text:
    WILLIAM H. CLAPP, Respondent, v. THE TOWN OF ELLINGTON, Appellant.

      Duty of commissioners of highways to construct and maintain bridges — they a/re not required to consPruct bridges which will inswt'e the safety of persons, passing over them in a manner and with vehicles involving peculiar and special danger.

    While the plaintiff, on September 1, 1885, was passing over a highway bridge in the town of Ellington, riding upon a traction engine, propelled by steam power, with a tank attached, weighing together 8,500 pounds, the bridge broke down and the plaintiff was injured. Upon the trial of an action, brought by the plaintiff, to recover damages because of such injury, evidence was given tending to show that one of the beams of the bridge had become rotten; that it had not been repaired, and that it was in consequence of the defective condition of the bridge that the injury occurred.
    The defendant's counsel asked the court to charge the jury that “it was not the official duty of the highway commissioner to so construct and maintain the bridge in question as to insure the safety of persons passing over it in a manner involving peculiar and special danger arising from the unusual way and method of construction and manner of locomotion of the vehicle used in passing over it; ’• also, to charge that "if the jury are satisfied, from the evidence, that the vehicle upon which the plaintiff was riding, and with which he was connected in passing over the bridge at the time of the accident in question, was unusual and extraordinary in weight, in method of construction or manner of propelling the same along the highway, and such unusual weight, method of construction and locomotion was such as to cause unusual and extraordinary strain upon the-bridge in passing over it, then the plaintiff took every possible risk of injury upon himself in trying to pass over the bridge, and the plaintiff cannot recover for the injuries sustained by the breaking down of the bridge, under such circumstances, although his injuries were the direct results of such imperfections and defects in the bridge.”

      Held, that exceptions taken by the defendant’s counsel to the refusal of the court to charge either of these propositions were well taken.
    That, assuming that the proposition embraced in the first request was intended to state a general proposition, and that it was not intended to be limited to the engine that broke through the bridge, both the propositions were correct and should have been charged.

      Gregory v. The Inhabitants of Adams (14 Gray, 342-248); McCormick v. Township of Washington (112 Penn St., 185) followed.
    While the commissioner of highways is required to construct and maintain bridges of sufficient strength and material to insure the safety of persons passing over them with such vehicles as are commonly and ordinarily used in that country, he cannot be required-' or expected to construct and maintain bridges which will insure the safety of persons passing over them in a- manner involving peculiar and special danger arising from any unusual weight.
    Appeal from a judgment entered in the office of the clerk of Chautauqua county on April 9, 1888, upon a verdict for $2,000 rendered at the Chautauqua Circuit, and from an order of the Erie Special Term denying a motion for a new trial, made on a case and exceptions, which was entered in the same office on April 2 1888.

      F. W. Stevens and W. H. Henderson, for the appellant.

      A. C. Wade, for the respondent.
   Haight, J.:

On the 1st day of September, 1885, the plaintiff was passing over a highway bridge in the town of Ellington, riding upon a traction engine propelled by steam power, with tank attached, the two weighing 8,500 pounds. The bridge broke ‘ down and the plaintiff was injured, and this action was brought to recover damages. Upon the trial evidence was given tending to show that one of the beams of the bridge had become rotten; that it had not been repaired, and that it was in consequence of the defective condition of the bridge that the injury was occasioned. At the conclusion of the trial the defendant’s counsel asked the court to charge the jury that “ it was not the official duty of the highway commissioner to so construct and maintain the bridge in question as to insure the safety of persons passing over it in a manner involving peculiar and special danger arising from the unusual way and method of construction and manner of locomotion of the vehicle used in passing over it; ” and, again, he requested the court to charge that, “ if the jury are satisfied from the evidence that the vehicle upon which the plaintiff was riding, and with which he was connected in passing over the bridge at the time of the accident in question was unusual and extraordinary in weight, in method of construction or manner of propelling the same along the highway, and such unusual weight, method of construction and locomotion was such as to cause unusual and extraordinary strain upon the bridge in passing over it, then the plaintiff took every possible risk of injury upon himself in trying to pass over the bridge, and the plaintiff cannot recover for the injuries sustained by the breaking down of the bridge under such circumstances, although his injuries were the direct results of such imperfections and defects in the bridge.” The court declined to charge either of the propositions requested further than as it had already charged upon the subject. Exceptions were taken to such refusals.

The court had not previously charged either of the propositions,but had charged: That there was no reason why people cannot travel over highways and bridges with this kind of implement or machinery as well as other wagons. If it is heavy and ponderous, it naturally requires the exercise of more care than though it were light and not weighty. If unusual, of course, greater degree of vigilance would necessarily be expected and required than though it was not of an unusual character. It is lawful to travel with it. It is only a question of diligence and reasonable care naturally required in the use of it.”

As to the first proposition embraced in the requests to charge, we understand it to state a general proposition, and that it was not intended to limit it to the engine that broke through the bridge. Had it been limited, to the engine in question the refusal of the court to charge as requested would have been correct, for the court could not be called upon to state as a matter of law that the engine in question was of unusual weight and method of construction, and that it involved peculiar and special danger. Such questions were for the jury and not the court; but, as stating a general proposition, we think this and that which followed were both correct and should have been charged. These requests appear to have been copied from the opinion of the court delivered in the case of Gregory v. The Inhabitants of Adams (14 Gray, 242-248). In that case damages were sought to ' be recovered for injury to an elephant which had broken through a bridge upon the highway.

Merrick, J., in delivering the opinion of the court, says that it was the duty of the town to keep the bridges “ in such condition that, having in view the common and ordinary occasion for their use, and what may fairly be required for the proper accommodation of the public at large in the various occupations which may from time to time be pursued, each particular way should be so wrought, prepared and maintained that it may justly be considered, for all the uses and purposes for which it was laid out and designed,, to be reasonably safe and convenient.” * * * “ This is the measure and extent of the obligation of towns in reference to the support and maintenance of public highways. They are not required to make preparations for the safety or convenience of those who undertake to use those ways in an unusual or extraordinary manner, involving peculiar and special peril and danger, whether it be in respect to the kind or character of animals led or driven, or the magnitude or construction of carriages used, or the bulk or weight of property transported. And if any person undertakes to use or travel upon a public highway in an unusual or extraordinary manner, or with animals, -vehicles or freight not suitable or adapted to a way opened and prepared for the public use in the common intercourse of society and in the transaction of usual and ordinary affairs of business, he then takes every possible risk of loss upon himself; and he can have no remedy against the town to recover recompense for injury sustained, although they be the direct result of defects and imperfections in a way, for which it would be responsible in case of injury to individuals in the lawful and proper use of it.”

It appears to us that the rule as thus laid down is both wise and just. The commissioner of highways is required to construct and maintain bridges of sufficient strength and material to insure the safety of persons passing over them with such vehicles as are commonly or ordinarily used in that country; but he cannot be required or expected to construct and maintain bridges which will insure the safety of persons passing over them in a manner involving peculiar and special danger arising from unusual weight and. so forth. As, for instance, heavy buildings are sometimes moved through the public-way, yet we should not expect a commissioner of highways to construct and maintain bridges of sufficient strength to support moving buildings. We are, therefore, inclined to the view expressed by the learned judge in the opinion quoted from, that it was a question for the jury, and that if the jury became satisfied from the evidence that the vehicle upon which the plaintiff was riding at the time of the accident was unusual and extraordinary in weight, method of construction or manner of propelling the same, and that such weight, method of construction and locomotion was such as to cause unusual and extraordinary strain upon the bridge,that the plaintiff in running upon the bridge took upon himself the risk of injury, thereby becoming guilty of contributory negligence which precludes his recovery even though there w'as negligence on the part of the highway commissioner. It is true, as the trial court stated, that improved implements of travel are invented, and machinery for threshing and other agricultural purposes are matters involved in civilization. It is further true that these traction engines in farming communities have within the last few years come into use in the threshing of grain, and that they are usually propelled from place to place through the highways; and that these facts will have to be taken into consideration by the jury in determining whether they are unusual or extraordinary; but the question has heretofore been, one for the jury and not for the court.

The legislature has now provided that no town shall be liable for any damage resulting to a person or property by reason of the breaking of any bridge by a traction engine in crossing the same of the weight of four tons or over, while such person is engaged in transporting or driving such engine along or upon the highways of the State. (Laws of 1887, chap. 526.) In the future cases will have to be determined under the provisions of this act. The case of McCormick v. Township of Washington (112 Penn. St., 185), is a case in point, and sustains the views expressed in the case of Gregory v. The Inhabitants of Adams (supra).

Several questions were raised in reference -to the admission and rejection of evidence, but, inasmuch as the objection may be obviated upon the new- trial, we have not thought it necessary to here consider them.

The judgment and order should be reversed and a new trial ordered, costs to abide event.

Barker, P. J.; Bradley and Dwight, JJ., concurred.

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


source: Caselaw Access Project

author: Barker, P. J.:

license: Public Domain

text:
    LAKE SHORE NATIONAL BANK, Respondent, v. BUTLER COLLIERY COMPANY, Appellant.

      When a corporation will he hound hy cm indorsement made hy an agent — a general finding of fact hy a referee will he controlled by a special finding on the same subject — a notice of protest, with no place of address, will not ehai'ge the indorser.

