text:
    The People, ex rel. Adon Smith, Jr., Appellant, v. The Commissioners of Taxes and Assessments of the City of New York et al., Respondents.
    (Argued October 6, 1885 ;
    decided October 21, 1885.)
    A committee of the estate of a lunatic is not an agent or trustee within the meaning of the provision of the Revised "Statutes (1 R. S. 389, § 5, as amended by § 3, chap. 176, Laws of 1851), which provides that every person shall he assessed in the town or ward where he resides, for “ all personal estate in his possession, or under his control as agent, trustee,” etc.
    The committee discharges a trust, hut such trust is in the court whose officer he is, and the lunatic is not divested of his estate ; its control and management simply are taken from him.
    Where, therefore, S., who resided in the city of New York, was appointed committee of the estate of a lunatic, who resided in Madison county, and the board of tax commissioners of the city assessed to S. “ as committee,” etc., the personal estate of the lunatic, held, that the assessment was erroneous, and was properly vacated.

      It seems that the personalty should have been assessed to the lunatic at his place of residence.

      People, ex rel. Smith, v. Com’rs, etc. (36 Hun, 359), reversed.
    Appeal from order of the General Term of the Supreme Court, in the first judicial department, made Hay 8, 1885, which reversed an order of Special Term, reversing the action of the commissioners of taxes and assessments, in the city of New York, in assessing to the relator “ as committee of Sidney Smith ’’ the personal property held by him as such committee. (Reported below, 36 Hun, 359.)
    The material facts .are stated in the opinion.

      William Man for appellant.
    The lunatic remains the owner of his property in spite of the appointment of the committee by the Supreme Court. (3 R. S. [5th ed.] 134, §§ 12, 17; Code of Civ. Pro., §§ 2320,2322, 2343; McKillip v. McKillip, 8 Barb. 153; Lane v. Schermerhorn, 1 Hill, 97; Pickersgill v. Read, 5 Hun, 170.) The committee is not an agent, trustee or guardian-within the meaning of section 5 of article 1 of the act in regard to taxation. (2 R. S. [7th ed.] 989; Boardman v. Supervisors, etc., 85 N. Y. 359; Ortley v. Messere, 7 Johns. Ch. 139.) The committee, who is merely the agent of the court under its order, and not under any contract, deed or will, is not taxable, and the person wh'o is the real owner of the property is taxable where he resides. (Matter of Kellinger, 9 Paige’s Ch. 62.)

      D. J. Dean for respondents.
    The relator, as committee of Sidney Smith, was liable to assessments for the personal property held by him in that capacity. (2 R. S. [7th ed.] 989, 991.) All of the elements necessary to create a trustee exist in the case of a committee. He is a person in whom “ some estate, interest or power in or affecting property of any description is vested for the benefit of another.” (Pickersgill v. Read, 5 Hun, 170; Ortley v. Messere, 5 Johns. Ch. 139; Person v. Warren, 14 Barb. 494; Thomas v. Bennett, 56 id. 201; Fields v. Fowler, 2 Hun, 401.) When the committee is appointed, the committee, and not the court, becomes the trustee within the meaning of the statute. (Matter of Kellinger, 9 Paige’s Ch. 62.) The term “ trastee,” as used in the statute, includes the relator. (Duroussiam, v. United States, 6 Cranch, 314, 323 ; Wakefield v. Fargo, 90 N. Y. 213; Holmes v. Carley, 31 id. 290; Chase v. N. Y. C. R. R. Co., 26 id. 523.)
   Danforth, J.

The relator, by an order of the Supreme Court entered in Madison county, was appointed committee of the estate of one Smith, a lunatic, who resided in that county. The relator lived in the city of New York, and its board of tax commissioners assessed to him, “ as committee,” the personal estate of the lunatic. Upon certiorari the court at Special Term vacated the assessment on the ground that the estate was not in possession of the relator, or under his control as “ agent, trustee, guardian, executor or administrator,” within the meaning of the statute (infra). Upon appeal to the General Term the decision was reversed.

There was no question that the property was liable to taxation, but the contention of the relator is that it should have been assessed against the lunatic at his place of residence. This depends upon the statute which prescribes the place in which property is to be assessed. The general provision under the Revised Statutes (Vol. 1, tit. 2, pt. 1, chap. 13, art. 1, § 5), as amended in 1851 (Laws of 1851, chap. 176, § 2), so far as it relates to this case, is that “ every person shall be assessed in the town or ward where he resides, when the assessment is made, for all personal estate owned by him, including all personal estate in his possession or under his control as agent, trustee, executor or administrator, and in no case shall property so held under either of these trusts be assessed against any other person.”

The relator cannot be regarded as “ agent,” for that designation, as we have already held, only applies to one whose principal is a non-resident of the State. (Boardman v. Supervisors, etc., 85 N. Y. 359.) It is obvious that he is neither executor nor administrator, nor is he assessed as such, nor as trustee or guardian. Strictly, then, the statute has not been followed. It says: “ When a person is assessed as trustee, guardian, executor or administrator, he shall be assessed as such, with the addition to. his name of his representative character.” Hor is the style or title by which the relator is described convertible with the statutory appellations. The office of committee is as well defined and specifically referred to in law and in the statutes, as that of guardian, executor or administrator.

The person filling either may be said to perform the function of a trustee; and had the legislature intended by that general word to embrace all persons who might be so described, it is difficult to see why they selected specific terms by which particular characters are indicated unless they intended to exclude others, nor why the word “ trustee ” was coupled with them unless it was to be taken in a technical sense and limited in its application to such persons as might by express appointment fill the office and by virtue of it hold the legal title to property as trustee under some trust authorized by statute. A different construction would deprive the prohibition of the statute (supra), of any force. It declares that “ in no case shall property so held under either of these trusts be assessed against any other person.” They are words of limitation and include only such persons as are invested with a delegated power under one or the other of the terms referred to. Such is not the case with the relator,

A trust is no doubt discharged by a committee of the estate of a lunatic, but the trust is in the court, and the committee acts under its appointment as agent, officer or bailiff. Through him the court must preserve the property intrusted to it and therewith maintain the lunatic and his family. But the lunatic is not divested of his estate or property rights, and the legal title thereto remains as before. Nothing has been taken from him but its control and management (Beverley’s Case, Coke’s Rep., part IV, p. 123 ; Lone de Oros v. Schermerhorn, 1 Hill, 97; McKillip v. McKillip, 8 Barb. 552; Code of Civ. Proc., chap. 17, tit. 6), and it is only by statute that certain actions even in respect thereto can be brought in any name save his. (Laws of 1845, chap. 112.) In a general sense and for certain purposes an “ agent ” is a trustee; yet it was deemed necessary to bring such a representative within the statute by amendment. The duties of attorney or factor or bailee would permit the same interpretation, and by the Code regulating procedure in actions any one with whom a contract is made for the benefit of another is to be deemed a trustee of an express trust and permitted to sue without joining with him the person for whose benefit the action was prosecuted (§ 449), but it cannot be supposed that such a person would be embraced within the statute which lies at the foundation of this proceeding. Something more than a trust reposed in one is required to make him a “ trustee,” "according to its intent. So is it with the “committee ” of a lunatic. He executes an important trust, but it is by virtue of a mere authority without any interest. It would seem to follow that the relator as “ committee ” could not be liable to assessment upon the property held by him in that capacity, but that it should be assessed to the lunatic, its owner, in the place where he resides. (1 Rev. Stat., title 2, part 1, chap. 13, art. 1, § 5.)

The order of the General Term should, therefore, be reversed, and the order of the Special Term affirmed, with costs in each court.

All concur.

