author: Green, J.:

text:
    Mary E. Johnson, Appellant, v. James Brasington and Others, Respondents.

      Will — intention of the testator — technical language — use of word “heirs” — kin of the testator pref ’erred — remainder limited to the heirs of a life tenant.

    A clause in the will of a testator must he construed according to the testator’s intention, irrespective of any other consideration, if such intention can be ascertained after examining the will, the testator’s surroundings and the objects which it may be inferred from these that he sought to attain.
    The ascertainment of Ms intention is not a matter of speculation or arbitrary conjecture, but must be arrived at through due regard to established rules by which particular words and expressions standing unexplained have obtained a definite meaning. If, however, it appears that particular words or expressions which have obtained a definite meaning in the law are used in a different sense, and were intended to convey a different meaning from that recognized by the law, such intention must prevail notwithstanding the legal interpretation which these words had previously received.
    The word “ heirs ” has a well-known technical meaning and is to be understood in its legal sense, unless, from the contents of the will, it plainly appears that the testator intended to use it in a different sense.
    When a testator uses only technical phrases the court is bound to understand them as such, because the court cannot say that the testator did not know their meaning. But if the testator uses olhtír expressions which shows that he did not intend to use such phrases technically, then his intention must prevail.
    When the word “heirs” is used, not-to denote succession, but to describe legatees or devisees, and there is no context to explain it otherwise, there is no reason to depart from the natural and ordinary sense of the word.
    If there 'be two equally probable interpretations of a last will and testament, that one is to be adopted which prefers the kin of the testator to strangers.
    In the construction of a will words may be enlarged or restricted as may best comport with the intention of the testator.
    Where a remainder is limited to the heirs of a person to whom a life estate is given, the persons who, on the termination of the life estate, are the heirs, take as purchasers by virtue of the remainder so limited to them.
    A testator by his last will and testament devised all his real estate to his wife during the term of her natural life;- and after her death he devised said real property to his son Stephen for and during the term of his natural life, and at the decease of his son he directed that'said real estate should be equally divided among the children or heirs of his said son Stephen, in equal shares, they to have the same in fee.
    The wife mentioned in the will of the testator was his second wife, his first wife having died some twenty years prior. His son Stephen was his only heir at law and at the time of the death of the testator was unmarried.
    The testator’s second wife survived him for a period of five years, and his son died, never having had wife or child.

      Held, that the clause “children or heirs” should not be construed as meaning that, if the testator’s son should have no children, the fee of said real estate should go to the general heirs of such son;
    That the testator employed the word “.heirs” in its ordinary and common acceptation, as meaning children, issue, heirs of the body or lineal descendants, and .not in its technical or legal sense, and that the fee of said property descended to the persons who were the heirs of the testator at the time of his decease, and not to the heirs of his son.
    Appeal by the plaintiff, Mary E. Johnson, from an interlocutory and a final judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of Niagara on the 30th day of October, 1894, upon the decision of the court rendered at the Niagara Special Term, sustaining the demurrer of certain defendants to the complaint, dismissing the plaintiff’s complaint and directing the cancellation of a lis pendens.

      Henry M. Davis, for the appellant.

      Arterrms A. Bradley, for the respondents.
    Present — Dwight, P. J., Lewis and Bradley, JJ.
    Judgment affirmed on opinion of Green, J., at Special Term.
   The opinion at Special Term was as follows :

Green, J.:

February 27, 1874, Samuel Brasington died in the town of Porter in the county of Niagara, leaving a last will and testament made on the day previous, which will was duly admitted to probate in said county. He left him surviving Betsey Brasington, his second wife, and Stephen L. Brasington, a' son by his wife Cassandra Knapp Brasington. Flis first wife died in the month of July, 1854, nearly twenty years before the execution of said will. To his second wife, Betsey, he gives and bequeaths all of the personal property of every name, nature and kind absolutely, and also all of his real estate of every name, nature and kind for and during the full term of her natural life, to be used by her as she thinks best and for her comfort, to do with the avails of the same as she pleases. After her death he gives and devises the said real estate to his son Stephen, to have the same for and during the full term of his natural life, then at the decease of his said son, he directs that it is to be equally divided among the children or heirs of said Stephen L. Brasington in equal shares, share and share alike, they to have the same forever in fee simple. His second wife, Betsey, survived the said Stephen L. Brasington for a period of about five years, and the said Stephen L. Brasington died never having had wife or child, and leaving no brother or sister, or any descendant of any brother or sister him surviving.

The plaintiff in this action and her brothers and sisters are the children of the deceased sister of the first wife of Samuel Brasington. This plaintiff.brings this action in partition,-claiming to own an interest in the said property as an heir of Stephen L. Brasington.

The question is, whether the word “ heirs ” is to be takén in its primary or technical sense, or in a restricted or secondary sense as meaning heirs of the body, issue or lineal descendants.

Tlie clause in question must be’ construed according to the testator’s intention irrespective of any other consideration, if such intention can be ascertained, after examining the will of the testator, his surroundings, and the object which, from these, we may infer he sought to attain. The ascertainment of this intention is not a matter of speculation or arbitrary conjecture, but must be arrived at, having due regard to established rules by which particular words and expressions standing unexplained'have obtained a definite meaning. If, however, it appears that particular words or expressions which have obtained a definite meaning *in the law are used in a different sense, and were intended to convey a different meaning, such intention must prevail notwithstanding the -interpretation which these words had previously received. Hence, as- no two wills are ever exactly alike, and as the circumstances which surround, each testator vary, adjudications upon the -construction- of other wills have little weight except so far as they illustrate the general laws governing the construction of such instruments. (Drake v. Drake, 56 Hun, 595.)

The word “ heirs ” has a well-known technical meaning, and is to be .understood in its legal sense, unless, from the contents of the will, it plainly appears that the testator • intended to use it in a different sense ; and when the testator, uses only technical phrases the court is bound to understand them as.s.uch, because the court cannot say that he did not know their meaning/ " But if the testator uses other expressions, which shows he did not mean to use those phrases technically, then the intention must prevail.'/.-And when the word “ heirs” is used, not to denote succession, but tó describe legatees or devisees, and there is no context to explain it otherwise, there seems to be no reason to depart from the natural and'ordinary sense of the word. (Wallace v. Minor, 86 Va. 555.)

If there be two equally probable interpretations of the will, that one is to be adopted which prefers the kin of the testator to strangers. (Quinn v. Hardenbrook, 54 N. Y. 86.)

"Words may be enlarged or restricted as may best comport with the evident intention and purpose of the tesi/ator. (Matter of Logan, 131 N. Y. 460.)

While technical words in a will, when uncontrolled by the context, are presumed to have been used in their technical sense, still the context may overcome the presumption when it appears thereby, and from extraneous facts of the kind already alluded to, that the testator used the words in .their common and popular sense.” (Lawton v. Corlies, 127 N. Y. 105.)

“ Each judgment stands upon the construction or interpretation due to the words under examination, as they are looked at in the light of circumstances surrounding the parties to the instrument, and the situation of persons intended to be benefited.” (Greenwood v. Holbrook, 111 N. Y. 469.)

In Hard v. Ashley (117 N. Y. 606-614) there was a devise to Z. for life, remainder to her children. By a codicil this was revoked, and the testator gave to Z. and her heirs ” a legacy “ in lieu and instead of said bequest.”

Held, that the testator used the word “ heirs ” in the codicil as the equivalent of “ children ” in the will.

In Drake v. Lawrence (19 Hun, 112) the devise was to the daughter for her life, the remainder “ to her children and lawful heirs.” At the death of the testatrix the daughter had children, all of whom died before her, unmarried and intestate. It was held that the children of the daughter took vested remainders, which, upon their death, passed to the mother.

The court said that the words “ and lawful heirs ” were added <£ simply as another designation of the persons who were to take the remainder in the property. The testatrix through them referred to the same persons who had been previously mentioned; who were the children of her daughter, and those children she designated as her daughter’s lawful heirs. * * * She gave the remainder absolutely to the children of Mary UVE. ICeese, who were also designed to be designated by her as the lawful heirs of their mother. * * *

As the remainder was given to these children in terms, it was not a devise which was limited to the heirs, or the heirs of the body, of the person to whom the life estate was giyen.”

"Where a life estate was given to the daughter, and, in-case she should die leaving issue, then the property to be divided among her lawful heirs, and the daughter died without leaving issue, held, that the remainder in fee was not disposed of by will. (Wood v. Keyes, 8 Paige, 365.)

In Scott v. Guernsey (48 N. Y. 122) the court said: ££ The testator has used the word £ heirs ’ in the sense of £ children.’ ” 3,

In Kiah v. Grenier (1 T. & C. 388, 392) the word heirs ” was construed to mean heirs of the body.

In Bundy v. Bundy (38 N. Y. 410-421) the words “ die without heirs ” were held to mean heirs o'f the body or lineal descendants; that the presumption is that the testator used the word in a general sense, meaning lineal and collateral heirs, unless it appears from the will and the extrinsic fact known to the testator that it was used by him in the restricted sense, as including lineal heirs only.