    Upon the trial of an action, brought by the plaintiff upon four several promissory notes, dated at Buffalo, and made payable to the order of E. S. Hubbell, agent, “at E. S. Hubbell’s office, 421 Hamburg street,” and indorsed as follows: “E. S. Hubbell, agent for Buffalo Colliery Company,” the referee found that the defendant was a corporation organized under the laws of the State of Pennsylvania, for the purpose of mining coal and preparing the same for and conveying it to market; that the company established an office at Elmira, in this State, where its general business was transacted, and sold large quantities of coal in the city of Buffalo, where it kept an office, the business in that city being-conducted by Hubbell as the company’s agent; that before the notes in suit were made and discounted, Hubbell had been in the habit of receiving from the defendant’s customers doing business with him as agent, notes similar to those in suit, which he indorsed and had discounted by the banks doing business in the city of Buffalo, and at the plaintiff’s bank, and also found that the indorsements in suit were made in the usual course of business, as carried on by Hub-bell, with the knowledge and consent of the company.

      Held, that the indorsements made by Hubbell, as the agent of the company were its indorsements, and that it was bound thereby.

      Exchange National Bank v. Monteath (17 Barb., 171; affirmed 26 N. Y., 505) followed; DeWitt v. Walton (9 N. Y., 572); Moss v. Livingston (4 id., 208) distinguished.
    As to the service of the notice of protest on one of the notes made by Eleanora B. Grant, the referee, in the body of his report, stated, as a fact, “ that notice of presentation for payment, demand of payment and that the said maker neglected to pay the same, was given' to said Hubbell as said agent.” At the request of the defendant the referee made a further finding on the same subject, which is as follows: “ The notice of the protest on the Eleanora B. Grant note was addressed: E. S. Hubbell, agent Butler Colliery Co.; no place of the address is given. This is the only notice of protest of that note.”
    The notary’s certificate was read in evidence, which stated that ho deposited in the post-office, at the city of Buffalo, and paid the legal postage thereon, due notice of the demand, non-payment and protest, signed by him, and folded in the form of letters, as follows, viz: “ Notice for Eleanora B. Grant, directed Buffalo, N. Y.; for E. S. Hubbell, directed Buffalo, N. Y.; for E. S. Hubbell, agent for Butler Colliery Co:, inclosed to E. S. Hubbell.” Hubbell had indorsed the notes individually, after the indorsement by the company.

      Held, that the special findings of fact, made by the referee, controlled the general finding on the same subject, and that as it stated that no address was given in the notice of protest to] Hubbell, as agent for Butler Colliery Co.; that the service of the notice was incomplete, and it must be held, as a matter of law, that the defendant was not charged as an indorser on that note.
    Appeal from a judgment entered in favor of the plaintiff upon the decision of a referee, in the office of the clerk of Chautauqua county, on February 23, 1888.
    The defendant is a corporation organized under the general laws of the State of Pennsylvania for the purpose of mining for coal and preparing the same for and conveying it to market. The lands upon which it was authorized to carry on its operations were all located in the State of Pennsylvania. The statute provides that the business of corporations organized under its provisions shall be managed and conducted by a president, board of directors, a clerk, treasurer and such other officers, agents and factors as the company may authorize to act for it. The company established an office at Elmira, in this State, where its general business was transacted, and the president and officers were residents of this State. The company sold large quantities of coal in the city of Buffalo, where it kept an office, Eli S. Hubbell acting as its agent in the management of the business transacted at that place. The action is upon four several promissory notes, all dated in the months of April, Hay and June, 1886, and made payable to and indorsed by Hubbell, as agent for the company, all of them being discounted by the plaintiff at his request, amounting in the aggregate to the sum of $2,176.57, for which sum, with costs, judgment was entered. From this judgment the defendant appeals.

      J.. W. Dininny, for the appellant.

      Holt & Holt, for the respondent.
   Barker, P. J.:

We have reached the-conclusion that notice of the demand, nonpayment and protest of the Eleanora B. Grant note was not duly served so as to charge the defendant as indorser, for reasons hereinafter stated. Upon the facts as found by the referee and set forth in his decision, the legal conclusion that the defendant is liable as indorser upon each of the other notes is well supported. The evidence, as set forth in the case, tends to support each fact which it was necessary for the plaintiff to maintain to establish the defendant’s liability as indorser upon each of those notes. The referee has not made a certificate that the case as settled by him contains all the evidence produced on the trial. Therefore, on this appeal, this court cannot look into the evidence for the purpose of determining the point made by the appellant that some of the material findings of fact are against the weight of evidence. We can only review the questions of law presented by the exceptions. (Porter v. Smith, 107 N. Y., 531; Spence v. Chambers, 39 Hun, 193.)

The makers of the several promissory notes were debtors of the defendant, and the consideration for each noté was their respective indebtedness to the company. The business of the company carried on at Buffalo by the defendant was legitimate, and within the powers conferred upon it by its charter. This business was conducted by Hubbell as the company’s agent duly appointed to conduct that branch of its operations. He was in sole charge of the same at that place, and the transactions were of considerable magnitude and extended through a period of years. The indorsements of the notes in suit were made during the latter part of Hubbell’s agency. The notes were dated at Buffalo, and made payable to the order of E. S. Hub bell, agent, “at E. S. Hubbell’s office, 421 Hamburg street.” The indorsement was as follows : “ E. S. Hub-bell, agent for Buffalo Colliery Company.” Before the notes in suit were made and discounted ITubbell had been in the habit of receiving from the defendant’s customers, doing business with him as agent, notes in form similar to those in suit, which he indorsed and procured to be discounted by banks doing business in the city of Buffalo, and at the plaintiff’s bank, the proceeds of which were remitted to the defendant’s chief office at Elmira, which was under the immediate superintendence of the president and directors of the company.

The referee in his report sets forth the mode and manner in which the business carried on by ITubbell was conducted and managed, and the extent of the same, and without restating in full the findings in this respect, in this connection; that the indorsements in suit were made in the usual course of business as carried on by ITubbell with the knowledge and consent of the company. These facts found by the referee show conclusively that the indorsements were made by Hubbell as the agent of the company, and the form of the indorsements made the same the act of the company. The manner in which agents of corporations must execute contracts in order to avoid personal liability and to bind their principals, in general the rule is the same as with the agents of natural persons ; and in general, if from the contract itself, or from the contract coupled with the conduct of the parties thereto, it appears that credit was given not to the agent, but to the corporation; and that it was the intent of the parties that the corporation should be bound, whatever may be the particular form of the contract, the corporation is alone liable upon it. (Angell & Ames on Corporations, 288.) The rule is illustrated as the same is applied in the case of Exchange National Bank v. Monteath (17 Barb., 171), which was affirmed in the Court of Appeals (26 H. Y., 505.) In that case the defendants were copartners doing business under the name of the Albany and Canal Line of Tow-boats, and Thaddeus Joy and George Monteath transacted the business of the company at Albany in the name of “Joy & Monteath, agents,” etc., and Albert Hoyt was their agent in the city of New York. Joy drew drafts upon the New York agent, which were signed “ Joy & Monteath, agents Albany and Canal Line of Tow-boats, ‘ payable to their own order, addressed to and accepted by ’ Albert Hoyt, agent.” They were also indorsed by Joy in the name of “ Joy & Monteath, agents,” and the drafts were discounted by the plaintiff. It was held that the acts of Joy & Monteath in issuing the drafts, under the circumstances mentioned, was binding on their principals for whom they acted ; and that the drafts in the form in which they were issued was the undertaking of' the company. In that case it was admitted that Joy & Monteath were authorized to draw and accept drafts for their principals; and in the case at bar Hubbell’s authority to indorse notes for the company was established by the proofs. In view of the nature of the business carried on by the defendant in Buffalo by Hubbell, as its agent, and the facts found by the referee and set forth in his report, the form of the indorsement was merely a convenient mode adopted by the agent with the consent of the principal; and thus the form of the indorsement became the adopted name of the company for the purpose of realizing on its commercial paper.

The learned counsel for the appellant has cited several cases, and among them DeWitt v. Walton (9 N. Y., 572), in support of his contention that the indorsement bound the agent personally and not .the company. In that case there was an absence, as the court held, of proof indicating any consent or authorization by the principal that his agents might make notes in his behalf and in his business in the form adopted in that case; but the rule was distinctly affirmed that, if the principal had adopted the name used as his business designation, he could himself make contracts in that name and could authorize his agent to contract for him in the same manner; and Brown v. The Butchers and Drovers’ Bank (6 Hill, 443) was cited in support of the decision. The case of Moss v. Livingston (4 N. Y., 208), where it was held that the acceptance of the draft in suit was tlie acceptance of the agent and not of his principal, was placed on the same grounds as those stated in DeWitt v. Walton.

