text:
    William S. Keiley, as Receiver, etc., Respondent, v. Mechanics and Traders’ Bank, Appellant.

      Liability for property received under a void bill of sale and chattel mortgage — the price received with interest.

    In an action brought to set aside a chattel mortgage on the property of a company, of which the plaintiff was receiver, and also a bill of sale, both of which were given to secure the payment of certain notes, it appeared that the defendant took possession of the mortgaged property and sold it, receiving §3,350 in cash for it, and that the purchaser subsequently paid §3,500 more on account of one of the notes still unpaid.
    On appeal from a judgment entered upon the decision of a referee setting aside the mortgage and bill of sale as void, and charging the defendant with §3,750 as the amount received for the property, and interest thereon from the date of the conversion thereof,

      Held, that the referee was justified in finding that the defendant received §3,750 for the property, and that the defendant could not complain of a determination which- fixed the value at what he received therefor.
    Appeal by tlie defendant, Mediamos and Traders’ Bank, from a judgment' or order of tlie Supreme Court, made at tlie New York Special Term in favor of the plaintiff, and entered in the office of the clerk of tlie city and county of New York on the 10th day of November, 1892, overruling certain exceptions of the defendant to the report of a referee and confirming said report.

      Charles Strauss, for the appellant.

      Blumenstiel & Ilirseh, for the respondent.
   Per Curiam :

The Industrial Manufacturing Company, on the 24th of January, 1888, had certain notes under discount at the Mechanics and Traders’ Bank (this defendant).

For the purpose of securing the payment of such obligations at maturity, it executed to the defendant a chattel mortgage upon all of its property, consisting largely of machinery then in use by it, and at the same time delivered to the defendant a bill of sale, embracing the same property, under which the defendant at once took possession.

Subsequently an action was brought for the dissolution of the corporation, in which plaintiff was duly appointed receiver of its property and effects, and thereafter he commenced this suit to set aside the mortgage and bill of sale.

The trial at Special Term resulted in an interlocutory judgment, declaring the chattel mortgage and bill of sale void, and decreeing that they be set aside. From that judgment an appeal was taken to the General Term of this court, resulting in its affirmance. (39 N. Y. St. Repr. 438.)

By the interlocutory judgment a referee was appointed to take and state the accounts, and report to the court “ what amounts should be paid over to the plaintiff, in accordance with the terms and provisions hereof.”

The referee reported that the plaintiff was entitled to have judgment against the defendant for the sum of $3,750, with interest thereon from the date of the conversion of the property, amounting to $958.75. The report being confirmed by an order of the court, a final judgment was thereafter entered.

So we may consider on this review only the exceptions taken subsequent to the entry of the interlocutory judgment.

The appellant calls our attention to some exceptions, taken by him to certain rulings of the referee, in the admission and rejection of testimony. But after an examination of the questions presented by them, the conclusion is reached that they do not call for a reversal of the judgment.

The main contention of appellant is that the defendant should have been charged with the sum of $2,250, instead of $3,750.

The secretary and treasurer of the “ Industrial Manufacturing Company ” testified that at the time of the giving of the mortgage and bill of sale, the machinery, fixtures and merchandise described in such instruments were worth between $7,000 and $8,000, the original cost being over $12,000. On the part of the defendant expert witnesses wei'e called, who gave to the property a much lower valuation, their estimates running from $1,531.50 to $1,161.

It appears that almost immediately after the defendant took possession of the property two of the officers of the company, separately and each for himself, commenced negotiations with the officers of the defendant, to purchase the machinery and merchandise described in the chattel mortgage and bill of sale. The negotiations resulted in a sale of the property to one of them, and the referee reached the conclusion, not unwisely, that the sum which the defendant realized from the sale of the property, under the circumstances disclosed, furnished better evidence of value than that afforded by the testimony of the experts.

'The appellant insists, however, that the referee found that the defendant received for the machinery and effects $1,500 more than it did in fact receive.

The mortgage was given originally to secure a note for $2,250, and defendant contends that it was sold for a sum sufficient to pay that note only. There were two other notes not yet matured, which had been discounted by defendant for the benefit of the Industrial Manufacturing Company,” on one of which the indorser was entirely responsible, while on the other, which was a note of $3,000, the indorser was in poor credit, and failed some two or three months afterwards.

The purchaser of the machinery actually paid $1,500 on account of this note, and while one of the defendant’s officers insisted that the payment of this sum was not provided for in the agreement ■which he made with him to sell the property, it is apparent that the purchaser understood that he was obliged to pay $3,750 in order to secure the property.

He was willing to pay it and did pay it. After an examination of the testimony, which it is unnecessary to discuss here, we are of the opinion that the referee was fully justified in finding that the defendant received $3,750 for the property, and that it cannot complain of a determination fixing the value at a sum which it actually received for it.

The judgment should be afiirmed, with costs.

Present — O’Brien, P. J., Follett and Parker, JJ.

Judgment affirmed, with costs.


source: Caselaw Access Project

author: Van Brunt, P. J.:

license: Public Domain

text:
    The Granniss and Hurd Lumber Company, Respondent, v. Richard Deeves, Appellant.

      Failure of a contractor’ to complete the wor'k within the time specified — set-off against a claim for-the balance due on the contract — delay caused by the owner — extra wor'k, not necessae-ily ca/used by faulty construction — omissions in work done— architects certificate.

    A person may permit a contractor to go on and complete Ms work after the time specified by the contracts within which it was to be completed, without prejudice to his right to avail himself of the damage sustained by him by reason of such delay, byway of a counterclaim, in an action brought by the contractor to recover any balance claimed to be due under the contract; but such claim for damages does not constitute a bar to the contractor’s action.
    Where it was provided by the contract relating to the erection of certain houses, that certain of the work was to be completed by a specified time, and the work was not finished by such time on account of the failure of the owner to complete work which was required to be done on his part before the work of the contractor could be commenced, the owner-has no ground for complaining of ■ the delay.
    Upon the trial of an action brought to recover an alleged balance due the plaintiff from the defendant for work done and materials furnished under contracts in connection with the building of certain houses by the defendant, and for the value of extra work and materials furnished in and for said houses by the plaintiff for the defendant, there was evidence given upon the trial showing that, extra work was done upon the houses, but it did not appear that it was caused by original defects in the construction thereof.

      Meld, that it might be presumed to have been caused by circumstances arising subsequent to the finishing of the houses by the plaintiff.
    By an arrangement between the parties the defendant caused to be completed certain work omitted from the work to be done by the plaintiff, and he was allowed the expense thereof, and he never, until after such transaction, asserted that he was not liable to pay any balance due upon the contracts because of the failure of the plaintiff to complete the work therein specified.

      Held, that a claim to that effect subsequently made by the plaintiff was not well founded.
    It was provided by the contract that the balance due upon the houses was to be paid upon their completion “on certificate of architect.” '
    The architect certified that the plaintiff was entitled to a settlement, but added that such certificate was not intended to prejudice any claim the defendant might have for time lost or work which the defendant had to do to carry out the terms of the contract.

      Held, that a claim, that proper architect’s certificates were not furnished, could not prevail.
    Appeal by the defendant, Richard Deeves, from a judgment of tbe Supreme Court in favor of the plaintiff, confirming the report of a referee, entered in the office of the clerk of the city and county ■of New York on the 15th day of August, 1892.
    Written on the side of the contract made between the plaintiff and the defendant, more particularly set forth in the following opinion, was thejlollowing:
    “ I hereby accept this contract with the terms herein contained. Payments to be made as follows: When sash in, trimmed and stairs up, $1,500 per house. Balance at completion on certificate of •■architect.
    “ (Signed) RICHARD DEEVES.”

      D. Thornton, for the appellant.

      II. U. Ocvrdozo, for the respondent.
   Van Brunt, P. J.:

This action was brought to recover an alleged balance due to the plaintiff from the defendant for work done and materials furnished under certain contracts in connection with the building by the ■defendant of nine houses on West Eighty-second and Eighty-third ■streets in the city of New York, and for the value of certain extra work and materials furnished by the plaintiff to the defendant in •and for said houses.