Ordered accordingly.


source: Caselaw Access Project

author: Finch, J.

license: Public Domain

text:
    Fanny B. Haight, Respondent, v. James C. Brisbin et al., Appellants.
    (Argued October 6, 1885;
    decided October 27, 1885.)
    Where an executor is empowered and directed by the will to sell real estate, in case of gross negligence or bad faith on his part in failing to perform this duty, the surrogate has power to remove him therefor, to compel him to account, and upon such accounting to charge him with any loss to the estate resulting from such negligence or bad faith, (Code of Civ. Pro., §§ 2605,2685.)
    The surrogate has the same jurisdiction in the case of a testamentary trustee. (Code of Civ. Pro., §§ 2807, 2817.)
    Until a default in this respect is established before the surrogate, an action to recover the damages resulting therefrom may not be maintained against the sureties upon a bond given by the executor or trustee.
    The provision of the Code of Civil Procedure (§ 814), authorizing an action for a breach of the condition of a bond given in the course of “an action or special proceeding” has no application.

      It seems, thaf in casé of a default, for which the surrogate has no jurisdiction to give redress, the remedy of the party injured is in equity, to charge the executor, not by action at law upon his bond.

      Haight v. Brisbin (36 Hun, 579), reversed.
    Appeal from judgment of the General Term of the Supreme Court, in the third judicial department, entered upon an order made May 27, 1885, which affirmed a judgment in favor of plaintiff, entered upon an order overruling a demurrer to plaintiff’s complaint. (Reported below, 36 Hun, 579.)
    This action was upon a bond executed by defendant, Giles S. Brisbin, with the other defendants as sureties, given in pursuanee of an order of the surrogate, conditioned that said Giles S. Brisbin, as executor and trustee under the will of Catherine S. Bailey, should faithfully discharge the trusts, and obey all lawful decrees and orders of the surrogate touching the administration of said estate.
    The complaint set forth a clause in the will of said testatrix directing and empowering the executor to sell and convey all the real estate of which she died seized and to invest and hold the proceeds in trust under certain trusts declared therein. As a breach of the condition of the bond it was alleged that the executor was “guilty of gross neglect or bad faith, in failing to sell said real estate and invest the proceeds as required.”
    Further facts appear in the opinion.

      P. C. Ford for appellants.
    No action at law can be sustained against a trustee unless there has been an accounting, or an express promise to pay a certain sum. (De Forrest v. Parsons, 2 Hall [Supr. Ct.], 159; Dias v. Brunnell, 24 Wend. 9; McCrea v. Purmort, 16 id. 460 ; Duval v. Covenhoven, 4 id. 561; Perry on Trusts, § 17.) In whatever way, or for whatever purpose, or in whatever form trusts under wills are created, they are exclusively within the jurisdiction of courts of equity. (2 Story’s Eq. Jur., § 1058; Hill, on Trustees [Am. ed.], 518 and 66, 808 and note; Curtis v. Smith, 6 Blatchf. 537; Johnson v. Johnson, 120 Mass. 465 ; Davis v. Coburn, 128 id. 377; Probate Court v. Kimball, 42 Vt. 320; Cahoon v. Cahoon, 48 id. 49.) The sureties cannot be prosecuted on their bond until the default of the executor has been first established in a proper proceeding against him in the Surrogate’s Court. (Code of Civ. Pro., §§ 2607, 2608, 2609 ; Hood v. Hood, 85 N. Y. 561; People v. Barnes, 12 Wend. 492; Stilwell v. Mills, 19 Johns. 304; Salisbury v. Van Hoesen, 3 Hill, 77; People v. Rowland, 5 Barb. 449 ; Thayer v. Clark, 48 id. 243; Estate of Schofield, 3 Civ. Pro. B. 323; Brown v. Balde, 3 Lans. 287.) The bond in question being taken by the surrogate, an officer of limited jurisdiction, in pursuance of special statutory provisions, as the same statutes prescribe the mode of its enforcement, no other can be pursued. (Hood v. Hood, 85 N. Y. 574; People v. Corliss, 1 Sandf. 247; 14 Beav. 290; Estate of Schofield, 3 Civ. Pro. R. 323; 1 Dem. 196; Redf. Law & Pr., Surr. Ots. [3d ed.] 402, 403; Hancox v. Wall, 28 Hun, 214; Matter of Hunter, 3 Redf. 175.) Whenever the real estate in question is sold, the proceeds will become legal assets in the hands of the executor, for which he will be bound to account before the surrogate as personal estate. (Hood v. Hood, 85 N. Y. 570; Stagg v. Jackson, 1 .id. 206.) Surrogates have now full jurisdiction over the accounts of testamentary trustees. They may compel a judicial settlement of their accounts and the payment of debts and legacies. (Code of Civ. Pro., §§ 2802-2820; Glover v. Holly, 2 Bradf. 291; Gladding v. Follett, 2 Dem. 58; Daley’s Estate, 1 Tucker, 95; Adair v. Brimmer, 74 N. Y. 539; Seaman v. Duryea, 11 id. 324.)

      Edward Fitch Bullard for respondent.
    The executor is personally liable for neglecting and refusing to sell the real estate. (Tiffany on Trustees, 670, 671, 680.) An action like this may be brought by leave of the court, which was granted in this case. (Hood v. Hood, 85 N. Y. 567, 573.) As the surrogate had no jurisdiction, he could never put the sureties in default under the second condition of the bond. (Shellington v. Holland, 53 N. Y. 371.) The sureties in this case gave the bond with their eyes open, and are liable for prior as well as subsequent acts. (Schofield v. Churchill, 72 N. Y. 565 ; Code, § 2596.) They are estopped from questioning the jurisdiction of the surrogate to require the bond. (Thayer v. Clark, 4 Abb. Ct. App. 391.) Formal objections to the bond are not fatal. (Gould v. Wilson, 81 N. Y. 573.)
   Finch, J.

The argument on this demurrer concedes, as a general rule, that the sureties upon the bond of an executor or administrator are not liable until the default of their principal has been established before the surrogate. (Hood v. Hood, 85 N. Y. 561.) The respondent, however, claims that the rule is not universal and admits of exceptions, and is not to be applied in a case where the Surrogate’s Court has no jurisdiction to redress the specific wrong which forms the subject of complaint. The causes of action asserted by the plaintiff were in substance that an executor, empowered and directed by the will to sell real estate, had been guilty of gross neglect and bad faith in failing to sell and invest the proceeds; and the action , to redress this grievance is brought in the Supreme Court and seeks damages for a breach of the bond. The plaintiff insists that for this injury the surrogate can give no redress, and, therefore, to require his preliminary adjudication would involve an impossible condition and leave the injury inflicted without a remedy. If such a case should occur, equity would be quite sure to furnish a remedy, the specific need of its intervention being disclosed and all necessary parties being brought before the court, and that would be the appropriate remedy to charge the executor instead of an action at law upon the bond. Trust duties are peculiarly the subject of equity jurisdiction, and those of an executor or testamentary trustee are in the main subjected to the surrogate’s control. We have quite recently considered the scope and boundaries of the jurisdiction conferred upon that tribunal. (Hyland v. Baxter, 98 N. Y. 610.) Within the principles there established we discover no reason for doubting the power of the surrogate upon an accounting to charge the executor with any loss to the estate resulting from negligence or bad faith. While it is true that in the first instance that court could not order the sale of the real estate, and take upon itself the discretion and judgment committed to the executor, it could certainly reach the justice of the case by its power of removal and its authority upon an accounting. For gross neglect, and especially for bad faith on the part of an executor in refusing to perform the duties of his trust the surrogate may remove him and settle and adjust his accounts, and charge him with any loss to the estate which has resulted from his misconduct. (Code, §§ 2685 and 2605.) Such gross neglect or positive bad faith as would justify fils removal would equally justify a redress of the injury in the adjustment of his accounts. It is no answer to say that such remedy has been tried and failed. It did not fail for lack of jurisdiction, but from a judgment adverse to the application upon its merits. (Haight v. Brisbin, 96 N. Y. 132.) We do not think this case comes within any of the possible exceptions referred to in Hood v. Hood (supra). If the present action can be deemed one in equity so also was that, and it expressly decided that no .equitable action could be maintained to charge the sureties until the principal’s default had been adjudged by the surrogate, unless in certain exceptional cases in which the special circumstances requiring the aid of equity are disclosed. Ho such special circumstances here exist, unless it be held that the surrogate, upon a proceeding ending in a removal of the executor, and as a consequence the adjustment of his accounts, could not charge him with a devastavit produced by his omission to sell when he might have done so, under circumstances showing gross neglect and bad faith, and establishing a definite consequential loss to the estate. Where there has been a failure to sell personal property by an executor without adequate excuse it is quite common to charge him with the resultant loss, and we can see no good reason why in a proper case the same remedy might not be applied as to the disposition of real estate. In each case there is a wrong and a loss and, therefore, a devastavit. Where the executor, in bad faith and with gross negligence, has withheld land from sale until it has depreciated in value, he has just as completely wasted assets as if he had willfully destroyed them or negligently permitted their injury. How, then, does he completely account when he accounts for but a part in its value of what he received ? And why does not an authority to make him account justly involve the right to charge him with a willful or negligent loss which his own misconduct has brought upon the estate ? It does not help the appellants to call the defendant a testamentary trustee. In that character the surrogate’s jurisdiction remains. He may settle the accounts and is vested with power of removal, (Code, §§ 2807, 2817); and that in any case where the trustee has improvidently managed or injured the property committed to his charge,” or -been guilty of “ other misconduct in the execution of his trust.”