As to the service of notice of protest of the Eleanora B. Grant note the referee has made special findings of fact, and from them it is to be determined whether the referee’s legal conclusions can be supported, that they were sufficient to charge the defendant as indorser. In the body of the report it is stated as a fact, “that notice of such presentation for payment, demand of payment, and that the said maker neglected to pay the same, was given to said Iiubbell as said agent.” At the request of the defendant the referee made a further finding on the same subject, which is as follows: • “The notice of the protest on the Eleanora B. Grant note was addressed ‘E. S. Iiubbell, Agt. Butler Colliery Company.’ No place of address is given. This is the only notice of protest of that note.” It should be mentioned in this connection that the agent Hubbell indorsed the note individually, after the indorsement by the company. The notary’s certificate was read in evidence by the plaintiff, and it is stated therein that the note was protested on the day it fell due, and notice to the maker of the note was served on the same day. He also certified that he deposited in the post-office, at the city of Buffalo, and paid the legal postage thereon, due notice of the demand, non-payment and protest, partly written and partly printed, signed by him and folded in the form of letters, as follows, viz.:

“Notice for Eleanora B. Grant, directed Buffalo, N. Y.
“ For E. S. Hubbell, directed Buffalo, N. Y.
“ For E. S. Hubbell, Agt. for Butler Colliery Co., inclosed to E. S. Hubbell.”

The counsel for the appellant, in his printed points, admits that it does appear on the face of the certificate made by the notary, that the notice to Hubbell, as an individual indorser, was addressed to him at Buffalo. As we construe the special finding, it is stated as a fact that the notice of protest for Hubbell, as. agent for the Butler Colliery Company was inclosed in an envelope addressed to E. S. Hubbell without any finding as to the place of address, or in what post-office deposited. If it could be fairly held that the notice for Hubbell, as agent, was inclosed in the letter directed to E. S. Hub-bell, which contained the notice addressed tS him personally, then we think that would have been a good service, for the law presumes that the letter was received by Hubbell; and if it contained the notice addressed to him, as agent, that would have been a good service, for he had authority to receive for his principal notice of the dishonor of commercial paper. (2 Daniels on Negotiable Instruments, § 998, p. 49; Bank of Auburn v. Putmam, 3 Keyes, 343; Fassin v. Hubbard, 55 N. Y., 465 ; Firth v. Thrush, 8 Barn. & Cres., 387.) But the special findings of fact made by the referee control the general finding on the same subject, and by them it is stated that in the notice of protest to Hubbell, as agent, no place of address was given; and the service of notice was, therefore, incomplete, and it must be held, as matter of law, that the defendant was not charged as indorser on that note. The point made that it appears by the evidence that Hubbell had been discharged, and ceased to be agent when two of the notes in question were protested, and that Mr. Coleman, president of the bank, was notified of the fact, and for that reason service of notice on Hubbell was insufficient, is not supported by the evidence. Another point made by the appellant is that long before the notes in suit were made the company had ceased to do business in Buffalo; and at that time Hubbell was, in fact, acting for other parties. There is some evidence tending to show that before the notes in suit .'were executed, the defendant had ceased to do business in Buffalo; and that the same kind of business was carried on by a firm composed of persons who were stockholders and officers of the corporation, who did their business in the name of the “ Butler Colliery Company,” being a name exactly the same as the corporate name of the defendant; and that Hubbell acted as their agent, and not the agent of the company. This evidence presented a question of fact, and there was much evidence the other way which tends to support the conclusion of the ieferee that Hubbell was the agent of the defendant at the time the notes in suit were made; and we are not at liberty to examine the proofs with a view of determining whether the finding of the referee, as contained in his report, is contrary to the evidence as claimed by the appellant. The exceptions taken by the appellant to the reception of evidence offered by the plaintiff have been examined, so far as our attention has been called to' them by the brief of counsel, and we find no error.

Judgment reversed, and new trial granted before another referee,unless the plaintiff stipulates within thirty days to deduct from the judgment the amount of the Eleanora B. Grant note, and interest; and if such stipulation is served, then the judgment, as modified, is affirmed, without costs of this appeal to either party.

All concur.

Judgment reversed, and a new trial granted before another referee, costs to abide event, unless the plaintiff, within thirty days, stipulates to deduct from the amount of the recovery the amount of the Eleanora B. Grant note ; in which case the judgment is so modified, and as so modified affirmed, without costs of this appeal to either party.


text:
    SAMUEL J. LEVIS, Appellant, v. WILLIAM J. BURKE, Respondent.

      Lien of a defendant’s attorney for costs—effect then’eon, of a stipulation to discontinue an appeal signed by a defendant who has interposed no counter-claim.

    Appeal from a judgment of the County Court of Monroe county of July 9, 1888, reversing the judgment of the Municipal Court of Rochester in favor of the plaintiff.
   The complaint alleged a hiring by the defendant from the plaintiff’s assignors, by written contract, of a piano at a price named, payable quarterly in advance, which the defendant was to return in good order, and to hold himself .responsible for damage to the same while in his possession, the hiring to continue until the defendant should notify the owners to remove the piano. There was the further allegation that “ said piano was greatly damaged and injured to the extent namely, forty-five dollars,” for which sum, with interest, the plaintiff demanded judgment. The complaint was verified and the written contract was attached. On this complaint the plaintiff went into the Municipal Court, on the return day of the summons, and (the defendant not appearing) was permitted, without mating any proof, to take judgment for damages, forty-seven dollars and seventy cents, including interest, as claimed in the complaint.”

The court at General Term said: “ On the argument of the defendant’s appeal in the County Court, the plaintiff (respondent in that court and appellant here) produced a stipulation, which purported to be signed by the defendant in person, consenting that the action and appeal might be discontinued and dismissed, without costs to either party as against the other, and that an order to that effect might be entered, without further notice, on filing the stipulation. The stipulation was not proved, by acknowledgment of the defendant, or otherwise, though its authenticity does not appear to have been questioned, and the record does not show that any motion was made thereupon to dismiss the appeal, nor that aiiy order has been entered to that effect or discontinuing' the action. The com-t disregarded the stipulation and rendered the judgment of reversal from which the appeal was taken to this court. The judgment seems to have been rendered upon the assumption that the attorney for the defendant had a lien for his costs, which entitled him to prosecute the appeal for their recovery, notwithstanding the settlement of the controversy by the parties. That assumption was not well founded. Several decisions of this court have given construction to the provision of the Code which gives to the attorney a lien for his costs before judgment. (Code Civil Pro., § 66.) That statute gives to the attorney for either party a lien ‘ from the commencement of an action, or the service of an answer containing a counter-claim,’ only ‘ upon his client’s cause of action or counterclaim,’ as the case may be. This court held, in Pierson, Receiver, v. Safford (30 Hun, 521), that a counter-claim, consisting of a cause of action in favor of defendant, upon which he might recover an affirmative judgment, was necessary to bring the case within the provision of section 66, and that a set-off, though pleaded as a counter-claim, which could be applied only in reduction of the plaintiff’s recovery, did not constitute a counter-claim within the meaning of the section referred to, to which the lien of the attorney, could attach, and the decision in that case affirmed an order of the Special Term denying a motion of the defendant’s attorney to set aside a settlement made by the parties and an order of discontinuance, and for leave to continue the action to judgment for the purpose of protecting his own rights therein.

“ In Quinlan v. Birge (43 Hun, 483) this court held, that even in case of an affirmative cause of action, the attorney could not prosecute the action after a settlement made by the parties before judgment, verdict or decision, except by leave of the court, on notice to all parties interested, and on showing that the settlement was intended, or would have the effect to defraud the attorney of his costs, and that they could not be collected from his own client or out of the fund received in settlement of the action to which his lien already attached.

T. F. Stark, for the appellant.

James Murphy, for the respondent.

“ In the case at bar the defendant had no counter-claim, even in name, indeed, he had interposed no answer to the plaintiff’s complaint, and, under the former of the decisions cited, the attorney had no lien for his costs before judgment. But it does not follow that the judgment of the County Court should be reversed. The effect of such reversal would be to affirm the judgment of the Municipal Court, for which the appellant has no right to ask while he stands upon the stipulation produced by him, which, if effect is to be given to it, discontinues the action as well as the appeal. We think he mistook his remedy in aj>pealing to this court from the judgment of the .County Court. He should, rather, have made his motion' in the latter court to set aside its judgment and for leave to enter an order of discontinuance on the stipulation. That motion would have brought up the question whether the stipulation was the genuine and valid act of the defendant. The appeal to this court being-dismissed, the plaintiff will still have the remedy suggested in the County Court.

The appeal to this court should be dismissed, without costs to either party.”

Opinion by Dwight, J.; all concuned.

Aj>peal dismissed, without costs to either party.


author: Follett, J.: Martin, J.: Hardin, P. J.

text:
    CONRAD LOOS and Others, Plaintiffs, and ALBERT K. HISCOCK, one of the Receivers, Appellants, v. J. FORMAN WILKINSON, Appellant, Impleaded with Others.

      When a fraudulent grantee of i eal estate, incwmbered by mortgages, will not be allowed for payments madeby him thereon — he isnot entitled to bereimbursed from the rents collected,,for the payment by him of mlid incunibi'ances and taxes, and for insurance and repairs—the meaning of “ net rents,” in an accounting by such a gra/ntee, considered.