The answer admitted the making of the contracts, but denied the performance thereof, and admitted the doing and performance of extra work, but denied the value thereof, and alleged payment for all work and extra work done by the plaintiff, and for all materials and extra materials furnished.

It also set up a counterclaim for damages for the alleged failure to complete the work to be done under the contracts within the time therein stipulated, and also because the work done and materials furnished by the plaintiff were of inferior kind and quality.

The issues raised by the pleadings having been referred to a referee, said referee reported in favor of the plaintiff, and from the judgment thereupon entered this appeal is taken.

The claim upon the part of the appellant is that the plaintiff did not substantially comply with the terms of the contracts and the-plans and specifications as found by the referee, and that the contracts were not only not completed within a reasonable time, but were not completed at all, and that the certificates, required by the contracts were not furnished, and that the plaintiff delayed the work unnecessarily and unreasonably, and failed to do the work it did in a good and workmanlike manner, by which the defendant was. damaged.

In the consideration of these questions raised by the- appellant we have been somewhat embarrassed by the fact that the referee has, in respect to some of the points raised in the case, taken an erroneous, view of the law, and also seems in his opinion to have, in at least one respect, a different idea of the facts than that which is contained in his findings.

Upon an examination of the opinion of the referee, it will appear-that he states that it does not appear at any time while the work was in progress, either before or after the dates fixed by the contracts for-completion, any complaint was made by the defendant that the contracts had not been performed within the periods fixed in the contracts.

Upon examination of the findings it will be found that the referee finds : “ That during the progress of the work under both contracts defendant continuously complained of the lack of material and. men, and spoke to the foreman and superintendent of plaintiffs, and wrote to the plaintiffs thereof and repeatedly requested the plaintiffs verbally and in writing to supply more men, and send the material to tlie buildings being erected, and expressed dissatisfaction at the maimer in which the plaintiffs were performing their worlc under the contracts.”

The referee also seems to have been of opinion that as the defendant allowed the work to proceed and be completed, he waived the strict performance of the contracts in regard to the time of completion, citing the cases of Smith v. Gugerty (4 Barb. 614), and Gallagher v. Nichols (60 N. Y. 438). Neither of these cases support the view of the learned referee upon this point, but it will not be necessary to criticize them, as in the ease of Dunn, v. Steubing (120 N. Y. 232), the rule is expressly recognized to be otherwise. Undoubtedly the defendant had the right to terminate the contract if the plaintiff was not proceeding with that diligence which the terms of the contracts required. But this was not his only remedy. Tie had a right to let the plaintiff go on and complete his work, and then he had the right to say : “ I will pay you for the work you have done, but I want the damages you have caused me in not doing my work as you agreed to do it.”

In the case cited, upon the trial the learned court charged in the manner specified, and this charge was approved by the Court of Appeals. And all that was held was that although the defendant might have insisted on his strict legal rights, and upon failure to perform on the day fixed put an end to the contract, yet, not having done this, but having permitted the plaintiff to continue his work, he could not then insist on the delay as a defense to an action brought to recover the price of the work, there being a great difference between availing himself of the delay of the plaintiff as a defense and the recovery of damages arising from such delay by way of counterclaim.

But in the case at bar the referee found that the delay in. the performance of the work was caused by the failure of the defendant to complete work which 'was required to be done on his part before the work of the plaintiff could be commenced, and there was ample evidence in the case to sustain this finding. And if this was the condition of affairs, as is probably the case, then the defendant would have no ground for complaining of the delay.

The claim upon the part of the plaintiff, that the contracts were not substantially completed, does not seem to liave been well founded. By the arrangement between the parties, the defendant caused to be completed certain omissions in the work done by the plaintiff, and he has been allowed the expense thereof. He never, until after all these transactions, asserted the claim that he was not liable to pay any balance due upon the contracts, because of the failure of the plaintiff to complete.

The substantial dispute between the parties was as to alleged damages sustained by the delay, and also for certain other work which had been done by the defendant upon these houses. This work, in respect to which evidence was given, was certainly done upon the houses in question; but it does not appear that it was caused by original defects in construction. It may well have been caused by circumstances arising subsequent to the finishing of the houses by the plaintiff.

The claim, which seems to have been asserted for the first time upon the bringing of this suit, that the proper architect’s certificates were not furnished, cannot prevail.

The architect certified that the plaintiff was entitled to a settlement, but knowing that there was a controversy between the plaintiff and the defendant, added that such certificate was not intended to prejudice any claim the defendant might have for time lost, or work which the defendant had to do to carry out the terms of the contract. The architect, by this certificate, did not intend to judge between the parties in reference to the claims of each; but intended to give such a certificate as would entitle the plaintiff to enforce its legal rights without prejudicing the defendant if he was able to establish a condition of affairs different from what was supposed to exist.

Under these circumstances we see no reason for disturbing the judgment, and it should be affirmed, with costs.

Follett and Parker, JJ., concurred.

Judgment affirmed, with costs.


author: Folljbtt, J. :

text:
    Sarah E. Mellen, Respondent, v. William C. Banning, Individually and as Sole Surviving Executor of the Last Will and Testament of Abner Mellen, Deceased, Maria L. Kendall, Helen J. Banning, Abner M. Wilcox and Winifred Wilcox, Appellants.

      Action of partition —• construction of a will — lands devised in fee and power of sale thereof given to executors — equitable conversion — reconversion into realty — power of sale not a bar to the action for pa/i'tition — query, whether repugnant to the devise — assertion that a sale is against interest — legal right to a pa/i'tition — valid exercise of a power of sale — sufficiency of evidence of insolvency —right of a failing debtor to pay claims, usurious or barred by the Statute of Limitations — defeet of parties —form of judgment.

    Upon tlie trial of an action of partition it was shown that the former owner of the premises sought to be partitioned, died, leaving a will, by which, under the fifth clause thereof, he devised all his real estate to his wife, Helen M. Mellen, and his three children, Abner Mellen, Jr., Maria L. Kendall and Helen J. Banning, share and share alike; and by the eighth paragraph of his will, he gave power and authority to his executrix and executors and the survivors of them, for the purposes of a division or distribution, or for any other purpose, that they in their best judgment might think proper, to sell and convey, either at public or private sale, all or any of his real estate, and to apply the proceeds of such sale or sales in conformity to the provisions of his will.

      Held, that under the fifth clause of the testator’s will his devisees acquired the absolute fee of all the lands of which he died seized, subject to the execution of the power contained in the eighth clause;
    That the power of sale in the will did not convert the land into personalty;
    That the devisees and their successors in interest were entitled to the possession of the land, and to receive the rents and profits of it ;
    That the power of sale contained in the eighth clause was not a beneficial one, but was a general power in trust, and could be executed by the executors only for the purpose of administering the estate committed to their charge as such;
    That the power, so far as it authorized a sale for the purpose of division, was a mere collateral one, or power in gross, and was not appurtenant to any estate granted to or trust reposed in the executors;
    That such power of sale was not a bar to an action in equity to effect the division of the real estate.
    Query, whether, when land is devised in fee to persons competent to convey their interests, a power conferred on executors as such to sell and convey the same land and divide the avails among the devisees is valid, and is not repugnant to the devise.
    On the trial the defendants did not claim that a present partition would not be for the best interests of the parties, and they asserted the validity of certain sales admitted to have been made pursuant to the power for the purpose of dividing the estate.