In order to entitle the plaintiff to recover in this action, we must hold that the testator inténded simply by the use of the words “ or heirs ” to devise the remainder in f.ee to his own kindred and the relatives of his first wife, in case his son Stephen should have no issue, although there is no expression in the will of any such intention. To give such a construction to those words would be, we believe, to impute to the testator an intention he never entertained. If such was his intention, it is a very .reasonable supposition that he would have given some expression to it in words by providing in express terms that in case the son should have no children or issue, then the remainder should go over to others. But the testator here failed to make any such provision. It would be a stretch of language to construe the clause children or heirs ” as meaning that if Stephen should have no children, then the fee should go ¿p his, Stephen’s, heirs generally. It is -^evident that the testator employed the word “ heirs ” in its ordinary or common acceptation as meaning children, issue, heirs of the body or lineal descendants, and not in its technical or legal sense. It is limited in scojie and meaning by the word “ children,” and must be taken in the special or secondary sense of issue, lieirs of the body, etc.

The words “ or heirs ” were not used in the will to denote substitution or succession, but merely as designating the heirs of his body as devisees (as purchasers), and should not, therefore, be taken in their primary legal sense, when it appears from the context that the testator used them in a different sense; for an intention actually expressed or to be gathered from the terms of the will must prevail over the technical meaning of the words. The testator evidently used the words in a colloquial and not a technical sense, as meaning heirs of the body of Stephen.

The testator contemplated the event of Stephen marrying and having issue, and to provide for such an event lie carves out a life estate for Stephen and devises the fee to his children or heirs, but stops there, and makes no provision for disposition of the fee in case the expected event should not happen.

The fee was not given to Stephen, because the testator hoped or expected that he would marry and have children, and he wished to secure the property to them; but he has failed to evince any intention to devise the fee to the heirs generally of Stephen upon his death without issue. It should be particularly observed that the persons entitled to the remainder, if entitled at all, must take as purchasers, that is, by direct devise from the testator himself, and not by way of succession or inheritance from Stephen, for he was only given a life estate, and the fee was devised to his children or heirs. “ Where a remainder shall be limited to the heirs or heirs of the body of a person to whom a life estate in the same premises shall be given, the persons who, on the termination of the life estate, shall be the heirs, or heirs of the body of such tenant for life, shall be entitled to take as purchasers by virtue of the remainder so limited to them.” (1 R. S. 725, § 28; Knight v. Weatherwax, 7 Paige, 182.)

Consequently we must assume, in support of plaintiff’s title, that it was the intention of the testator at the time he made this will to demise the fee to the collateral relatives or kindred of his first wife, as well as to his own kindred, in case his son should have no children born to him; for if the word “ heirs ” is to be taken in its primary legal sense, it would include them all. To hold that such was the testator’s intention, to deprive his own heirs of the whole or a portion of his estate, and to give it to strangers in blood without any expressions indicative of such purpose, would be in violation of well-settled rules of construction and contrary to the will of the testator.

There is nothing in the will indicating that the testator intended that his first wife’s relatives should have any part of his estate by virtue of the terms of the will, or even his own brother or kindred. Such an intention cannot be inferred from the clause “ children or heirs.”

The reports are full of instances where the word “ heirs ” has been construed to mean “ children,” heirs of the body, issue and descendants. When that word is connected with the word “ children,” it is clearly evinced tlmt it was used by a testator in its popular, common or ordinary sense and meaning, as issue, etc., and not in its broad, general, comprehensive, legal or technical sense, as heirs generally, and especially so when we bonsider the surrounding facts and circumstances, the particular relationship of the testator to the parties to this action, the fact that his first wife died twenty years before the making of the will, and that neither she nor her relatives were mentioned in the will.

It is difficult to draw any substantial distinction between a devise to “ children and heirs ” and a devise to “ children or heirs ” of a life tenant, and to hold that in the one case the word “ heirs ” is but another designation for “ children or issue,” whilst in the other it means heirs generally, such a distinction would be more fanciful than real. However, there are many instances where the word “or” has been construed “and,” and there is ample warrant for substituting the one for the other in this case in order to effectuate the intention of the testator and to accomplish the purpose he had in view.

The fee descended to the persons who were the heirs of the testator at the time of his decease, and the heirs of Stephen take nothing. It follows that the plaintiff has no title, and the demurrer must be sustained, with costs to the defendants.


source: Caselaw Access Project

author: O’Brien, J.:

license: Public Domain

text:
    Leopold Zimmermann and Another, Appellants, v. Elias Heil, Respondent.

      Broker and customer — sales on “margin” —■ duty of broker, after default of customer, to sell when so directed.

    The relation existing between one who purchases stocks on a “margin ” and his broker is not merely that of pledgor and pledgee; there also exists the relation of principal and agent, and, in this view, the broker, as agent, is bound to obey the instructions of his customer.
    A customer who had bought through his broker silver certificates, had exhausted his “margin” and refused upon request to advance any more, informed his brokers that if they held the silver longer they did so at their own risk aiid must bear any further loss. Upon a sale made not until some time thereafter a further loss resulted.

      Held, that the failure of the brokers to sell within a reasonable time from their receipt of the instructions to sell precluded them from recovering such loss.
    Although the broker in such a situation is an agent who has an interest he must obey instructions; he cannot be allowed to speculate upon future changes in value at the risk and expense of his principal.
    Appeal by tlie plaintiffs, Leopold Zimmermann and another, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 24th day of December, 1894, upon the verdict of a jury rendered after atrial at the New York Circuit, and also from an order entered in said clerk’s office on the 21st day of January, 1895, denying the plaintiffs’ motion for a new trial made upon the minutes.
    The action was brought to recover an alleged loss resulting to plaintiffs, who were stockbrokers, from the purchase for the defendant of certain silver certificates. The silver certificates were bought September 3, 1890, and were sold November 20, 1891. The plaintiff testified that his order to sell was given on or about October 9, 1890.

      William F. GolcZbecTc, for the appellants.

      Henry L. Scheuerman, for the respondent.
   O’Brien, J.:

This action is brought to recover the balance claimed to be due upon transactions in silver certificates in which plaintiffs acted as defendant’s brokers. They purchased on defendant’s order and for his account, certificates representing 10,000 ounces of silver bullion, on September 3, 1890, against which the defendant deposited a certain amount as margin. By reason of a decline in the market the margin became exhausted between October 9 and 11, 1890, but the plaintiffs held the certificates until November .21, 1S91, when they were sold at a further loss, which, with interest and storage charges, they seek to recover in this action. The defense presented upon the trial was that the transactions were concluded on October 7, 1890, by the defendant’s refusal to advance more margin, and by a conversation between the parties, in which, as asserted on one side but denied on the other, the defendant informed plaintiffs that if they thereafter held the silver they did so at their own risk, and that if they incurred loss thereafter they would have to boar it themselves and could not charge it upon the defendant.

The plaintiffs contend that, as they had received no order from defendant to sell prior to the time his margin was exhausted, they had no right or authority to sell before that time; while, on the other hand, after his margin was exhausted, defendant had no right or authority to say what should or should not be done with the silver unless he either put up an additional margin or paid plaintiffs the amount of his then existing indebtedness. In other words, that if even the legitimate inference from the conversation between the parties when the margin was exhausted was that defendant desired plaintiffs to sell out, plaintiffs were under no obligation to do so since it was their privilege, provided they exercised good faith, to sell or not as they thought best for their own protection, after defendant’s margin had been exhausted and he had not responded to their call for additional margin.

The legal question is thus presented as to whether or not a customer, after his margin is exhausted, can refuse a call for more margin and then rid himself of future loss by notice to the broker that lie will not be responsible therefor, and that any additional loss that may result from his holding and not selling he must bear himself. Or, differently expressed, was the trial judge right in his statement that if the defendant so informed the plaintiffs, they were bound to sell within a reasonable time after the exhaustion of margin, and that if they held the certificates for a longer period and further loss resulted, such loss must fall on the plaintiffs ? The question seems never to have been directly passed upon. It has been held that the legal relation of broker and client is that of pledgor and pledgee (Markham v. Jaudon, 41 N. Y. 235); and as stated in American and English Encyclopaedia of Law (Vol. 18, p. 668), the rule applicable to the contract of pledge is, that when the debt matures and is not paid, the collateral may be sold by the pledgee after reasonable notice to the pledgor. And while, in the absence of directions or notice to sell, the broker or pledgee is not bound to sell, the question here is, what is his duty when directions to sell, or their equivalent, are' given him ?

As stated, there is a lack of authority upon this point, the nearest upon the facts being Field v. Leavitt (37 N. Y. Super. Ct. 215), which was a case where personal property had been pledged to secure the payment of a note. It appeared that the pledgor and the parties to the note united in demanding a sale of the greater portion of the property pledged upon an offer procured by them, and the pledgees and owners of the note refused to make the sale. It also appeared that if such sale had been made, and the money paid thereon, the proceeds of the sale would have paid the note, except $200, and the remainder of the property pledged would have sold for a greater sum than the balance of the note; whereas, after-wards the property sold for a much less sum than the note, and left a deficiency to be paid by the parties. It was held that, even assuming that the proposed purchaser was solvent and ready to make the purchase, there being no proof in the case that the refusal to sell by the pledgees was not the exercise of an honest judgment on their part, having regard to their own rights and interests as well as those of the parties to the note and the owners of the property, the most that was shown and could be claimed from those facts was that the pledgees made a mistake, and that no liability could ensue therefrom under the circumstances. This to some extent sustains the appellants’ contention that after the conversation as detailed by the defendant (and which was credited by the jury), of his unwillingness to be responsible for further loss, and if they held the securities longer they did so at their own risk, this placed no obligation on them to sell, and that, while they had the privilege, it was not their duty, nor were they bound to sell.