    On December 9, 1884, John Wilkinson took possession of certain real property under a deed to himself as grantee, which was set aside July 1,1886, as fraudulent in fact, by a judgment in this action, which was affirmed by the General Term and the Court of Appeals, the court holding that the grantors and the grantee conspired to defraud the creditors of the grantors, and that the deed was given by the grantors, and was accepted by the grantee, for the purpose of carrying into effect their fraudulent scheme.
    The judgment adjudged and decreed that the defendant John Wilkinson “account for and pay over to the receivers thereby appointed the amount found due on said accounting' of the net rents and profits collected from said premises from the date of the assignment to Charles E. Hubbell, therein referred to, to wit, December 9, 1884, to July 1, 1886; and, also, that said John Wilkinson surrender to said receivers possession of said premises covered by said deed and mortgage, and that said Charles E. Hubbell fully account for and pay over to said receivers all the property which has come into his hands, possession or control under said fraudulent assignment, together with such rents as he has or shall collect from the real estate so conveyed to said John Wilkinson, as aforesaid, together with the rents, profits, interest and income, and any and all increase thereof, as may he settled and found upon and hy the accounting herein provided for.”
    By an order made at a Special Term, after an accounting by John Wilkinson before a referee, he was charged with the rents received by him, and with interest thereon, amounting to $45,181.73, and credited with $21,620.13 for amounts paid by him therefrom for interest on mortgages on the premises, for repairs, taxes and insurance on the property, and for payments made to an agent appointed to collect the rents.
    An appeal was taken from the order so made by the judgment-creditors and one of the receivers and by John Wilkinson, the latter appealing from the part of the order charging him with the rents and profits and interest.

      Held, that, as the Court of Appeals had hold that John Wilkinson must pay to the receivers the rents and profits accrued from the subject of the fraudulent grant while he was in possession of it, that interest might be properly allowed upon the rents and profits so received by him, as he was a fraudulent grantee.
    Part of the real property attempted to be conveyed by the fraudulent grant was subject to two mortgages given November 1, 1873, .payable the next day and bearing interest (the rate not specified) payable semi-annually. The grantee paid interest on these mortgages at the rate of seven per cent per annum, from which the Special Term deducted one per cent and credited the grantee with the remainder.

      Held, that, assuming that the grantee was entitled to be allowed for interest paid, he was not entitled to he allowed a greater sum than could have been recovered from the property, and that as the holders of these mortgages could only collect interest at the rate of six per cent per annum, no error was committed by the Special Term.

      Bennett v. Bates (94 N. Y., 354); O’Brien v. Young (95 id., 428) followed.
    That when a grantee takes a deed for the purpose of defrauding the creditors of the grantor, and the deed is subsequently set aside for the fraud, the grantee is not entitled to be reimbursed out of the subject of the grant, or out of the rents and profits arising therefrom, as against the creditors of the grantor, for moneys expended in paying valid incumbrances, or taxes, or for repairs, improvements, or insurance, or in caring for the property.
    The cases bearing upon this question collated, distinguished and considered by Follett, J.
    That that part of the order which allowed John Wilkinson $7,973.86 for interest paid on the mortgages, $1,351.78 paid for repairs, $9,257.59 paid for taxes, $2,136.90 paid for insurance; and $900 for collecting rents, should be reversed, and that John Wilkinson should he charg ed with the full amount of rents received, with interest upon them from the dates when the sums were received to the date of their payment to the receiver, at the rate of six per cent per annum. (Hardin, P. J., dissenting upon the ground that, as the judgment which was entered provided that John Wilkinson “account for and pay over to the receivers thereby appointed, the amount found due on said accounting of the net rents and profits collected from the said premises; ” that the referee committed no error in ascertaining the net rents and profits by deducting from the gross rents received the necessary expenditures for necessary repairs and taxes.)

      It seems that, assuming that the judgment did provide for an accounting “for the net rents and profits collected from the said premises,” the addition of the word ‘ ‘ net ” did not, in any way, alter or effect the judgment; that the term net rents in this case meant the rents actually received, and that the fact that the defendant Wilkinson afterward paid for repairs on the property and also paid taxes and insurance premiums, did not reduce the amount of rents collected or render the rents so collected, any the less net rents than they would have been if he had not paid for repairs and for such taxes and insurance premiums. (Per Martin, J.)
    That if this construction was too strict, and it should be held that from the words “net rents and profits”,it might be implied that deductions might be made from the rents received, still, it would be clear, that even then only such deduction should be made as would be justified by the principles of law applicable to such a case, and, that as John Wilkinson was a wrong-doer, a fraudulent vendee of the property from which rents were received, he was not entitled to any of the credits allowed him by the order. (Per Martin, J.)
    Appeal by the plaintiffs and by one of the receivers of J. F. and A. Wilkinson, and of the defendant J. Forman Wilkinson, from an order of the Onondaga Special Term, entered in the office of the clerk of Onondaga county, on December 22, 1887, modifying and confirming the report of a referee appointed to take and state the account of John Wilkinson a fraudulent vendee, for rents and profits.
    December 9,1884, John Wilkinson took possession of certain real property under a deed to him, which was set aside July 1, 1886, as fraudulent in fact; the court holding that the grantors and grantee conspired to defraud the creditors of the grantors, and that the deed was given by the grantors and was accepted by the grantee for the purpose of carrying into effect their fraudulent scheme. The grantee received tlie rents and profits of this property from December 9,1884, to July 1,1886 (the date of the entry of the judgment), which he was directed by the judgment to account for and pay over to the receivers appointed by the judgment, which provided, among other things, as follows :
    It is hereby adjudged and decreed: That the deed of the real estate made and executed by the defendant J. Forman Wilkinson and Alfred Wilkinson, deceased, and their respective wives, to the defendant John Wilkinson, which is dated May 5, 1884, and was recorded December 9, 1884, in Onondaga County Clerk’s office, and which is particularly described in the complaint in this action, was and is fraudulent and void as against the plaintiffs herein and their judgments and claims, and the same is hereby vacated and set aside.
    And it is further adjudged and decreed: That said defendant John Wilkinson is not entitled to hold said deed and conveyance as security for any indebtedness existing from, J. Forman Wilkinson and Alfred Wilkinson, deceased, on account of his previous knowledge and participation in the fraudulent intent of the said grantors in executing the same, and it is adjudged that he account for and pay over to the receivers hereinafter appointed, the amount found due on said accounting of the net rents and profits collected from said premises from the date of the assignment to Charles E. Hubbell, hereinafter referred to, to wit, December 9, 1884, to July 1, 1886.
    And it is further adjudged and decreed: That the purported general assignment made and executed December 9, 1884, by the said J. Forman Wilkinson and Alfred Wilkinson to the defendant Charles E. Hubbell for the benefit of their creditors, as alleged, which was recorded in Onondaga County Clerk’s office December 10, 1884, was and is fraudulent and void as against these plaintiffs and their judgments and claims, and the same is hereby vacated and set aside.
    And it is further adjudged and decreed : That Charles E. Hubbell and Albert JL Hiscoek, both of Syracuse, New York, be and they are hereby appointed receivers of the personal property of the said J. Forman Wilkinson and Alfred Wilkinson, in the hands of the said assignee, and elsewhere, and of the rents and profits of the real estate that has or shall accrue, from December 9, 18.84, according to the usual course and.practice of this court.
    And it is further adjudged and decreed: That said defendants, J. Forman Wilkinson and Charlotte 3VE. Wilkinson, as executrix of the last will and testament of Alfred Wilkinson, deceased, and said John Wilkinson, surrender to said receivers possession of said premises covered by said deed and mortgage, and that said Charles E. Hubbell fully account for and pay and deliver over to said receivers all the property which has come into his hands, possession or control under said fraudulent assignment, together with such rents as he has or shall collect from the real estate so conveyed to said John Wilkinson as aforesaid, together with the rents; profits, interest, income, and any and all increase thereof as may be settled and found upon and by the accounting herein provided for.

      This judgment was affirmed in July 1887, by the General Term, and in October, 1888, by the Court of Appeals. The Special Term, by an order entered December 20, 1887, charged John Wilkinson with the rents received, and credited him with certain payments, which are shown by the following statement:
    John Wilkinson,'received rents (Schedule A)........ $42 >466 34
    John Wilkinson, charged with interest.............. 2, 715 39
    $45,181 73

      Credit.

    John Wilkinson paid interest on mortgages
    (Schedule B), less one per cent, $1,327.80, $7, 973 86 John Wilkinson, paid for repairs on property (Schedule C).................... 1, 351 78
    John Wilkinson, paid taxes on property (Schedule D)..............-........ 9,257 59
    John Wilkinson, paid for insuring property (Schedule E)....................... 2 ,136 90
    John Wilkinson, allowed for pay of agent to collect rent, etc................... 900 00
    - 21, 620 13
    John Wilkinson, ordered to pay receivers .......... $23, 561 60
    John Wilkinson appeals from that part of the order charging him with the rents, profits and interest, $45,181.73; from that part which allows but $900 for payment of agents who collected the rents and cared for the property, instead of the amount claimed ($2,323.32), which was five per cent on the sum collected; and from that part of the order Avhich deducts $1,327.80, the difference between six per cent and seven per cent, paid for interest on mort-, gages, as charged in Schedule B. The judgment-creditors and Albert K. Hiscock, one of the receivers, appeal from that part of the order allowing John Wilkinson any of the five above specified credits, aggregating $21,620.13.