      Held, that they were not in a position to make a claim that the partition was not for the best interests of the parties.
    Query, whether, if it had appeared that for any reason a sale under such a power would be more beneficial to the parties in interest, or that a present sale would be injurious to their interests, or that some of the owners were not competent to convey, a court of equity might withhold its judgment.
    When land is converted into money by a will the beneficiaries may reconvert it into realty, if it is not needed for the purposes of administration, and the power of the executor to sell is extinguished.
    The right of a tenant in common having an estate of inheritance, or for life, or years, to maintain an action for the partition of the interests in land, is a legal right.
    ,On April 17, 1890, the surviving executor, assuming to act under the power, sold at public auction No. 204 Fifth avenue to one Warren for $270,000, subject to a mortgage thereon. The purchaser executed a contract and paid ten percent, but afterwards refused to take the title because of the pending litigation in respect to it, and brought an action for the recovery of the money he had paid, in which it was held by the court that the executor could not compel the specific performance of the contract. The executor attempted to sell other pieces of the property under such power of sale, but nothing was paid therefor, the bids made on such sales having been assigned to two of the defendants. It did not appear that such attempted execution of the power was at the request of any of the devisees, while it was shown that the defendants moved for and obtained a final judgment confirming the sale made under the interlocutory judgment in the present action which provided that five-sixteenths of the proceeds be paid to the plaintiff, and a like proportion to Maria L. Kendall and Helen J. Banning, and one-sixteenth to Abner M. Wilcox. Whether they accepted the moneys resulting therefrom did not appear.

      Held, that it did not appear that there had been a valid execution of the power of sale by the executor, or that any of the land had passed to the purchasers thereunder;
    That the effect of the power of sale and its attempted execution was not dependent upon any question of fact, but was a pure legal question arising upon the face of the will and a few undisputed facts.
    It was shown that three judgments were recovered against Abner Mellen, Jr.; one October, 1889, by Abner M. Wilcox for $351.53, one January, 1890, by Maria L. Kendall for $1,386.34, and one January, 1890, by Helen J. Banning for §1,386.34, on all of which judgments executions were returned wholly unsatisfied.
    That on February 7, 1891, three judgments were recovered against Abner Mellen, Jr., for $3,991.57 each, one by Maria L. Kendall, one by Helen J. Banning and one by William C. Banning, as one of the administrators of Helen L. Mellen, deceased, on which it did not appear that executions had been issued or returned.

      Thaton November 3,1888, Abner Mellen, Jr,, executed a conveyance of his interest in the real estate of which the testator died seized to a third person, who, the same day, conveyed the same to his wife, Sarah B. Mellen, the plaintiff, both of which deeds were recorded November 28, 1888.
    The defendants alleged that at that time Abner Mellen, Jr., was insolvent, and indebted for the sums for which such judgments had been recovered against him, and to his father’s estate for §77,000, and the action was changed into one in the nature of a creditor’s bill to set aside the conveyance to the plaintiff.
    On April 24, 1889, Abner Mellen, Jr., made a general assignment for the benefit of creditors, without preferences, to one McKay, who accepted the trust and entered upon its execution, and on March 6, 1890, Abner Mellen, Jr., died intestate. Letters of administration were granted on his estate to his widow, but this action was not revived and continued against her as such administratrix, nor have his assignee or heirs been made parties thereto.
    The jury found that Abner Mellen, Jr., was indebted to the plaintiff, on November 5, 1888, in the amount of §82,487.09, and that the value of the interest that day conveyed to the plainliff by him was $80,000, and it also found a general verdict for the plaintiff.
    The facts considered under which it will be

      Held, that the evidence is sufficient to support such a finding of the jury.
    A failing debtor may pay or secure to be paid a debt barred by the Statute of Limitations, or one which he might defend as usurious; or, if he has agreed' to pay interest upon unpaid interest, he may pay or secure its payment, and if done in good faith, the payment made or security taken cannot be set aside by his creditors.
    The jury found that the father of Abner Mellen, Jr., surrendered to him nine notes in the aggregate amount of §77,000.

      Held, that in the face of the written admissions of Abner Mellen, Jr., and of other evidence which showed that the notes were uucanceled and in the possession of his father at the time of his death, such finding must be set aside, together with the general verdict, in so far as it can be deemed to sustain the same;
    That whether Abner Mellen, Jr., was or was not indebted to his father’s estate could not be determined in this action without the presence of his administratrix in her representative capacity as a party;
    That, under the circumstances, the final and interlocutory judgments should be modified by reversing the provisions holding that the plaintiff was entitled to five-sixteenths of the avails of the sale free from any lien and directing that the avails be paid directly to her, and should direct that the amount of the avails of the plaintiff’s interest in the real estate, be paid into a trust company to await the determination of what, if any, liens existed on her share, and that any party to the action be given leave to apply to bring in any necessary parties to determine what liens exist, their amount, and whether prior or subsequent to the claim of the plaintiff, and that a reference should be ordered for the purpose of determining that question.
    Appeal by the defendants, Maria L. Kendall, Helen J. Banning, William C. Banning, lier husband, individually, Abner M. Wilcox and Winifred Wilcox, Ms wife, and William C. Banning, as executor of the last will and testament of Abner Mellen, deceased, from a final judgment of the Supreme Court in favor of the plaintiff, rendered at the New York Special Term and entered in the office of the clerk of the city and county of New York on the Yth day of April, 1892, and from the interlocutory judgment made at the New York Special Term and entered in the office of the clerk of the city and county of New York on the 25th day of November, 1891, and from an order made at the New York Circuit and entered in the office of the clerk of the city and county of New York on the 31st day of October, 1890, denying the defendants’ motion for a new trial upon the minutes, and from an order made at the New York Special Term on the 23d day of December, 1891, and entered in the office of the clerk of the city and county of New York, denying the defendants’ motion for a new trial, and for a rehearing of the motion made at the New York Circuit, and from an order made at the New York Special Term on the 23d day of December, 1891, and entered in the office of the clerk of the city and county of New York, denying the defendants’ motion for a new trial and to set aside the verdict.
    This action was begun November 30, 1888, to partition the land which Abner Mellen owned at the date of his death. He died May 27, 1887, seized in fee of three pieces of land, one known as No. 201 Fifth avenue, one as No. 6 Mulberry street and the other being a piece seventy-one feet and three inches wide by ninety-two feet in length, situated on the south side of East Seventeenth street and known as Nos. 516, 518 and 520. He left him surviving Helen L. Mellen, widow, Abner Mellen, Jr., a son, Maria L. Kendall, a daughter, Helen J. Banning, a daughter, and Abner M. Wilcox, a grandson, the son of a deceased daughter, as next of kin and heirs at law. He left a will which contains, among others, the following clauses:

      “ Fifth. All the real estate of which I shall die seized and possessed, or to which I shall be entitled at the time of my decease, I give and devise and bequeath unto my wife, Helen L. Mellen, and my three children, Abner Mellen, Jr., Maria L. Kendall and Helen J. Banning, share and share alike, to them, their heirs and assigns forever.”