Section 814 of the Code has no application to the case.

The judgments of the Special and General Terms should be reversed, and the defendants appealing have judgment on the demurrer, with costs.

All concur.

Judgment accordingly.


author: Earl, J.

text:
    Alfred F. Dunham, Respondent, v. Edmund Griswold, Appellant.
    (Argued October 12, 1885 ;
    decided October 27, 1885.)
    Where the parties, in settlement of a disputed claim, agree upon the amount due, and the' one against whom the claim was made executes a written agreement to pay the sum so fixed, in an action upon the agreement he is precluded from setting up as a defense that nothing was in fact due.
    A mere threat to sue upon a claim, and to arrest the person against whom it is made in such suit, or by virtue of an execution which maybe issued upon a judgment obtained therein, is not such duress as will avoid a promise to pay the claim, induced by the threat.
    Where it is claimed that a promise was obtained by duress, and it appears there was no arrest and no actual force used, but simply threats, the question as to duress is ordinarily one of fact, and may not be determined as one of law.
    It is not sufficient to establish duress to show that the threats were uttered, it must be shown that they constrained the will of the promisor, and so induced the promise.
    Appeal from judgment of the General Term of the Supreme Court, in the second judicial department, entered upon an order made February 13, 1883, which affirmed a judgment in favor of plaintiff, entered upon a decision of the court on trial without. a jury.
    The nature of the action and the material facts are stated in the opinion.

      James J. Fox for appellant.
    The alleged account stated and agreement are not binding on the defendant, since they were executed by him under duress, caused by threats of a criminal prosecution and imprisonment on a criminal charge, i. e., the charge of swindling or embezzlement. (Leopold v. Senior, 7 N. Y. Weekly Dig. 438; Foshay v. Ferguson, 5 Hill, 154; Mathews v. Board, 6 Mass. 506 ; Sear v. Cohen, 45 L. T. 589; Haynes v. Rudd, 30 Hun, 238; Tilley v. Damon, 11 Cush. 247; Osborn v. Robbins, 36 N. Y. 365; 1 Greenl. on Ev., § 193 ; 2 id., §§ 121, 301; Bispham’s Eq., § 230.) The burden of proof was on the plaintiff, at the close of defendant’s case, to either contradict and rebut defendant’s evidence, or to show that there was no duress, on the ground that defendant could have been successfully prosecuted criminally on the charge of swindling or embezzlement. (Appleby v. A. F. Ins. Co., 54 N. Y. 253; Wambough v. Cooper, 2 Hun, 428.)

      John H. Clapp for respondent.
    The statement of account and agreement was valid and binding upon the parties regardless of the merits of the original-claim. (Adams v. Sage, 28 N. Y. 103; Wehrum v. Krum, 61 id. 623; Kidder v. Horrobin, 72 id. 159 ; Feeter v. Weber, 78 id. 337.) Threat of legal proceedings, even including arrest, is not sufficient to constitute duress. (Quincy v. White, 63 N. Y. 370.)
   Earl, J.

The plaintiff claimed that prior to September, 1881, he intrusted the defendant with certain securities which were to be converted into money and the proceeds invested for him, but that the defendant converted the proceeds to his own use, and he claimed that the defendant was indebted to him on account of such proceeds in the sum of $9,000 ; and to adjust- the claim of the plaintiff, which we may assume the defendant disputed, he settled with the plaintiff and an account was stated in which the defendant acknowledged that there was $9,000 due the plaintiff, and he executed a written agreement to pay the plaintiff that sum. This action was brought to recover the sum which was- thus adjusted by the settlement and which the defendant thus agreed to pay.

It was no defense to this action for the defendant to prove that he did not owe the plaintiff any thing. The plaintiff having made a- claim against him and he having disputed it, and the parties having settled the dispute by agreeing upon the amount due in an account stated which the defendant promised to pay, that promise is founded upon a sufficient consideration and can be enforced against him although he might be able to prove that nothing was in fact due from him. (Stewart v. Ahrenfeldt, 4 Denio, 189; Wehrum v. Kuhn, 61 N. Y. 623; Feeter v. Weber, 78 id. 334, 337.)

But the defendant further claims that he made the adjustment and promise and signed- the agreement to pay the plaintiff under duress, and hence that he is not^ bound by the agreement. The facts as to the duress depend entirely upon the evidence of the defendant, and it was, for the 'trial court, under all the circumstances of the case, to determine to what extent such evidence was entitled to credence. Upon the evidence it was a question of fact whether the agreement was executed in consequence of any duress whatever. The court could have found, and we may assume, did find, that the only threats used, if any, were to arrest the defendant in a civil action for the wrong which he had done the plaintiff. The negotiations for the settlement were pending several days. The defendant was not under arrest or restrained of his liberty in any way. He appears to have -been a business man in the full possession of his faculties, and the plaintiff was an old man, his uncle. A mere threat to sue the defendant and to arrest him in such suit, or by virtue of an execution which could be issued upon a judgment obtained therein, would not be such duress as would avoid a promise induced by such threat. (1 Pars, on Cont. [5th ed.] 393; Shephard v. Watrous, 3 Caines, 166 ; Farmer v. Walter, 2 Edw. Ch. 601; Knapp v. Hyde, 60 Barb. 80.) When there is no arrest, no imprisonment, no actual force, and it is claimed that a promise was obtained by duress per minas, then whether or not the promise was obtained by duress must usually be a question of fact, and the question cannot be determined as one of law. It' is not sufficient in such a case to satisfy the trial court that the threats were uttered ; but it must also be shown that they constrained the will of the promisor and induced the promise. The trial court in this case was not bound to believe the defendant when he testified that he made the adjustment with the plaintiff and signed the agreement to pay him the $9,000 solely in consequence of the threats. Whether he did or not was, under the circumstances disclosed in this case, and from the character of the evidence given, an inference of fact with which we have no jurisdiction to interfere.

The judgment should be affirmed.

All concur.

Judgment affirmed.


text:
    Samuel T. Prentiss as Receiver, etc., Appellant, v. William I. Nichols, Respondent.
    (Argued October 12, 1885 ;
    decided October 27, 1885.)
    In an action brought against a manufacturing corporation, after recovery of judgment and return of execution unsatisfied, a receiver of its property and effects was appointed. An order was subsequently granted by the court directing that on payment of the judgment and satisfaction thereof, the order appointing the receiver should be vacated; thereupon the corporation turned out to the judgment creditor a note owned by it in payment, this was accepted, the j ndgment satisfied and said order vacated. The note was left by said creditor in the hands of defendant, who was president of the corporation, and-he afterward collected the same. Another receiver of said corporation having been appointed in another action, brought this action to recover the money paid on the note as money belonging to the corporation. Held, that the action was not maintainable ; that the note became the property of the creditor, not only by the act of the company, but by the direction and with the approval of the court; that the new receiver gained no right in regard thereto except to question the validity of the payment, and this could only be done in an action against the creditor, not in an action against his agent.

