author: Finch, J.

text:
    Phillips Phœnix et al., Trustees, etc., Respondents, v. Maria W. Livingston et al., Appellants.
    The will of W., after directing the payment of debts and expenses, named six persons as “ executors of and trustees under ” it. A series of separate trust estates were constituted, running- for the lives of the specified beneficiaries. Some of these required specific sums to be set apart, others provided for the severance of the trust estates from the general assets, and their management by five of the six persons so named, holding as trustees. A large portion of the trust estate consisted of real estate, and provision was made for partition. Authority was conferred 'upon the trustees to lease and to sell certain portions, and general authority for the management of the land. The trustees were also empowered, in their discretion, to commit, by revocable power of attorney, the management of certain of the trust estates to the beneficiary. The accounts of the executors as such were settled, leaving in their hands only the trust estates, which were severed from the general assets, and thereafter separate accounts were kept with each beneficiary. Held, that by the will the testator contemplated and provided for two separate duties to be performed by his representatives, first as executors, and thereafter as trustees, and that they were entitled to commissions in both capacities, but that they were not entitled to commissions on the value of the real estate unsold at the termination of the trusts.

      Wagstaffyn. Lowerre (33 Barb. 309), questioned.

      In re He Peyster (4 Sandf. Ch. 511, 513), MaWhorter v. Benson (1 Hopk. 38), distinguished.
    (Argued January 21, 1886;
    decided March 2, 1886.)

      Appeal from judgment of the General Term of the Supreme Court, in the first judicial department, entered upon an order made May 22, 1882, which affirmed, so far as appealed from, a judgment entered upon the report of a referee. (Mem. of decision below, 28 Hun, 629.)
    This action was brought by plaintiffs as surviving trustees under the- will of Stephen Whitney, deceased, for settlement of their accounts.
    The appeal was from that portion of the judgment fixing the compensation of plaintiff.
    The material facts are stated in the opinion.

      J. Frederic Kernochan for appellánts.
    Plaintiffs were not entitled to receive a second commission upon the capital of the estate. (Drake v. Brice, 5 N. Y. 430; Valentine v. Valentine., 2 Barb. Ch. 430; Lansing v. Lansing, 45 Barb. 182; Holly v. L. G., 4 Edw. Ch. 284; Mann v. Lawrence, 3 Bradf. 424; Matter of Carman, 3 Redf. 46; Ward v. Ford, 4 id. 34; Laytin v. Davidson, 29 Hun, 622; Matter of Jackson, 32 id. 200; Meeker v. Crawford, 5 Redf. 450; Hall v. Hall, 78 N. Y. 535; Hurlburt v. Durant, 88 id. 121; Johnson v. Lawrence, 95 id. 154.) There can,.in no case, be a paying over from one as executor to himself as trustee. (Judson v. Gibbons, 5 Wend. 224; Hartnett v. Wandell, 60 N. Y. 346.) The duties so assumed are continuous and not successive as is shown by the fact that he may be removed as trustee before his executor’s duties are completed. (Quackenboss v. Southwick, 41 N. Y. 117.) Amere separation of funds in the same hands does not entitle one to commission, otherwise a commission might be claimed on each reinvestment of capital. (Matter of Kellogg, 7 Paige, 267; Johnson v. Lawrence, 95 N. Y. 154.) There can be no compensation awarded to a trustee (where the instrument creating the trust is silent as to compensation) except the compensation under the statute; i. e., a percentage upon the sums of money (or their equivalent) received and paid out. (Matter of Carman, 3 Redf. 46; Hall v. Hall, 78 N. Y. 535; Hurlburt v. Durant, 88 id. 121.) Where one holds real estate, as trustee for the life of another, inasmuch as he never holds the fee but merely the life estate, the basis for determining his compensation must be the value not of the fee but of such life estate. (Embury v. Sheldon, 68 N. Y. 234-5; Betts v. Betts, 4 Abb. N. C. 147; Newell v. Nichols, 75 id. 78.) In the ease at bar there was no constructive paying out, as there certainly was no actual paying out of the value of the fee to the grandchildren. (Manice v. Manice, 43 N. Y. 303.) Where there was no power of sale the analogy of a specific devise is applicable, as the fee itself was never administered upon by the trustees. (Schenck v. Dart, 22 N. Y. 420; Burtis v. Dodge, 1 Barb. Ch. 77.)

      William B. Boss for respondents.
    Compensation by way of commissions has been properly awarded to the trustees under the trusts created by the eighth, ninth, and thirteenth clauses of the will, upon the personal property and the value of the real property as proven adjudged to constitute such trust shares respectively. (Valentine v. Valentine, 2 Barb. Ch. 430; Drake v. Price, 5 N. Y. 430; Hall v. Hall, 78 id. 535; Hurlburt v. Durant, 88 id. 122; Johnson v. Lawrence, 95 id. 154; Laytin v. Davidson, id. 263; In re Mason, 98 id. 527, 536; Mc Whorter v. Benson, Hopk. 28, 42; Wagstaff v. Lowerre, 23 Barb. 209; Matter of DePeyster, 4 Sandf. Ch. 512; Matter of Edw. Schell, 53 N. Y. 565; Cox v. Leggett, 18 Hun, 19; Matter of Moffatt, 24 id. 327; Innes v. Parcel, 2 T. & C. 538; Savage v. Sherman, 24 Hun, 311; 87 N. Y. 287; Matter of Allen, 96 id. 327; Biddle's Appeal, 83 Penn. St. 340; Story’s Eq. Jur., § 1268, note; 2 Perry on Trusts, § 918; 1 R. S. 729, §§ 60, 61; id. 730, § 67.) A trustee is entitled to commissions upon the capital of the trusts although he transfers to the beneficiaries, or new trustees the entire stocks and securities which came into his hands at the outset of the trust. (Matter of Moffatt, 24 Hun, 327; Ogden v. Murray, 39 N. Y. 202; Matter of Mason, 98 id. 536.) The amount of property held in trust is the proper basis of allowance to the trustee; and, there is no well-founded distinction between lands and stocks as to the trustee’s compensation.
      (McWhorter v. Benson, Hopk. 28, 42; Cox v. Leggett, 18 Hun, 17; Ward v. Ford, 4 Redf. 47; Matter of Moffatt, 24 Hun, 310; Matter of Roosevelt, 5 Redf. 623; 87 N. Y. 287; Biddle’s Appeal, 83 Penn. St. 340; Story’s Eq. Jur., § 1268, note.)
   Finch, J.

There are hut two questions in this case, and both may be considered- without reviewing the complicated details of the trust accounts. These questions are whether the executors who were also trustees became entitled to commissions in both capacities; and if so whether the trustees’ commissions are to be computed upon the value of the real estate. The first of these questions must be answered by subjecting the facts established to the test of the rules adjudged in Johnson v. Lawrence, (95 N. Y. 154), and Laytin v. Davidson (id. 263). In the first of these cases double commissions were refused, for the reason that the will contemplated no separation of duties on the part of the executors, and no transfer to or holding by them of any portion of the estate in the character of trustees; while in. the second, double commissions were allowed upon the ground that the will did contemplate a severance of duties and a point of time at which those of the executors would be ended and those of the trustees begin. In that case the severance of the trust funds from the general assets contemplated by the will had taken place; so much of the estate as was needed for debts, legacies and expenses had been to those purposes appropriated; and the balance having been ascertained by a settlement of the executors’ accounts became and was adjudged to constitute a trust fund to be further held and managed as such. Within the doctrine of these cases commissions in both capacities were properly allowed in this. The will contemplated a severance of duties and a point of time when that severance should take place. At the beginining of the instrument after directing the payment of debts and expenses the testator names six persons executors of and trustees under this my last will and testament.” They were first to act as executors of the will and then as trustees under it. A series of separate trust estates are then constituted, running for the lives of specified beneficiaries. Some of them required specific sums to be set apart, and others and more important ones provided in very careful detail for a severance of purely trust estates from the general assets and their further management and administration not by the executors but by five out of the six of them holding as trustees. Since a serious portion of the trust estates consisted of real property, provision was made for a suitable partition for the purposes of the trusts, and a broad and abundant authority given for the management of the lands. The trustees were empowered to lease the improved property for a period not exceeding five years, and that which was unimproved for not more than twenty-one years. Authority was conferred to sell the lands in other States, the unimproved property in this State, and the dwelling-house with the consent of the widow; and the trustees were authorized to rebuild structures destroyed or impaired and erect new buildings upon unimproved property so as to render it productive. A further provision of the will is quite significant. The trustees are empowered in their discretion, through the agency of a revocable'power of attorney, to commit the management of certain of the trust estates to the beneficiary, but preserving in themselves the title and resuming control whenever they should deem it advisable. It is impossible to reflect upon these provisions of the will without a resultant conviction that the testator contemplated and provided for two separate duties to be performed by his representatives ; one as executors and the other as trustees; the latter to commence at the termination of the former, and to begin with a severance of the trust estates from the general assets and to be held and managed thereafter by his executors or some among them in the capacity of trustees. Such a severance was in fact made. The accounts of the executors as such were settled, and there was left nothing but the trust estates to be managed for the beneficiaries. Separate accounts were opened with each, and they were held and managed for many years, with a great amount of labor, with a large demand upon the care and patience of the trustees, and with a very heavy burden of responsibility. We think it was a proper case for the allowance of commissions to the same persons, first in the character of executors and then in that of trustees.