      Hiscock, Doheny & Hiscock, for judgment-creditors and receiver.

      Louis Marshall, for John Wilkinson.
   Follett, J.:

The Court of Appeals has held that John Wilkinson must pay to the receivers the rents and profits accruing from the subject of the fraudulent grant while he was in possession of it. (Loos v. Wilkinson, 110 N. Y., 195.) Interest may be allowed upon the rents and profits received by and recovered from a fraudulent grantee. (Jackson v. Wood, 24 Wend., 443; Vandevoort v. Gould, 36 N. Y., 639, 647; Taylor v. Taylor, 43 id., 578, 584; Cowing v. Howard, 46 Barb., 579 ; Low v. Purdy, 2 Lans., 422; New Orleans v. Gaines, 15 Wall., 624; Mowry v. Whitney, 14 id., 620; Littlefield v. Perry, 21 id., 205: 1 Sedg. on Dam. [7th ed.], 254, note; Sedg. & W. on Tit., § 670.)

Part of the real property attempted to be conveyed by the fraudulent grant was subject to two mortgages given November 1, 1873, payable the next day, and bearing interest (the rate not specified) payable semi-annually. The grantee paid interest on these mortgages at the rate of seven per cent per annum, from which the Special Term deducted one per cent, and credited the grantee with the remainder. The holders of these mortgages could only collect interest at the rate of six per cent per annum. (Bennett v. Bates, 94 N. Y., 354; O'Brien v. Young, 95 id., 428.) Assuming that the grantee is entitled to be allowed for interest paid, he is not entitled to be allowed a greater sum than could have been recovered from the property. Assuming (which is not held) that the grantee is entitled to be allowed for such necessary expenses as he incurred in caring for the subject of the grant and in collecting the rents, the evidence as to the extent and value of the services is such that the amount was a question of fact for the Special Term, and we are satisfied that no error was committed, as against the grantee, in the amount allowed. No error was committed by the Special Term as against John Wilkinson, and his appeal cannot be sustained. When a grantee takes a deed for the purpose of defrauding the creditors of the grantor, and the deed is subsequently set aside for the fraud, the grantee is not entitled to be reimbursed out of the subject of the grant, or out of the rents and profits arising therefrom, as against the creditors of the grantor, for money expended in paying valid incumbrances, taxes, for repairs, improvements, insurance, or in caring for the property. (Boyd v. Dunlap, 1 Johns. Ch., 478; Wood v. Hunt, 38 Barb., 302; Union National Bank v. Warner, 12 Hun, 306; Davis v. Leopold, 10 N. Y. Week. Dig., 266 ; S. C., rev., 13 id., 337 and 87 N. Y., 620; Taylor v. Taylor, 43 id., 578, 584; Woodhull v. Rosenthal, 61 id., 382, 396; Wood v. Wood, 83 id., 575, 581; Beam v. Smith, 2 Mason, 252; Railroad Co, v. Soutter, 13 Wall., 517; Thompson v. Bickford, 19 Minn., 18; Pettus v. Smith, 4 Rich. Eq. [S. Car.], 197; Seivers v. Dickover, 101 Ind., 495 ; Borland v. Walker, 7 Ala., 269 ; Mosely v. Miller, 13 Bush. [Ky.], 408; Stovall v. The Fammers and Merchants' Bank, 8 Sm. & M. [16 Miss.], 305; Wilson v. Horr, 15 Iowa, 489; Allen v. Berry, 50 Mo., 90; Kenney v. Browne, 3 Ridg. P. C., 462; Briggs v. Merrill, 58 Barb., 389 ; Shand v. Hanley, 71 N. Y., 319; Beckett v. Tyler, 3 McA., 319 ; Wait’s Fraud. Convey., chap. 13; Bump on Fraud. Convey. [2d ed.], 594; 1 Sedg. on Dam. [7th ed], 246; Just. Inst., book 2, tit. 1, § 35, Sanders [6th ed.], 110; Domat’s Civ. Law [Cush. ed.], 1981.) This general rule is so broadly and firmly settled in all countries that we might safely reverse that part of the order which allows John Wilkinson to set off $%1,620'.13 against the sum which lie received for rents, and stop the discussion at this point; but the amount involved, and the earnestness with which this case has been argued, perhaps, justify a statement of how this wholesome rule has been applied to particular cases.

In Wood v. Hunt (supra), the subject of the fraudulent grant was directed to be sold for the benefit of the grantor’s creditors; and it was provided that if the creditors’ claims were not paid out of the avails, the grantee should pay over the rents and profits, unless he elected to pay the deficiency; and he was disallowed the sums expended in paying the grantor’s creditors and the claims which he had purchased of the grantor’s creditors. In Union National Bank v. Warner (supra), certain debts of the grantor, amounting to $5,047, were specified in the deed, and assumed and agreed to be paid by the fraudulent grantee. The deed was set aside, and it was held that the fraudulent grantee was not entitled to be protected against the debts lie had assumed. In Davis v. Leopold (supra), the fraudulent grantee had assumed the payment of a prior mortgage for $1,000; but it was held that she was not entitled to protection against the liability assumed. In Bean v. Smith (supra), the fraudulent grantee, subsequent to the date of the deed, and prior to the time when it was set aside as fraudulent, paid sums for the benefit of the grantor; and it was held that he was not entitled to be reimbursed. In Railroad Company v. Soutter (supra), fraudulent purchasers of a railroad paid a prior mortgage amounting to nearly half a million dollars; and it was held, their purchase being set aside at the suit of creditors, that they were not entitled to be reimbursed, as against the creditors. In Thompson v. Bickford (supra), the defendant received a fraudulent grant in October, 1858, of land, subject to a valid mortgage. At this time the grantor was indebted to the grantee, and it was agreed that after the grantee was paid out of the land the remainder should be returned to the grantor, which was done by both to defraud the grantor’s creditors. The grantor received the rents and profits until January 1,1859, and thereafter the fraudulent grantee received them until 1865, when he sold and conveyed the land. In the meantime the grantee had paid $1,200 in discharge of the prior mortgage. The grantee was compelled to pay over to the grantor’s creditors the rents and profits received and the avails of the sale, without deduction on account of the mortgage paid, taxes paid, or the indebtedness of the grantor to the grantee. In Pettus v. Smith (supra), one Thomas Smith owned negroes, which were subject to a valid mortgage for $4,600, which he sold to one Eyan for $5,000, out of which Smith paid the mortgage; and thereafter Charles Smith (a brother of Thomas) paid Eyan the $5,000 and took a bill of sale of the negroes, all of which was done by the three for the purpose of defrauding the creditors of Thomas Smith. Charles Smith was held liable to account for the sum for which the negroes were sold, for sums received for their hire, for their increase, and to deliver those remaining unsold, without allowance for the $4,600 paid to discharge the prior mortgage. In Seivers v. Dickover (supra), a failing debtor transferred his chattels to defraud his creditor, to one who knew the purpose. The fraudulent transferree paid a valid judgment and a valid note held by others against the fraudulent debtor, amounting to $658, and paid the fraudulent debtor $342 in cash. The fraudulent transferree was held liable to the creditors of the debtor for the value of the chattels, without allowance for the sums paid. In Borland v. Walker (supra), the fraudulent grantee had, in consideration of the grant, paid large, sums to the grantor’s creditors, but was not allowed for such payments. In Mosely v. Miller (supra), the defendant induced the plaintiff, by fraudulent representations, to convey a farm to defendant, and upon the conveyance being set aside for the fraud, the defendant was charged with the rent, with interest, and was not allowed for his improvements. In Stovall v. The Farmers and Mechanics' Bank (supra); one who conspired with others to purchase property at an execution sale for much less than its value, for the purpose of defrauding the creditors of the defendant in the execution, was not allowed the sum which he paid the sheriff at the sale, though it had been applied in reduction of the judgment upon which the execution was issued, and was compelled to account for the whole value of the property. In Wilson v. Horr (supra), a chattel mortgage was taken for a sum greater than was due the mortgagee, for the purpose of defrauding the mortgagor’s creditors, and it was not allowed to stand as security for the sum actually due from the mortgagor to the mortgagee. In Allen v. Berry (supra) a fraudulent grantee was compelled to account for all he had received, including rents and profits, without deduction for improvements made. In Kenney v. Browne (supra), an attorney fraudulently obtained a grant from his client, which was set aside for the fraud, and the grantee was refused compensation for improvements made by him. The chancellor, speaking for the court, said: “ As to the equity arising from lasting and valuable improvements, I do not consider a man who is conscious of a defect in his title, and, with that conviction in his mind, expends a sum of money in improvements, as entitled in any sort to avail himself of it. If the person really entitled to the estate will encourage the possessor of it to expend his money in improvements, or if he will look on and suffer such an expenditure, without apprising the party of his intention to dispute his title, and will afterwards endeavor to avail himself of such fraud, upon the ground of fraud, the jurisdiction of a court of equity will clearly attach upon the case. But does it follow from thence that if a man has acquired an estate by rank and abominable fraud, and shall afterwards expend his money in improving the estate, that, therefore, he shall retain it in his hands against the lawful proprietor? If such a rule should prevail, it will certainly fully justify a proposition which I once heard stated at the bar of- the Court of Chancery, that the common equity of this country was to improve the right owner out of the possession of his estate.”