We think that the facts her.e, being different, distinguish it from the case referred to. The defendant’s statement that he could not afford to deposit more margin, and that he would not lose more than he had lost, amounted in effect to an order to sell, or the expression of a desire to sell, which was the inference and conclusion drawn from the evidence by the jury; and the learned trial judge was, therefore, right in charging that if they believed such to be the fact the defendant would be absolved from further liability. While the legal relation between broker and client is that of pledgor and pledgee, there exists likewise that other legal relation of principal and agent. And we fail to see why an agent, in the case of a purchase and sale of stocks, is not in the same position with respect to his principal as any other agent would be. True, he has an agency coupled with an interest; but this relation of agency when once created is not" affected .by the question whether the principal has or has not kept good his margin. Until the transaction is finally closed out and a profit or loss results, the relationship between the parties is undisturbed. If we are correct in this view, it would be an anomalous conclusion to hold that an' agent, for his own supposed benefit or profit, could violate the instructions of his principal, and if a gain resulted, have the benefit of it, and if a loss, charge it upon his principal. Even though a broker engaged in the sale of stocks has ail interest as agent in the transaction or in the property which he holds for his principal, there is no hardship in his being obliged at all times to comply with the client’s instructions. It is entirely within the broker’s right and power at all times to protect himself by requiring sufficient margin, which, if not forthcoming, entitles him to sell, and thus avoid a loss. If, on the other hand, he is careless and unbusinesslike, and permits the margin to become exhausted and a loss results, he cannot take the risk of making this good by holding the property of his principal after he is instructed to sell the same, and for any additional future loss occurring after such instructions are given, hold his customer. Any other rule would permit an agent to speculate upon the account and at the risk of his principal.

We think, therefore, that the customer has the right to direct the broker to sell his stock at any time, and unless he does so within a reasonable time thereafter he is responsible for any loss that may result from his failure to obey his customer’s instructions; that this rule is not to be varied, whether the customer lias or has not exhausted his margin; and that, although it is the broker’s privilege to sell upon failure of the customer to keep good his margin after notice to do so, upon taking the proper steps, if he retains the stock after instructions to sell, it is at his own risk and without the right to have recourse to the customer for any loss that may result from his failure within a reasonable time thereafter to sell. This was the view entertained by the learned trial judge; and, though there are isolated sentences in his charge to which exceptions were taken, it will be found upon reading it in its entirety that it clearly presented, upon the evidence, the.correct rule of law, and the exceptions taken and urged on this appeal being all substantially directed to the question we have discussed, they must, for the reasons stated, be held untenable.

The question of fact as to whether the conversation occurred in which the defendant told the plaintiffs that he would not advance more margin, and that if they hereafter held the silver they did so at their own risk, and if any loss occurred they must bear it themselves, and the inference which the jury was thus allowed to draw that this was an intimation that the defendant desired the plaintiffs to sell, were resolved, upon conflicting evidence, in defendant’s favor, and the verdict so reached should not be disturbed.

Judgment and order accordingly affirmed, with costs.

Tan Brunt, P. J., and Eollett, J., concurred.

Judgment affirmed, with costs.


author: O’BeieN, J.:

text:
    Myer S. Isaacs, as Assignee, etc., of Morris Rosendorff and Another, Respondent, v. Solomon Cohen and Another, Appellants, Impleaded with Others.

      “Single costs only," under section 1426 of the Code of Civil Procedure — action for injuries from the trespass of a sheriff— security — division of an action under section 1424 of the Code — when the defendants therein cannot he segregated.

    The term “ single costs only” as used in section 1426 of the Code of Civil Procedure, does not mean only one hill of costs, hut means single costs as distinguished from double costs allowed by section 8258 of the Code.
    In ah action brought to recover for injuries suffered'by reason of the seizure by the sheriff of certain property alleged to belong to the plaintiff, the fact that the sheriff justifies the alleged trespass,, on the ground that it was set in motion by several independent parties, does not render the plaintiff, when compelled to proceed against these indemnitors whom the sheriff has caused to be substituted in his place and stead, liable as to each of them for separate bills of costs, and compelled to give separate undertakings or one undertaking large enough to cover the costs of each by way of indemnity.
    In an action brought to recover for injury suffered by reason of the seizure by the sheriff of certain property alleged to belong to the plaintiff, if the defendant, the sheriff, moves to substitute all his indemnitors as defendants in the action in liis place, the court is authorized under section 1424 of the Code of Civil Procedure to divide the action and to limit each action to the part of the property for which each class of indemnitors is responsible. If this is not reexuested or done, and the substitution made is general under sections 1421 and 1422 of the Code, and the whole body of indemnitors are treated as responsible for the entire trespass complained of in the original action against the sheriff, they, having chosen to assume that attitude, cannot thereafter be segregated.
    Appeal by tlie defendants, Solomon Cohen and another, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the.county of-New York on the 9th day of January, 1895, denying the defendants’ motion to increase the amount of the undertaking given as security for costs by the plaintiff.

      A. 11. ParTchwrsb, for the appellants.

      Pulius J. Franh. for the respondent.
   O’BeieN, J.:

This action- was commenced against the sheriff to recover $25,000 for the alleged wrongful taking and seizure of personal property levied upon under executions issued to 1dm on judgments in four different actions against plaintiff’s assignors. A motion was made by the sheriff to substitute all the indemnitors in the various actions as defendants in this action in his place, and an order was entered granting such motion. The plaintiff had been required to file security running to all the defendants for $250 ; and upon the claim that this was insufficient, the present motion was made to have the amount increased. The motion for such increase presented the question whether separate defendants are entitled in an action of this kind to separate undertakings to secure costs which they expect to have awarded to themselves separately and independently of each other, or to have security in such an amount as will cover separate bills of costs to each defendant, in case they succeed in the action.

We might rest our decision upon the opinion of the judge below were it not that lie seems inadvertently to have fallen into an error in construing section 1426 of the Code of Civil Procedure. Among other things, that section provides: But if the substituted or remaining defendants recover judgment, they are entitled to single costs only.” The judge held that this meant a single bill of costs. Whether the language quoted from the section means single, as distinguished from double costs, or, as held by the judge below, a single bill of costs, we think is to be determined by reference to other provisions of the Code. By section 3258 it is provided that where the defendant is a public officer he is entitled to recover what is called double costs; and the sheriff, who was the original defendant herein, had he successfully defended the case, would have been entitled to the benefits of this section. The indemnitors, who are the substituted defendants, standing as they do in the shoes of the sheriff, would seemingly be subrogated to his rights, and the question might arise as to whether, like the sheriff, if successful, they were not entitled to double costs, except for the limitation which the language quoted' places upon such right, and which provides that they are entitled to but single costs. We think, therefore, that if the Legislature liad meant but one bill of costs it would have said so, and not have used the term “ single costs,” which is only clear when we recall that there are other provisions under which the parties who stood in the shoes of a public officer might be entitled like him to double costs.

Apart, however, from this, we think the order was right. The trespass as against the plaintiff was originally committed by the sheriff, and so far as the plaintiff is concerned, it was entirely immaterial whether it was the result of a single judgment or of four, the fact being that it was made by the sheriff upon plaintiff’s property, and to recover for the injury suffered by such seizure he brought his action. The sheriff, had he remained a party, could not have claimed more than one bill of double costs; and it would be a seeming hardship to hold that, because he justifies an alleged trespass upon the ground that lie was set in motion by several independent parties, the plaintiff in seeking his redress, which he had a right to do, against the sheriff, and when compelled to proceed subsequently, not against the sheriff, but those whom the latter has substituted in his place and stead, should be liable as against each of these several parties for separate bills of costs, and compelled to give separate undertakings, or one large enough to cover the costs of each indemnitor. These defendants have now been substituted in the place of the sheriff, as against whom, as already said, the plaintiff would be liable for but one bill of double costs. If they had desired separately to justify and litigate and obtain the right to a separate bill of costs, they should have presented this question, as correctly held by the court below, when the application to substitute was made. For,” as was said, the court, under section 1424, was then authorized to divide the action, and to limit each action to the part of the property for which each class of indemnitors was responsible. As this was not requested or done, the substitution was general under sections 1421 and 1422, and the whole body of indemnitors were treated as responsible for the entire trespass complained of in the original action against the sheriff. Having chosen to assume that attitude, they cannot now be segregated.” And as they stand in no other or different position than the sheriff would have stood in had he still remained a defendant in the action, there is no reason why the plaintiff, who is seeking to recover damages for the trespass upon his property, should be compelled to assume responsibility for separate bills of costs in favor of such of the parties as might establish their freedom from liability, after- having chosen a position in which they all stand of justifying the trespass.

We think tlie order was right and should be affirmed, with ten dollars costs and disbursements.

YaN Brunt, P. J., and Parker, J., concurred in result.

Order affirmed, with ten dollars costs and disbursements.


text:
    Edward L. Oppenheim and Others, Respondents, v. James M. Waterbury and Another, Appellants, Impleaded with Another.

      Stock purchase with an agreement for guaranty — the purchase a good consideration for the guaranty thereafter given —ambiguous language construed in the light of surrounding circumstances.

    Stock was purchased by one person for another upon the condition that the latter was to obtain a guaranty in respect thereto from certain third persons ; but such guaranty was not delivered to the person purchasing the stock until some days after the purchase thereof.