The appellants, however, further insist that the commissions of the trustees should not be computed upon the value of the real estate, and the argument is that commissions are only given upon sums of money or their equivalent received and paid out; that the trustees never received the fee of the lands since that fee vested at once in the grandchildren, the trustees taking only an estate commensurate with their trust which simply terminated and was never transferred or paid over. We think this objection is well founded, and that, as it respects real estate held in trust, the commissions of the trustees are not to be computed upon the value of the land which remains unsold. The office of a trustee was at first deemed honorary, and without compensation, but our statute changed the rule and allowed compensation to executors, administrators and guardians, at a fixed percentage to be .computed upon all sums received and paid out. Trastees were not named specifically in the enactment, but they were held to be within the equity of. the statute, and entitled to compensation as if included within it. To that we must, therefore, refer, and by that be governed in determining whát allowance, if any, is to be made. Sums received and paid out are made the basis of computation. It has, nevertheless, been held that securities received by an executor, and by him turned over to the parties entitled, might be treated as money received and paid out for the purpose of computing commissions. This was itself an extension of the authority of the statute, justified by the consideration that what was accepted as money by the parties interested might well be treated as such for purposes of compensation. But we are-asked now to take a step further, and give a new extension to the act, which does violence to its language, and makes land, in no just sense received or transferred, constructively money. The only authority for this doctrine is the case of Wagstaff v. Lowerre (23 Barb. 209), and a few cases in the Supreme Court and the surrogate’s court in the city of Hew York, which have followed it as authority. Wagstaff v. Lowerre was a Special Term decision. It cited, as authority, but two cases, neither of which justified the conclusion reached. In one of them (Matter of De Peyster, 4 Sandf. Ch. 511, 512), the court said, there is force in the argument that there is no well-grounded distinction between lands and stocks as to the trustees’ compensation,” but the remark was uncalled for, and unnecessary for the purposes of the decision. The lands there in question had been bid in upon foreclosure of mortgages belonging to the estate and in equity remained personalty, and were therefore treated as such in the hands of the trustees. The other case cited (McWhorter v. Benson, Hopk. 28, 42), gives no indication that real estate was at all in question, and the elaborate opinion of the chancellor aims only to show that the statute had fixed a definite rate of compensation for an executor’s services; a rate computed upon the sums of money received and paid out, and that an allowance of a gross sum was not permissible. Wagstaff v. Lowerre, therefore, stood upon no existing authority, and it can have only the force derived from its reasoning. In this court, the question is an open one, and so far as we have been able to ascertain, has never been discussed and decided. We ought not to wander from the statute and strain its construction to an extent approaching perilously near to legislation. In the present case, the fee of the lands it is conceded, vested in the grandchildren by force of the will at the date of the death of the testator. The estate of the trustees took priority, but only for the purposes of the trust. (Stevenson v. Lesley, 70 N. Y. 512.) They were authorized to sell and to rent the real estate. Upon all sums of money thus realized and passing through their hands they were entitled to commissions ; but the unsold lands, at the close of the trust, passed to the possession of the remaindermen, not through any title derived from the trustees, but by force of the original devise. The trustees transferred no land, but simply refrained from exercising their power of converting it into money. And so they not only never paid it out even constructively by any grant or conveyance, but never even received the absolute fee which all the time was a vested interest in remainder. Their estate was simply commensurate with their trust, bounded as to the duration by the terms of the trust, and as to the unsold lands never equalling in- value that of the fee. We must, therefore, adhere to the statutory basis of computation and decline to advance further.in a construction which steadily departs from a plain and unambiguous enactment having a definite purpose and meaning. If hardship or injustice shall result, of which we are by no means certain, the remedy may be readily applied by further legislation.

So much of the judgment as allows commissions upon the value of the unsold lands should be reversed, without costs to either party.

All concur.

Judgment accordingly.


source: Caselaw Access Project

license: Public Domain

text:
    Charles Snowden et al., Appellants, v. William H. Guion, Respondent.
    The “ United States Lloyd’s ” issued an open policy of marine insurance, which became operative only by special indorsement, describing the particular risk assumed. As issued, the underwriters were liable for loss of “ animals caused directly by stranding, sinking, burning or collision.” This was subsequently modified by inserting after the words “directly by,” the words “a sea.” Thereafter this indorsement was made upon the policy : “ February 16, 1878, steamer Greece, New York to London, 188 live cattle ; amount insured, $9,500.” The shipment referred to was made February 14. Both parties knew at the time of the indorsement that the cattle were carried between decks. The steamer encountered a severe storm; the waves caused it “to roll tremendously;” the cattle were thrown down violently, and most of them were killed. In an action upon the policy, held, that the loss was caused “ directly by a sea,” within the meaning of the policy, and that the insurers were liable ; that the risk contemplated was some effect of “a sea” upon the vessel, the proximate result of wjiich would be a loss to the property insured, and this was not limited to an effect produced by one or more specific and particular waves, as distinguished from the genera] commotion of the water.
    Also held, that it was not competent to show by oral evidence that the words “ by a sea,” were intended to apply only to shipments on deck ; that the contract by its terms covered all shipments accepted as risks. without regard to the place upon the vessel where the cattle were carried, and it could not be varied by paroi.
    The policy contained this clause : “ The said goods and merchandize hereby insured are valued at-, as indorsed.” The blank was not filled up. It was provided by clauses as follows: “ No shipment to be considered as insured until approved and indorsed on this policy by the assurer. * íc- indorsements valued at the same, provided they do not vary from the cost more than-per cent.” Held, that the policy was an open, not a valued one; that the statements in the indorsement of the sum insured was not a valuation; and that, therefore, as the loss sustained was more than the amount insured, defendant was not entitled to a deduction for salvage,
    Evidence was given tending to show that the- surviving cattle were in a weak and dying condition so that a sale was necessary. Defendant’s counsel requested the trial court to charge, “ that the plaintiffs having shown only a partial loss, and not having given any notice of abandonment cannot recover for a total loss;” this was refused. Held no error; that the evidence authorized a finding of an absolute total loss.

      Snowden v. Guión (18 J. & S. 137), reversed.
    (Argued January 25, 1886;
    decided March 2, 1886.)
    Appeal from order of the General Term of the Superior Court of the city of New York, made March 3, 1884, which reversed a judgment, in favor of plaintiffs, entered upon a verdict. (Reported below, 18 J. & S. 137.)
    This action was upon an open policy of marine insurance issued by defendant and others, known as the “ United States Lloyds.” As issued, it contained this clause: “ The United States Lloyds, liable only for loss of animal or animals, caused directly by stranding, sinking, burning or collision.” Afterward this was changed by inserting after the words “ directly by,” the words “ a sea.”
    The insurance in question was effected by this indorsement upon the policy:
    “ Féb7'uary 16, 1878.

      “ Steamer Greece, New York to London, one hundred and eighty-eight live cattle; amount insured, $9,500.”
    The steamer sailed from New York, having the cattle specified on board, shipped between decks. In the course of the voyage the steamer encountered a severe storm. As the captain testified^ “ a very confused sea,” which “ caused the ship to roll tremendously.” The cattle were thrown down, and one hundred and fifty-five of them died from “ being bruised and exhaustion.” . '
    Plaintiffs’ interest in the cattle insured was proved to be $12,145.98. The cattle which survived and were landed, were in a damaged condition, and were sold for $1,879.15.
    The further material facts appear in the opinion.

      Ira D. Warren for appellants.
    Plaintiffs cannot recover upon the policy unless they show that the water came in direct contact with the cattle and so injured them. (1 Phill. on Ins., § 1099; Knapp v. Warner, 57 N. Y. 668; Stapenhorst v. Wolff, 65 id. 596; Clark v. N. Y. L. Ins. Co., 64 id. 33.) The words “ directly” and “ direct ” are used by legal writers on marine insurance in the sense of “ proximate.” (Tilton v. Hamilton F. Ins. Co., 1 Bosw. 378; Phill. on Mar. Ins., §§ 1098, 1129; Arn. on Ins. 664; Lawrence v. Aberdein, 5 B. & Aid. 107; Gabay v. Lloyd, 3 B. & C. 793; Montoya v. London Ass. Co., 6 Exch. Rep. 451; Walker v. Maitland, 5 B. & A. 171; Bishop v. Pentland, 7 B. & C. 219; 1 Phill. on Ins., §§ 1132-1134; Coyt v. Smith, 3 Johns. Cas. 16.) The policy in suit is not a valued policy. (1 Phill. on Mar. Ins., § 27; 2 id. §§ 1179, 1180; 1 Arn. on Mar. Ins., § 124, p. 309; 1 Pars, on Mar. Ins. 256; Wilson v. Nelson, 33 L. J., Q. B. 220; Hemmingway v. Eaton, 13 Mass. 108.) The loss was an actual total loss. (Am. Ins. Co. v. Carter, 4 Wend. 53; McCall v. Sun Mut. Ins. Co., 66 N. Y. 517; 2 Phill. on Mar. Ins., §§ 1495-6-7; id., § 1487; McCall v. Sun Mut. Ins. Co., 66 N. Y. 515; 2 Pars, on Ins. 86; Arn. on Ins. 850.)