      “ Eighth. I hereby give full power and authority to my said executrix and executors, or whichever of them shall qualify, and the survivors and survivor of them, for the purposes of a division or distribution, or for any other purpose that they, in their best judgment, may think proper, to grant, alien, sell and convey, either at public or private sale, all, or any, real estate owned by me, or to which I shall be entitled, or in which I shall have any interest, at the time of my decease, and to apply the proceeds of such sale or sales in conformity to the provisions of this, my last will and testament.”
    June 15,1887, the will was admitted to probate and letters thereon were issued to Helen L. Mellen, Abner Mellen, Jr., and William C. Banning, the persons nominated as executors by the testator, who entered upon the execution of the trust. September 28, 1888, Helen L. Mellen died intestate, leaving said Abner Mellen, Jr., Helen J. Banning and Maria L. Kendall, her children and Abner M. Wilcox, a grandson, the child of a deceased daughter, her next of kin and heirs. On the death of the widow, each of the three children became entitled to an undivided five-sixteenths, and the grandson to an undivided one-sixteenth of the realty of which Abner Mellen, Sr., died seized. October 15, 1888, letters of administration were granted on the estate of Helen L. Mellen to Abner Mellen and William 0. Banning. November 3, 1888, Abner Mellen, Jr., conveyed his five-sixteenths to Lawrence E. Ellis, who, on the same day, conveyed the same interest to Sarah E. Mellen, the wife of Abner Mellen, Jr. Both deeds were duly recorded November 28, 1888.
    When this action was begun Abner Mellen, Jr., Helen J. Banning, William 0. Banning, her husband, Maria L. Kendall, Abner M. Wilcox and Winifred Wilcox, his wife, were made defendants. William 0. Banning was not at first joined in liis representative capacity. The complaint set forth the title as hereinbefore stated, and demanded a judgment that the premises be partitioned, or, in case they eonld not be, without injury to the interests of the owners, that they be sold and that a receiver be appointed to collect the rents during the pendency of the action. Abner Mellen never appeared in the action. The other defendants answered jointly. They admitted that Abner Mellen, the plaintiff’s husband, by the devise of his father, and by descent from his mother, acquired five-sixteenths of .the premises, but denied that the plaintiff was the owner of five-sixteenths of the premises, and alleged that she had no interest in them except her right of dower as the widow of Abner Mellen.
    The defendants alleged in their answer that when Abner Mellen executed the conveyance of his interest he was indebted to his father’s estate in the sum of $130,116.67; to Maria L. Kendall in the sum of $7,896.35, and to his said two sisters and Abner M. Wilcox, for rents collected from the tenants of said premises, in more than $12,000. It is also alleged that Abner Mellen was required to account in the Surrogate’s Court as the representative of the estate of his father and mother, and that by the decree of that court he. was directed to pay Maria L. Kendall $11,707.36; Helen J. Banning the sum of $11,707.36; to William C. Banning and Abner Mellen, as administrators of the estate of Helen L. Mellen, the sum of $17,561.05, and that it was further adjudged that he was indebted to his father at the date of his death in the sum of $77,000, and that July 20, 1889, judgments were entered on the decree of the surrogate in favor of Maria L. Kendall, Helen J. Banning, and William C. Banning and Abner Mellen, as administrators for the sums aforesaid, and that executions were issued upon those judgments and returned wholly unsatisfied. It is also alleged that Abner M. Wilcox recovered a judgment October 18, 1889, against Abner Mellen for $351.53, and that an execution was afterwards issued and returned wholly unsatisfied, and that Maria L. Kendall assigned her claim against Abner Mellen for $7,896.35 to Banning, Bissell & Co., who, December 16,1889, recovered a judgment thereon for $8,939.36. It is alleged that the conveyances from Abner Mellen to Lawrence E. Ellis and from him to the plaintiff were made with intent to hinder, delay and defraud the creditors of said Abner Mellen and especially to defraud Maria L. Kendall, Helen J. Banning and Abner M. Wilcox, and that said conveyances were void as against them.
    April 24, 1889, Abner Mellen made a general assignment for the benefit of creditors, without preferences, to Gordon McKay, who accepted the trust and entered upon its execution.
    March 6, 1890, Abner Mellen died intestate, leaving him surviving Sarah E. Mellen, widow, Gordon McKay Mellen, son, Stanley Mellen, son, Evelyn Mellen, daughter, his only heirs and next of kin, and on the 14th day of April, 1890, letters of administration were granted on his estate to his widow, Sarah E. Mellen; but this action has not been revived and continued against his representative, and neither his assignee nor heirs have been brought in as parties. On the 6th of August, 1890, an order was made at Special Term directing that the summons and complaint and all the papers in the action be amended by inserting after the name 'William C. Banning the words “ individually and as sole surviving executor of the last will and testament of Abner Mellen, deceased,” and that a copy of the summons and complaint so amended be served on him, and that he be made a party defendant in his representative capacity. This was done, and he appeared and answered, setting up the defenses interposed in the joint answer before served, and also that on the 17th of April, 1890, he executed the power of sale contained in the eighth clause of the will of Abner Mellen, and sold all of the lands devised by him.

      Joseph II. Choate, for the appellants.

      Hmry Dailey, Jr., for the respondent.
   Folljbtt, J. :

Under the fifth clause of the testator’s will his devisees acquired the absolute fee of all the lands of which he died seized, subject to the execution of the power contained in the eighth clause. (1 R. S. p. 739, § 56 ; Mellen v. Banning, 60 Hun, 151; Clift v. Moses, 44 id. 312 ; affd., 116 N. Y. 144.) They took precisely the same estate that they would have done had all of the land been subject to a mortgage, containing a power of sale executed by the testator or by some former owner of the fee. The will did not convert the land into personalty out and out, but it remained realty (White v. Howard, 46 N. Y. 144-162; In the Matter of the Will of Fox, 52 id. 530-537; affd., United States v. Fox, 94 U. S. 315 ; Hobson v. Hale, 95 N. Y. 588), and the devisees and their successors in interest were entitled to the possession of the land and to receive the rents and profits of it. (Clift v. Moses, supra, and the cases therein cited.)

The power of sale contained in the eighth clause is not a beneficial one, but it is a general power in trust. • (1 R. S. p. 732, §§ 78, 79; p. 734, § 94.) The power is eonferi’ed on the executors in their representative capacity and not on them as individuals, and it could be executed only for the purpose of administering the estate committed to their charge as executors. (Sweeney v. Warren, 127 N. Y. 426.) Had it been necessary to sell the realty to pay the debts of the testator, undoubtedly the power might have been exercised for that purpose, and so we shall assume it could have been for the purpose of dividing the estate among those entitled thereto, but we cannot conceive of any other purpose for which it could have been exercised. It is not asserted that any of the testator’s debts are unpaid, nor is it claimed that the attempted execution of the power by the surviving executor was for any purpose except to divide the avails arising from the sale among the devisees, their heirs, grantees and the holders of liens. There being no debts it is apparent that the power could be exercised only for the purpose of dividing the estate among those entitled to it. The power, so far as it authorizes a sal» for the purpose of division, and that is the only purpose for which it now exists, is a mere collateral one, or power in gross, and is not appurtenant to any estate granted to, or trust reposed in, the executors.

In discussing this case wo shall assume, without deciding, that when laud is devised in fee to persons competent to convey their interests, that a power conferred on executors as such, to sell and convey the same laud and divide the avails among the devisees, is valid, and is not repugnant to the devise. Was this power of sale, which could be exercised only for the purpose of division among the owners of the fee, an absolute bar to an action in equity to effect the same purpose ? It seems to us that the question admits of but one answer and that in the negative. It may be that in a case in which it should appear that for any reason a sale under such a power would be more beneficial to the parties’ interest, or that a present sale would bo injurious to their interests, or that some of the owners were not competent to convey, that a court of equity might withhold its judgment. But this question we do not decide, for under our statutes the right of a tenant in common having an estate of inheritance, or an estate for life, or for years, to maintain an action for the partition of the interests, is a legal right. (Code Civ. Proc. § 1632.) The appellants in this case did not claim on the trial that a present partition would not be for the best interests of the parties, and standing as they did, asserting the validity of the sales admitted to be made pursuant to the power for this very purpose, they were not and are not in a position to make such a claim.

In Morse v. Morse (85 N. Y. 53), an action for partition, it was said: The plaintiff, Charles D. Morse, is one of the sons of the testator, and claims that by the will, the five children of the testator first mentioned, and the trustee of his son Edwin, took upon the testator’s death a present legal estate in the farm as tenants in common, subject to a bare power of sale vested in the executor. If this is the true construction of the will, the right of the plaintiffs to maintain an action for partition may be conceded.”

In Blanchard v. Blanchard (4 Hun, 287 ; S. C., 6 T. & C. 551; affd., 70 N. Y. 615), an action for partition, the testator, who died May 10, 1873, devised to his widow and to two of his children the use of his farm until June 29, 1890. ’ lie further directed that within two years after June 29’, 1890, his executor should sell the farm and divide the proceeds arising from the sale among certain persons named in the will. An action to partition the farm was brought by one of the devisees within two years after the death of the testator, and it wras held that the naked power of sale vested in the executor did not suspend the power of alienation, and that its existence was not a bar to an action brought for partition. The execution of a bare power of sale is not a conveyance by the donee of the power, but is regarded as the act of the donor of the power. It was said in the case last cited: “ Before execution, the power is a lien or charge upon the lands (1 K. S. p. 735, § 107), and has no greater effect upon the interests of heirs or devisees than a mortgage made, by the testator, payable at the time fixed for the execution of the power, would have had. No one would question the validity of a mortgage given by a testator to secure .the payment of a sum of money twenty years after his death because it contained the usual power of sale. No doubt such a power in either case obstructs the, sale or other disposition of lands by the owner, but not by reason of the time limited for the exercise of the power. It would ordinarily have the same effect if no restriction as to time were imposed; but the absolute right of alienation of the fee is not affected thereby. In the case before us the residuary devisees took an estate in fee, which, notwithstanding the incumbrance of the power, is neither defeasible nor conditional, and they may alienate it' at pleasure. A conveyance from them and the devisees of the term would pass the whole estate.”

