23d day of July, 1891. And the temporary receiver of its property .was appointed on the twenty-ninth of the .same month, in a proceeding for the voluntary dissolution of the corporation.

The charge that the company had or was about to dispose of its property to defraud its creditors depended on the facts that within a week prior to the issuing of the attachment its president represented to one of the plaintiffs that “ the defendant had merchandise at its store, in the city of New York, of the value of twenty-five thousand dollars,” that attachments were issued against it in the City Court because of its residence in Dutchess county, on the twenty-second day of the month; and the sheriff had been prevented from serving the attachments by the statement that the merchandise in the store had. all been sold to A. J. Bates, who then claimed to be its owner. It was also stated in another affidavit that the attorney of the company had admitted that it had transferred all its property in the city of New York to A. J. Bates for the purpose of raising money. And it was on these facts that the averment was made that the company had disposed of or was about to dispose of or secrete its property to defraud its creditors. But it is quite clear that the facts disclosed do not support the inference which the plaintiffs endeavored to deduce from them. The sale to Bates was not shown to be dishonest or fraudulent, or for a consideration in any respect inadequate. It was to raise money, and the company was at liberty to make the .sale for that object. Even if the company was insolvent, as it may be inferred it was from the proceedings taken to secure its voluntary dissolution, it still had the right to sell its property to raise money, which is, in fact, all that it was made to appear that it had done. The conclusion sworn to, that the sale was induced by a fraudulent intent, can only support an attachment when it appears to be warranted by the facts. And the sale mentioned did not warrant it. There was, on the contrary, nothing to indicate that the sale was fraudulent or made for any other than a lawful object. Eraud is never to be presumed in the absence of facts supporting the pre_ ■sumption that it exists. And when its existence is asserted, that ■assertion must be supported by the facts before a case on that ground will be made for an attachment. (Stow v. Stacy, 9 N. Y. Supp., 1; Bennett v. Edwards, 27 Hun, 352.) The evidence to establish a fraudulent intent in the sale of the merchandise wholly failed to prove it. And the order should be reversed, with ten dollars costs, and the disbursements, and the attachment set aside.,

Ingraham, J.:

The fraudulent disposition of property must appear from the affidavits upon which the attachment was granted, and we cannot consider on the appeal from this order the proceedings to dissolve the corporation commenced after the attachment was granted. The fact that the defendant had sold its property to Bates for the purpose of raising money did not of itself justify an inference of fraudulent intent.

There is nothing to show what was paid by Bates for the property or that the amount paid by him was not properly applied by the defendants, I concur, therefore, reversing the order and vacating the attachment.

Van Brunt, P. J\, concurred in the result.

Order reversed, with ten dollars costs, and the disbursements and the attachment set aside.


author: Per Curiam :

text:
    SAFETY STEAM GENERATOR COMPANY, Appellant, v. DICKSON MANUFACTURING COMPANY, Respondent.

      Hosts — an offer of judgment for a certain sum and costs carries with it the right in a proper case, to an extra alloioance.

    After issue had been joined in an action, the defendant served an offer of judg-. ment for a certain sum and costs, which was accepted.

      I-Ield, that as the plaintiff then became entitled to costs, he was also, in a proper case, entitled to an extra allowance.
    That an extra allowance is a part of the costs.
    Appeal by the plaintiff, the Safety Steam Generator Company, from an order, entered in the office of the clerk of the city and county of New York on the 19th day of August, 1891, denying, on the ground of a want of power, the motion of plaintiff for an additional allowance, by way of costs-.

      II. B. Glosson, for tlie appellant.

      E. E. Smith, for tlie respondent.
   Per Curiam :

Tlie motion in tlie court below was denied. It appeared that, after issue joined tlie defendant served an offer of judgment, which was accepted by the plaintiff, whereby defendant offered to .allow judgment for a certain sum and costs. The plaintiff made a motion for an allowance, which was denied by the court because of .a supposed want of power.

In this we think the court erred. The case of Landon v. Van Etten (57 Hun, 122), seems to be in conflict with this proposition. Although tlie precise question was not involved, yet it was there held that an allowance was part of the costs, and that a defendant succeeding after an offer, being entitled to costs, was entitled to an allowance. The case of Wing v. De La Rionda (126 N. Y., 680 also establishes the principle that an extra allowance is part of the costs. Therefore, the jflaintiff being entitled to costs, the court had power in a proper case to grant an allowance.

Our attention has been called to the case of Penfield v. James (56 N. Y., 659), in which the court seems to have held, that where an insuiflcient offer of judgment was served, the plaintiff was not entitled to an allowance. We think that either the court must have acted under a misapprehension of the facts or the case must be incorrectly reported.