      Treadwell Cleveland for respondent.
    Assuming that the words “by a sea” were inserted in the policy at the time the risk was written there was a distinct collateral agreement, made at the time of the agreement, to so change the policy, that the change, when" made, should apply only to future shipments on deck, and the loss was, therefore, not within the policy. (Chapin v. Dobson, 78 N. Y. 79; Lindly v. Lacey, 17 C. B. [N. S.] 578; Chitty on Contracts [11th Am. ed.], 159; Pyne v. Campbell, 6 E. & B. 370; Wallis v. Littell, 11 C. B. [N. S.] 369; Julliard v. Chaffee, 92 N. Y. 529; Un. Trust Co. v. Whiton, 97 id. 172, 178; Eighmie v. Taylor, 98 id. 288; Brigg v. Hilton, 99 id. 526.) The contracting parties did not intend that the words “ by a sea ” should cover such a loss as that described in the testimony. (Knapp v. Warner, 57 N. Y. 668; Stapenhorst v. Wolff, 35 Sup. Ct. [3 J. & S.] 25; affirmed, 65 N. Y. 596; Clark v. N. Y. L. Ins. Co., 64 id. 33; White v. Hoyt, 73 id. 508, 511; Reynolds v. Com. F. Ins. Co., 47 id. 604; Booth v. Cleveland Mill Co., 74 id. 21; Un. Trust Co. v. Whiton, 97 id. 172, 178.) The action having been brought for a total loss, and the loss being not an actual total loss, but only a constructive total loss, and no notice of abandonment having been given, the plaintiffs cannot recover. (McCall v. Sun Mut. Ins. Co., 34 J. & S. 314; Pars, on M. Ins. 152; 2 Phillips on Ins. 1490-91 and 1535-6; Ruckman v. Merchants' louisville Ins. Co., 5 Duer, 342; McConochie v. Sun Mut. Ins. Co., 26 N. Y. 477.)
   Finch, J.

The question whether the policy, as modified, by the insertion of the words a sea,” covered the shipment of cattle upon the steamer Greece, or took effect only upon later shipments, was one of fact, depending upon the inquiry when the modification was made, and whether before or after the risk by the shipment in controversy was assumed. That shipment was made on the 14th of February, 1878, and the steamer sailed with its cargo of cattle uninsured. An open policy with its blanks unfilled was at that date in the possession of the shippers, but could only become operative by a special indorsement describing the particular risk assumed. The day after the steamer sailed the broker of the shipper called upon the agent of the underwriters, with this open policy in his principal’s possession, and in his own a memorandum denominated a “ live cattle clause,” with a view to procure an amendment of the policy. A live cattle clause had been in the policy during the business of a previous year, but had proved unsatisfactory to the shippers, and the broker’s object was to procure its amendment before farther insurance was taken. Apparently the parties came to an agreement as to ' the amendment to be made, for at the close of the conversation, one of the insurer’s agents who had listened to it, modified the memorandum by inserting the words “a sea” among the causes of loss by which a liability was incurred, and dating the amendment February 15th. The day following this agreement to modify the terms of the open policy an application was made and accepted to insure the cargo of the Greece. How soon the words of modification were actually written in the open policy is somewhat uncertain, but upon the facts, the question was submitted to the jury whether the cargo of the ship was insured under the policy as it stood before the alteration, or as it was modified, and with their verdict in favor of the latter conclusion we must be content.

The proposition that the added words applied only to shipments on deck, and did not cover the risk in controversy, because the cattle were transported between decks, is answered by the finding of the jury that the cargo was insured under the modified policy, both parties well knowing that the cattle were carried under deck. And it encounters the further difficulty of attempting to contradict and modify the written contract by paroi evidence. We have so recently considered this subject, and pointed out the difference between proof which alters the terms of the contract itself, and that which leaves it to stand unchanged, but establishes an additional and collateral agreement that we need not prolong the discussion. (Chapin v. Dobson, 78 N. Y. 74; Eighmie v. Taylor, 98 id. 288.) The contract, as put in writing, covered by its terms all shipments accepted as risks, without regard to the place upon the vessel in which the cattle were carried. It purported to insure the safe transportation of one hundred and eighty-eight cattle upon the steamer, and that shipment was covered by the risk according to the terms of the contract. The paroi proof seeks to establish the exact contrary, and to show that the shipment specified in the indorsement, was not covered by the risk because the cattle were placed between decks. The proof tended to modify the contract itself, to limit and restrain the legitimate scope of its meaning, and not to .prove a new and collateral agreement consistent with its terms.

' Bor can we dismiss this appeal upon the ground that the new trial awarded by the General Term may have been granted upon questions of fact, for, although a motion for a new trial was made at the Circuit and denied, no order was, in fact, entered from which an appeal could be taken, and the General Term held accordingly that the facts were not before them for review.

We are obliged, therefore, to meet the two final'questions upon which the judgment against the insurer was reversed; and these are the true construction of the words, “ by a sea,” as used in the contract, and the inquiry whether the policy was or was not a valued policy. The words to be construed are susceptible of two meanings, the one general, and the other restricted and particular. A sea ” may mean a general disturbance of the surface of the water occasioned by a storm, and breaking it up into the roll and lift of waves following or menacing each other. When a captain reports that on a particular day he encountered a heavy sea, he uses a natural and appropriate expression, which we are not liable to misunderstand. If he says that a gale came from a particular direction, and raised a sea which delayed his progress, he properly describes the general disturbance of the water consequent upon a storm. On the other hand, if he reports that in a gale a sea carried away his boats, and another swept a seaman overboard, we understand him in each instance to refer to some particular wave or surge, separate from its fellows, which worked its own peculiar and special destruction. The latter is substantially the meaning of the phrase adopted by the General Term, while the former was the construction of the trial court. In his charge to the jury, the learned judge assumed such first construction as the true meaning of the phrase, and submitted the question whether the animals died from bad ventilation and foul air consequent upon the enforced closing of the hatches, or from the heavy sea which threw them down and inflicted mortal injuries. The verdict of the jury established the latter as the cause of the loss under the construction adopted by the court, but if that was wrong, the verdict may have been a consequence of the error.

Since the phrase inserted was thus ambiguous, we are at liberty to resort to the surrounding circumstances in aid of its interpretation. Before the words a sea ” were added the policy insured only against a loss occasioned u directly by stranding, sinking, burning,or collision.” These causes of loss evidently contemplate injuries to the ship which occasion as proximate consequences the death of the animals carried. If the ship strands, ot sinks, is burned or collides with another vessel or some fixed obstruction, that has happened from which, if the animals die, the loss falls upon the insurer. When among these risks of the vessel another risk is placed, it must naturally mean also, a cause of loss from something which again has happened to the vessel. As it respects cattle carried between decks, where single waves could not reach them, it is clear that nobody contemplated, as a peril to be insured against, the direct impact of such a wave upon the animals, killing them by force of a blow which it could not directly strike, or by submersion in the water which would rapidly run from the decks. The risk contemplated was some effect of a sea ” upon the ship which among its proximate results should cause the death of the cattle. Both parties knew, when this particular risk was accepted, that the cattle were shipped between decks, and the modification effected by the new words inserted, must have contemplated the possible killing of the cattle by the action of u a sea ” upon the ship. The jury found that such outward force applied to the vessel directly occasioned the death of the animals, and so the loss was covered by the risk, unless we are further to say that the death of the animals must be traced to the effect upon the vessel of one or more specific and 'particular waves as distinguished from the general commotion of the water. The ship rocked and pitched in the storm. That could be anticipated and the risk of resultant injury insured against. But the effect of any one wave upon the violent motion of the vessel could by no possibility be separated from the concurring agency of others, nor could any two or any fifty. Some one or more might be remarkable for size or force, but no man could measure their share in producing the motions of the vessel. It is scarcely reasonable, therefore, to believe that the words “ by a sea” meant the blow of one or more particular waves upon the vessel, when loss from a cause so identified was almost impossible, where the cattle were carried between decks and killed by the tossing of the ship. The General Term do not limit the words “ by a sea ” to a single wave specifically,” but concede that it might mean more than one. If so, how many more, and how are they to be identified as causing that particular rolling of the ship which killed specific animals ? A reference to the conversation which culminated in the modification of the contract, does not make the construction of specific and particular waves any easier to adopt, for that respected cattle shipped on deck. As to them, a surge which washed them overboard, or dashed them against each other or fixed parts of the vessel, might be identified, for it would be one which would come upon the ship and sweep its decks; but as to cattle under deck, no such injury could be reasonably contemplated, and that which would enter the minds of the contracting parties would be the tossing of the vessel in a heavy sea, by which the' cattle might be thrown from their feet and dashed against the partitions or each other and so killed by “a sea ” powerful enough to produce the result. In that conversation the plaintiffs’ broker put several supposed cases to the underwriter relative to on-deck shipments, all of which the latter conceded should be covered by the risk. The first was a loss occasioned by the cattle being washed or pushed overboard by the sea, and the second by a sea boarding the vessel and killing the animals on deck. These cases contemplate an injury inflicted by one or more waves producing death differently. In the one the force of the surge sweeps the animal into the water and occasions death by drowning; in the other the same force throws the ani.mal from its feet and dashes it against the deck or fixed obstacles, for the force of the wave alone, in and of itself, would not produce death. But a third case was put and received an equal assent. The broker suggested if the animal should die by a collision ly the sea.” That did not mean a collision between a wa*e and the animals, because that case had just been put and answered. It could only mean a collision of the animal with some fixture or portion of the vessel occasioned by the action of the sea ” upon the ship, instead of a single wave coming on board. Unless it meant that, it was not a third case, but an idle and useless repetition of the second. So that, if we are at liberty to consider this conversation as a means of ascertaining what the parties really meant and intended by the modifying words afterward adopted, we must again believe that a loss occasioned by the motion of the ship struggling with a dangerous sea, and dashing the animals against partitions or each other, was within the intention and contemplation of the parties. The use of the word “ directly ” does not alter the interpretation. Between the shock of the -waves upon the vessel and the death of the animals there was no inteiwening cause upon the theory involved in the finding of the jury. If a railroad train dashes against an approaching engine and a passenger is killed by being thrown against a seat or side of the car his death is the direct result of the collision, as completely as if the colliding engine had struck him. If in the present case, the storm had compelled the closing of the hatches, and the animals had died from foul air and'insufficient ventilation, the loss would have been an indirect result of the heavy sea. But that theory is excluded by the verdict of the jury.