In Purdy v. Wright (44 Hun, 239 ; S. C. fully reported, 8 N. Y. St. Repr. 243) — an action for partition of land — it was held that the existence of a naked power of sale in executors for the purpose of division of the proceeds was not a bar to an action by the devisees for partition. In that case, however, the power had remained unexecuted for more than twenty-five years.

In Duffy v. Duffy (50 Hun, 266; affd., 130 N. Y. 654) — an action for partition — the testator devised one-half of his real estate to his widow, but died intestate as to the remainder, which descended to his heirs. He authorized his executors “ to sell and dispose of said estate at public auction, and to convey the same, with full power to execute a good and sufficient deed in law therefor.” It was held that notwithstanding this power of sale an heir could maintain an action for partition.

The case last cited was commented on in Fritz v. Fritz (43 N. Y. St. Repr. 755 ; S. C., 17 N. Y. Supp. 801), where it was said: “ The case of Duffy v. Duffy (50 Hun, 266; 19 N. Y. St. Repr. 228), in no wise conflicts with this view. In that case there was no devise of the real estate in question or of the proceeds thereof. The will contained a mere naked power of sale, and all that was held was that the real estate descended to the heirs at law, and unless the power of sale was exercised its existence was no bar to partition.”

Henderson v. Henderson (113 N. Y. 1), was an action for the construction of a will which authorized the executor to take entire charge and management of all of the real and personal estate of the testator, lease it, collect the income, rents and profits, make investments, insure, pay taxes, make repairs, pull down buildings and erect new ones; it also contained a power to partition or sell the realty. The question in the case was whether a valid trust was created, and if so, whether it suspended the power of alienation beyond the statutory limit. It was held that a trust was not created, but that the executor was invested with the power of sale together with the power to manage the estate and receive the income and rents until partitioned by him or sold by him as authorized by the will and tlie avails divided. In the course of the discussion it was. said: The powers of partition and of sale being valid, however, the children of the testator took their interests at his death subject to their exercise, and, lienee, one or more of them could not maintain any compulsory partition proceedings, pending the existence of the right in the executor to exercise his powers.” This question was not involved in the case, and the observation quoted was by way of argument.

In Prentice v. Janssen (79 N. Y. 478), the will under consideration directed the executors to sell all of the realty and convert it into money. This was a conversion out and out. The court held that the beneficiaries under the will could, by electing to hold the property as realty, defeat the power of sale. It was said: “ The testator, by the authority and direction to his executors to sell the real estate, constructively converted the same into personal estate, and, being thus converted, the residuary legatees were entitled to take the same as such, and had a right at their election to reconvert into real estate. No distinct and positive act is required for such a. purpose, and the rule applicable to such a case is that in the recon-, version of real estate a slight expression of intention will likewise be considered sufficient to demonstrate an election on the part of those absolutely entitled.”

In that case it was held that the land could be partitioned among the owners notwithstanding the power to sell. When land is devised upon a trust to sell and pay the proceeds to A, although no interest in the land is expressly given to A, yet in equity he is the owner,, and the donee of the power must convey as the equitable owner directs. (Leigh & Dalzell on Conversion, 169.)

Aside from the authorities, we think, on principle, the power, assuming its validity, was not a bar to a voluntary partition among the owners of the fee, nor to an action by any of them for partition. The sale of the land not being necessary for the payment of debts, the executor had no control over it for the ¡mrposes of administration. The owners had the absolute right of possession, together with the right of collecting the rents. They could convey it or divide it among themselves on such terms as they might agree, and either course would'extinguish the power. When land is converted into money by a will the beneficiaries may reconvert it into realty,, if it is not needed for the purposes of administration, and it becomes such, and the power of the executor to sell is extinguished. (Jarman on Wills [6th Am. ed.], 562.) In this case the devisees had renewed old leases and executed new ones of the-property, and treated it as land held by them in common. It does not appear that the attempted execution of the power was at the request of any of the devisees.

On the 17th of April, 1890, Banning, the surviving executor, assuming to act under the power, sold at public auction No. 204 Fifth avenue to George H. Warren for $270,000, subject to the mortgage thereon for $50,000 held by the Mutual Life Insurance Company. The purchaser executed a contract and paid ten per cent, but afterwards refused to take the title because of the pending litigation in respect to it, and brought an action for the recovery of the money he had paid. The records of this court show that he was. successful, and that it was held that the executor could not compel the specific performance of the contract. ( Warren v. Banning, 50 N. Y. St. Repr. 810 ; 21 N. Y. Supp. 883.) No. 6 Mulberry street was bid off at the sale for $27,000, and Ahe East Seventeenth street, property for $47,000, by Benjamin P. Fairchild for Mrs. Banning and Mrs. Kendall, but nothing has been paid for either piece of property, and Mr. Fairchild never executed a contract but assigned his bids to Mrs. Banning and Mrs. Kendall. It does not appear that there has been a valid execution of the power of sale, or that any of the land has passed to purchasers under it. Again, it appears by the record that the appellants to this action moved for and obtained the final judgment confirming the sale made under the interlocutory judgment, which directs that five-sixteenths of the avails of the sales be paid to the plaintiff and a like proportion to Mrs. Kendall and to Mrs. Banning, and one-sixteenth to Abner M. Wilcox. Whether these appellants have accepted of these moneys does not appear from the printed case.

The effect of the power of sale, and its attempted execution, is. not dependent upon any question of fact, but is a pure legal question arising upon the face of the will and a few undisputed facts. This branch of the case was not involved in any question tried before or submitted to the jury.

By the course taken on the trial this action was converted into a creditor’s bill in favor of Maria L. Kendall, Helen J. Banning and Abner M. Wilcox to set aside the conveyances from Mellen to Ellis, and from the latter to the plaintiff, upon the ground that they were fraudulent and void as against creditors. The record shows that ■October 18, 1889, Abner M. Wilcox recovered a judgment against Abner Mellen for $351.53, on which an execution was returned December 19, 1889, wholly unsatisfied, and that January 24, 1890, Maria L. Kendall recovered a judgment against Abner Mellen for $1,386.34, on which an execution was returned March 18, 1890, wholly unsatisfied, and that on January 24,1890, Helen J. Banning recovered a judgment against Abner Mellen for $1,386.34, on which •an execution was returned March 18, 1890, wholly unsatisfied.

The record also shows that February 7, 1891, three judgments were recovered against Abner Mellen for $3,991.57 each, one by Maria L. Kendall, one by Helen J. Banning and one in favor of William C. Banning, as one of the administrators of Helen L. Mellen, deceased. It does not appear that executions have been issued or returned on the three judgments last mentioned.

The defendants, for the purpose of establishing the fraudulent character of the conveyances, asserted and attempted to maintain on the trial before the jury two propositions:

(1) That the property conveyed to the plaintiff largely exceeded in value the amount in which Abner Mellen was indebted to her. (2) That at the time of the conveyance the grantor was insolvent and indebted for the sums for which the aforesaid judgments were recovered, and also indebted to the estate of his father for $77,000 •on nine notes given by the son to the father January 28, 1885. Eight of the notes were for $8,375 and one for $10,000. The first note to become due was payable January 31, 1890, and a note fell ■due on each thirty-first day of January thereafter. The one for ■$10,000, the last to mature, is to become due January 31, 1898.

The contest waged before the jury was principally over these two •questions of fact. The court, at the request of the counsel for the •defendants, submitted to the jury the following written questions:

First. Was the indebtedness of Abner Mellen, Jr., to theplaim tiff on November 5, 1888, the balance shown hy the books of Mellen & Company, amounting with interest to $19,889.62; if not this sum, what sum ? ” The jury answered that the indebtedness was $82,487.09.