The order should be reversed, with ten dollars costs and disbursements, and the plaintiff allowed to renew his motion at Special Term.

Present — Yan Brunt, P. J.; Daniels and Ingraham, JJ.

Order reversed, with ten dollars costs and disbursements and the plaintiff allowed to renew his motion at Special Term.


text:
    ANTON KIMBEL and Others, Respondents, v. JOHN MASON, Appellant.

      Practice — a reference and an amendment to the convplaini raising a new issue should not he directed in the same order.

    In an action, whose object was to recover for goods sold and delivered, the complaiiit' alleged an account stated. Upon a motion for a reference, under section 1013 of the Code of Civil Procedure, the complaint was further amended .so as to claim upon a quantum meruit, and a compulsory reference was also ordered.

      Held, that the amendment of the complaint tendered to the defendant a new issue, that he had a right to answer such new matter, and that an order of reference granted at the same time with the amendment, thus depriving him of that right, was improper.
    Appeal by the defendant John Mason from an order, entered in the clerk’s office of the city and county of New York on the 2Sth day of July, 1891, appointing a referee and amending the complaint in the above-entitled action.

      Franklin Bien, for the appellant.

      John A. Weeks, for the respondents.
   Yan Brunt, P. J.:

We are of the opinion that the court had no power in the same order to direct an amendment of the complaint and order a compulsory reference. The defendant had a right to answer the amended complaint. Under the complaint, as originally framed, the plaintiff could certainly have claimed the right to prove an account stated. By the amendment, this cause of action was eliminated, and one upon a qiLanimm meruit substituted. This new cause of action the defendant had a right to meet by a new pleading. If it be claimed that there was also a count in'tlie complaint for goods sold and delivered* and that that remained, it is to be observed that, in connection with that count, the plaintiff claimed that the price of goods delivered had been agreed upon, and that this allegation was stricken out in the order of reference, and another substituted in its place alleging what was the reasonable value thereof.

All entirely new issue was tlius tendered tú the defendant, and liis right to answer could not be taken away, and before issue joined no reference can be made.

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

Daniels and Ingraham, JJ., concurred.

Order reversed, with ten dollars costs and disbursements.


text:
    THE PEOPLE OF THE STATE OF NEW YORK ex rel. CHARLES PUTZEL, Respondent, v. JOHN SIMONSON and Others, Appellants.

      Corporations — Laws of 1890, chapter 563, section 15, relative to persons aggrieved by a corporate election — inspectors will not be ordered to receive and count proxies rejected by them.

    Chapter 563, Laws of 1890, section 15, provides that the Supreme Court shall, upon the application of .any person or corporation aggrieved by or complaining •of any election of any corporation or any proceeding, act or matter touching the same, upon notice, in a summary way hear the proofs of the. parties, “ and •establish the election, or order a new election, or make such order and give such relief as right and justice may require.”

      Held, that nothing in this section authorized the court to compel inspectors of election to receive and count proxies which they had rejected at an election, and to amend their certificate of election in that regard.
    That this was so, although their action in the matter was erroneous.
    Appeal by tlie defendants, Jolm Simonson, Robert E. Babb and 'Sigismund Belirendsolin, from an order, entered in the office of the •clerk of the city and county of New York on the 16th day of July, 1891, directing that a peremptory writ of mandamus issue to them commanding them to receive and count certain proxies and amend a certificate of election as therein directed.
    The relator' was the secretary of the United States Cremation Company (Limited). An election of said company was held June 30, 1891. The relator held certain proxies of stockholders in said company, which said Simonson, Babb and Behrendsohn, who were the inspectors at such election, rejected. The relator then procured an order that said inspectors show cause why they should not be required to receive and count said proxies. Upon the return-day of this order a peremptory mandamus issued.

      O. T. Ilmiland, for the appellants.

      A. L. Sessions, for the respondent.
   Per Curiam :

"We do not think that section 15 of chapter 563 of the Laws of 18.90, justified the granting of a mandamus. The section in question is simply a re-enactment of the provisions of the Revised Statutes, and the relief intended by the section was to establish an ■election already had, or to set aside that election and order a new one, and the proceeding authorized is summary and not by'mandamus. There is nothing in that section which authorizes the court ±0 eompel the inspectors of election to count votes which they have heretofore refused to count, although they may have acted erroneously. The only relief which could he afforded, where the inspectors had acted improperly, would he to order a new election in case justice requires such action. The proceedings for that purpose are prescribed by statute.

The order appealed from should he reversed, with costs of appeal and the proceedings dismissed, with twenty dollars costs.

Present- — Wan Brunt, P. J., Daniels and Ingraham, JJ.

Order reversed, with costs of appeal, and the proceedings dismissed, with twenty dollars costs.