It was further claimed, and the General Term held, that this was a valued policy, establishing the value at the sum insured. In that also we think, they were in error. . Tf this was a valued policy it became so by containing in its terms an agreement of insurer and insured, fixing absolutely for the purposes of the contract the value of the subject insured at the amount insured, If the policy expressed such agreement, and made the value of the cattle identical with the sum insured then since some of them were saved and landed in specie at the port of destination, ■ and realized a value, it would follow, as the underwriters claim, that such salvage should be deducted from the insurance, and the balance only be recovered. The application of the shippers was for a policy valuing the cattle at the sum insured, but the question is what was granted rather than what was asked. The underwriters might still have given an open policy and the insured accept it, and we are to decide upon what was thus given and accepted, possibly taking into account the form of the application if there be ambiguity or doubt. We should naturally look for an agreed valuation in definite language and in the indorsement, since it is that which gives vitality to the policy and is the special repository of the intention of the parties. Usually in a valued policy after the statement of the subject insured the added phrase appears, valued at ;” and the blank being filled, the agreed value is settled. (1 Pars, on Mar. Ins. 256; Hemmingway v. Eaton, 13 Mass. 108.) In this policy the technical phrase appears, but the blank is left unfilled, and where it appears it evidently contemplates a valuation in the indorsement if none is made in the body of the policy. The clause devoted to that subject provides “ the said goods and merchandises hereby insured are valued at as indorsed.” This means that the property is valued at the sum stated as its valxie in the indorsement, and not at the sum stated as amount of insurance which also appears in the indorsement. The policy remains open if its blank is unfilled and no valuation of the subject insured is specified in the indorsement. In the present case the blank valuation in the body of the policy was left a blank, and no valuation of the cattle was named in the indorsement, but merely the sum insured. That sum, however, it is claimed became the valuation by force of another clause of the policy which reads: “indorsements valued at the same, provided they do not vary from the cost more than per cent.” Where this phrase occurs in the policy, it follows one which provides: “.no shipment to be considered as insured until approved and indorsed on this policy by the assurer,” and precedes the one already referred to, which agrees upon a valuation. If the phrase “ valued at the same ” means at the sum insured then this form of policy is never an open but always a valued policy; and then, too, the subsequent formal clause “ the said goods ” "x" * “ are valued at” is superfluous and unmeaning, since already it had been said that the valuation was to be the sum insured. We think the clause relied on has an entirely different purpose and meaning, the force of which lies in the proviso. Its evident aim is to guard against an over-valuation, when it is made effective by filling up its blanks. It means that the property insured is valued “ the same ” as that value is stated in the indorsement, provided such value does not vary from the cost more than per cent. If a maximum of variation from cost, permissible in the valuation, is agreed upon, that furnishes a protection against an excess which might be in the nature of a wager, and largely exceed the real value. The clause, therefore, does not mean that the sum insured is to be the agreed value, and so in all cases the policy shall be a valued one; but contemplates an agreed valuation which may be stated in the indorsement, and which shall be the agreed value “ of the goods, provided they do not vary more than per cent from cost.”

We do not concur for the reasons stated with either of the conclusions which led the General Term to a reversal of the judgment, but the respondent further seeks to justify the reversal, upon the ground of the refusal of the trial judge to charge “that the plaintiffs having shown only a partial loss, and not having given any notice of abandonment, cannot recover for a total loss.” This request assumed that only a partial loss was shown, and as matter of law upon the facts. But there was evidence from which the jury might have found that the cattle surviving were in a weak and dying condition, so that a sale was necessary, and so that there was an absolute total loss rather than a constructive one. (2 Phil. on Mar. Ins., § 1487; McCall v. Sun Mut. Ins. Co., 66 N. Y. 505, 515.)

The order of the- General Term should be reversed with costs, and judgment on verdict affirmed.

All concur.

Order reversed, and judgment affirmed.


author: Miller, J.

text:
    Edward Materne et al., Appellants, v. Benno Horwitz et al., Respondents.
    Prior to the passage of the Penal Code, which makes it a misdemeanor to sell, or offer for sale, any package of goods falsely marked as to place where manufactured, quality or grade (§ 438), a contract for the sale of goods to be furnished with deceptive labels, intended by the parties and calculated to deceive customers of the purchaser, was against public policy, and the courts will not aid either party to enforce such a contract.
    Where, therefore, plaintiffs contracted to sell and deliver to defendants domestic sardines with labels upon the boxes representing that they were put up at foreign ports by firms there engaged in the sardine trade, it being known to both parties that the labels were used to deceive the consumers, — Held, that plaintiffs were not entitled to maintain an action to recover the contract price for the sardines, which plaintiffs tendered, but defendants refused to accept and pay for.
    (Argued February 3, 1886;
    decided March 2, 1886.)
    Appeal from judgment of the General Term of the Superior Court of the city of New York, entered upon an order made at the February Term, 1884, which affirmed a judgment in favor of defendants, entered upon an order dismissing the complaint on trial. (Reported below, 18 J". & S. 41.)
    This action was brought to recover the contract price for four hundred cases of sardines.
    The following facts appeared. The plaintiffs and defendants were wholesale dealers in sardines. They entered into a written agreement by which the former were to sell and the latter to buy four hundred cases of “ domestic sardines,” the boxes in the cases to have “ fancy labels upon them.” Domestic sardines were fish taken and packed in Maine, and “ fancy labels ” were decorated labels in a French style. The plaintiffs knew that these labels would contain a statement in substance that the contents of the box had been packed in France, in olive oil, by persons named on the label. One of the plaintiffs testified that imported sardines come mostly from France and are worth in the market about fifty per cent more than domestic sardines on account of the quality and the duty. The goods tendered by the plaintiffs under the agreement, had upon them labels like those described bearing names that were apparently names of French packers, doing business in France.
    It did not appear that there were any persons of that name. Defendants refused to accept or pay for the sardines so tendered.

      Charles D. Adams for appellants.
    To relieve defendants from liability under their contract, it was necessary to prove affirmatively an intent to defraud on plaintiffs’ part. (Laws of 1850, chap. 123; Laws of 1862, chap. 162; Laws of 1863, chap. 209; Laws of 1878, chap. 401; Low v. Hall, 47 N. Y. 104; Rudderow v. Huntington, 3 Sandf. 256.) There being at the time when this contract was made, in 1881, no statute forbidding it, it was a valid contract for the sale of goods, unless it was absolutely void on grounds of public policy, because the goods were in shape to be used, if the vendee saw fit to defraud the public. (Tracy v. Talmadge, 14 N. Y. 162; Sacketts Harbor Bk. v. Codd, 18 id. 244.) It is no defense to an action brought to recover the price of property sold, that the vendor knew it was bought for an illegal purpose, provided it is not made a part of the contract that it' shall be used for that purpose, and that the vendor has done nothing in aid or furtherance of the unlawful design. (Gansen v. Tifft, 71 N. Y. 57; Webber v. Donnelly, 33 Mich. 172.) The goods plaintiffs tendered were precisely what the contracts called for, and the transaction was not prohibited by law. (Kreiss v. Seligman, 8 Barb. 439, 449-50.) On reselling, the plaintiffs acted as agents of the defendants, and were only bound to good faith, and reasonable care and dilligence. (Dustan v. McAndrew, 44 N. Y. 72, 79; Smith v. Pettee, 70 id. 13; Sherwood v. Ribbons, 6 Weekly. Dig. 231; O'Brien v. Jones, 15 J. & S. 67.)

      Otto Horwitz for respondents.
    The enforcement of this contract, whereby the plaintiffs would be enabled to sell the merchandise’in question, thus fraudulently packed and labeled, would be against public policy as well as a violation of the statutes, and will not be enforced by the courts. (3 Barb. 228; Seneca Co. Bk. v. Lamb, 26 id. 595; Story on Cont., § 613; Barton v. Port J., etc., Plank Road Co., 17 Barb. 397; Griffiths v. Wells, 3 Denio, 226.)
   Miller, J.