      Appeal from judgment of the General Term of the Supreme Court, in the first judicial department, entered upon an order made May 22, 1882, which affirmed a judgment in favor of defendant, entered upon a verdict directed by the court.
    This action was brought by plaintiff as receiver of the Illuminated Tile Company, a manufacturing corporation, to recover a sum alleged to have been collected by defendant as president of said corporation upon a note owned by it, and to have been converted by him to his own use.
    It appeared that the defendant formerly held a demand against the corporation of which he was president, for moneys loaned to it; this he assigned to his son George L. Nichols. The latter recovered a judgment on the demand against the company, upon which an execution was issued, and returned unsatisfied, and an action was thereupon prosecuted by him against the company for the appointment of a receiver, and such an appointment was made. Afterward James M. W ilbur, who stated in his affidavit that he was the owner of nine hundred and ninety-seven of the one thousand shares of the capital stock of the corporation, applied by motion for leave to the company to pay the judgment and to have the receivership set aside or terminated. TJpon his affidavit and notice to the plaintiff, upon whose application the receiver has been appointed, an order was made substantially directing the receivership to be set aside on the payment and satisfaction of the judgment. This payment was provided for by the transfer of the note of persons indebted to the corporation, and upon that being done the judgment was satisfied, and an order was thereupon made vacating and setting aside the preceding order by which the receiver had been appointed.
    The note was left in defendant’s hands for collection; before it was paid the plaintiff received his appointment as receiver in another action instituted by a subsequent judgment creditor of the corporation; said note was thereafter paid to defendant as agent for the owner, partly in money, partly in a new note.

      E. Sprout for appellant.
    The legal title to the property of the Illuminated Tile Co. vested in Pelton, the receiver, upon the filing of his bond. (In re Berry, 26 Barb. 55; Verplank v. Merchants' Ins. Co., 2 Paige, 438.) The defendant Nichols, after Prentiss was appointed receiver, having converted the note to his own use by collecting $6,550.50 not then due, and taking a new note for the $4,000 balance of the $10,550.50 note inclusive, is liable to plaintiff under the law in reference to the estates of persons, in which creditors have a right to share pro rata. (Laws of 1858, chap. 314, § 2; Osgood v. Latyn, 48 Barb. 465; 3 Keyes, 521; Robinson v. Bank of Attica, 21 N. Y. 411; R. S. [Edm. Ed.], marg. 603, § 4.)

      Samuel Hand for respondent.
    The company had the right and it was its duty to pay the judgment out of the first moneys collected. (1 R. S. 693, § 4.) The act of the company was legal, and the receiver cannot impeach or disaffirm it. (Ryde v. Lynde, 4 N. Y. 387.) The act of the defendant was the act of the company, duly authorized and adopted by it and done for its benefit. (Phillips v. Campbell, 43 N. Y. 272.) Proof that at the time of payment the corporation was in fact insolvent is not conclusive evidence that the application or payment was made “ in contemplation of insolvency of such company,” within the meaning of the statute (2 R. S. 603, § 4), declaring such a disposition of its property unlawful and void; the act must have been done because of existing or contemplated insolvency. (Paulding v. Chrome S. Co., 94 N. Y. 334.) The obligation to make the application was incurred a long time before, and the fulfillment of the agreement relates back to that time. (Castle v. Lewis, 78 N. Y. 131; Paulding v. Chrome S. Co., 94 id. 336.) The appointment of Guy R. Pelton as receiver being preliminary to final judgment, did not dissolve the corporation. (Kincaid v. Dwinelle, 59 N. Y. 548; Dubois v. Cassidy, 75 id. 298; Mann v. Pentz, 3 id. 415; Code of Civ. Pro., § 1788 ; 2 R. S. 472, § 85.) The court has the power, and in such a case as this its exercise is proper on payment of the plaintiff’s claim, to order the discontinuance of the proceedings and the discharge of the receiver. (Angell v. Silsbury, 19 How. Pr. 48.)
   Finch, J.

A verdict for the defendant was rendered by the jury under the direction of the court. There was no controversy about the material facts. When the Nichols judgment was paid, with the permission of the court, and the order which appointed Felton receiver was vacated for that purpose, the tile company was at liberty to pay its debt subject only to statutory restrictions. It did pay it by turning out to the judgment creditor the note of Bartlett, Robbins & Co., for $10,550, which represented their indebtedness to the tile company. The documentary evidence shows that fact, and the testimony of the defendant confirms it. That note thus became the property of the judgment creditor, not "only by the act of the company, but by the direction and with the approval of the court, which vacated the receivership for that purpose and upon that condition. The note remained in the defendant’s hands as the agent of such owner, and when it was ultimately paid to the defendant, partly in money and partly in a new note, he received the proceeds still as the owner’s agent, and neither the tile company nor the defendant had any title to it whatever. Of course it follows that the new receiver, the present plaintiff, obtained no title to it by his appointment, and gained no right, except to question the validity of the payment, and seek" a recovery from the true owner to whom the transfer had been made. He has not sued the true owner, nor brought him into court to answer, but has" sued the agent on the theory that the fund belonged to the tile company, and was being withheld and converted by its officer. No such cause of action was established. On the contrary it appeared that a stranger to the action owned the fund, and- that the tile company had no title to or interest in. it when . the plaintiff was made receiver. It is claimed that the payment to the creditor was invalid because the company was insolvent. If that is fully established, it is immaterial. The payment was not shown to have been made in contemplation of insolvency, and the facts indicate the contrary. And that question could not be raised in an action to which the creditor, who was paid, was in no manner a party. The transfer made, was not to an officer or stockholder of the company and restrained for that reason.

The judgment should he affirmed, with costs.

All concur.

Judgment affirmed.


text:
    Solomon Loeb, Respondent, v. Benjamin A. Willis, Impleaded, etc., Appellant.
    (Argued October 14, 1885 ;
    decided October 27, 1885.)
    Where a suit is discontinued after judgment, the adjudication concludes no one and is not an estoppel or bar in any sense.
    Where, therefore, after judgment in an action for foreclosure in which a grantee of the mortgaged premises, who by his deed assumed and agreed •to pay the mortgage and who appeared, and defended was sought to be and was held liable for any deficiency, the court, on application of plaintiff, granted to him leave to discontinue the action and to bring an action upon the bond, accompanying the mortgage; and where, to such new action, the grantee was made a party defendant, held, that he was not precluded from contesting his liability by the judgment in the foreclosure suit, but was entitled to show an entire or partial failure of consideration for his agreement to assume the mortgage, or any defense, complete or partial, which he could have interposed to an action brought by his grantor to enforce said agreement.
    Also held, that after the trial court had decided as matter of law that said grantee was estopped by the former adjudication, to avail himself of the error, he was not bound to offer any evidence.
    Appeal from judgment of the General Term of the Supreme Court, in the first judicial department, entered upon an order made May 11, 1883, which affirmed a judgment in favor of plaintiff, entered upon a verdict directed by the court.
    The nature of the action and the material facts are set forth in the opinion.