The policies of insurance were not taken for the benefit of the creditors of the fraudulent grantors, but for the benefit and in the name of the fraudulent grantee. If the buildings had burned, the creditors could not have recovered the damages from the insurer. (Bernheim v. Beer, 56 Miss., 149 ; S. C., 7 N. Y. Weekly Dig., 61; Lerow v. Wilmarth, 91 Mass. [9 Allen], 382; Carpenter v. The Providence Washington Ins. Co., 16 Pet., 495; Nippes’s Appeal, 75 Pa. St., 472; Bump on Fraud. Convey. [2d ed.], 591.)

In Robinson v. Stewart (10 N. Y., 189), a father conveyed all of his real estate, worth $2,000, and transferred chattels worth $326, to his son, who agreed to pay his father’s debts, supposed to amount to about $400, and to pay $300 to his sisters, which he paid, and much more. At the date of the conveyance and transfer, the father was an indorser on a note, but died before it fell due. The maker-failed to pay the note, and the heirs of the indorser were charged. The holders of the note brought an action and set aside the conveyance and transfer, as fraudulent, as against them; but, by the judgment, the son was subrogated to the rights of the creditors whose claims lie had paid, and the avails of the property was decreed to be applied in payment, pro rata, of the decedent’s debts. " The son averred, in his answer, that he did not know of his father’s indorsement when he received the conveyance and transfer, and there was no evidence that he did. No evidence was taken in the case, which was determined on the pleadings and a stipulation. (Pages 192, 194.) The provision in the judgment in favor of the grantee can be upheld upon two grounds: (1) That it was a case of constructive instead of a case of active fraud; (2) that the grantor being dead, the plaintiffs having no judgment or lien, and the grantee’s claims against his father’s estate not being extinguished by setting aside the deed, his claims and and all others should be paid pro rata out of the decedent’s estate in the due course of administration. In King v. Wilcox (11 Paige, 589), the fraudulent grantee purchased and took assignments of two mortgages, and the complainant, in his bill, conceded to the defendant the position of a mortgagee in possession. This assertion of counsel is confirmed by the chancellor, (page 595.) The position of a mortgagee in possession is quite different from the position' of a fraudulent grantee in possession; but there are remarks in the opinion indicating that the chancellor understood that such a grantee might be compensated for improvements made by him, but these remarks are without support in the prior or subsequent authorities. The learned chancellor had,' in an earlier case (Putnam v. Ritchie, 6 Paige, 403, 404), limited the right of possessors of land without title to offset improvements, to possessors in good faith.

To sustain the claim for repairs, we are referred to Jackson v. Ludeling (99 U. S., 513), in which Mr. Justice Bradley, speaking for the court, said: “ It cannot be doubted that they (defendants) supposed themselves to be the legal owners of the property by virtue of the judicial sale, and made the' repairs and improvements in controversy under that idea; but, as the vice of their title consisted in their own inequitable acts and proceedings, we think that they are to be regarded, in the language of the civil law, as possessors in bad faith. The common law allows nothing to the possessor in good or bad faith for expenditures made upon land from which he is evicted by superior title; but equity, in cases within its jurisdiction, allows the possessor in good faith both for repairs and improvements; but where the possessor (being a trustee) has been guilty of actual fraud, it makes him no allowance for improvements, but allows him condensation for necessary repairs. (Lewin on Trusts, 466.) The present case, however, is to be governed by the law of Louisiana, which is based upon the civil law, not precisely as laid down in the compilations of Justinian, but as interpreted in the jurisprudence of France and Spain, and has some peculiar rules on this subject.” (99 U. S., 518, 519.) Article 2314 of the Louisiana Code, by which this case was controlled, provides: “ He to whom property is restored must refund to the person who possesses it, even in bad faith, all he had necessarily expended for the preservation of the property.” Notwithstanding this section and the circumstances under which the repairs to this railroad (which was in a state' of complete dilapidation and ruin, and was put in working order) were made, Mr. Justice Field dissented most vigorously in an_ opinion in which, among other things, he said: In the courts that administer the common law, the rights of the owner are paramount and exclusive. An occupant without title is not recognized as entitled to compensation for improvements. Heron, in his History of Jurisprudence says: There is no case c decided in England, Ireland, or the United States, grounded upon common-law principles, declaring that an occupant of land, without a special contract, is entitled to payment for his improvements, as against the true owners, when the latter had not been guilty of a fraud in concealing the title.’ ” (99 U. S., 537.)

It is insisted that Wilkinson is entitled to be credited with $900, paid for collecting rents, but it is difficult to see upon what ground. He did not expend this, or any of the sums with which he was credited, for the benefit of the creditors of his grantor, nor in good faith, but to carry into practical effect his fraudulent scheme and reap the benefits of the attempted fraud for himself and his co-conspirators. The fraud described in the record, and by which Wilkinson acquired possession and sought- to acquire title, is a criminal fraud, for which the perpetrators are liable to indictment, and, upon conviction, to imprisonment in a penitentiary for not more than one year, or to a fine of not more than $500, or to both (Penal Code, §§ 15, 586); which fact Wilkinson and those who have acted with him seem to have forgotten, as well as the rule that persons who obtain possession of property by criminal means do so at their peril, and are not entitled to reimbursement for moneys expended in preserving, repairing or improving the property. As well might a person acquiring possession of property by larceny, when compelled to surrender it, ask a court of equity to require the rightful owner to pay for moneys expended in repairing, insuring and caring for the property, as for this grantee, who acquired possession by criminal means, to ask a court to allow him for such expenditures.

That part of the order which allows John Wilkinson $7,973.86 for interest paid on mortgages, $1,351.78 paid for repairs, $9,257.59 for taxes paid, $2,136.90 for insurance paid, and $900 for collecting rent, aggregating $21,620.13, is reversed, and said John Wilkinson is charged with the full amount of rents received, with interest upon them from the dates when the sums were received to the date of their payment to the receiver, at the rate of six per cent per annum. The order to be settled before Mr. Justice Martin; Conrad Loos and others, plaintiffs, and Albert K. Hiscock, receiver, to have ten dollars costs and printing disbursements against John Wilkinson.

Martin, J.:

The judgments, in pursuance of which the reference in this matter was had, and the order appealed from made, provided that John Wilkinson should account for and pay to the receivers herein “ the amount found due on said accounting of the net rents and profits collected from said premises ” from December 9, 1884, to July 1, 1886 ; but such judgments appointed the persons named therein as receivers of “ the rents and profits,” directed the referee to take an account for “the rents and profits,” and provided that upon the coming in of the referee’s report judgment may be entered “ for the rents and profits,” without in either case using the word net. Hence it may be a question whether under the provisions of the judgment, when taken as a whole, it should be held that they provide for an accounting for the “ net rents and profits ” only. But assuming that the judgments provide for an accounting for “ the net rents and profits collected from the premises,” and it becomes important to determine the meaning of the term “ net rents and profits ” as used therein. Does the addition of the word “ net ” in any way alter or affect the judgment ? Does the term “ net rents ” in this ease mean more or less than rents received ? The only rents received by the fraudulent vendee were net rents; or, in other words, he has been charged only for such rents as have been actually received by him. The fact that he afterwards paid for repairs on the property, paid the taxes and for insurance does not reduce the amount of rents collected, nor render the rents so collected any the less net rents than they would have been if he had not paid such taxes, insurance and for repairs. I do not think that the use of the word net in any way changes the liability of such fraudulent vendee for the rents collected by him.

If, however, this construction is too strict, and it should be, that from the words “ net rents and profits ” it may be implied that deductions might be made from the rents received, still, it would seem clear that, even then, only such deductions should be made as would be justified by the principles of law applicable to such a case. I do not think it was intended by the use of the words “ net rents and profits ” to authorize any credit to the defendant Wilkinson which was not justified by the rules of law applicable to the case of a fraudulent vendee; nor do I think such was the effect of the words used. John Wilkinson was a wrong-doer, a fraudulent vendee of the property from which such rents were received, and was not, I think, entitled to any of the credits allowed him by the order appealed from for the reasons which are so clearly and fully stated in my brother Follett’s opinion, in which I concur.

Hardin, P. J.

(dissenting):

Upon the accounting had of the rents and profits received by J ohn Wilkinson, the referee allowed to be deducted from the rents received by Wilkinson the amount expended for necessary repairs and the amount paid for taxes during the eighteen months while the rents were accruing. These deductions were sustained by an order made at Special Term, now brought before us for review. By the decision made at Special Term, which has been affirmed by this court and by the Court of Appeals, it was found, as a matter of law, that John Wilkinson “should fully account for, and pay over to the receivers to be appointed herein, the amount found due on said accounting of the net rents and profits collected of said premises from the date of said assignment to July l, 1886.” In the judgment which was entered upon that decision, it was provided that John Wilkinson “account for, and pay over to the receivers hereinafter appointed, the amount found due on said accounting of the net rents and profits collected from said premises, from the date of the assignment to Charles E. Ilubbell, hereinafter referred to, to wit, December 9, 1884, to July 1,1886.” In the action of Bates and others against Wilkinson and others, it was adjudged that John Wilkinson “ account for, and pay over to the receivers hereinafter appointed, the amount found due on the said accounting of the net rents and profits collected from said premises, from the date of the general assignment to Charles E. Ilubbell, hereinafter referred to, to wit, December 9, 1884, to July 1, 1886.” It was found by the referee that during the period while the rents were accruing, there was “necessarily expended for the care and preservation of the said property, and for repairs thereon, the "sum of $1,351.73.” It was also found that, “ during the same period, he paid the proper authorities in discharge of city and county taxes which had been duly assessed, and constituted a lien upon said property, the sum of $ 9,257.59.” As a matter of law, he found that the expenditure “for talcing care of and preserving the property, and such as were necessary for realizing the rents and profits, should be allowed to the defendant upon the accounting” and that there should be “ deducted from the amount of rents and profits received * * * the sums paid by him for taxes and assessments upon said property.”