Second. What was the value of the interest in the real estate conveyed to plaintiff on November 5, 1888; was it $107,000 ; if not, what was it ? ” The jury found that the value of the interest conveyed in the real estate at the date when conveyed was $80,000,, and the jury also found a general verdict for the plaintiff.

It is urged that the special findings which embrace the important issues in this case are contrary to the weight of the evidence. We will briefly examine the evidence on which these findings rest. First. Is the evidence sufficient to sustain the finding that the value of the five-sixteenths interest conveyed to the plaintiff at the date of the conveyance was worth $80,000 ? Two experts were called by each side and gave their opinion of the value of the property. The property was described and its rental value proved, and from this evidence and the opinions of the four experts, we think the finding of the jury as to value cannot be set aside as against the weight of evidence. The learned counsel for the appellants concedes in his brief that the result of the evidence of Meyer, their principal witness on the question of value, was that the interest when conveyed was worth $95,000, but $15,000 more than the value as found by the jury. This difference of opinion as to value of this kind of property involved in litigation, part of the owners claiming that title could only be acquired to it through the exercise of the power of sale, and one of the owners claiming title could be. acquired only through a judgment in partition, is not so wide as to> authorize this court to say that the opinion of the jury is contrary to the weight of evidence. On the contrary, upon a consideration of all the circumstances, we think that the estimate of the jury of the value of the property was a fair one. The learned trial judge who saw the witnesses and heard them testify so thought and confirmed the verdict.

Is the amount of Abner Mellen’s indebtedness to the plaintiff, as found by the jury, sustained by the evidence? It was proved beyond dispute, and partly by witnesses called by the defendants, that the plaintiff, for several years prior to the conveyances, was in the receipt of a considerable income from her own estate. The amount of her income was established by checks for dividends due her on shares which she held in various corporations. These checks were produced and are a part of this record. That she was the owner of these dividends was conclusively established and was not questioned. She testified, and in this she was supported by the testimony of others, that many of these checks were turned over to the firm of Mellen & Co., of which her husband was a member, and that others were turned over to her husband, or applied in-payment of the expenses of the family. It is true, as the learned counsel for the appellants claims, that as to a few of these checks the testimony given by the plaintiff conflicts with that given by her husband, but in not very important particulars. This we do not regard as singular, or as evidence of perjury or intended fraud on the part of either. There were a great number of these checks received from time to time during several years, and it would be most remarkable if both should agree as to when and how every one was turned over and the avails applied. The disagreements pointed out in the brief of the counsel are of a nature that tend to show that the husband and wife had not agreed upon a statement of what should be testified to by each to support the plaintiff’s case. We do not think that we should be justified in holding, contrary to the verdict of the jury and confirmed by the judge who heard the case, that the jury should have found that the plaintiff and her husband testified falsely in respect to the use that was made of those various checks. Had there been doubt about the fact that the plaintiff actually possessed these moneys, a different question would be presented. We are of the opinion that the evidence is quite sufficient to support the finding of the jury that those various checks were turned over or applied for the benefit of the plaintiffs husband as testified to by them. Mellen’s indebtedness for the sum represented by those checks having been established, was the jury justified in including in the sums of the indebtedness, compound interest ? Ail executory agreement between debtor and creditor that compound interest shall be paid, cannot be enforced by the creditor. But if the interest be added to the principal and a new security given, it is valid and enforcible against the debtor, or a debtor may, in settling the claim, pay compound interest, and if not done with intent to defraud creditors, no advant&ge can be taken of it by them.

From 1870 to January 20,1885, the firm of Mellen & Co. was composed of Abner Mellen, Sr., owning one-half interest, Abner Mellen, Jr., owning three-eighths interest and John B. Taylor, owning one-eighth interest. On the date last mentioned, Taylor sold out his interest in- the firm and retired. He was called by the defendants and testified that on the date of his withdrawal from the firm, Abner Mellen, Jr., was indebted to. the firm in the sum of $77,000 for which the nine notes were given, and that he (Taylor) was indebted to the firm in upwards of $1,000, for which he gave seven notes, and that all of these notes were taken by the father. When Taylor withdrew the remaining members of the firm assumed all of its liabilities. The firm was continued by the father and son under the same firm name until April 30, 1885, when the father transferred his interest to the son, who agreed to pay all of the debts of the firm, and the son continued the business in his own name until May, 1888.

Campbell, who was called by the defendants, testified that he was the bookkeeper of Mellen & Co. and Abner Mellen, Jr., from April 10, 1881, to December 31, 1887, and that during that time it was the custom of the firm- at the end of each calendar year to credit Mrs. Mellen with interest on all sums of money which she had advanced during the year, and so form a new principal for the next year.

Mellen testified in his deposition that it was agreed by the firm and by him that his wife should be credited with such sums as she advanced to the firm when advanced, and that interest should be allowed on each item until the close of the year, and then add the interest to the account and form a new principal. There is no evidence in the case that tends to contradict this, but the books of the firm and of Abner Mellen, Jr., show that that practice prevailed for several years. Such being the agreement, the creditors of Abner Mellen cannot complain that he fulfilled the agreement by making a conveyance of his property. The fact that part of the consideration for the conveyance by Abner Mellen to the plaintiff was for compound interest allowed pursuant to a previous agreement and practice between them,, is no ground for setting aside the deed as fraudulent. A failing debtor may pay or secure to be paid a debt barred by the Statute of Limitations, or one which he may defend as usurious ; or if he has agreed to pay interest upon unpaid interest he may pay or secure its payment, and if done in good faith, the payment made or security taken cannot be set aside, by his creditors. The amount of the husband’s indebtedness to the wife was a question of fact for the jury, and the evidence is sufficient to sustain their finding.

The jury found that the father in his lifetime surrendered to the son the nine notes for $77,000. Neither the existence nor the amount of this debt was an issue of fact on which the decision turned, but the amount of Abner Mellen’s liabilities to others was competent as bearing upon the question of the intent with which the conveyance to the plaintiff was made. The transfer to her having been found to have been made in good faith and for a sufficient consideration, the fact that he owed his father’s estate $77,000 is not sufficient to justify setting aside the conveyance as fraudulent. The money arising from the sale under the interlocutory judgment has been deposited with a trust company, subject to the order of the court, and if it shall be determined in future proceedings that the estate of Abner Mellen, Sr., has a claim against the plaintiff’s husband which should diminish his share in his father’s estate it can be adjusted by an appropriate direction.

The view we have taken of the questions hereinbefore discussed renders it unnecessary to determine whether a judgment setting aside the conveyances as fraudulent could have been rendered in this action without making the assignee or heirs at law of Abner Mellen parties.

By an order made by this court in this case the referee appointed by the judgment to sell the property has been directed to deposit the five-sixteenths of the avails arising from the sale, and claimed by the plaintiff, with a trust company, to await the final determination of the question, what liens existed on this share which are prior to the plaintiff’s claim % By this order the subject of the litigation is the money instead of the land.

We could stop the discussion at this point were it not for thefaotthat it may hereafter be claimed in behalf ©f the plaintiff that, by the general verdict;and the thirty-second and thirty-third findings of the court, it is established that Abner Mellen, in his lifetime, surrendered his claims against his son to him. As we have before stated, this was not an issue in the case, but a mere incidental fact bearing on the real issue, and it has been so held by this court (In re Mellen’s Estate, 50 N. Y. St. Repr. 750; 21 N. Y. Supp. 811.) The thirty-second and thirty-third findings of fact cannot, in the face of the written admissions of Abner Mellen, Jr., and the other evidence which shows that the notes were uncanceled and in the possession of his father at his death, be sustained, but must be set aside together with the general verdict in so far as it can be deemed to sustain these findings.