It must be assumed, we think, that the defendants knew when the agreement was made that they intended to purchase sardines of the kind that were tendered to them, and that the plaintiffs understood that the defendants knew it. It is also inferrable that the defendants entered into the agreement, to the knowledge of the plaintiffs, for the purpose of selling the goods to others in the condition in which they were when delivered. It is also evident that the labels were used to deceive the consumers and not the contractors, and to obtain higher prices for the sardines. The plaintiffs procured and furnished the deceptive labels, after binding themselves by contract to do so, and this was done for an unlawful purpose, and with a view of furnishing goods for the market in a condition calculated to deceive the consumers who might purchase them. It is, therefore, apparent that it was part of the contract that an unlawful object was intended, of which hath parties were cognizant, and that it was designed by them, under the contract, to commit a fraud and thus promote an illegal purpose by deceiving other parties. In such a case the courts will not aid either party in carrying out a fraudulent purpose.

To carry out this contract would be contrary to public policy, and in such a case, as we have seen, the court will not aid either party.

Under the Penal Code (§ 438), it is made a misdemeanor to sell or offer for sale any package falsely marked, labeled, etc., as to the place where the goods were manufactured, or the quality or grade, etc. The contract in question would seem to be covered by this provision of the Code, but as the Penal Code did not go into effect until May 1, 1882, and this contract was made June 30, 1881,- the section cited has, we think, no bearing on the question presented.

The case was properly disposed of upon the ground first stated, which is fully considered and elaborated in the opinion of the General Term by Sedgwick, J., in which we concur.

The judgment should be affirmed.

All concur.

Judgment affirmed.


text:
    John G. Smith, Appellant, v. Thomas Boyd et al., Respondents.
    On the same paper, and following the signatures to an assignment for the benefit of creditors, was written a notary’s certificate of acknowledgment. It bore the’ same date as the assignment, and named as the persons acknowledging the ones who apparently executed the assignment. It stated that the persons named were to the notary known “ to be the individuals described in, and who executed the same.” Held, that the words “the same” referred to the instrument to which the certificate was appended, and sufficiently identified it; and that the certificate showed a due acknowledgment of the instrument.

      Smith v. Boyd (10 Daly, 149), reversed.
    (Argued February 2, 1886;
    decided March 2, 1886.)
    Appeal from judgment of the General Term of the Court of Common Pleas, in and for the city and county of blew York, entered upon an order made at the January term, 1884, which affirmed a judgment in favor of defendants, entered upon the report of a referee. (Reported below, 10 Daly, 149.)
    This action was brought by plaintiff as assignee for the benefit of the creditors of Clinton H. Smith, to recover for the alleged wrongful taking and conversion of property, part of the assigned estate.
    The complaint was dismissed by the referee on the ground that the assignment was not duly acknowledged.
    The certificate of acknowledgment was upon the same sheet of paper as the assignment; it bore the same date and followed the signatures of the assignor and assignee. The following is a copy thereof:

      “ State of New York, )

      City and County of New York, j ss‘'
    “ On this 21st day of February, 1882, before me personally appeared Clinton II. Smith and John Gf. Smith, to me personally known to be the individuals described, and who executed the same, and who acknowledged to me that they executed the same for the purposes therein mentioned.
    “JOHN N. BEOWN,
    “ Commissioner of Deeds,

    “ New York County.”

      John J. Adams for appellant.
    The use by the notary in his certificate of the words “ the same,” without referring to the assignment, was at most a clerical error, and would not invalidate the assignment. (Boyd v. Smith, and Lien v. Smith, N. Y. C. P., April 24, 1882; Meriam v. Harson, 2 Barb. 232; Sheldon v. Stryker, 27 How. 387.) Where the language of an assignment for the benefit of creditors can be abundantly satisfied by a construction which will support the instrument, such construction should be given. (Benedict v. Huntington, 32 N. Y. 219; Bogart v. Haight, 9 Paige, 297: Mann v. Whitbeck, 17 Barb. 388; Sherman v. Elder, 24 N. Y. 381; Kellogg v. Slauson, 11 id. 502; Platt v. Lott, 17 id. 478; Bk. of Silver Creek v. Talcott, 22 Barb. 550; Brain v. Dunning, 30 id. 211; Read v. Worthington, 9 Bosw. 617; Grover v. Wakeman, 11 Wend. 187.) The certificate is sufficiently complete to indicate clearly that there was an acknowledgment of the instrument by the parties to it. (Claflin v. Smith, 35 Hun, 372, 375.)

      Robert Ludlow Fowler for intervening cestuis of plaintiff, appellant.
    The certificate of acknowledgment was a substantial compliance with the statutes of New York. (Laws of 1877, chap. 466, § 2, as amended; People v. Collins, 7 Johns. 554.) If the taking of an acknowledgment be held a judicial act, our statutes of jeofails embodied in the present liberal codes of procedure, unquestionably apply to the certificate which is a mere official judgment on a state of facts. (Code, §§ 722, 724; Warner v. Jaffray, 96 N. Y. 248, 253.) The form of the certificate of the acknowledging officer, not having been prescribed by law, is left to the discretion of such officer by implication and ex necessitate rel. (Ritter v. Worth, 58 N. Y. 627; Sheldon v. Stryker, 42 Barb. 284; West Point Iron Co. v. Reymert, 45 N. Y. 703; Canandarqua Academy v. McKechnie, 19 Hun, 62.) The judicial presumption is in favor of the sufficiency of an official certificate. (Hunt v. Johnson, 19 N. Y. 280, 292; People v. Snyder, 41 id. 397; Carpenter v. Dexter, 8 Wall. 513, 526; Kelly v. Calhoun, 95 U. S. 713; Morse v. Clayton, 21 Miss. 373; Wells v. Atkinson, 24 Minn. 161.) This is not the ease of an instrument with no certificate, but the case of an instrument with a certificate alleged to be defective by reason of the omission of a word. Such an omission may be helped, for any purpose, by a reference to the deed itself, and the missing context supplied by intendment. (Carpenter v. Dexter, 8 Wall. 513, 528; Brooks v. Chaplin, 3 Vt. 81.) When the omission in a certificate is obviously a mere clerical error the court passes it over, for de minimus non curat lex. (Scharfenburg v. Bishop, 35 Iowa, 60; Davar v. Cardwell, 27 Ind. 478; Picket v. Doe, 5 S. & M. 470; 13 Miss. 470; Samuels v. Shelton, 48 Mo. 444; Monroe v. Eastman, 31 Mich. 283; Rigler v. Cloud, 14 Penn. St. 364.)

      Otto Horwitz for respondents.
    An observance of the provisions of the General Assignment Act of 1877 is a prerequisite of the validity of an assignment. (Britton v. lorentz, 45 N. Y. 151; Jones v. Bach, 18 Barb. 568; Board of Education v. Fonda, 77 N. Y. 357.) As to acknowledgments general assignments are precisely analogous to deeds executed by married women under the statutes which were m existence prior to 1879. (Jackson v. Stevens, 16 Johns. 110; Martin v. Divelly, 6 Wend. 9; Gillett v. Stanley, 1 Hill, 121; Ryers v. Wheeler, 23 Wend. 434; Elwoods v. Klock, 13 Barb. 50 ; Merritt v. Yates, 71 Ill. 630; Wetmore v. Laird, 5 Biss. 160; Enterprise Transit Co. v.
      Sheedy, 16 Rep. 565; Jefferson Co. Build. & Loan Ass. v. Hial, 17 id. 397; Bk. of Healdeburgh v. Bailhall, 18 id. 333; Heaton v. Fryberger, 38 Iowa, 185; West Point Iron Co. v. Reginort, 45 N. Y. 703; Sheldon v. Stryker, 42 Barb. 284; Ritter v. Worth, 58 id. 627.) The essential parts of an acknowledgment are the identity of the instrument and the acknowledgment of it, and these must be stated in the certificate. (Bryan v. Raniery, 8 Cal. 467; Henderson v. Granele, id. 581.) It is as incumbent to identify the instrument acknowledged as the parties acknowledging it. (Merritt v. Yates, 71 Ill. 636; Miller v. Lenk, 2 T. & C. 86; Fryer v. Rockefeller, 63 N. Y. 268; Gillett v. Stanley, 1 Hill, 121; Stanton v. Britton, 2 Conn. 529; Pendleton v. Britton, 3 id. 406; Hayden v. Westcott, 11 id. 129; Jackson v. Osborn, 2 Wend. 555; Tulley v. Davis, 30 Ill. 103; Shepard v. Carriel, 19 id. 313; Hardin v. Kirk, 49 id. 153; Callaway v. Fasb., 50 Mo. 420; Wolf v. Fogarty, 6 Cal. 224; Hartley v. James, 50 N. Y. 38; Norman v. Wells, 17 Wend. 137; Smith v. Hunt, 13 Ohio, 260; Hess v. McCabe, 45 Md. 79; Buell v. Irwin, 24 Mich. 145; Spitznagle v. Vauhessh, 13 Neb. 338; Lestwich v. Neal, 7 W. Va. 569.)
   Finch, J.