Inasmuch as the decision and judgment entered thereon provided for an accounting and a payment over of the net rents and profits. I am inclined to think the defendant should be allowed, out of the gross rents received, the necessary expenditures for repairs and the necessary expenditures for taxes. If such an allowance be made to the defendant, a reasonable interpretation is given to the language of the decision and the judgment, in virtue of which the accounting took place; besides, the creditors receive as much as the property would have yielded, had not the fraudulent conveyance,'which has been set aside, been made. Precedents exist for such allowances, which have not been directly interfered with or overruled by any authority which has come under observation.

In Van Horne v. Fonda (5 Johns. Ch., 388), which was a case of actual fraud, Chancellor Kent, in pronouncing the decree and providing for an accounting of a defendant, observed: “ He entered in his own wrong and held under a claim of title procured by fraud, and he is not entitled beyond the amount of his actual expenditures.” (5 Johns. Ch., 415.) He observed, further, that all such matters “ must be satisfactorily proved,” and he directed a reference to a master to state an account “ upon the principles and under the directions already declared.”

In Sands v. Codwise (4 Johns., 605), an order was made by the Court of Errors for an accounting against parties who had taken “ two deeds grossly fraudulent and absolutely void,” and the decree provided as follows: “And that in taking such accounts, allowances be made to the said Comfort Sands and Henry Sands, for taxes, repairs and improvements, permanently useful, and the balance of the accounts for the said last-mentioned rents and profits, when received, shall be placed in the hands of the assignee of the estate of Comfort Sands, as such bankrupt.”

In Jackson v. Ludeling (99 U. S. 536), it was stated in the prevailing opinion that “ any net earnings of the railroad, or proceeds of property, which shall have come into his hands as such receiver, after paying his expenses and compensation, will go to the benefit of the bondholders.”

If the learned trial judge had intended to exclude an allowance to the accounting defendant of the necessary expenditures for necessary repairs, and the necessary disbursements for town, county, State and municipal taxes, it may reasonably be supposed and held that he would not have used the expression “ net rents and profits,” in his decision and the judgment entered thereon. I am, therefore, of the opinion that the referee committed no error in ascertaining the net rents and profits, in deducting from the gross rents received the necessary expenditures for necessary repairs and taxes already alluded to.

That part of the order which allows John Wilkinson $7,973.86 for interest paid on mortgages; $1,351.78 paid for repairs; $9,257.59 for taxes paid; $2,136.90 for insurance paid, and $900 for collecting rents, aggregating $21,620.13, is reversed; and that part of the order charging John Wilkinson with the full amount of rents received, with interest upon them, is affirmed, with costs and printing disbursements against John Wilkinson. The order to be settled by Hr. Justice Martin.


author: Follett, P. J.:

text:
    JOHN P. MORENUS and ROBERT H. GLOVER, as Administrators, etc., of LENORA MORENUS, Deceased, Respondents, v. IRA CRAWFORD, Appellant.

      When an action under the civil damage act, brought against two persons not connected in business, may be discontinued as to one and continued as to the other ■—a wife may recover under the act for a horse hilled by her husband when intoxicated— the action does not abate by her death and can be continued by her repi-esentatives —• evidence discrediting a witness.

    In August, 1875, Lenora Morenus brought an action, under the civil damage act, against Ira Crawford, who kept a hotel at the village of Berkshire, and Nehemiali Hoag, who kept a hotel in the village of Richford, who were not connected in business, to recover the value of a horse owned by the said Lenora, which was killed by John Morenus, her husband, while intoxicated.

      The first trial resulted in a judgment against both defendants, which was reversed upon the ground that a joint sale was alleged in the complaint, which was not proved. On the second trial an order was entered permitting the action to be continued against Crawford and discontinued as to Hoag. A judgment recovered by the plaintiff on the second trial was reversed because of an error in the admission of evidence. The plaintiff having died intestate, on January 3, 1886, her administrators were, by an order duly entered, permitted to continue this action, and thereafter recovered, upon a third trial, a judgment from which this appeal was taken. ■ *

      Held, that, as the uncontroverted evidence showed that the plaintiff’s intestate, a married woman, was injured in property by an intoxicated person, or in consequence of the intoxication of her husband, she was within the class of persons authorized to maintain actions under the civil damage act.
    That when the action was discontinued against Hoag, and continued against Crawford alone, it became simply an action against the latter, to he prosecuted and determined as though originally brought against Crawford alone, and that the court committed no error in permitting the case to proceed against him alone.
    That, as the appellant had failed to appeal from the order permitting the action to he continued against Crawford alone, he could not now ask for a reversal of the judgment upon the ground that the complaint would not sustain a several judgment.
    That as the plaintiff’s intestate had lost an article of personal property which diminished her estate, for which she had a right of action against her husband, and had such an action been brought it would not have abated by her death, the civil damage act extended the liability to a person who contributed to the loss by doing a certain specified act.
    That the action did not abate by the death of Lenora Morenus, and its revival by order of tlio court and its continuance by her representatives were legal.
    The defendant testified that he did not sell or deliver whisky to John Morenus on May 15, 1875, the day on which the horse was killed. The plaintiff was permitted to prove that between 1874 and 1880, inclusive, the defendant was seven times indicted and convicted of violating the excise law, five of the convictions being upon the plea of guilty.

      Held, that this evidence was competent for the purpose of affecting the weight of his testimony.
    That an objection taken by the defendant that the plaintiff, having shown part of these convictions by a cross-examination of the defendant, record evidence could not be resorted to, to prove the same and additional convictions, was untenable, as it was competent to prove the convictions by two witnesses.
    Appeal from a judgment in favor of the plaintiff, entered in the office of the clerk of Broome county on August 30, 1887, after a trial at the Broome Circuit before the court and a jury, and from an order made at Special Term, entered in the same office, August 6, 1886, directing that the action be revived and continued, and also from an order denying amotion made for a new trial on the minutes of the justice presiding on the trial, entered in the said office on August 12, 1887.
    The appeal was heard upon a case which contains all of the evidence.
    May 15, 1875, a horse owned by Lenora Morenus was killed by John Morenus, her husband, while intoxicated. The horse was worth $150. These facts are uncontroverted. At this date Ira Crawford kept a hotel at the village of Berkshire, where he sold liquors to be drank on the premises, and Nehemiah Hoag kept a. hotel at the village of Richford, where he sold liquors to be drank on the premises; but they were not connected in business.
    In August, 1875, Lenora Morenus brought this action, under the civil damage act, against Crawford and Hoag, who separately answered. The trial, which was before a referee, resulted in a judgment against both defendants for the conceded value of the horse and costs. This judgment was reversed upon the ground that a joint sale was alleged in the complaint, which was not proved, and the proof of separate sales by each defendant did not establish a right to a joint judgment. (15 Hun, 45.)
    On the second trial, which was at the Broome Circuit before the court and a jury, the court, by an order entered, permitted the action to be continued against Ira Crawford and discontinued as to Nehemiah Hoag. The second trial resulted in a judgment for the plaintiff’s damages ‘and costs, which was reversed because the plaintiff was allowed to prove that the defendant sold liquors without a license. (31 Hun, 85.) January 3, 1886, the plaintiff died intestate, and July 6, 1886, by an order duly entered, the administrators of the intestate were permitted to continue this action. The third trial, which was had at the Broome Circuit before a jury, resulted in a judgment for the value of the horse, with interest and costs; from, which judgment this appeal is taken.

      Alexander Cumming, for the appellant.

      F. P. Lewis, for the respondents.
   Follett, P. J.:

The uncontroverted evidence shows that plaintiff’s intestate, a-married woman, was injured in property by an intoxicated person, or in consequence of the intoxication of her husband. She was within the class of persons authorized to maintain actions under the civil damage act. The appellant asks for a reversal of the judgment upon five grounds, which will be considered in the order in which they are discussed in his brief.

(1.) “The complaint will not sustain a several judgment.”