      Benjamin A. Willis for appellant.
    The findings at Special Term, and the decree thereupon entered in an action to foreclose a mortgage collateral to the bond, which is the subject of this action, are not res adjudicaba, and do not constitute an estoppel in this action, the said decree having been vacated, and said foreclosure action discontinued before the commencement of this proceeding, and there being, at the time this action was tried, no subsisting judgment. (Read v. Proprietors, 8 How. [U. S.] 274; Bigelow on Estoppel, 29; Wixon v. Stevens, 17 Mich. 518; Queen v. Hutchings, 6 Q. B. [2 B. D.] 300; Ford v. Doyle, 44 Cal. 635; Webb v. Bucklalew, 82 N. Y. 555 ; Carlin v. McCall, 1 Hilt. 389, 399 ; Audubon v. Excelsior F. Ins. Co., 27 N. Y. 216; Lawrence v. Banker, 5 Denio, 216 ; McLaughlin v. McGee, 79 Penn. St. 217 ; Freeman on Judgments [3d ed.], § 333 ; Taylor v. Smith, 4 Ga. 133; Tyler v. Willis, 35 Barb. 213; Carter v. Clarke, 7 Robt. 42.) The appellant had a right to prove the invalidity of the covenant to assume, breach thereof and failure of consideration. (Dunning v. Leavitt, 85 N. Y. 30 ; Flagg v. Munger, 9 id. 483; Smith v. Truslow, 84 id. 660; Garnsey v. Rogers, 47 id. 238; Comstock v. Drohan, 71 id. 13; Cumberland v. Codrington, 3 Johns. Ch. 254.)

      William Man for respondent.
    The evidence offered by defendant was immaterial even if it had not already been passed on by the court on the same issue, and it could not affect the question of Willis’ liability on his assumption of the debt. (Pullman v. Alley, 53 N. Y. 637.)
   Earl, J.

In January, 1875, the defendant Willis took a deed of real estate in the city of New York, from S. T. Meyer, which was incumbered by a mortgage held by A. T. Meyer, and he assumed and agreed to pay such mortgage. A. T. Meyer, the mortgagee, subsequently assigned the mortgage to the plaintiff, and he commenced an action to foreclose the same, making S. T. Meyer, the mortgagor, and Willis and others defendants. Willis interposed an answer to the action and appeared upon the trial thereof and defended the same upon the merits. The plaintiff recovered in the action the usual foreclosure judgment, by which it was also adjudged that the mortgagor and Willis were both responsible for any deficiency which should remain after applying the proceeds of the real estate upon the mortgage. Subsequently, and before proceeding to a sale under that judgment, the plaintiff made a motion to the court for leave to discontinue the foreclosure action, and to allow him to bring suit upon the bond accompanying the mortgage. The motion was granted and an order was entered discontinuing the foreclosure action. Thereafter this action was commenced, to enforce against the mortgagor and against Willis, on his agreement to pay the mortgage, the' whole amount due thereon. In his complaint the plaintiff, among other things, alleged the foreclosure action, that Willis interposed an answer therein upon the merits, that the issue raised by the answer came on for trial, that Willis appeared and offered evidence upon the trial to sustain the issues on his part, which evidence was received and considered, that the court after due deliberation thereon filed a decision containing findings of fact and of law which remained on the files of the court, and which ordered judgment upon the issues in favor of the plaintiff directing a foreclosure of the mortgage and a sale of the premises thereby mortgaged, and that the plaintiff should have judgment against the defendants Meyer and Willis for any deficiency, after applying the proceeds of the foreclosure upon the debt; and he alleged that the liability of Willis to pay the bond secured by the mortgage had been already adjudged by the court. He further alleged, that upon his application, an order was made permitting him to discontinue the foreclosure action without costs, and discontinuing the same and permitting him to bring an action upon the bond. Willis in his answer, among other things, denied that there was any adjudication binding upon him, and alleged that on the 17th day of December, 1874, it was agreed by and between him and the defendant Meyer, his grantor, that in consideration that he would purchase the real estate referred to in the complaint, and assume the payment of the mortgage, he, Meyer, would lease the real estate of him upon the conveyance of the same to him for the term of two years, and pay him therefor $4,400 for the first year, -and $4,800 for the second year, and also pay certain taxes then due upon the real estate, and that he would also procure an extension of time in which to pay the mortgage; that in pursuance of such agreement, and relying thereupon, he, Willis, took the conveyance of the real estate and assumed the payment of the mortgage ; that Meyer wholly and entirely failed in every respect to comply with his agreement or to carry out the same.

Upon the trial the plaintiff offered in evidence the bond and mortgage and the assignment thereof to him, and the deed of the real estate to Willis, which contained the covenant and agreement on his part to assume and pay the mortgage. He further offered in evidence the judgment-roll in the action referred to in the complaint and the order made at Special Term discontinuing the foreclosure action; and then, after a computation of interest, he rested his case. The defendant Willis then offered in evidence a contract between his grantor, Meyer, and himself, to which the plaintiff objected, upon the ground that the facts had been passed upon, and the objection was sustained, and Willis excepted. Willis then offered himself as a witness on his own behalf and was asked by his counsel this question: “ Please state what contract, if any, between yourself and Meyer was made at the time the transfer of the property in question was made to you ? ” This was objected to by the plaintiff on the same ground and the objection sustained. Willis’ counsel then offered to show that at the time the real estate was conveyed to him a written contract was made between him and Meyer, to the effect that if he would assume the payment of the mortgage Meyer would hire the property from him for two years, at the rate of $4,400 for the first year, $4,800 for the second year, and pay all the taxes and assessments on the property and have the payment of the mortgage extended five years, and that Meyer would also assume the mortgages on other property, which Willis, by the terms of the agreement, was to convey to him; and that Meyer failed in every respect to comply with any of his stipulations; that he only paid rent for three months, and that the mortgages on the other property were foreclosed, and that Willis had to pay all the taxes and assessments which Meyer agreed to pay, and had to bid the property in, and this evidence was excluded.

It thus appears that the trial court held that the adjudication in the foreclosure action absolutely estopped Willis and precluded him from giving any evidence to defeat or diminish the plaintiff’s recovery against him. In this we think there was error.

The foreclosure action was discontinued and all the proceedings therein thus annulled. There was no longer any record or adjudication in that action which bound any one. By the discontinuance of an action the" further proceedings in the action are arrested not only, but what has been done therein is also annulled, so that the action is as if it never had been. If a suit be discontinued at any stage, or the judgment rendered therein be set aside, or vacated, or reversed, then the adjudication therein concludes no one and it is not an estoppel or bar in any sense. (Bigelow on Estoppel, 21; Freeman on Judgments [3d ed.], § 333; Leonard v. Barker, 5 Denio, 220 ; Audubon v. Excelsior Ins. Co., 27 N. Y. 216.) After ruling as matter of law that Willis was estopped by the former adjudication, he was under no obligation to offer any evidence, and it cannot be said here that his offer was not sufficiently broad or specific because we cannot tell what, but for the erroneous ruling, he might have proved. . It is possible that he might have brought his defense within the rules laid down in Dunning v. Leavitt (85 N. Y. 30). Under that decision it was his right to prove, if he could, either an entire or a partial failure of consideration for his assumption of the mortgage, and he could establish any defense, complete or partial, as against the plaintiff which he could have interposed to an action brought by his grantor to enforce his contract of assumption. If the facts alleged by him in his answer, and offered by him to be proved, were true, he certainly would have had, to some extent at least, a defense to the plaintiff’s action. We cannot say that the erroneous rulings did not prej udice Willis, and we think the case should, therefore, go back and be tried under a correct ruling as to the law and a proper application of the principles laid down in Dunning v. Leavitt.

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

All concur.

Judgment reversed.


author: Rapallo, J.

text:
    The People, ex rel. Smith Lent, Respondent, v. Joseph B. Carr, Secretary of State, Appellant.
    (Argued October 13, 1885 ;
    decided October 27, 1885.)
    The provision of the State Constitution (Art. 6, § 13), declaring that “ no person shall hold the office of justice or judge of any court longer than until and including the last day of December next after he shall be I ' seventy years of age,” does not apply to a person holding the office of surrogate ; such office is not that of “ justice or judge,” within the meaning of said provision.
    Appeal from order of the General Term of the Supreme Court, in the third judicial department, made September 16, 1885, which affirmed an order of Special Term directing a peremptory writ of mandamus to issue to defendant, requiring him to give notice of the election of a surrogate in and for the county of Westehester, at the then next general election.
    The application for the writ was made upon the ground that the incumbent, who was elected in November, 1882, for a term of six years, became seventy years of age in July, 1885, and that in consequence thereof, and by virtue of section 13 of article 6 of the State Constitution, his term would expire on December 31, 1885.