      Held, that the purchase of the stock and the guaranty were parts of one and the same transaction and that the purchase of the stock was a sufficient consideration to sustain the guaranty.
    When the language of a guaranty is ambiguous and does not furnish conclusive evidence of its meaning, the court is entitled to look at all the circumstances of the case and arrive at the intention of the parties from such sources of information.
    Appeal by the defendants, James M. Waterbury and another, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 27th day of November, 1894, upon the verdict of a jury rendered after a trial at the New York Circuit.

      William B. Ilornblower, for the appellants.

      Otto llorwitz, for the respondents.
   O’Brien, J.:

This action was brought' by plaintiffs, who, under the firm name-of E. L. Oppenheim & Co., were engaged in business as stockbrokers in the city of New York, against the defendants Waterbury and Lopor as alleged guarantors, and one Matthew Griffin as principal debtor. The latter, though named as a party, was never served with the summons and complaint, and has not appeared.

Oil the trial it appeared that on April 3, 1893, Griffin asked the-plaintiff E. L. Oppenheim whether he was willing to buy and carry for Mm 500 shares of Cordage stock under the guaranty of the defendants Waterbury and Loper. Though at first expressing an unwillingness, upon the statement of Griffin that the proposed guarantors were perfectly responsible Oppenheim finally consented. Griffin thereupon handed him a slip of 'paper, showing the report of a broker of the purchase of 200 ■ shares of Cordage stock which Griffin had given an order to another broker to buy, and said to Oppenheim, “ When will you compare those 200 shares % ” ’ Oppenheim testified that “ comparing stock ” meant stepping into the shoes of the first broker that had made the purchase. “ In other words, if the party wishing to buy stock gives a broker the direction to buy for E. L. Oppenheim & Co., that broker stands still the risk of it until I confirm it by comparing the stock.' Then it becomes my purchase.” Oppenheim took this paper, and Griffin said he was going to buy the other 300 shares in the same way. Oppenheim then said: “You bring me a memorandum of the other 300 shares, and I will make out a notice and you take it to Waterbury & Loper and you will have it endorsed, and then it will be all right.” The plaintiffs communicated with a broker named Prentice, who had purchased for Griffin on the third of April, about comparing the stock, and then prepared the written guaranty sued upon, which is as follows:

“ OFFICE OF E. L. OPPENHEIM & Co.,
“ 35 New St. & é Exchange Court,
“New YobK, Apl. 3rd, 1893.
“Mr. Matthew GeiffiN:
“We have bought for your account and risk:
No. shares. Description. Price.
200 N. C. O. Com. 68J 200 “ 68J
100 “ 68f
Time. Firm name.
Reg. A. L. Norris.
“ ‘ Haight & Jewett.
“ Beebe & Yan S.
“ New Yoek, April 3d.
“ Eor value received, we hereby guarantee this account.
“J. M. WATERBURY.
“ G. WEAYER LOPER.
“ Stocks or bonds sold short ’ will be borrowed for your account and risk.
“E. L. OPPENHEIM & Co.,
“ per A. H.”

It thus appears that on April third. Prentice purcliased 500 shares of Cordage stock by the order of Griffin. In the course of the day the purchases were compared by the clerk of the plaintiffs whose business it was to do so; and the next day, April fourth, the stock was delivered and paid for. The guaranty was not actually delivered until April fifth, when Griffin brought it to the plaintiffs, signed by the defendants Waterbury and Loper. In explanation of the delay, Oppenheim testified that Griffin had informed him that ho obtained the guaranty on the third, and had gone to plaintiffs’ office after three o’clock, but finding that Oppenheim had gone home, he did not care to give the guaranty to anybody but him, so took it away again; and that on the fourth, when 'this conversation was had, he then claimed that he had not the guaranty with him, having changed his coat and left it in another, but that he would bring it down the next morning, which he accordingly did and delivered it to Oppenheim. That a loss occurred, and that plaintiffs called on Griffin to take up the stock, and subsequently on the defendants Waterbury and Loper for additional margin, and that upon their refusal to do anything in regard to the stock, it was sold and a loss resulted, are not disputed. The propriety and regularity of the sale of the stock being conceded, and the jury having disposed of the question as to whether the plaintiffs were interested with Griffin in the purchase, these matters are no longer the subject of contention, the questions arising upon this appeal being ones of law as to the validity of the guaranty itself and the admissibility of certain testimony.

It is contended that there was no consideration for the alleged contract of guaranty. This is sought to be supported by the argument that at the time the paper was signed by Waterbury and Loper the plaintiffs had already purchased the stock, and as they made no agreement with Griffin to carry it for any definite period of time, there was no consideration for the guaranty as between plaintiffs and the guarantors; that there could be but two possible considerations, either an actual purchase of the stock on the faith of the guaranty or a binding agreement to carry the stock for a definite time on the faith of the guaranty; and that neither of these w~as, in fact, shown to exist. This argument is claimed to be upheld by several cases cited, which go to the extent of holding that if the debt or obligation be first'incurred or completed, there must be a new consideration for the promise to guarantee that debt; and appellants refer to the rule as laid down in Brandt on Suretyship' and Guaranty (§ 17), that “ Where the consideration between the principal and creditor has passed and become executed before the contract of the surety or guarantor is made, and such contract was no part of the inducement to the creation of the original debt, such consideration is not sufficient to sustain such contract.” This section is but a corollary of what is expressed in section 15 of the same work, which reads : “ Where a promise that a surety or guarantor'will become liable is part of the inducement on which the creditor acts in creating the original debt', this is a sufficient consideration to support the contract of the surety or guarantor who subsequently signs.” To sustain this last proposition of law we are referred to many cases, but we think that of McNaught v. McClaughry (42 N. Y. 22), which is cited with approval in Erie County Sav. Bank v. Coit (104 N. Y. 537), sufficiently evidences the law of this State. There a principal executed and delivered a note to a creditor, which specified no time of payment, and at the same time agreed that he would procure B. to sign as surety if at any time the creditor should deem himself insecure. Afterwards, the creditor returned the note to the principal, with the request that he would get B. to sign it, which he did, and B. was held liable. As said in the course of the opinion in that case,: “ The authorities are clear upon the two propositions involved in the question: 1. If Abram had given his note to the plaintiff, and the same had been accepted in performance of the contract without further condition, and the note was yet unmatured, the obtaining an additional indorser would have been a gratuitous act" on the part of Abram, and the indorser would not be bound. He would not be bound, not because there was no direct consideration moving to himself, but because there was no sufficient consideration moving to his principal. On the other hand, if Abram had originallyvagreed with the lender that he would obtain the new indorser, and had obtained the money upon the faith of that promise, then his finding the additional indorser was based upon a valid consideration, and the indorser was held by his signature.”

The testimony here clearly shows that the stock was purchased upon the condition that the plaintiffs were to receive the guaranty of the defendants. In fact, the defendants’ guaranty and the purchase of the stock were parts of one and the same transaction, and we think, upon such facts, the purchase of the stock was consideration for the defendants’ guaranty. It clearly appears that plaintiffs entered into the transaction entirely on the faith of the proposed guaranty. Undoubtedly the plaintiffs ran the risk of the failure of Griffin to perform by obtaining such guaranty; but when secured, it related to the original agreement between the parties, became a part and parcel of the transaction, and thus made the consideration that moved to Griffin move as well to them.

In thus considering the question we have taken the view most favorable to the appellants, that the guaranty, though originally promised by Griffin, was a transaction completed before it was delivered. If it had not been forthcoming, it would have been entirely within the right of the plaintiffs at once to sell the stock, because their purchase was conditional upon Griffin’s promise to secure the guaranty. Until this was delivered to plaintiffs, the transaction was incomplete, so far as making Griffin the purchaser, and the effect of giving the guaranty was to alter the position of the plaintiffs from that of unconditional to conditional holders; and such an alteration in their position, made upon the faith of the guaranty, was a sufficient consideration to support the defendants’ promise. We think, too, that the respondents correctly argue that the evidence warrants the inference that plaintiffs offered to purchase the stock upon Griffin’s promise to obtain the guaranty. In that event, when Oppenheim had purchased, Griffin became bound to procure the guaranty. The plaintiffs had a contract right against the principal debtor. Upon the guaranty being given, that right was extinguished, and the guaranty was given for the express purpose of'extinguishing that right.

Another contention of the appellants is, that the contract of guaranty is void under the Statute of Frauds; that it being a “ special promise to answer for the debt, default or miscarriage of another,” there is no sufficient “note or memorandum thereof” in writing to comply with the statute. (2 R. S. 135, § 2, as amended by the Laws of 1863, chap. 464.) We think the writing in itself sufficient ; but, as said in Evansville Bank v. Kaufmann (93 N. Y. 281), “ When, therefore, the language of a guaranty is ambiguous and does not furnish conclusive evidence of its meaning, we are entitled to look at all of tlie circumstances of tlie case and arrive at tlie intention of tlie parties from tliese sources of information.” Whatever ambiguity may exist, therefore, was cleared up by the evidence introduced, which, under the authorities, we think was for that purpose competent. As shown by the writing itself and by the testimony, what was guaranteed was the account and whatever might result therefrom ; and, therefore, it is not sound nor logical to argue that, because no definite time was fixed during which the stock was to be carried, no consideration was expressed, the carrying of the account being a mere incident, and whether it was for a definite or an indefinite time was entirely immaterial. The loss that resulted flowed from the failure of the principal debtor to pay for the stock, and the defendants could only be relieved of their liability as guarantors when the principal debtor paid the purchase price or satisfied the account.