We do not concur in the ruling which destroys the assignment of the insolvents, because of the defect in the notary’s certificate of acknowledgment. The criticism of its form has a very perceptible and adequate foundation, when the instrument is read by itself, and with no attending circumstances to solve its ambiguity or give meaning to its words. Whether in the light of those circumstances, and applying the admitted canons of construction, it can be read so as to identify the instrument acknowledged, is the question presented for our determination. If the notary had written, instead of the phrase “the same,” where it first occurs in the certificate, the words, “the foregoing instrument,” his certificate would have been perfect, and identified the paper acknowledged. It is evident from what he did write, that he intended to certify the acknowledgment of some instrument, the parties to which he knew, and that they executed it, and were described in it. His certificate appears upon the same paper with the assignment, and following its signatures and bearing the same date. It names, as the persons acknowledging, the two who apparently executed the assignment. The words, “ the same,” must have some meaning if any just construction can furnish it, for the writer is supposed to have used them for some purpose, and as vehicles of some idea, and not to have written them uselessly or without intelligent meaning. Unless they refer to the assignment, and serve to identify it, they are wholly without force and must be rejected as idle and superfluous. If they have any meaning at all, they must find it in a reference to the assignment immediately preceding, and which alone answers so much of the description as appears. The words are relative, and imply an antecedent which is missing, and without which they are senseless. The result is an ambiguity which often has to be solved with the aid of surrounding circumstances. That the assignors named, executed and acknowledged some instrument in the presence of the notary the certificate assures us. If that instrument was other and different from the one to which the certificate is appended, the words “the same” would be inexplicable. They would prove as indefinite and uncertain as if the phrase had been “an instrument,” or “some instrument,” or “ a certain instrument,” which, indeed, is the construction put upon them by the court below. But they are not so indefinite. They imply a known antecedent which the others do not, and assume that the instrument referred to has been in some manner already identified. That manner was only by identity of names and dates, and position upon the same paper with the certificate, and immediately preceding it. To that instrument, and not to some other‘indefinite one, the words “ the same ” must refer, or practically be stricken from the certificate as having no purpose or meaning. That we do not unduly strain the language of the certificate by this construction, or indulge a dangerous' laxity in the performance of official duty by acknowledging officers, may be made apparent by reference to one or more precedents in the courts of our own State. In Canandxirqiia Acad emy v. McKechnie (19 Hun, 62, 68), the rule was said to be established that a certificate of proof or acknowledgment need not be in the precise language of the statute, but is to be liberally-construed, and is enough if it shows a substantial compliance with the statute. In Jackson v. Gumaer (2 Cow. 552), the question arose over the acknowledgment of a mortgage in 1816, under the Revised Laws which required the officer to certify that he knew the person making the acknowledgment to be “ the person described in, and who executed ” the writing. The officer simply certified that the individual acknowledging was “ to me known.” On its face, the whole force of the expression established only the fact of' a personal acquaintance, and not at all the prescribed fact that he was known to the officer to be the identical person who was described in, and who executed the instrument. The argument was strongly pressed that the omission was fatal. It was urged that the statute was imperative, audits purpose salutary, and aimed at frauds in personating grantors. To which it was replied, that the objection was “hypercritical,” and that the phrase “to me known” should be construed as to me known “ as a grantor in the deed upon which my certificate is indorsed.” Assuredly it is no more difficult to refer the words “the same” in the certificate before us to the paper on which the certificate was indorsed, than to extract from the words “ to me known ” the further meaning “ as grantor ” in the deed “ upon which my certificate is written.” The same construction of the latter phrase was adopted in equity. (Troup v. Haight, Hopk. 239), and again in an action at law. (Duval v. Covenhoven, 4 Wend. 561.) Less pertinent deviations from the statutory language are found in Meriam v. Harsen (4 Edw. 70), and. West Point Iron Co. v. Rymert (45 N. Y. 703). While we do not underestimate the force of the criticism applied to the certificate before us, we are still of opinion that we ought to construe the ambiguous words in the light of the circumstances, and as referring to the instrument to which the certificate was appended, and as sufficiently identifying it.

The judgment should be reversed and a new trial granted, costs to abide the event.

All concur.

■ Judgment reversed.


author: Andrews, J.

text:
    The United States Trust Company of New York, v. The New York West Shore & Buffalo Railway Company et al.
    The Act of 1883 (Chap. 378, Laws of 1883), in relation to receivers of corporations, including the second section" thereof, in reference to receiver’s fees, applies only to receivers of corporations appointed in proceedings in bankruptcy, and a receiver appointed in an action to foreclose a mortgage executed by a corporation is not entitled to the fees specified in said section.
    The allowance of commissions to such a receiver is governed by the provision of the Code of Civil Procedure (§ 3330), providing for the allowance by the court or the judge where not “ otherwise specially prescribed by statute.”
    (Argued February 9, 1886;
    decided March 2, 1886.)
    Appeal from order of the General Term of the Supreme Court in the second judicial department made the second Monday of December, 1885, which affirmed an order of Special Term.
    This was an action to foreclose a mortgage executed by the railroad company, defendant, upon its property and franchises. Horace Russell and Theodore Houston were appointed receivers of the mortgaged property.
    The order appealed from fixed and settled their compensation at $40,000 each.

      Wm. G. Choate and EliJm Boot for appellants.
    The provisions of chapter 378, Laws of 1873, extend to all receivers of all corporations. (Guardian L. Ins. Case, 93 N. Y. 631; Clinch v. South Side R. R. Co., 1 Hun, 636.) The language of the statute being clear and unambiguous, and there being no reason why it should not be interpreted according to the ordinary use of language, it is the duty of the court to give it effect, whatever may be the personal opinion of the judges on the wisdom and policy of the law. (Jackson v. Lewis, 17 Johns. 475; affirmed, 18 id. 504; Pres., etc., of Waterford Turnp. Co. v. People, 9 Barb. 170; People v. C. R. R. Co., 25 id. 201; King v. Burrell, 12 Ad. & El. 468; Everett v. Wells, 2 Scott, 531; Green v. Wood, 7 Q. B. Rep. 178; Beebe v. Griffin, 14 N. Y. 244; McClusky v. Cromwell, 11 id. 593, 601; Wood v. Adams, 35 N. H. 36; People v. Green, 86 N. Y. 318; Waller v. Harris, 20 Wend. 561; Johnson v. H. R. R. R. Co., 49 N. Y. 455; People, ex rel. Davies, v. Cowlis, 13 id. 350; Sedg. on Stat. and Const. Law, 187; Cooley’s Const. Lim. [5th ed. 201, 202] 168, 169; Parry v. Edie, 1 Term R. 313; James v. Patten, 2 Seld. 9; Catlin v. Gunther, 1 Kern. 368; People v. Albertson, 55 N. Y. 50; License Tax Cases, 5 Wall. 462; People v. Purdy, 2 Hill, 31; Johnson v. Lawrence, 95 N. Y. 154, 157.) The court below had, under the provision of this statute, no discretion to fix the fees at a less sum than the statute provides. (Ex parte Jordan, 4 Otto, 251; Halsey v. Van Amringe, 6 Paige, 12; Dakin v. Deming, id. 96; Meacham v. Stearns, 9 id. 398; King v. Talbot, 40 N. Y. 96; Hancox v. Meeker, 95 id. 538; Hobart v. Hobart, 96 id. 637.) Each of the appellants is entitled to full commissions upon the receipts and disbursements. .(Brown v. Jarvis, 2 De G., F. & J. 172; Washington v. State, 17 Wis. 148.) The receivers are entitled to the statutory commissions upon- the whole amount of their receipts and disbursements, without regard to the particular source of such receipts, or the particular objects of such disbursements. INor is their right to such commissions affected by the fact that they had an active trust. (In re Bunch, 12 Wend. 280.) The word “ moneys,” and “ sums of money” are used as a standard of value or measurement by which to determine the extent of the property passing through the hands of the judiciary officer. (Wagstaff v. Lowerre, 23 Barb. 209, 226; In re De Peyster, 4 Sandf. Ch. 511; In re Moffat, 24 Hun, 327; In re Roosevelt, 5 Redf. 605; Laytin v. Davidson, 95 N. Y. 263; Hurlburt v. Durant, 88 id. 121; In re Bunch, 12 Wend. 280; Green v. Sanders, 18 Hun, 308; Wood v. Ford, 4 Redf. 34; Howes v. Davies, 4 Abb. Pr. 71; In re Kellogg, 7 Paige, 265; Hall v. Tryon, 1 Dem. 296; Bennett v. Chapin, 3 Sandf. 673; In re Morgan's Estate, 15 Abb. N. C. 198; Johnson v. Lawrence, 95 N. Y. 157; In re Hurlburt, 89 id. 259.)