      C. F. Tabor, and Calvin Frost for appellant.
    The limitation of age fixed by section 13 of article 6 of the Constitution was unknown and contrary to the common law. “ If, therefore, the words used be susceptible of two senses, one agreeable to, the other against law, the former sense shall be adopted.” (Chit on Cont. 80; Coke Lit. 42; 2 Bl. Com. 380; Archibald v. Thomas, 3 Cow. 284; Chase v. Lord, 77 N. Y. 1; McManus v. Gavin, id. 36; Dwarris on Stat. 695, 706.) Barely and with doubtful propriety courts, in construing a statute, in order to ascertain the intention of the obscure provision, have been known to resort to the journals to see what was said on its passage. (Sedgw. on Const, of Stat. [2d ed.] 19, 204n, 205; 7 Penn. St. 144; 26 id. 446.) The people were the enacting body, and their intention we can only discover by applying the usual and well-established rules of construction. (People v. Dayton, 55 N. Y. 386; 5 Proc. & Deb. 3777, 3916, 3918; Sedgw. 325.) Every obscure and doubtful passage is to be explained according to the intention of the parties. (Smith’s Com. 626.) The meaning of a word may be known by reference to the neighboring words. (Smith’s Com. 656.) The words “judge or justice” are to be taken in their ordinary and familiar signification and import. (Smith’s Com. 661.) Sedgw. on Const. 219; Newall v. People, 3 Seld. 97.) An intent to change an existing law should clearly appear. (Lee v. Forman, 3 Metc. [Ky.] 114; Sedgw. on Const. 246; Sieber’s rules in note.) The surrogate does not hold the office of judge or justice of any court. He holds the office of surrogate. (Tonnele v. Hall, 4 Comst. 140; 2 Bl. Com. 87; Settle v. Van Evrea, 49 N. Y. 280; People v. Mann, 97 id. 535; Brick's Estate, 15 Abb. Pr. 12; Dayton’s Surr. [3d ed.] 65.) Words used in statutes and constitutions should be understood according to their popular significance and common usage, and especially should this rule be applied to the language used in constitutional provisions of which the people are the enacting power. (Wenzler v. People, 58 N. Y. 520; Gibbons v. Ogden, 9 Wheat. 188 ; Webster v. Cooper, 14 How. [U. S.] 504.) This is so unless there is something in the context or the purpose of the act, showing that they were to be used in a technical or unusual sense. (Commonwealth v. Dallas, 4 Dall. 218; People v. Goodwin, 50 Barb. 562, Millard v. Lawrence, 16 How. [U. S.] 251; Smith’s Com. on Const., § 481; Potter’s Dwarris on Stat. and Const. 143.) In construing the Constitution no resort can be had to the debates in the constitutional convention, because not it but the people were the enacting body. (Wenzler v. People, 58 N. Y. 524.) Legislative acts, by Congress and State legislatures, are entitled to high consideration by the courts in the construction of Constitutions both Federal and State—especially when such legislation is contemporaneous, or nearly so, with the making and adoption of the Constitution. (Cohens v. Virginia, 6 Wheat. 420; People v. Green, 2 Wend. 274: People v. Brundage, 78 N. Y. 403; People v. Comstock, id. 360.)

      M. L. Cobb for respondent.
    A surrogate, whose duties are mainly judicial in their character, is a “ judge of a court,” within the meaning of section 13 of article 6 of the' Constitution of the State. (People v. Brundage, 78 N. Y. 403; People v. Gardner, 45 id. 812.) The application of the restrictive clause does not depend upon the official name or designation of the officer, but upon the nature or character of the duties he is to perform. (People v. Mann, 97 N. Y. 536.)
   Rapallo, J.

The question to be determined on this appeal is, whether the provision contained in section 13 of article 6 of the Constitution, to the effect that no person shall hold the office of judge or justice of any court longer than until and including the last day of December next after he shall be seventy years of age,” applies to persons holding the office of surrogate.

The important judicial functions exercised by surrogates may afford reason for applying to them a disqualification by age, similar to that prescribed with respect to judges and justices of courts referred to in the Constitution. But the question before us is not, whether the disqualification should have been extended to those officers, or whether it should be deemed by analogy to apply to them, but whether by the terms of the Constitution they are included in it under the designation of persons holding the office of “judge or justice of any court.”

For the purpose of determining this question, it is necessary in the first place to consider the context in which the language quoted is used in section 13 of article 6, and also other provisions of article 6 of the Constitution, the whole of that article having been adopted by the vote of the people at the same time, in 1869, as a separate article known as the judiciary article. Section 2 of article 6 establishes a Court of Appeals, to be composed of a chief judge and six associate judges, to be elected, and to hold office for the term of fourteen years. Section 6 provides for the continuance of the existing Supreme Court, to be composed of the justices then in office, with an additional justice to be elected.

Section 12 provides that the Superior Court of the city of New York shall be composed of six judges, and the Court of Common Pleas of the same city, of the three judges then in office and three additional judges ; the Superior Court'of Buffalo, of the judges then in office and their successors, and the City Court of Brooklyn, of such number of judges, not exceeding three, as may be provided by law.

Section 13 provides for the election of justices of the Supreme Court and of judges of all the other courts mentioned in section 12, and declares that the official terms of the said justices and judges who shall be elected after the adoption of the article shall be fourteen years, and then follows immediately, in the same section, the provision, “ but no person shall hold the office of judge or justice of any court longer than until and including the last day of December next after he shall be seventy years of age.” Section 14 next follows, providing that a compensation shall be established by law for the services of the judges and justices hereinbefore mentioned, which shall not be diminished during their official terms.

It must be observed that up to this point no person has been designated in the Constitution ap a judge or justice of any count except the judges of the Court of Appeals, the justices of the Supreme Court, and the judges of the Superior Court and Court of Common Pleas of the city of ITew York, of the Superior Court of the city of Buffalo and of the City- Court of Brooklyn.

That the limitation as to age was intended to apply to the judges and justices of those courts is too clear to be capable’of misapprehension. The only other officers or body having judicial powers, mentioned in the sections of article 6, preceding section 13, are the Commission of Appeals. That high tribunal had power, under section 4, .to hear and determine certain of the causes pending in the Court of Appeals, and by section 5, it was provided that the decisions of the Commission should be entered and enforced as the judgments of the Court of Appeals.. But the Commission was not designated in the Constitution as a court, nor the commissioners as judges, but as commissioners, and it was therefore assumed that the disqualification of age under section 13 did not apply to them, for it is a matter of history that one venerable commissioner held his office without question for several years after he had passed the age of seventy, and in the case of Settle v. Van Evrea (49 N. Y. 280), it was decided that section 27 of article 6, which prohibits any judge of the Court of Appeals from acting as referee, did not apply to a commissioner, because he was not a judge of the court.

All the provisions of article 6 of the Constitution bearing upon the question at issue, which precede sections 13 and 14, have now been examined, and we next come to section 15, relating to County Courts. This section continues the existing County Courts and provides that the judges thereof then an office shall hold their offices until the expiration of their respective terms, and that their successors shall be chosen by the electors of the counties for the term of six years. These judges come literally within the words of the Constitution, for they are judges of courts, designated as such by the Constitution. (People v. Gardner, 45 N. Y. 812; People, ex rel. Joyce, v. Brundage, 78 id. 403.) No judicial officer, other than those who have been ah’eady named, is in any part of the Constitution designated as a judge or justice of any court.