The other points raised as to the insufficiency of the writing to satisfy the Statute of Frauds, we think are met by the argument presented by the respondents.

Other exceptions relied upon relate to alleged errors of the court in admitting in evidence, over the defendants’ objection, the declarations of Griffin as against his co-defendants. In the author already referred to (Brandt on Suretyship and Guaranty, § 627), it is said that “When the declarations or admissions of the principal are made in the course of the performance of the business for which the surety is bound so as to become a part of the res gestee, they are evidence against the surety.” If we accept this as a correct statement of the law, it was proper to allow plaintiffs to show just what was done by Griffin in carrying out his promise to deliver the guaranty; and as all the declarations made by him were in the course of and before the delivery of such guaranty, we do not think it was error to admit them. But taking the contract between the parties and what thereafter followed, in connection with the purchase of the stock by plaintiffs, and the subsequent delivery of the promised guaranty by Griffin on the fifth of April, we think there was sufficient evidence to justify the disposition made by the trial court even though we exclude all the evidence objected to, introduced on the part of plaintiffs explanatory of their failure to receive the contract of guaranty before the fifth, and consisting of statements and declarations made bj' Griffin to Oppenheim.

Upon tlie merits, tlie plaintiffs were entitled to recover, and, there being no valid legal objections presented, we think the judgment should be affirmed, with costs.

YaN BbüNT, P. J., and Follett, J., concurred.

Judgment affirmed, with costs.


author: O’BbieN, J.:

text:
    The People of the State of New York ex rel. Augustus Clason, Respondent, v. The Nassau Ferry Company and Another, Appellants.
    Mamdmnus— right to inspect corporate stock book and account books — facts to be shown on an application for.

    A stockholder of a corporation operating a ferry has the right, under section 29 of chapter 688 of the Laws of 1892, to inspect the stock book of such corporation during business hours, with his attorney or other person having the requi • site knowledge, to obtain information as to tlie financial condition of the corporation and as to the management and the conduct of its officers, and where such request is denied the corporation will be compelled by mandamus to produce such book.
    An order directing an examination of the books of account of a corporation will not be granted by the court at the instance of a stockholder of such corporation, unless it appears that such stockholder is the owner of the amount of the capital stock of such corporation specified in section 52 of chapter 688 of the Laws of 1892, and has made a written request to the treasurer of such corporation for a statement of its affairs, under oath, embracing a particular account of all its assets and liabilities, and such treasurer, within thirty days after the receipt of such written request, lias not delivered the same to him.
    Appeal by the defendants, The Nassau Ferry Company and another, from an order of the Supreme Court, granted at the New York Special Term on the 11th day of March, 1895, and entered in the office of the clerk of the county of New York, awarding to the relator a peremptory writ of mandamus requiring the defendants to allow the relator, with the aid of his attorney or other necessary assistant, to examine and inspect and take extracts from the records and books of account of the said Nassau Ferry Company and the books kept by said corporation containing the names of all persons who are, or since the incorporation of the said corporation have been, stockholders of such corporation and showing their places of residence, the number of shares of stock held by them, respectively, the time when they respectively became owners of such shares and the amount actually paid thereon.

      S. Hanford, for the appellants.

      L. Laflin Kellogg, for the respondent.
   O’BbieN, J.:

The relator, 'as owner of thirty-three and a half shares of the capital stock of the Nassau Ferry Company, in company with his attorney, demanded the right to be allowed, during business hours, to examine the records, books of account and stock books of the company, which demand was refused by the treasurer, except that the latter offered to allow the relator himself to examine the stock book. The judge at Special Term held that the relator was entitled to the writ, and granted an order directing it to issue, which required that he be allowed, with the aid of his attorney or other necessary assistant, to inspect and examine all the books of the company mentioned.

It appears by the relator’s affidavit that the stock of the company, as fixed by its certificate, was the sum of $15,000, divided into 150 shares of $100 each ; that the stock which came to the relator was not acquired by purchase, but was received by him pursuant to the provisions of the will of his deceased grandfather; that the purpose for which the examination was sought was to ascertain the value of the stock, sales of which had not taken place in the open market; and that in relator’s view the only mode of finding out what was the value of the stock owned bjr him was to obtain the names of the stockholders and confer with them, and, in addition, to obtain a knowledge as to the financial condition of the company and the management and conduct of its affairs.

As to the stock of the company, we think that the relator’s right is accorded by the Stock Corporation Law (Laws 1892, chap. 688, § 29), which, with respect to corporations like the ferry company, among other things, provides: “The stock book of every such corporation shall be open daily during business hours for the inspection of its stockholders and judgment creditors, who may make extracts therefrom.”

This brings us to the second question, as to the relator’s right to an examination of the books of account of the company. By section 52 of the Stock Corporation Law, already referred to, the relator, being the owner of more than a sufficient amount of the capital stock of the company, could have made a written request to the treasurer “ for a statement of its affairs under oath, embracing a particular account of all its assets and liabilities,” and the treasurer would have been required to deliver the same within thirty days. ■ If the relator had availed himself of this provision of law he would have obtained practically all the information which he states that he desires, and we think that before invoking the aid of the court he should have exhausted the remedy given to him by statute, which, if it had been resorted to, might have obviated the necessity of this application. It may be that the Supreme Court, independently of statute, by virtue of its supervisory powers, has the right to order an inspection of the books of account of a corporation by a stockholder upon a proper showing being made, particularly in the absence of any statutory restriction of such power. It is not, however, necessary for us to determine that question, for the reason that in this case no sufficient showing was made to entitle the relator to the relief sought, and no explanation afforded why he did not take the remedy given by statute and demand a verified statement from the treasurer,'nor is there anything to show that such a statement so furnished would not have given him all the information he desired.

The excuse that the officers were justified in refusing to permit the relator to examine the books merely because his counsel was present, we think was an unreasonable one, as it was entirely proper for one situated as the relator, who was not familiar with corporate affairs, to take with him his attorney or other person having the requisite knowledge to obtain for him the information to which he was entitled.

We think that so much of the order as directed an inspection of the stock books should be affirmed, and in other respects it should be reversed, without costs to either party upon this appeal.

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

Order modified as directed in opinion, without costs.


author: O’Brien, J. :

text:
    The People of the State of New York ex rel. The United States Trust Company, Respondent, v. Edward P. Barker and Others, as Commissioners of Taxes and Assessments of the City of New York, Appellants.

      Taxation of a corporation — dividends declared payable in the future, not “ surplus pi'ofits or reserved funds’’ —1857, chap. 456, § 3.
    Dividends declared by a corporation, but payable in the future, become at once the property of the shareholders and are thereafter hold by the corporation simply as a trustee for the shareholder.
    A corporation declared a dividend on the 7th day of December,, 1893, and made it payable on the 10th day of January, 1894. The 8th day of January, 1894, was the day appointed by the proper authorities as that upon which the taxable status of the corporation should be determined.

      Held, that the dividend was not a part of the “surplus profits or reserved funds ” of the corporation, and was not taxable as property of the corporation under the provisions of section 3 of chapter 456 of the Laws of 1857.
    Appeal by Edward P. Barker and others, as commissioners of taxes and assessments of the city of New York, from an order of the Supreme Court, made at the New York Special Term and entered in the office, of the clerk of the county of New York on the 24th day of January, 1895, adjudging the proceedings of the respondents in regard to the assessment of the relator for taxation on its capital stock to be illegal and erroneous, reducing the relator’s assessment and correcting the tax to be levied thereunder.
    The second Monday of January, 1894, was the eighth day of that month.

      David J. Dean, for the appellants.

      Edward IK Sheldon, for the respondent.
   O’Brien, J. :

The facts upon which the propositions of law were to be argued upon this appeal, stipulated in the court below, are as follows :

I. That the relator is a trust company, duly created and existing under and by virtue of the laws of the State of New York, and transacts its business at No. 45 "Wall street in said city.

IL That- at a regular meeting of the board of trustees of the relator, held on the 7th day of December, 1893, the following action was taken: “ The question being on the adoption and recommendation of the examining committee, it was resolved and carried that the report be adopted as read, and a dividend of sixteen per cent was declared, payable January 10, 1894.”

III. That on the said 7th day of December, 1893, there was set apart on the books of the relator to the credit of the “ Eightieth Dividend ” account, and charged to “ Profit and Loss,” out of the net profits for the preceding six months, the sum of $320,000; that said sum was paid out as such dividend on the 10th day of January, 1894.

IY. That during the period from December 7, 1893, to January 10, 1894, there was continuously on deposit in the Bank of the Manhattan Company to the credit of the relator a sum in cash exceeding $320,000, but that sum was not separated on the books of said bank from the general cash held to the credit of the relator, nor in any way indicated as a special deposit until said 10th day of January, 1894.

Y. That in each statement rendered by the relator to the commissioners prior to that for the year 1894, the amount of the semiannual dividend declared by the relator in the preceding December and payable the January 10 thereafter, has been deducted from the taxable value of the relator’s capital stock, and such deduction has been allowed by the commissioners.

It will be noticed that the dividend was declared on the 7th day of December, 1893, payable January 10, 1894, and the date fixed for ascertaining what should be assessable as the capital stock of the corporation liable to taxation was the second Monday of January, which was intermediate between the date of the declaration and the payment of the dividend. The relator claimed that this dividend was not one of the assets, nor subject to taxation on the second Monday of January, 1894, and it is from the conclusion of the judge at Special Term sustaining this view that the appeal is taken.