Whether Abner Mellen, Jr., was or was not indebted to his father’s estate could not be determined in this action without the presence of his administratrix in her representative capacity as a party. It is usual to determine the existence of liens on the shares of tenants in common by a reference, and we think that the clauses in the final and interlocutory judgment which directs the referee to pay to the plaintiff five-sixteenths of the avails of the sale, should be reversed and her interest be directed to be paid into a trust company to await the determination of what, if any, liens existed on her share, and that any party to this action be given leave to apply to bring in any such parties as may be necessary to have determined what liens exist, their amount and whether prior or subsequent to the claim of the plaintiff, and that a reference should be ordered for the purpose, of determining this question. Several exceptions to the reception and exclusion of evidence are discussed in the brief of the learned counsel foi\the appellant, some of which might be regarded as sufficient to require a new trial in a legal action; but this is an equitable one, and we think that substantial justice does not require that a new trial be granted, and that these exceptions should be disregarded pursuant to section 1003, Code of Civil Procedure.

The judgments should be modified by reversing the provisions holding that the plaintiff is entitled to five-sixteenths of the avails of the sale, free from any lien, and also those provisions directing the avails to be paid directly to her, and, as so modified, the judgments should be affirmed, without costs to either party.

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

Judgments modified as directed in opinion, and, as modified, affirmed, without costs to either party.


author: Eollett, J. :

text:
    Mary J. Killoran, as Administratrix of the Estate of John H. E. Killoran, Appellant, v. Clinton W. Sweet, Respondent.

      Life insurance policy, assigned to protect a purchaser of land charged with an annuity — the assignee is not obliged to pay premiums unless he has agreed to do so.

    Laud devised, charged with a legacy to be paid in yearly installments, was conveyed to one Sweet, who was protected from liability for future payments of the legacy by an assignment of a policy of insurance on the life of the legatee, running to the latter, and his administrators and assigns. Sweet did not pay the premiums falling due under this policy, and the policy expired. There was no evidence that he had agreed to pay the premiums; although he had received a sum of money sufficient to pay them at the time of the assignment, for the balance of which in his possession in an action brought against him by the legal representatives of the legatee he consented to have judgment entered against him.

      Held, that Sweet was not liable for his failure to pay the premiums in the absence of an agreement to do so, and that there was no evidence of such an agreement having been made by him.
    Appeal by the plaintiff, Mary J. Killoran, as administratrix, etc., from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the cleric of the city and county of New York on the 24th day of March, 1893, on a verdict directed by the court in her favor and against her objection.

      Henry A. Forster, for the appellant.

      Edward Jacobs, for the respondent.
   Eollett, J. :

In October, 1869, Margaret Killoran died, leaving a will which was duly probated, by which she devised the fee of No. 450 Sixth avenue to Dominick J. Killoran, her son, subject to a charge of $4,500, payable to John II. E. Killoran, another son, in installments of $250 on each first day of May, beginning May 1, 1870, and ending May 1, 1887.

It was provided that in case said annuitant died before the whole sum should be paid the subsequent annual payments were to be paid to persons mentioned in the will.

Dominick J. Killoran paid to his brother $250 annually for eight years, $2,000 in all, the last payment being made May 1, 1877. This left a charge of $2,500 on the premises, payable in ten annual installments on each first day of May thereafter. On the 22d of November, 1877, Dominick J. Killoran conveyed the premises to the defendant in this action by a full covenant deed, and at the same time John H. E. Killoran acknowledged the receipt of all previous annual payments due him and conveyed all of his interest in the premises to the defendant, and for the purpose of securing the defendant against the liability of paying annual sums to other persons in case John IT. E. Killoran died before the expiration of the ten years within which the remaining $2,500 were to be paid, Dominick J. Killoran procured a policy of insurance for $2,500 on the life of John H. E. Killoran, payable to his representatives or assigns. It bore date November 20, 1877, and the annual premium thereon was $56.75, amounting for ten years to $567.50, winch sum Dominick J. Killoran delivered to the defendant wherewith to pay the premiums on the policy for ten years. On the day the policy was issued it was assigned by John H. E. Killoran to the defendant.

July 16, 1886, John H. E. Killoran died of delirium tremens at Bellevue Hospital in the city of New York. Subsequently letters of administration were granted to his widow, who brings this action to recover damages against the defendant for permitting the policy to lapse. She claims that she is entitled to recover $2,872, the amount which would have been due on the policy had all the premiums been paid and all of the conditions of the policy kept and performed. The defendant answered that the policy was solely for his indemnity and benefit, and that he stopped paying the premiums because the insured violated the terms of the policy by impairing his health by the use of alcoholic stimulants and by traveling and residing outside of» the limits of residence and travel permitted by the terms of the policy. To establish the liability of the defendant for damages arising from his failure to pay the annual premiums it was necessary for the plaintiff to show that the defendant was under some obligation to make the payments. This was the issue which she tendered in her complaint and which she was bound to establish in order to recover. The defendant introduced no evidence, and the case was disposed of on that given by, and in behalf of, the plaintiff. She called the defendant, and he was examined in respect to the terms of the agreement under which the policy was assigned to and the money left with him for the payment of future premiums. He testified that he never promised to keep the policy alive, and that it was issued and assigned to him solely for his security. There is nothing in the case impeaching or discrediting this testimony; indeed, the natural inference deducible from all the evidence is that this policy was taken out and paid for by Dominick J. Killoran and assigned by John II. E. Killoran to the defendant solely for the latter’s security against any claims that might be made by others for the payment of the sum charged On the land. There is not the slightest conflict in the evidence, and there was no disputed question of fact, and no question for the jury. The defendant had in his hands $283.75 of the money delivered to him by Dominick J. Killoran which he had not expended in paying premiums on the policy, for which amount he consented that a verdict might be directed against him, with interest.

Under the complaint the plaintiff was not entitled to recover this sum in this action, but the defendant in his answer averred that he agreed with Dominick J. Killoran to pay to the plaintiff such part of $567.50 as he should not expend in the payment of premiums on the policy.

When John II. E. Killoran died there was but one annual payment of $250 left as a charge on the land, which the defendant has satisfied. It seems to us that the bare statement of the facts of this case demonstrates without the aid of argument and illustration that the plaintiff is not entitled to recover.

The vital allegation in her complaint is “that said defendant agreed out of said moneys to keep said policy alive by paying premiums thereon which should become due, including the premium which should become due on the 20th day of «November, 1886.” This allegation she not only failed to prove, but absolutely disproved it by her own witness.

The judgment is right and must be affirmed, with costs.

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

Judgment affirmed, with costs.


author: Follexx, J.:

text:
    Emma C. Wooster, Respondent, v. The Broadway and Seventh Avenue Railroad Company, Appellant.

      Master and servant — inadmissible evidence as to carefulness — objections to evidence.

    It is not competent for a plaintiff, seeking to show that tiie acts of her servant did not contribute to an accident, to give evidence to the effect that he was generally . careful.
    The particularity required in the specification of objections to evidence, considered.
    Appeal by the defendant, the Broadway and Seventh Avenue Railroad Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the city and county of New York on the 15th day of November, 1892, upon the verdict of a jury rendered at the New York Circuit, and also from an order made at the New York Circuit, and entered in said clerk’s office on the 22d day of November, 1892, denying the defendant’s motion to set aside the verdict and for a new trial.
    This action is for the recovery of damages for personal injuries received in a collision between a coupé, in which the defendant was driving, and defendant’s street car, caused, as it is alleged, by the negligence of the driver of the car. The plaintiff also seeks to recover special damages, the sum paid for the attendance of her physicians and nurse and the expenses of repairing the coupé.
    November 21, 1887, the plaintiff was driving east on Forty-fifth street in a coupé drawn by one horse, and driven by a coachman, who attempted to cross defendant’s track in Broadway in front of a car approaching from the south. A collision occurred by which the plaintiff’s left collar bone was broken and the coupé injured. The issues of fact upon which the case turned were : (1) Did the driver of the car negligently cause the collision? (2) did the driver of the coupé negligently contribute to the accident ? Upon these issues the testimony was conflicting, but the jury found both in favor of the plaintiff.