Justices of the peace are mentioned in section 15, and they exercise judicial powers. Two justices of the peace, together with the county judge, compose Courts of Sessions with such criminal jurisdiction as the legislature shall prescribe, and such justices may also exercise jurisdiction to a limited extent in civil cases, and may hold courts for that purpose. At the same time they exercise other powers. They are in numerous sections of the Constitution designated, not as judges or justices of any court, but as justices of the peace, and are elected under that designation, and on these grounds it was decided in the late case of People v. Mann (97 N. Y. 532), that they did not come within the disqualification by age contained in section 13 of article 6.

Surrogates are throughout all the provisions of article 6 designated as officers by that name, and not as judges or justices of any court. . By section 15 of article 6, it is provided that the county judge shall also be surrogate of his county, but that in counties having a population exceeding forty thousand, the legislature may provide for the election of a separate officer to be surrogate, whose term of office shall be the same as that of the county judge, which is six years. By section 16 the legislature is empowered, on application of the board of supervisors, to provide for the election of local officers, not to exceed two in any county, to discharge the duties of county judge and of surrogate in cases of them inability or of a vacancy. In section 25 surrogates are coupled with justices of the peace and other local judicial officers. Section 27 refers to Surrogates’ Courts, and for their relief authorizes the legislature to confer upon courts of record in any county having a population exceeding four hundred thousand, the powers and jurisdiction of surrogates. In no part of the Constitution are surrogates mentioned as judges or justices of any court, and at the time of the adoption of article 6, surrogates’ courts were not even courts of record, they having been first declared to be such in the Code of 1880.

Reading the clause of section 13, which imposes the disqualification by reason of age, in connection with all the other provisions referred to, it seems to us more reasonable to suppose that the people who voted for the adoption of article 6, understood the disqualification as applying to persons who in the Constitution itself were in express terms designated as judges or justices of courts, and were popularly known as such and elected by those designations, than to assume that the voters so minutely analyzed the nature of the functions of officers elected under other names, as to discover that some of their duties were of a judicial character, and that, therefore, they might, though not named as such, be construed to be judges. In interpreting constitutions regard must be paid to the popular sense in which words are generally used. (People v. Goodwin, 50 Barb. 562; Comm. v. Dallas, 4 Dall. 229; Gibbons v. Ogden, 9 Wheat. 188; Settle v. Van Evrea, 49 N. Y. 280.)

The constitutional provision in question is quite clear and intelligible as applicable to persons popularly known as judges or justices of courts, and named as such in the Constitution itself, but we think it would be unwarrantable to extend it by construction to every officer exercising judicial powers, though not commonly known as a judge or justice of a court, but elected by a different title. The legislature of 1870, which immediately followed the adoption by the people of the judiciary article (Art. 6) clearly indicated its understanding of the disqualification in accordance with the views above expressed. The act of 1870 (Chap. 86) was passed for the purpose of carrying into effect the provisions of the judiciary article, and section 8 of that act required all the judges and justices of the courts named in article 6, viz.: the judges of the Court of Appeals, the justices of the Supreme Court, the judges of the Court of Common Pleas and of the Superior Courts of the cities of Hew York and Buffalo and of the City Court of Brooklyn and judges of County Courts, to file in the office of the secretary of State a certificate of their age, for the purpose undoubtedly of showing whether they would be disqualified by age, from holding their offices before the expiration of the term for which they were elected. It will be observed that there was no provision requiring surrogates or justices of the peace to file any such certificate, clearly indicating that in the judgment of the legislature the disqualification did not apply to those officers. This legislative action, so closely following the adoption of the constitutional provision, is entitled to great consideration by the court in construing the provision. Marshall, Ch. J., in Cohens v. Virginia (6 Wheat. 420); Marcy, J., in People v. Green (2 Wend. 274); Church, Ch. J., in People v. Brundage (78 N. Y. 403).

Our conclusion is that the office of surrogate of Westchester county will not become vacant on the 31st of December next by reason of the present incumbent, Surrogate Coffin, having attained the age of seventy years in July last, and that the secretary of State was right in refusing to give notice of the election of a successor.

The orders of the Special and General Terms should, therefore, be reversed and the motion for a mandamus denied, with, costs.

All concur.

Ordered accordingly.


text:
    James G. Ross, Respondent, v. Samuel P. Wigg, Appellant.
    Within the meaning of the provision of the Qode of Civil Procedure (§ 1296), which declares that “ a person aggrieved, who is not a party ” to an action or proceeding, but who is entitled to be substituted in place of a party, may appeal from a judgment or order; a person is not “ aggrieved ” unless the judgment or order has binding force against his rights, his person or his property; the fact that it may remotely or contingently affect interests which he represents does not give him a right to appeal.
    A receiver appointed in supplementary procedings is not entitled to be substituted as defendant in place of the judgment debtor in an action brought by other creditors against him.

      It seems that said provision contemplates mainly, if not exclusively, cases where the party to the record is merely a nominal one, and the real party in interest is the one aggrieved, or where, since the judgment or order, there has been in some way a devolution of the entire interest upon some person not a party.
    (Argued October 9, 1885;
    decided October 27, 1885.)
    On March 7, 1884, an attachment and order of arrest were issued herein, which were executed the next day; on March 19 defendant obtained an order to show cause why they should not be vacated, the motion was denied, and on March 28 defendant appealed from the order. On March 24 other creditors obtained a judgment against defendant. Supplementary proceedings were instituted thereon, which resulted in the appointment of D. as receiver of defendant’s property on June 4. On June 27 the appeal from the order was argued. On July 12 defendant, without the presence of his attorney, offered judgment for the entire amount claimed, and stipulated' that an order should be entered dismissing the appeal, and on July 14 an ex parte order to that effect was entered, the offer of judgment was accepted and judgment was entered. Notwithstanding this the General Term affirmed the order appealed from. An order of affirmance was entered by D., and the defendant’s attorney, who appealed therefrom in defendant’s name, to this court, and moved to substitute D. as defendant. Held, that D. was not entitled to appeal or to be substituted.

      It seems that the remedy of the receiver, if any, was under the provision of the.Code of Civil Procedure (§ 682), authorizing a person who has acquired an interest in attached property to move to vacate or modify the attachment, or if the judgment and proceedings herein were collusive and fraudulent as against the other creditors of defendant, to insti- ■ tute an equitable action to set them aside.
    Appeal from order of the General Term of the Supreme Court, in the fourth judicial department, made August 25, 1885, which affirmed an order of Special Term, denying a motion to vacate an order of arrest and an attachment issued ft herein. Also motion to substitute James Dowdle, receiver, as defendant.
    The material facts are stated in the opinion.

      W. H. Kenyon for motion.
    The receiver in supplementary proceedings of the defendant’s property cannot be substituted for the defendant as a party to the action; and, therefore, he cannot appeal. (Code, §§ 1296, 682 ; Honegger v. Wettstein, 94 N. Y. 252.) The defendant had a right to make the stipulotion for the dismissal of the appeal. It is not in any sense an interference with his property. (Code, § 682.) The order dismissing appeal was properly entered in vacation. (Supreme Court Rule 11; 2 Edm. Stat., § 9.)

      Nathaniel C. Moak opposed.
   Earl, J.

On the 7th day of March, 1884, an attachment and order of arrest were granted in this action, and they were executed on the day following. On the 19th of March the defendant obtained an order to show cause why the attachment and order of arrest should not be vacated. That motion was denied, and on the 24th of March, Christie and others obtained a judgment against the defendant. On the 28th of March the defendant appealed from the order, refusing to vacate the attachment and order of arrest, to the General Term. On the 29th of April supplementary proceedings were commenced by Christie and others upon their judgment, which resulted in the appointment of Dowdle as receiver of the defendant’s property on the 4th of June. On the 27th of June the appeal from the order refusing to vacate the attachment was argued at the General Term. On the 12th of July the defendant personally, without the presence of his attorney, offered judgment for the entire amount claimed by the plaintiff against him, and at the same time stipulated that an order should be entered dismissing the appeal to the General Term on filing the stipulation without further notice; and on the 14th day of July an ex parte order to that effect was entered in the office of the county clerk of Oswego county. On the same day plaintiff’s attorney accepted defendant’s offer of judgment, and perfected judgment for the full amount claimed. The General Term subsequently affirmed the order of the Special Term, notwithstanding, the order dismissing the appeal. On the 25th of August, 1885, an order of affirmance was entered by Dowdle, receiver, and defendant’s attorney, and on the 29th of the same month the attorney and the receiver appealed in the name of the defendant tó this court. This motion is made to dismiss such appeal, and, we think, it should be granted.