Section 3, chapter 456 of the Laws of 1857, under which the relator was taxed, is as follows : “ The cajoital stock of every company liable to taxation, except such part of it as shall have been excepted in the assessment roll, or as shall have been exempted by law, together with its surplus profits or reserved funds, exceeding ten per cent of its capital, after deducting the assessed value of its real estate, and all shares of stock in other corporations actually owned bj such company which are taxable upon their capital stock under the laws of this State, shall be assessed at its actual value, and taxed in the same manner as the other personal and real estate of the county.”

The question presented, therefore, "is, was the amount of such dividend one of the assets of the relator constituting a part of its “ surplus profits or reserved funds,” or was it a debt which the relator was entitled to have deducted from the taxable assets of the company? In Matter of Kernochan (104 N. Y. 616, 624) it is said : “ As soon as the profits on shares of stock are ascertained and declared, they cease to be the property of the company, and the owner of the shares becomes entitled to the dividend. It at once forms part of his estate. The fact that they are made payable at a future time is immaterial.” In Hopper v. Sage (112 N. Y. 530) it is said: “ This is so in regard to dividends declared, but which are payable at a future time, and such dividends belong to the owner of the stock when declared. The declaration of the dividend is in legal contemplation a separation of the amount thereof from the assets of the corporation which holds such amount thereafter as the trustee of the stockholder at the time of the declaration of the dividend.” And in Jermain v. Lake Shore & Mich. South. Ry. Co. (91 N. Y. 488, 492) it is said: “When a dividend has once been declared out of net earnings, the amount of such dividend is no longer a part of the assets of the company, but is appropriated or set apart for the shareholders. They receive credit for the dividends, and the corporation simply holds them as their trustee.”

These authorities would seemingly be conclusive, but their force is sought to be avoided, first, by the language of the statute under which the relator was taxed; second, by the claim that the question disposed of in the cases cited was one between individuals; and, third, that the effect of permitting the deduction would be to enable the amount of the dividend altogether to escape taxation.

Even though it be assumed that the relator would have had the right to rescind the resolution under which the dividend was declared, and thus leave its surplus profits or reserved funds unimpaired, this cannot be regarded as conclusive upon the question as fco whether the amount of such dividend constituted a part of the relator’s assets or a part of either of the funds mentioned in the statute. Nor do we think it is to be determined by a consideration of whether, strictly speaking, the amount is to be regarded as a debt and thus deductible from taxable assets; the question really being whether it is a portion of the surplus profits or reserved funds, and the authorities cited favor the view urged by the respondent, that a sum dedicated to a specific use and no longer available for corporate purposes as long as the dividend resolution stands (which it did upon the second Monday of January) can no more be regarded as surplus or reserve than could the balances due depositors; and it having been held that the effect of a declaration of a dividend is to place the corporation in the position of trustee for those in whose favor the dividend was declared, and for the recovery of which they might sue, it cannot be regarded as part of the surplus profits or reserved funds of the corporation.

The second distinction sought to be made between the cases cited and the one at bar, that the questions there involved were between private individuals, while here it is between the municipality and a corporation, seems to us without force, because the legal principles controlling the disposition of the question would be the same. The third reason urged by appellants,- that this would permit the amount of the dividend to escape taxation altogether, is equally without force, because if it is property which belongs to the persons in whose favor' the dividend was declared, it should not be taxed as part of the assets of the corporation. Nor to the end that the tax might be collected should one not liable be obliged to pay it.

We think the order appealed from was right and should be affirmed, with costs.

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

Order affirmed, with costs. ■


author: O’Erien, J.:

text:
    Mary Lavelle, Respondent, v. Ellen Corrignio and Another, Appellants; The Home for the Aged of the Little Sisters of the Poor and Others, Respondents.

      Weight of testimony — reversal of a verdict rendered, upon conflicting evidence — statute of a sister State — granting of a new trial in a case involving more than one issue — action ofpcvrtition — finding of the jury upon questions of fact — setting aside a verdict.

    The testimony of a witness who has been for many years an inmate of a house of ill-fame should not favorably impress a jury, as against the testimony of more credible witnesses.
    The General Term is reluctant to interfere with the findings of a jury upon conflicting testimony where the jury has had the advantage of seeing the witnesses testify and observing their demeanor, but that rule does not apply in its full force where the conflicting testimony was before the jury in the form of written depositions, in which case the General Term is as competent to pass upon the credibility of witnesses so examined as is the-jury itself.
    If it is material in an action to show what is the statute law of a sister State upon a given point, the existence of such statute must be established upon the trial by competent proof.
    With respect to questions of fact which go to make up an issue, W'ken the decision on one of these, if set aside, would necessarily result in the setting aside of other questions of fact connected with it and tending to sustain the verdict, all questions connected with the same issue necessarily fall with it if a new trial be granted. The piosition is, however, entirely different where there are separate and distinct issues. In such a case, granting a new trial as to one issue does not necessarily affect the others.
    The issues in a partition action are triable of right by a jury, and section 970 of the Code of Civil Procedure makes the finding of the jury upon each question of fact arising upon the issues submitted to them conclusive upon the court unless the verdict is set aside or a new trial is granted, hut, since in such an action there may be any number of distinct issues, each made up of independent questions of fact, there is nothing to prevent the court from setting aside the verdict of the jury upon any one of the issues, and for this purpose there may he deemed to be as many verdicts as there are issues iu the action.
    Yan Brunt, P. J., dissenting.
    Appeal by tlie defendants, Ellen Corrignio and another, from an order of tlie Supreme Court, made at tlie New York Circuit and entered in the office of tlie clerk of the county of New York on tlie 22d day of October, 1894-, denying tlie defendants’ motion for a new trial made upon tlie minutes as sucli order was resettled by an order made at tlie New York Special Term, and entered in said cleric’s office on the 12th day of December, 1894, and also from an order made at the New York Special Term and enteredfin said clerk’s office on the 26th day of January, 1895, denying the defendants’ motion for a new trial on the ground of newly-discovered evidence.

      J. Brownson Ker, for the appellants.

      Henry Cooper, for the plaintiff, respondent.

      William T. Schley, for the respondents, The Home for the Aged, etc., and others.
   O’Erien, J.:

This action was brought for the partition of certain real estate in the city of New York, the property in her lifetiffie of one Ann Owens. Upon her death Ann Owens left her surviving two sisters, Mary Hardy, who died without issue shortly after the death of Ann Owens, and Rosanna Coy, born Hardy, who died in 1867, leaving her surviving three children, Ellen, Catherine and Mary Ann Coy. Ellen Corrignio and Mary Isabella Corrignio, though not originally parties to the action, were brought into it upon their own motion, claiming that they were the children and sole heirs at law of Mary Ann Coy, who, as we have seen, was a niece of Ann Owens. The question whether the Corrignios were the children of Mary Ann Coy was, with a number of other distinct issues framed in the action, left to the jury, and their verdict was against the claim advanced by the Corrignios; and it is upon the ground that such verdict was against the weight of evidence, and upon the further ground of newly-discovered evidence, that the two motions were made for a new trial, from the denial of which appeals are taken. In disposing of the first, viz., the motion for a new trial upon the minutes, a reference to the facts is necessary.

It was conceded that Mary Ann Coy -was a niece of Ann Owens, and in order to establish their claim of heirship to Ann Owens it was, therefore, only necessary for the Corrignios to show that they were the children or issue of Mary Ann Coy. To prove this they produced the testimony of their father, their own testimony and that of five other witnesses not related to them, all of which was taken by commission in New Orleans, where the Corrignios live. Their testimony, in substance, was that Ellen and Mary Isabella Oorrignio were the children, born out of wedlock, of Mary Ann Ooy and Dimitry Oorrignio; that, up to the time of the death of their mother in 1877, they had always lived with and been recognized by her and Dimitry Oorrignio as their children, •and by their aunts, Ellen Ronds (formerly Coy) and Catherine Coy, as their nieces; that since the death of their mother they have resided with their father and been treated by him and by their neighbors as the children of Dimitry Oorrignio and Mary Ann Coy; that in 1877, while their mother was on her deathbed, a clergyman ■of the Greek church was sent for and a marriage was solemnized between Mary Ann Coy and Dimitry Oorrignio, for the express purpose, of legitimating the three children who had been born to them out of wedlock; one of them, Dimitry, Jr., died soon after the death of Mary Ann Coy (or Oorrignio). Two of the witnesses .stated that they were present when the ceremonial marriage took place at her deathbed, between Mary Ann Coy and Dimitry Corrignio in 1877; that they were there as witnesses, and it was then stated that one of the reasons for the marriage was the desire both had of legitimating their three children, Ellen, Mary Isabella and Dimitry, Jr. These witnesses also testified to the fact that they had known the children since they were born, and knew that they had lived with the man and woman whose marriage they witnessed, and that the latter had always spoken to and of them as their children. In .addition, there was produced the certificate of the marriage, taken from the records of the church, which states that the marriage was had for the purpose of legitimating the three children who had been born out of marriage, naming them and giving their ages; and also the baptismal certificate of Ellen, also from the records of the church, showing that she was baptized as a child of Dimitry Oorrignio and Mary Ann Coy, and that their father and mother were both present at the baptism. These certificates are fortified by the testimony of the clergyman who furnished them and who states that they are correct extracts from the records of his church. We have also the testimony of the clergyman who performed the marriage ceremony, which corroborates that of the witnesses in reference to the solemnization of the marriage and the purposes for which it was done.