When this action was discontinued against Hoag and continued against Crawford, by leave of the court, it became simply an action against him, to be prosecuted and determined as though originally brought against Crawford alone. When this case was last before the General Term this question was discussed, Bookes, J., speaking for the court, saying: “ The complaint was dismissed as to one of the defendants, leaving the action to proceed against the other. In this there was no error. It was held in McIntosh v. Ensign (28 N. Y., 169), that “ a plaintiff is not' now to be nonsuited because he has brought too many parties into court; if he could recover against any of the defendants upon the facts proved, had he sued them alone, the recovery against them is proper,, although he may have joined others with them in the action, against whom no liability is shown.” (Code of Civil Pro.; §§ 456, 1205; Harrington v. Higham, 15 Barb. 524; Parker v. Jackson, 16 id., 33.) The rule is the same whether the action be on contract or in tort. Grover, J., says, in Roberts v. Johnson (58 N. Y., 613, 616), “ the action was for tort. In such cases the plaintiff may proceed against any one, all, or such number of the wrong-doers as he may choose.” So here the plaintiff might, as he did do in effect, consent to the dismissal of the complaint as against Hoag, and proceed against Crawford. If necessary to amend the complaint, it might be so ordered, and it would be so ordered on appeal, if necessary to sustain a just cause of action, as shown by the proof. The variance between the pleadings and proof as to the defendant Crawford was, however, quite immaterial. It in no way affected the merits of the case. We are of the opinion that the court committed no error in permitting the case to proceed against Crawford alone.

Again, the order permitting the action to be discontinued as to Hehemiah Hoag and continued against Ira Crawford alone, has not been appealed from. We are of the opinion that the complaint is sufficient to sustain the verdict and the judgment entered thereon.

(2.) “ The verdict is not sustained by the evidence.”

Under this point the appellant insists that the allegation in the complaint that the defendants wrongfully conspired and intended to injure the plaintiff, by selling and giving intoxicating liquors to her husband, takes the case out of the civil damage act and avers a good cause of action at common law. Reading this paragraph by itself, it is capable of that construction.' But this action has been discontinued against one of the defendants, and its form and the legal effect of the complaint have been radically changed by the order. The second proposition is the first proposition, stated in a different form, and the judgment of the General Term of the third department in this action, from which we have quoted, is a sufficient answer.

(3.) “ The cause of action did not survive plaintiff’s death.”

In Hegerich v. Keddie (99 N. Y., 258) an action begun under section 1902 of the Oode of Civil Procedure, by the representative of a decedent against a person who negligently caused the death of the decedent, was held to be abated by the death of the wrong-doer, and could not be revived and prosecuted against the representative of the wrong-doer. Upon this authority it was held (Moriorty v. Bartlett, 99 N. Y., 651; reversing 34 Hun, 272) that an action begun under the civil damage act by a widow to recover for an injury to her means of support, against a person who had sold intoxicants to her husband, who drank them, became intoxicated, and by reason thereof was drowned, was abated by the death of the defendant, and that it could not be revived and prosecuted against his representative.

In the case at bar the plaintiff’s intestate lost an article of personal property, which diminished her estate, for which she had a right of action (under the evidence in this case) against her husband (Howland v. Howland, 20 Hun, 472); and had such an action been brought it would not have been abated by her death. The civil damage act extends the liability to a person who contributed to the loss by doing a certain specified act. “An injury to property is an actionable act whereby the estate of another is lessened.” (Code Civil Pro. § 3343, sub. 10.) Under this definition this action is for the recovery of damages for an injury, to the plaintiff’s property, and is saved by the Revised Statutes, which provide:

“§1. For wrongs done to the property, rights or interests of another, for which an action might be maintained against the wrongdoer, snch action may be brought by the person injured, or after his death by his executors or administrators against such '"wrong-doer, and after his death against his executors or administrators, in the same manner and with like effect in all respects as actions founded upon contracts.

“ § 2. But the preceding section shall not extend to actions for slander, for libel or to actions of assault and battery, or false imprisonment, nor to actions on the case for injuries to the person of the plaintiff, or to the person of the testator or intestate of any executor or administrator.” (2 R. S., 441.)

In Cregin v. The Brooklyn Crosstown Railroad Company (75 N. Y., 192), Judge Rapallo, in discussing the above section, said : “ Section 1 preserves from abatement by death, actions for wrongs done to the property, rights or interests of another. This language is very broad and embraces a large class of actions. It is not confined to direct injuries to property, but includes all injuries to the rights or interests of a deceased party, except such as are enumerated and exempted in the following section : No. 2. These are actions for slander, libel, assault and battery, false imprisonment, and actions on the case for injuries to the person of the plaintiff. These exceptions necessarily prevent the surviving of any action for slander, libel, assault and battery or false imprisonment, or for any injury to the person of any deceased plaintiff, however seriously such injury may have affected his property or estate. But they do not cover an action for a wrong done to his rights or interests, even though this wrong may have been effected by means of an injury to the person, provided the injury was not to the person of the plaintiff, hut of some other party.” The doctrine of this case was reaffirmed by the Court of Appeals when the case was again before that court. (83 N. Y., 595.)

In Hegerich v. Keddie (supra) Chief Judge Ruger said: “ If the language of the statute applicable to this case be collocated and read according to its plain meaning and intent, the following sentence would seem to be the result: Actions by and against executors and administrators for wrongs done to the property rights or interests of their intestate or testator are hereby authorized, but so far as such wrongs have heretofore been remediable by actions of the case for injuries to the person of the plaintiff, or to the person of the intestate or testator of any executor or administrator, they shall not survive the death of the person to whom or by whom the wrong is done. The wrongs referred to in these sections are such only as are committed upon the property rights or interests ’ of the testator or intestate, and to a cause of action for which the executors and administrators acquire a derivative title alone. The whole scope and design of the statute is to extend a remedy already accrued to the representatives of a deceased party, and provide for the survival only of an existing cause of action.” (Page 262.)

From the same review, it is quite evident that the authors of the statutes intended explicity to provide for the abatement of causes of action for personal injuries occurring to the plaintiff, or to his intestate or testator. The assignability or survivability of things in action have frequently been held to be convertible terms, and, perhaps, furnish as clear and intelligible a rule to determine what injuries to property rights or interests are meant by the statute as it is possible to lay down.” (People v. Tioga Com. Pleas, 19 Wend., 73; Zabriskie v. Smith, 13 N. Y., 322)

“ The rights of property only which are in their nature assignable, and capable of enjoyment by an assignee, are those referred to in the statute. Such rights as arise out of the domestic relations clearly do not possess the attributes of property, and are not assignable by the possessor.” (Page 266.)

In Brackett v. Griswold (103 N. Y., 428), Judge Finch, in speaking for a unanimous court, said: “We have not been unmindful that in our discussion of this question we have assumed the assignability of a cause of action as a test, treating that and survivability as convertible terms.”

Section 1910 of the Code of Civil Procedure provides:

“ § 1910. Any claim or demand can be transferred, except in one of the following cases :

“ 1. Where it is to recover damages for a personal injury or for a breach of promise to marry.

“ 2. Where it is founded upon a grant, which is made void by a statute of the State; or upon a claim to or interest in real property a grant of which, by the transferor,. would be void by such a statute.

3. Where a transfer thereof is expressly forbidden by a statute of the State, or of the United States, or would contravene public policy.”'

This section relates exclusively to substantive law, but not to the law of procedure; and subdivision 11 of section 3347 does not except this cause of action from the operation of the section. The cause of action arose in 1875 ; and in 1880, by the operation of the section, it became assignable, and was assignable at the date of the death of Mrs. Morenus; and if assignability is a test of survivability, the action has not abated. The action did not abate by the death of Lenora Morenus, and its revival by order of the court, and its continuance by the representatives, is legal.

(4.) “ The court erred in its rulings on the trial.” .

The rulings at folios 5, 63 and 64 relate to the question of abatement, which has been discussed under the third point and determ ined in favor of the plaintiff, which renders a discussion of these rulings unnecessary.

The defendant testified that he did not sell or deliver whisky to John Morenus on the 15th of May, 1875. The plaintiff was permitted to prove (pages 31 and 32) that between 1874 and 1880, inclusive, he was seven times indicted and convicted of violating the excise law, five of the convictions being upon the plea of guilty. This was competent, for the purpose of affecting the weight of his testimony. (Penal Code, § 714; Code of Civil Pro., § 832; People v. Burns, 33 Hun, 296 ; People v. Elmore, 3 N. Y. Crim., 264; People ex rel. Kopp v. French, 102 N. Y., 583.) The objection, that having shown part of these convictions by cross-examination of the defendant, record evidence could not be resorted to, to prove the same and additional convictions, is untenable. It was competent to prove the convictions by two witnesses. No errors were committed in the rulings on the trial.

(5.) “ The judgment is unsupported by the evidence.”

John Morenus testified that defendant sold and delivered him whisky May 15, 1875, some of which he drank in the presence of defendant, and a pint of which he carried away in a bottle. Others testified to drinking whisky on that occasion with Morenus, which was delivered by the defendant and drank in his presence. One witness testified that defendant said to him after the accident that he did sell Morenus whisky. On the contrary, defendant testified that he did not sell Morenus whisky on the 15th of May, 1875, and other witnesses testified that Morenus told them on various occasions after the day in question that defendant gave him nothing but cider.

This presented a fair question of fact for a jury, the verdict of which will not be disturbed, especially in view of the fact that a former jury and a referee of great learning and experience have previously found the facts in the same way.

The judgment and orders are affirmed, with costs.

Kennedy, J., concurred; Martin, J., not sitting.

Judgment and order affirmed, with costs.