      Bronson Winthroj), for the appellant

      W. T. B. Millihen, for the respondent.
   Follexx, J.:

On the trial the plaintiff was asked : “ Q. The coachman who was driving at the time, how long had he been in your employment ? A. Oh, lie had been with me four or five years then; he is with us still. Q. And did you find him careful or careless ? ” Objected to by the defendant as immaterial, incompetent and irrelevant. Objection overruled. Defendant excepted. “ A. Oh, very careful; a very careful driver, indeed. It was a gentle horse.” Like evidence was given by the plaintiff’s husband over the defendant’s objection and exception. This evidence was undoubtedly supposed to bear on the issue of contributory negligence of the plaintiff’s driver. It certainly had no relation to any other issue. The issue was not whether the plaintiff had negligently employed or continued in her service a careless or unskillful driver, nor whether he had been careful or negligent on previous occasions, but it was, did his negligence contribute to this accident ? ”

This evidence was not relevant to this or to any other issue in the case, and was incompetent. (Jacobs v. Duke, 1 E. D. Smith, 271; Warner v. N. Y. Central R. R. Co., 44 N. Y. 465, 477 ; Maguire v. Middlesex R. R. Co., 115 Mass. 239; Whitney v. Gross, 140 id. 232; Mays v. Millar, 77 Penn. St. 238; Whart. Neg. 169; Whart. Ev. §40; Abb. Tr. Ev. 584.)

It has been many times held that it is not competent for a plaintiff to give evidence that the person by whom the alleged negligent act was committed had previously committed similar acts, or that he was generally negligent or unskillful. The same rule is applicable to a plaintiff seeking to show that the acts of her servant did not contribute to the accident.

The plaintiff was permitted to show on the trial, over defendant’s objection, that it was incompetent, irrelevant and immaterial,” the expenses of her cure and of repairing the coupé. It appears that she is a married woman living with her husband, and the presumption is that he is liable for and discharges the ordinary expenses of the household, and of the care of his wife and family. Before the plaintiff could be entitled to recoverfor these items it was necessary for her to show that the expenses were paid out of her own estate. This was not done. But the objection raised to this evidence was notas specific-as it should have been. The objection did not call specifically to the mind of tlie court and of the plaintiff’s counsel that the evidence was objected to on the ground that the plaintiff was not, but that her husband was, entitled to recover for these items, without showing that she had personally paid the charges or had become liable to pay them. Had this objection been made it might have been obviated on tlie trial by showing that the plaintiff had a personal estate, and had paid the charges out of it, or that she has become liable to pay them. (Thomp. Trials, §§ 693 et seq.) But we think for the first error discussed that a new trial should be had. The question of negligence and of contributory negligence is a close one, and we cannot say that the erroneous evidence did not influence the jury.

The judgment and order shoidd be reversed and a new trial granted, with costs to the appellant to abide the event.

Yan Brunt, P'. J., and O’Brien, J., concurred.

Judg'nieut and order reversed and new trial granted, with costs to the appellant to abide the event.


author: Follett, J.:

text:
    Connecticut Mutual Life Insurance Company, Respondent, v. Jacob S. Cornwell, Ann D. Cornwell, Catharine D. Cornwell and Andrew G. Cornwell, by their Guardian ad litem, Appellants, Impleaded with Others.

      Foreclosure of a lien — pleading — a single cause of action — a former owner of the lien an unnecessary party to its enforcement.

    A complaint alleged that the plaintiffs right to a mortgage lien arose by virtue of a mortgage executed to it by the then owner of the fee, and also by reason of money borrowed from him, for the purpose of paying valid lions then existing, and applied in payment thereof, and prayed for judgment foreclosing the mortgage, and also in case it was found that at its date the mortgagor was not the owner of the fee, that the discharge of the prior liens paid with the plaintiffs money be set aside, and the liens he restored and foreclosed.

      Held, that the complaint stated hut a single cause of action.
    When all of the interest of the former owner of a lien has been divested, either by formal assignment or by operation of law, he ceases to be a necessary party to an action for its enforcement.
    Appeal by tlie defendants, Jacob S. Cornwell, Ann I). Cornwell, Catharine D. Cornwell and Andrew G. Cornwell, from an interlocutory judgment of tlie Supreme Court in favor of the plaintiff, entered in the office of the clerk of the city and county of New York on the 15th day of April, 1893, overruling the defendants’ demurrer to the plaintiff’s complaint.

      Arthur Furber, for the appellants.

      Jolm J£. Bowers, for the respondent.
   Follett, J.:

The appellants demurred to the complaint on two grounds: (1) That two causes of action have been improperly united, and (2) that there is a defect of parties defendant because the former owners of the prior liens sought to be restored and enforced are not made parties.

The relief sought by this action is an adjudication that the plaintiff has a lien on the land for $22,000 which it is entitled to enforce as against the borrower and all persons having subsequent liens. It is alleged in the complaint that plaintiff’s right to a lien, arose by virtue of a mortgage executed to it July 3, 1889, by the then owner of the fee to secure the payment of said sum, and also, because the money was borrowed for the purpose of paying valid liens then existing and that it was applied in payment of those liens. A judgment is asked for the foreclosure of the last mortgage, and also, in case it is found that at its date the mortgagor was not the owner of the fee, that the discharge of the prior liens paid with plaintiff’s money be set aside, the liens restored and foreclosed. These' allegations constitute but a single cause of action, the existence of a lien for $22,000 and the right to enforce it. The fact that the lien is alleged to exist by reason of several instruments all affecting the same property and parties does not constitute two causes of action. Suppose the plaintiff, when it had loaned its money, had paid it directly to the holders of the liens, taken assignments of those liens and held them, together with its new mortgage as security for the loan, could it be maintained that all of these securities affecting the same property and persons could not be foreclosed in one action, or that by being set forth in the complaint that it contained two causes of action which could not be united? We think not. The complaint contains allegations showing that the plaintiff is entitled to be subrogated to the rights of the holders of the former liens, which allegations the appellants by their demurrer admit. This being so, the plaintiff is the ecpiitable owner of these liens and may enforce them the same as if they had been formally assigned, to the plaintiff. When a debtor gives his note for a liability previously contracted the creditor may, in an action brought to recover the amount due, allege that the debt exists by virtue of the last promise, the note, and that it also exists by reason of a sale of property, and a recovery may be had on the original consideration or on the last promise. In such a case but a single cause of action is set out. The first ground of the plaintiff’s demurrer is untenable.

The former owners of the liens paid off by the plaintiff’s money are not necessary parties to this action for the reason that all of their rights are as effectually vested in the plaintiff as though the liens had been formally assigned to it. (Ellsworth v. Lockwood, 42 N. Y. 89-96; Lidderdale v. Robinson, 2 Brock. 159 ; affd., 12 Wheat. 594; Robinson v. Leavitt, 7 N. H. 73; Rigney v. Loveyoy, 13 id. 247-252; Wilson v. Kimball, 27 id. 300-307; Pom. Eq. Juris. § 1211.)

Inlaw the word “ subrogation ” denotes putting a third person who has paid the amount due the creditor in his place. There are two kinds of subrogation : (1) Conventional; and (2) legal. A conventional subrogation occurs when the creditor formally transfers his claim to a third person. A legal subrogation arises when, by operation of law, a third person becomes equitably entitléd to stand in the place of the creditor. The latter mode of subrogation as effectually divests the creditor of his title to the debt or security and vests it in the third person as the former. (See cases above cited.)

It is well settled that an assignor of a mortgage who has no remaining interest in it is not a necessary party to an action brought to foreclose it. (Whitney v. McKinney, 7 Johns. Ch. 147; Slee v. Manhattan Company, 1 Paige, 48-52; Ward v. Van Bokkelen, 2 id. 289 ; Topping v. Van Pelt, Hoff. Ch. 545 ; Bloomer v. Sturges, 58 N. Y. 168, 175; Clark v. Mackin, 95 id. 346.) When all of the interest of a former owner of a lien has been divested, no matter whether by a formal assignment or by operation of law, he ceases to be a necessary party to an action for its enforcement. The .appellants’ second ground of demurrer is not well taken.

The judgment should be affirmed, with costs, with leave to the appellants to withdraw their demurrer on payment, within twenty days, of the costs included in the interlocutory judgment and the costs of this appeal.

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

Judgment affirmed, with costs, with leave to the appellants to withdraw their demurrer on payment, within twenty days, of the costs included in the interlocutory judgment and the costs of this-appeal.