As against these eight witnesses and this documentary evidence, we have the testimony of Ellen Fonds and Catherine Coy, who, as we have stated, were the two sisters of Mary Ann Coy. Their testimony was taken before the Corrignios had been made parties to-this action, and is to the effect that their sister, Mary Ann Coy, died without issue. Of these two, the one in the best position to know was Catherine Coy, who it appears was accustomed frequently to-visit her sister Mary Ann during her lifetime; whereas between the Corrignios and Ellen the same custom of visiting did not prevail, and although! she visited her sister at intervals and thus must have had some knowledge of the situation and surroundings of Mary Ann Coy, yet she was not in as good position to know the household of the Conignios and how it was made up as was her sister Catherine. Ellen Ponds’ testimony was that Mary Ann Coy left no issue that she knew of, and that of Catherine was to the effect that Mary Ann died without issue. This witness, however, was not one that should impress a jury as against more credible'witnesses, it appearing that for many years she has been an inmate of a house of ill-repute.

It may be said with respect to all the witnesses introduced that they were not present at the birth of these children and their testimony was hearsay, and that it does not appear but that they were, by reason of their friendship to the Corrignios, to some extent interested in their favor. But conceding all this, we must nevertheless keep in mind the fact that relationship such as is here sought to be established, in most cases, in the absence of better evidence, is required to be established by hearsajq and in this respect the Corrignios are in no different position from that of some of the other parties to this case. But if we eliminate the testimony of the father and of the girls themselves and all the other witnesses except that of the two clergymen and the church records, we fail to see why that was not sufficient to have inclined the jury in favor of the Corrignios, considering that the only evidence against them was the testimony of their two aunts, and that taken as a whole very uncertain in quality. The records were made, one in 1877 when Mai’y Ann Coy was married to Dimitry Corrignio, which fact was abundantly proved and about which there is no dispute, and the other upon the ' baptism of the child Ellen Corrignio, both of them being made at a time when it could not have been foreseen tliat they were ever likely to be available or of use in establishing the right of ’the persons affected thereby to any interest in the property of Ann Owens. These records, fortified as they are by the statement of the person who now has possession of them, that they are true records of his church, corroborated by the clergyman who performed the marriage ceremony, who testifies that he remembers the circumstances and that' the statement in the records is correct, are rather strong evidence in favor of the claim advanced by the Corrignios and entitled to great weight by a jury, as against that of two sisters, one of whom is now to be discredited, and the other of whom upon insufficient knowledge merely stated that her sister Mary Ann Coy left no issue that she knew of. It may be, as suggested by the respondents, that a good deal of the testimony in support of the claim of the Corrignios has been manufactured ; but certainly there is nothing, so far as the testimony of the clergymen and the records of the church are concerned, that in the slightest way would indicate that either spoke falsely.

It is the undoubted rule that this court is always reluctant to-interfere with the findings of a jury upon conflicting testimony, where the jury has had the advantage of seeing the witnesses testify and observing their demeanor. .But that rule in its full force does not apply here, because the testimony bearing upon the question of heirship was before the jury in the form of written depositions, and this court is as competent to pass upon the credibility of witnesses so examined as the jury itself. Such depositions clearly show, as we have already pointed out, that Mary Ann Coy was married to Dimitry Oorrignio, and that Ellen and Mary Isabella were raised by them as their children; that the church records, which were made at a time when it cannot be assumed that any one could have regarded them as valuable for the purposes of this suit, speak in favor of their claim to be the children of Mary Ann Coy, We know, on the other hand that, in addition to the testimony against this claim to which we have adverted, there are manj'- suspicious circumstances, such as the statement by the father of his age when the youngest of the children was born, and the neglect to-assert the claim with promptitude, and the failure when they became parties to the suit to attempt the destruction of the evidence' against them which had grown up from the testimony of Ellen Ponds and Catherine Coy, which had been taken and was on file as a matter of record.

In view of the evidence adduced for and against the claim of the Oorrignios, there was a question of fact for the jury; and we think the jury failed to appreciate the force of the evidence furnished by the church records, which, if credible, strongly corroborated the other five witnesses, who, as against the two on the other side, gave testimony tending to support the Oorrignios’ claim. If there is anything wrong about such records, a new trial will afford the respondents an opportunity to show it, and, by the cross-examination of the witnesses produced against them by the Oorrignios, tlie opportunity will be given of testing the weight to be attached to such evidence. The entire record enforces the conviction that the case on both sides was poorly tried. The parties all agreed that Ann Owens had died, but when is not made clearly to appear. So, too, in regard to the law of Louisiana, which, it is claimed, provides that the subsequent marriage of parents of children born out of wedlock legitimatizes the children — if that is the statute law of Louisiana, which we have no reason to doubt, its existence should have been established upon the trial. (Miller v. Miller, 91 N. Y. 315.) We think, therefore, that justice demands that a new trial should be had. As well said by Charles P. Daly, Ch. J., in Clark v. Mechanics' Nat. Bank (8 Daly, 504): “Juries are not infallible; they are individually and collectively subject to the ordinary infirmities of human nature, and cases do occur where, if the court did not interpose and set aside the verdict, it would amount to a denial of justice. By doing so no right is taken away. The effect of setting aside the verdict is simply to subject the case to further consideration by another jury, and even this has its limits. * * * This supervisory authority over the verdict of a jury, even upon a question of fact, is a most salutary one, and, in the language of Graham, no lover of justice would wish to see it crippled or narrowed, as it might otherwise be in the power of juries to trample upon justice.”

. A new trial need only be granted with respect to the issue raised as to the heirship of the Oorrignios, no necessity existing for setting aside the verdict upon the other issues between the plaintiff and the other parties to the action, because that as to the Oorrignios' being heirs.of Ann Owens was one entirely distinct from any other .issue in the case. The Oorrignios do not question the correctness of the verdict of the jury upon the issues raised by the other parties to the action, and since the verdict was entirely favorable to those other parties, upon the new trial the controversy as to the Oorrignios can be disposed of without disturbing the verdict upon those points as to which all parties agree it was correct. We think the appellants are right in their contention that the error into which the respondents have fallen in assuming that, if a new trial is to be granted to the Oorrignios, this will result in great hardship by requiring a new trial upon all the other issues in the case, arises from their failure to distinguish between the issue in the action and the questions of fact which go to make up such issue. 'It is undoubtedly true that, with respect to questions of fact that go to make up an issue, where one of these if set aside would necessarily result in the setting aside’of other questions of fact connected with it and tending to sustain the verdict, all questions connected with the same -issue would necessarily fall with it if a new trial were granted. The position, however, is entirely different where there are separate and distinct issues. In such a case granting a new trial as to the one does not necessarily involve the others; and where, as here, all the parties agree that the verdict upon all other points was right, it would be useless to have the parties again go through the form of establishing what nobody is contending against. We think, as urged by appellants, that the issues in a partition action, being triable of right by a jury, section 9Y0 of the Code of Civil Procedure makes the finding of the jury upon each question of fact arising upon the issues submitted to them conclusive upon the court, unless the verdict is set aside or a new trial is granted ; but since in such an action there may be any number of distinct issues, each made up of independent questions of fact, there is nothing to prevent the court from setting aside the verdict of the jury upon any one of these issues, and for this purpose there may be deemed to be as many verdicts as there are issues in the action. (Vermilyea v. Palmer, 52 N. Y. 471; Birdsall v. Patterson, 51 id. 43.)

Our conclusion, therefore, is that there-should be a new trial upon the condition that appellants pay all the costs of the action and the disbursements included in the judgment.

Although we have discussed,- it may not be necessary to decide, the question as to whether, upon setting aside the verdict, a new trial should be granted with respect to all the issues or only the one raised as to the heirship of the Corrignios, for the reason that, as the correctness of the verdict, except as to that issue, is not now disputed by any of the parties to the action, the Corrignios upon such new trial can stipulate as to the existence of such undisputed facts, and thus leave the simple question as to their relationship to Ann Owens to be disposed of.

Since the trial Catherine Coy has made an affidavit that the testimony given by her -was under a misapprehension as to the questions asked her, and that she did not intend to swear, and if she did it was untrue, that the Corrignios were not the children of her sister. It is upon the change which she would thus seek to introduce between her evidence given upon the trial and this statement, that the motion for a new trial on the ground of newly-discovered evidence is based; and it is insisted that this evidence is newly discovered because in no way could the defendants have procured it upon the trial. A question is presented as to whether, since giving her testimony upon the trial, she has not parted with her interest, leaving her, therefore, if of easy conscience, to swear as she may for the time incline. But in view of the conclusion reached upon the other ground it is unnecessary to decide this motion.

The order denying the motion on the ground of newly-discovered evidence is accordingly affirmed, and the order denying the motion for a new trial upon the minutes reversed and the motion granted, without costs to either party in this court, upon payment by appellants of the costs and disbursements included in the judgment.

Follett, J., concurred; Tan Brunt, P. J., dissented.

So ordered.


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    E. De Braekeleer & Co. (Limited), Respondent, v. Henry Schwabeland and Others, Appellants.

      Chattel mortgage — against whom enforeihle, although not filed — evidence of value in an action to recover personal property — objection not taken on the trial not considered on appeal.