      Joseph H. Choate for respondents.
    The second section of the act chapter 378 of the Laws of 1883, does not apply to receivers appointed pendente lite in foreclosure suits, but relates only to statutory receivers appointed to wind up a corporation and distribute its assets. (People, ex rel. Newcomb, v. McCall, 94 N. Y. 587; Code, §§ 768, 982; Whitney v. At. & N. Y. R. R. Co., 66 How. Pr. 436; High on Rec., § 378; Metz v. Buffalo, Corry & P. R. R. Co., 58 N. Y. 61; Negus v. City of Brooklyn, 10 Abb. N. C. 187; People v. N. Y. & M. B. R. R. Co., 84 N. Y. 565; Donaldson v. Wood, 22 Wend. 295; People v. Supervisors of Col. Co., 43 N. Y. 135.) The act of 1883 having no application to the case, and there being no other statute specially prescribing these receivers’ fees, they are necessarily governed by section 3320 of the Code of Civil Procedure, which leave the fees in the sound discretion of the court appointing. (Gardiner v. Tyler, 3 Keyes, 505; 1 Kent’s Com. 462; People v. Draper, 15 N. Y. 558; Potter’s Dwar. on Stat. 188; People, ex rel. Jackson, v. Potter, 47 N. Y. 375, 379; People v. N. Y. & M. B. R. R. Co., 84 id. 565; Duryee v. Mayor, etc., 96 id. 477, 495-496; Lessee of Brewer v. Blougher, 14 Pet. 178, 198; Smith v. People, 47 id. 330, 336, 339; People, ex rel. Mason, v. McClave, 99 N. Y. 83, 89; People v. Supervisors of Col. Co., 43 id. 132; People, ex rel. W. F. Ins. Co., v. Davenport, 91 id. 11, 18; People, ex rel. Wood, v. Larcomb, 99 id. 43, 49; Smith v. People, 47 id. 330, 336, 344; Hayes v. Symonds, 9 Barb. 260; People v. Mallory, 2 Sup. Ct. [T. & C.] 76, 80; People v. Crissy, 91 N. Y. 632; People, ex rel. Kingsland, v. Palmer, 52 id. 88; Reiches. Smyth, Collector, 13 Wall. 162; Homer v. The Collector, 1 id. 486; Redrock v. Henry, 106 U. S. 596; U. S. v. Claflin, 97 id. 552.) The act of 1883 cannot be construed to give to receivers in foreclosure suitspendente lite, and especially in railroad foreclosures, the compensation provided in the second section of that act for “ receivers of corporations,” as such an interpretation would lead to most unjust, absurd and mischievous consequences, and cannot, therefore, be sustained. (L. S. & M. S. Ry. Co. v. Roach, 80 N. Y. 339, 344; People v. Lambier, 5 Denio, 9; Smith v. People, 47 N. Y. 330, 336; People v. Mallory, 2 Sup. Ct. [T. & C.] 76, 80, 81; Donaldson v. Wood, 22 Wend. 395; People, ex rel. v. Comm’rs of Taxes, 95 N. Y. 554, 5 58, 559; People, ex rel. Wood, v. Lacombe, 99 id. 43, 49; Duryee v. Mayor, etc., 96 id. 495; U. S. v. Kirby, 7 Wall. 482, 486-7.)
    E. W. Paige for JST. Y., W. S. & B. It. B. Co., and Ashbel' Green, as receiver, respondents.
    Messrs. Bussell & Houston were not “ receivers of corporations ” within the meaning of chapter 378 of the Laws of 1883. (Whitney v. N. Y. & A. R. R. Co., 66 How. Pr. 436, 445.) They were appointed receivers of the specific property described in the mortgage only, i. e., the West Shore railroad, and not of any other property. (Foster v. Townshend, 68 N. Y. 203, 206; Keeney v. Home Ins. Co., 71 id. 306, 401; Hollenbeck v. Donnell, 94 id. 342, 347.) The statutes on the subject show that by the phrase “ receiver of a corporation,” as used in the acts of 1880, 1881, 1882, 1883, is meant a receiver who has the powers conferred by the Be vised Statutes upon a receiver’s appointment in the case of the voluntary dissolution of a corporation. (Hollenbeck v. Donnell, 94 N. Y. 342; High on Rec., § 288; Mann, Receiver, v. Pentz, 2 Sand. Ch. 257, 266; Verplanck v. Mer. Ins. Co., 1 Ed. 84, 88; Bangs v. McIntosh, 23 Barb. 591; Howe v. Denel, 43 id. 504; Belmont v. Erie R. Co., 52 id. 637; Att'y-Gen. v. Utica Ins. Co., 2 J. C. 271; Att'y-Gen. v. Bk. Niagara, Hopk. 354, 598; Laws of 1825, chap. 325; Code of Civ. Pro., §§ 1784-5, subd. 4; 2 R. S. 463, part 3, chap. 8, tit. 4, § 36; 2 R. S. 469, §§ 67, 68; Kincaid v. Dwinelle, 59 N. Y. 548; People, ex rel. Garling, v.
      Van Allen, 55 id. 31, 38.) Section 2 of chapter 378 of the Laws of 1883, relates only to receivers having the powers conferred by the Revised Statutes upon receivers appointed upon the voluntary dissolution of a corporation. (People, ex rel. Newcomb, v. McCall, 94 N. Y. 587, 590; Dwarris, Potter’s ed., 253, 255, 270; Rex v. Morris, 1 B. & A. 441.)
   Andrews, J.

The Code of Civil Procedure, which was in force when the proceedings in this action were taken, furnishes the general rule governing the allowance of commissions to receivers. It is found in section 3320, which provides as follows: § 3320. A receiver, except as otherwise specially prescribed by statute, is entitled, in addition to his lawful expenses, to such a commission, not exceeding five per centum upon the sum received and disbursed by him, as the court by which, or judge by whom he is appointed, allows.” The judge at Special Term in substance held that this section governed the allowance of commisions in the case, and made an order fixing the commissions of the receivers at a gross sum, less than five per centum upon the sums received and disbursed. The order of the Special Term was affirmed by the General Term, and the only question presented on tins appeal, is as to the application of section 3220 to the case of a receiver pendente lite-, appointed in a foreclosure action, to foreclose a mortgage executed by a corporation. It is plain that the section is applicable to receivers appointed in foreclosure actions, where the mortgagor is an individual. But it is claimed that the case of a receiver appointed in a foreclosure action against a corporation, is taken out of the general rule of law by force of the second section of the act, chapter 378 of the Laws of 1883, and that by that section such a receiver is entitled to a fixed percentage upon receipts and disbursements, which the court is bound to allow, irrespective of any consideration of the character or value of the services rendered. The act of 1883 is entitled An act in relation to receivers of corporations.” The second section, upon which the appellants rely, is as follows“ § 2. Every receiver shall be allowed to receive as compensation for his services as such receiver, five per cent for the first $100,000 actually received and paid out, and two and one-half per cent on all suros received and paid out in excess of the said $100,000.” We have reached the conclusion that the appellants were not cc receivers of corporations ” within the meaning of the act of 1883, and shall content ourselves with a brief statement of the reasons for our judgment. The power of a Court of Chancery to appoint a receiver pendente lite, in foreclosure cases, is a part of its incidental jurisdiction, not depending upon any statute, and which it exercises, whenever by reason of the insufficiency of the security, or other reason, equity requires that the rents and profits of the mortgaged property, pending the litigation, should be impounded and retained, to be applied upon the debt, to be ascertained by the final judgment. (Hollenbeck v. Donnell, 94 N. Y. 342.) The receiver by virtue of his appointment, takes possession of the mortgaged property and receives the rents and profits as the officer of the court, but the title to the property is not changed, but remains- in the mortgagor until a sale under the decree in the action. (Keeney v. Home Ins. Co., 71 N. Y. 396.) This jurisdiction is not affected by the character of the mortgagor, whether an individual or a corporation. It rests upon grounds quite independent of the character of the parties to the instrument, or the nature of the mortgaged property. But it was held at an early day in this State, that the jurisdiction of chancery did not extend to the sequestration of the .property of a corporation by means of a receiver, or to the winding up of its affairs, or to control or restrain the usurpation of franchises by corporate bodies, or by persons claiming without right to exercise corporate powers. (Attorney-General v. Utica Ins. Co., 2 Johns. Ch. 371; Attorney-General v. Bk. of Niagara, Hopk. 354.) The refusal of the Court of Chancery to entertain jurisdiction of corporate bodies, at the instance of creditors, or to wind up their affairs in case of insolvency, led to the enactment by the legislature in 1825, of the act chapter 325 of the laws of that year, entitled “ An act to prevent fraudulent bankruptcies of incorporated companies, and to facilitate proceedings against them,’ ’ etc. By this act jurisdiction was conferred upon the Court of Chancery to sequestrate the property of a corporation, -upon the application of a judgment creditor, after the return of an execution unsatisfied, and to appoint a receiver of its property (§ 15), and in case of an incorporated bank, which had become insolvent, or had violated its charter, it authorized the Court of Chancery, upon the petition of the attorney-general, or of a creditor, to proceed by injunction and to appoint a receiver of the property of the bank, and to distribute the same among its creditors (§ 17). The provisions of the act of 1825, enlarged and extended, were incorporated into the Revised Statutes, in the article entitled, “ Of proceedings against corporations in equity ” (2 R. S. 462), and a complete statutory system was enacted for the winding up of the affairs of a corporation against which an execution had been returned unsatisfied, at the instance of the creditor in the execution, and for similar proceedings against insolvent banking or other specified corporations, at the instance of the attorney-general, or any creditor or stockholder (§§ 36, 39,. 40, 41). The court was authorized to appoint receivers of the corporate property. Their powers and duties are specified in the statute in great detail, and it is declared that receivers so appointed shall be vested with all the estate, real and personal, of such corporation,” and they are declared to be trustees of such estate, for the benefit of the creditors of such corporation, and its stockholders.” (2 R. S. 469, §§ 67, 68.) The system inaugurated by the act of 1825, and incorporated into the Revised Statutes, has been continued by the Codes, and for fifty years prior to the act of 1883, had been the statutory system of procedure for the winding up of the affairs of insolvent corporations, through receivers appointed by the court, not by virtue of its inherent jurisdiction, but under statutory authority, the statute which authorized their appointment» also prescribing with great minuteness their powers and duties. The immediate point in controversy is, whether the act of 1883, was an additional regulation prescribing the rights and duties of receivers of insolvent corporations, or has a wider scope, embracing all receivers of a corporation or of corporate property, however appointed, or for whatever purpose the appointment may have been made. We think the limited construction of the statute is the true one, and that the general language of the second section, prescribing the fees of receivers, must, in view of the context, be construed as relating only to receivers of insolvent corporations. The act is made up mainly from the provisions of chapter 537 of the Laws of 1880, and the subsequent amendments of 1881 and 1882 (Laws of 1881, Chap. 639; Laws of 1882, Chap. 331), and those acts expressly related to receivers of insolvent corporations. The first section is new, and in substance is a legislative enactment of the Supreme Court rule Ho. 81, and prescribes that an application for the appointment of a receiver of a corporation, shall be made in the judicial district in which the principal business office of the corporation is located, or in a county adjoining such district. This section makes no reference to the nature of the proceeding in which the application is made. But a reference to the ninth section shows that proceedings against insolvent corporations only were in contemplation. The ninth section declares that all applications to the court, contemplated by the act, shall be made in the judicial district where the principal office of the “ insolvent corporation ” was located. The other sections provide for orders and proceedings of various kinds. If the nature of the proceeding to which the act relates is left indefinite by any of the other sections, the obscurity is removed by the ninth section, which shows that the legislature was dealing with insolvent corporations, and that the orders to be made, were in proceedings against such .corporations only. The second section is the one prescribing the fees. The third section provides that the order appointing the receiver shall designate the place of deposit of the funds of the corporation, and that they shall not be deposited elsewhere, except upon the order of the court, on notice to the attorney-general. The application for an order changing the place of deposit must, according to the ninth section, be made in the judicial district where the principal office of the insolvent corporation ” is located. The third section, therefore, relates to a proceeding against an insolvent corporation, for it is only in such a proceeding, as appears by the ninth section, that an order is contemplated. The fourth section makes it the duty of the receiver of an insurance, banking or railroad corporation to make and .file periodical accounts every six months, prohibits his paying to any attorney or counsel, any costs, fees or allowances, until the amounts shall have been stated and approved by the court “ by an order duly entered,” and requires notice of the presentation of any such accounts, to be given to the attorney-general, who is also required to examine the books and accounts of the receiver at least once every twelve months, provisions very appropriate to a receivership for winding up the affairs of a corporation. It is not questioned that the remaining sections of the act, from five to ten, both inclusive, relate exclusively to proceedings against insolvent corporations. We think the preceding sections relate to the same subject. It is a matter of public notoriety that the act .of 1883' was passed, in view of the scandals which had been set afloat, in respect to the administration of the affairs of insolvent corporations through receivers. Omitting the second section, it is, we think, reasonably clear that the object of- the act was to supplement the existing legislation, in respect to the winding up of the affairs of insolvent corporations, and to provide further restrictions and safe-guards against the misuse or depletion of corporate funds in the hands of the receivers. The second section deals with a subject germane to the purpose of the act, and fixes the compensation of the receiver, and when it used the language, “ every receiver,” it is by the ordinary rules of interpretation and construction of statutes, to be restrained to the particular subject with which the legislature was dealing, and to which the section in question had an appropriate application. (See Smith v. People, 47 N. Y. 330; People v. McClave, 99 id. 83.)

The conclusion is that the act of 1883, including the second section, relates exclusively to receivers of corporations, appointed in proceedings in insolvency.

The order should therefore be affirmed.

All concur.

Order affirmed.


text:
    Charles S. Kennedy, Respondent, v. The New York Life Insurance and Trust Company, Appellant.
    An affidavit, upon which an order for service of summons by publication, under the Code of Procedure (§ 135) was granted, stated that the defendants “ cannot after due diligence be found within this State,” that they were Residents of other States named, and that the summons “ was duly issued for said defendants, but cannot be served personally upon them by reason of such non-residence.” Meld, that the affidavit was sufficient to sustain the order and to give the court jurisdiction, at least where collaterally brought in question.

      Garieton v. Garieton (85 N. T. 313), distinguished.

      Kennedy v. M. Y. L. Ins. and T. Go. (32 Hun, 35), reversed.
    (Argued March 5, 1886;

    decided March 23, 1886.)
    Appeal from order of the G-eneral Term of the Supreme Court in the second judicial department, made February 12, 1884, which reversed a judgment in favor of defendant, entered upon a decision of the court on trial at Special Term. (Reported below, 32 Hun, 35.)
    This action was brought to recover damages for an alleged breach of a contract by defendant to sell and convey to plaintiff certain premises.
    Defendant acquired title under a foreclosure sale; it was ready and willing to convey, but plaintiff declined to accept a conveyance, claiming defendant’s title was defective, in that the summons in the foreclosure suit was served by publication, and that the affidavit upon which the order for such service was made was insufficient to give the court jurisdiction.

      R. E. Robinson for appellant.
    Even statements capable of being construed as allegations of fact would be sufficient for jurisdiction. (Belmont v. Comen, 82 N. Y. 256.) If there was any evidence of an attempt to find and serve it was enough to confer jurisdiction. (Staples v. Fairchild, 3 N. Y. 41; Peck v. Cook, 41 Barb. 549; Van Wyck v. Hardy, 39 How. Pr. 392; Roche v. Ward, 17 id. 416; Titus v. Relyea, id. 265; Barnard v. Heydrick, 49 Barb. 62; Steinle v. Bell, 12 Abb. Pr. 171; Howe Machine Co. v. Pettibone, 74 N. Y. 68; Wortman v. Wortman, 17 Abb. Pr. 66.) The recital in the order that the defendant cannot after due diligence be found is prima

      facie evidence of the existence of such fact. (Bosworth v. Vandewalker, 53 N. Y. 597; Maples v. Mackey, 89 id. 146.)

      Josiah T. Marean for respondent.
    Yon-residence of a defendant does not dispense with effort to find within the State. (Carlton v. Carlton, 85 N. Y. 313; Code of Procedure, § 135; Howe Machine Co. v. Pettibone, 74 N. Y. 71.) The interpretation of the language of a deposition is a matter of law. (Bixby v. Smith, 3 Hun, 63; Peck v. Cook, 41 Barb. 549; Long v. Rogers, 19 Ala. 321, 331; Carpenter v. People, 8 Barb. 610; Hill v. London G. L. Co., 3 II. & N. 920.)
   Miller, J.

The right of. the plaintiff to recover in this action depends upon the construction .to be placed on section 135 of the Code of Procedure.

In Carleton v. Carleton (85 N. Y. 313), upon which the respond ent relies, the affidavit stated, that defendant has not resided in the State of Yew York since March, 1877, and deponent is advised and believes is.now a resident of San Francisco, California,” and it was held, that this was not sufficient under the Code of Procedure (§ 135), to authorize the granting of the order; that it was merely an allegation of non-residence, and did not tend to establish that defendant <could not, after due diligence, be found within the State.

It will be seen that in the case cited the affidavit as to residence is upon information and belief and does not show positively and distinctly that the defendant was a non-resident. Considerable stress is laid upon this fact, and in the opinion it is said : “ Cases may arise where the proof of residence in a distant State at the very time, and of an absolute location there, would be so strong and conclusive as to render it entirely apparent that no act of diligence would be of any avail; and if the affidavit here had stated positively and distinctly that the defendant was at the time not only a resident of the State of California, but was then actually living in that State, there would be ground for claiming that due diligence would be unavailing.”

It would thus seem that where the proof of non-residence is clear and conclusive, and that the defendant is living out of the State and in a distant State, there may be strong reasons for holding that proof of due diligence is not required and a different result arrived at.

The ease under consideration differs somewhat from Carleton v. Carleton (supra). The affidavit here states that the defendants “ cannot, after due diligence, be found within this State ” (they being residents of other States as therein named), and “that the summons herein was duly issued for said defendants, but cannot be served personally upon them by reason of such non-residence.” Here is a clear statement that the defendants are non-residents of the State and reside in other and distant States, and that the summons which has been issued cannot be served by reason thereof. This supplies the defect in the affidavit in the case cited in reference to the proof of non-residence and establishes beyond question that fact, making the case considered stronger in this respect than the one cited. The allegation as to non-residence is preceded by the statement that the defendants cannot, after due- diligence, be found within this State, which, taken in connection with the subsequent averment as to non-residence, may be considered, we think, as a statement either that an attempt has been made to find the defendants, or at least that they are so remotely located out of the State and have such a fixed residence that it would be impossible after due diligence to find them within the State for the purpose of serving the summons on them.

The statement as to due diligence is not absolutely an allegation of a conclusion of law, or an opinion, but, in connection with what follows, a statement of facts which tend to establish that due diligence has been used.

The two cases are clearly distinguishable, and we think the affidavit here contained allegations sufficient to call upon the judicial mind to determine whether due diligence had been employed to find the defendants, for the purpose of serving the summons issued. In granting the order, the judge so held, and as the language employed will bear this interpretation, the court should not, certainly in a collateral proceeding, determine that the affidavit was entirely defective and set aside the order.

The order of the General Term should be reversed and the judgment of Special Term affirmed.

All concur.

Order reversed, and judgment affirmed.