    A chattel mortgage as between the parties thereto is perfectly good although it is not filed. It is enforeihle against every one except a bona fide purchaser or a creditor, and is void as against a bona fide judgment creditor with an execution in the hands of the sheriff.
    Such mortgage is, however, valid as against a judgment that is fraudulent and void, and which was entered pursuant to a fraudulent scheme to cheat the creditors of the judgment debtor, and to secure for the latter some benefit out of the property seized and sold upon an execution issued upon such judgment.
    Tn an action brought against a sheriff, to recover certain chattels taken and sold by him under an execution issued upon a judgment, the trial judge charged the jury to assess the value of the property as they deemed it to 'be established by the evidence, and that they could take into consideration anything that was . in evidence upon the subject. The point that the jury, under such charge, fixed the value of the property as of the date,of the levy by the sheriff and not as of the date of the trial was not taken by the unsuccessful party at the trial.

      field, that he could not raise such objection for the first time upon an appeal;
    That an objection to the evidence introduced- upon the trial by the plaintiff, who was the successful party, showing the value of the goods at the time of the purchase thereof, taken on the grounds only that no proper foundation had been laid therefor, and that the evidence was incompetent, was insufficient to raise the question as to the inadmissibility of such evidence as not showing the value of the property at the time of the trial.
    Appeal by the defendants, Henry Sehwabeland and others, from a judgment of the Supreme Court in favor of the plaintiff, entered* in the office of the clerk of the county of New York on the 25th day of April, 1893, upon the verdict of a jury rendered after a trial at the New York Circuit, and also from an order entered in. said clerk’s office on the 21st day of April, 1893, denying the defendants’ motion for a new trial made upon the minutes.

      Uriah W. Tomplvins, for the appellants.

      Daniel P. Days, for the respondent.
   O’Brien, J.:

This action was originally brought against the sheriff to recover certain chattels taken by the latter under an execution upon a judgment. The property when levied upon was claimed by plaintiff, and upon demanding its return the judgment creditor, with the defeudants as sureties on the bond, having indemnified the sheriff, the latter retained and subsequently sold the property under the execution. This action in replevin, therefore, though originally brought against the sheriff, was changed by the substitution of these defendants in his place.

The facts alleged in the complaint are : That on April 14, 1892, Peter R. Saitta and Edith E. Saitta, at that time in business as retail grocers under the name of Saitta & Co., as security for the payment of their several notes, amounting to $1,429.66, executed and delivered to plaintiff a chattel mortgage upon three wagons, two horses and certain harness, etc., set out in a schedule attached to the mortgage. This mortgage was not recorded until the 9th day of May, 1892. On the Ith day of May, 1892, the sheriff, under an execution that had issued upon a judgment of the City Court, wherein E. Christian Korner and Henry Schwabeland were plaintiffs and the Saittas defendants, for $383.22, levied upon the same property described in the chattel mortgage. The complaint alleged that this judgment was fraudulent and void and was entered pursuant to a plan or scheme to hinder, delay and defraud creditors of the firm of Saitta & Co., and to enable the latter to receive benefit from the judgment. Similar charges were made against another judgment in favor of Salvatore Messina, but as the defendants did not claim that the latter was valid, or seek to justify the acts of the sheriff thereunder, and based their right to a levy and sale of the property on the judgment of Korner & Schwabeland, we need not again refer to the Messina judgment.

It will, therefore, be seen that the questions involved and submitted to the jury were: That plaintiff, claiming under a chattel mortgage, sought the possession of property covered by that mortgage which had been given to it by Saitta & Co. for a good and valuable consideration, and which by its terms entitled the plaintiff when the amount due was not paid to the possession of the property mortgaged. That it was prevented from taking possession by the entry of a judgment, the issuance of an execution and a levying of the sheriff upon the property, under a judgment which was fraudulent and void. It is conceded that the chattel mortgage was not hied until two days after the levy by the sheriff was made ; but it is well settled that a chattel mortgage as between the parties is perfectly good without, being filed (Jones v. Graham, 77 N. Y. 628), and is enforcible against everybody except a bona fide purchaser or creditor. It is equally well settled that a chattel mortgage which has not been filed is void as against a bona fide judgment creditor with an execution in the hands of the sheriff. We regard it also as good law that such mortgage is valid as against a judgment that is fraudulent and void, and which was entered pursuant to a fraudulent scheme to cheat the creditors of- the judgment debtor and secure for the latter some benefit out of the property seized and sold upon an execution issued upon such judgment.

Upon the pleadings, therefore, the issue was fairly presented as to whether or not this judgment under which the sheriff levied was fraudulent and void. To sustain this issue upon plaintiff’s part evidence was introduced tending to show that the debt upon which the judgment purported to be founded had been paid, and that, notwithstanding such payment, an arrangement, with knowledge on the part of the judgment creditors, was by their agent entered into, by which the judgment was to be entered and execution issued, the property levied upon and sold, and out of the proceeds of sale the judgment debtors were to secure to themselves the benefit of the property when bought in, or a portion of the proceeds. That this scheme was carried out, and that after the sale a portion of the amount realized was paid to the judgment debtors. In addition there was furnished evidence of the successive steps taken leading up to the entry of the judgment attacked, including the suspicious alteration of dates appearing in the judgment roll. The defendants presented evidence on their side tending to show that the claim which was the basis of the judgment had not been paid, though they admitted that they had received certain property from their debtors to an amount in excess of their claim, which they stated, however, was merely as collateral therefor and not as payment thereof. In this connection the defendants offered in evidence as an exhibit the paper in writing signed by Saitta & Co., which states : “ To satisfy the amount and claim due on a suit now pending and to be discontinued to-day, we hereby assign, transfer and set over unto Korner & Schwabeland 3 bbls. of whiskey and one barrel of sherry; ” and the plaintiff’s exhibit, signed by Korner & Schwabeland, which states: “We agree to allow Saitta & Co. to pay the sum. of ■'$354, and the goods now deposited with us are to be returned within three months on payment of that amount due us.” These, which ■are not all the evidence on the subject, are referred to as showing that a question of fact was fairly presented as to whether or not before the entry of judgment the claim upon which it was founded had or had not been paid; and this question having been properly presented to the jury, their verdict upon this branch of the case is conclusive.

As will be seen from the quotation which we make from the ■charge of the learned trial judge: “ The question here, therefore, is whether the judgment and execution were valid. The plaintiff .says they were not. They claim that judgment was entered against Saitta & Co. after the claim embraced within it had been settled .and paid. The defendants’ answer to this is that the claim was not paid. Their contention is that the whiskey which they received was not received under an agreement that it should be taken in payment and satisfaction of their claim. They say that it w-as to be received only by way of collateral, and indeed that its acceptance, ■even as collateral, was to depend upon its being satisfactory. They say further that when they received the whiskey they found it was not what it was represented to be, and that they notified Saitta & Co. that they would not accept it. That again is denied upon the other side, and that raises the question of fact for your determination.”

The other question, as to whether the judgment was entered and the execution issued for the purpose of cheating and defrauding this plaintiff and preventing its executing its mortgage, was, upon the evidence, a question of fact, and under proper instructions was submitted by the court for the determination of the jury.

There was no exception to the charge, and all the questions involved having been fairly and clearly presented, the verdict of the jury upon the facts is conclusive.

In addition to the question raised upon the motions to dismiss upon the complaint and the opening, and when the testimony of the plaintiff was closed, which, as we have endeavored to point out, were properly -denied, the appellants have pressed upon our attention one or two other questions which may be briefly referred to.

They insist that the jury fixed the value of the property as of the date of the levy by the sheriff, while the Code requires that the value should be as of the day of trial. This question was not raised below, nor was any exception taken to the charge of the judge upon this subject; the fact being that the judge charged that the jury were to assess the value of the property as they deemed it to De established by the evidence, and at the instance of the defendants’ counsel, who asked that the jury be permitted to consider the testimony of the value of the property as given by the deputy sheriff who sold it, the court stated that they could take into consideration anything that ivas in evidence upon that subject. While, therefore, the point was not made at the proper time, and is not now available, it is still insisted that the plaintiff, under defendants’ objection, was permitted to show the value at the date when some of the goods were purchased, two or three months prior to the time of the seizure. That the exceptions thus relied upon are not good either in form or substance is easy of demonstration. The witness who purchased the wagons was on the stand, and testified that he had bought and sold horses and wagons before that time, and was familiar with their value, and after this testimony showing his competency, the question was asked him: “ What were those wagons worth ? ” To which he answered : “ We paid $190 apiece for thorn.” Then came the objection that no foundation had been laid for the question. When the questions were asked, What was the value of the horses ? ” and again, “ What was the value of this harness % ” objections were made upon the same ground, and the further one that it was incompetent; neither of which was good.

The other rulings upon evidence complained of relate to conversations between one of the Saittas and the agent of Korner & Schwabeland, out of which the arrangement grew which resulted in the fraudulent scheme and the entry of the fraudulent judgment complained of. It is insisted that such conversations were not competent as against the sheriff or these indemnitors. This is but another way of urging that it is not competent for the plaintiff to show the fraudulent scheme or the fraudulent judgment; the mere statement of which proposition it seems to us answers itself.

Upon examination of the record, therefore, .we fail to find any merit in the appeal. We think that the judgment was right, and should be affirmed, with costs.

Yak Brunt, P. J., and Eollett, J., concurred.

Judgment affirmed, with costs.