It is undisputed that the appeal is without the authority of the defendant, and is brought by the receiver alone, who is not a party to the action. It is claimed, however, that the receiver was entitled to appeal under section 1296 of the Code, which provides that “ a person aggrieved, who is not a party, but is entitled by law to be substituted, in place of a party ; or who has acquired since the making of the order, or the rendering of the judgment appealed from, an interest, which would have entitled him to be so substituted, if it had been previously acquired, may also appeal as prescribed in this chapter for an appeal by a party. But the appeal cannot be heard until he has been substituted in place of the party; and, if he unreasonably neglects to procure an order of substitution, the appeal may be dismissed upon motion of the respondent.” This case is not within that section. We have great doubt whether the receiver is an aggrieved party. He is in no way bound or affected by the order from which he has brought the appeal. That order simply affirmed an order previously made to which he was not a party. The fact that it may remotely or contingently affect interests which he represents does not .give him a right to appeal. Before a person can be said to be aggrieved within the meaning of that section by an adjudication, it must have binding force against his rights, his person or his property. But before one not a party can claim the right to appeal he must not only be aggrieved, but he must be entitled to be substituted, and it is clear that the receiver .was not entitled to be substituted in the place of the defendant. We know of no principle or rule of law which would authorize any court to strike the name of the defendant from the record against the will of the plaintiff and substitute in its place the name of the receiver. The plaintiff was entitled to retain his judgment, against the defendant for what it was worth and enforce it against him if he could. Section 1296 contemplates cases, mainly, if not exclusively, where the party to the record is merely a nominal one and the real party in interest is the one aggrieved because he is the real party; or where since the judgment or order there has been by death or in some other way a devolution of the entire interests or property involved in the litigation to some other person who has thus become the party aggrieved. The defendant too had a right to be upon the record in his own name and to defend the action if he thought proper, and if not, to consent to any disposition of it to which the parties could agree. The remedy of the receiver, if he had any, was under section 682 of the Code, which provides that a person who has acquired a lien or interest in attached property after its attachment “ may at any time before the actual application of the attached property, or the proceeds thereof, to the payment of a judgment recovered in the action, apply to vacate or modify the warrant, or to increase the security given by the plaintiff, or for one or more of those forms of relief, together, or in the alternative.” Or if the judgment in this action and the subsequent proceedings have been collusive and fraudulent with intent to defraud the honest creditors of the defendant, the receiver may institute an equitable action to set them aside.

We are, therefore, of opinion that this motion should be granted, with costs of appeal to this court and $10 costs of motion.

The views thus far expressed also disposed of the motion on behalf of the receiver to be substituted in the place of the defendant, under section 1299 of the Code, which provides that, where on an appeal from one court to another an application for an order of substitution is permitted in the last three sections, it shall be made to the appellate court. As he was not entitled to be substituted under either of the sections named, the motion must be denied, with $10 costs.

All concur. .

Ordered accordingly.


author: Miller, J.

text:
    Frederick Cass, Respondent, v. Samuel B. Higenbotam, Appellant.
    (Argued October 9, 1885 ;
    decided October 27, 1885.)
    In an action upon a promissory note damages for the conversion by the holder of property pledged to him as security for the payment of the note may properly be pleaded as a counter-claim; and the amount thereof must be taken into consideration in determining whether a judgment in such action is re viewable in this court.
    After the commencement of such an action defendant tendered the amount due on the note with costs on condition that plaintiff return the property pledged, which return was demanded and refused. Held, that it was not essential to the validity of the tender to pay the money into court; that defendant was entitled to make the tender conditional, and the refusal of plaintiff to surrender the property pledged rendered him liable for a conversion ; also that defendant was entitled to counter-claim damages for the conversion, although occurring after the commencement of the action; and that, if an application to the court for leave to set up the tender as a defense was necessary, as the answer ryas received and retained without objection, and plaintiff had allowed the trial to proceed .without objection, and had obtained judgment, it was too late to insist on appeal that the defense was improperly pleaded because no leave was obtained.
    The obligations of pledgor and pledgee in such case are mutual, concurrent and reciprocal; either party is entitled to performance by the other as a condition of his own performance. The refusal of either to perform, where performance is tendered by the other, furnishes ground for an action.
    Where a tender has simply the effect to extinguish a lien, and does not discharge the debt, payment into court is not required.

      It seems the provision of the Code of Civil Procedure (§ 732) in reference to tenders refers only to that class of tenders which satisfy and discharge the debt.
    Plaintiff set up in reply to the defense that before tender was made an action had been commenced against him by a third person for a portion of the property pledged, of which defendant was notified, and he had become a party thereto, and that plaintiff, at the time of the alleged tender, offered to return the balance of the property upon payment of the note, but defendant refused to accept and .to -make payment. Meld, that the pendency of said action furnished no justification for the refusal to deliver all of the property pledged, and did not bar defendant’s right to counter-claim his damages. .

      It seems that plaintiff’s remedy was by action in the nature of a bill of inter-pleader, making the claimants parties, and thus have it determined who was the true owner.

      Cass v. Higenbotam (27 Hun, 406), reversed.

      Appeal from judgment of the General Term of the Supreme Court, in the first judicial department, entered upon an order made June 30, 1882, which affirmed a judgment in favor of plaintiff, entered upon a verdict directed by the court. (Reported below, 27 Hun, 406.)
    This action was brought upon a promissory note, for the sum of $350. The note was admitted by the answer, but it alleged, by way of defense, that the amount of the note with interest and costs had been tendered to the plaintiff after suit brought; and, by way of counter-claim, that certain diamonds had been pledged by the defendant to the plaintiff, as collateral to the payment of the note, and that on the 20th of January, 1880, after the action was commenced,- the defendant had tendered to the plaintiff the full amount due on the note with interest and costs and demanded a return of the diamonds;. that the plaintiff refused to accept the tender and return the diamonds, but had converted them to his own use, to the defendant’s damage $1,000, for which judgment was demanded. The plaintiff replied admitting the making of the pledge, and setting up that before the offer of payment and demand of the return of the diamonds, an action had been commenced against him by a third party, the wife of the defendant, for a portion of the diamonds, claiming them as her property; that the defendant in this action was notified of that action and had become a party thereto, and that the plaintiff, at the time of the alleged tender, had offered to return to the defendant the jewelry for which suit had not been brought, upon payment of the note, but defendant had refused to accept such portion, and to make payment. The facts set forth in the answer and reply were sufficiently proved on the trial, and it was proved that the action brought by the wife of defendant for a portion of the diamonds, to which both plaintiff and defendant in this action are parties, is still pending undetermined.
    Upon this state of facts the court below directed a verdict for the plaintiff for the amount of the note, to which defendant’s counsel duly excepted.

      Samuel B. Higenbotam for appellant.
    The tender of debt, interest and costs, as made, divested bailee’s lien on the pledge. (Kortright v. Cady, 21 N. Y. 349; Harkdey v. Tatham, 1 Keyes, 222; La Motte v. Archer, 4 E. D. S. 46; Lawrence v. Marshall, 53 N. Y. 23; Haskin v. Kelly, 1 Robt. 173; Jones on Pledges, §§ 542, 592; Holmes v. Holmes, 12 Barb. 138; Becker v. Boon, 61 N. Y. 322 ; Jeannet v. Theasau, 1 Law Bul. 28; Mela v. Geis, 3 Civ. Pro. Rep. 152; Wheelock v. Tanner, 39 N. Y. 481; Edwards v. Farmers, 21 Wend. 467.) If the bailee was without excuse for refusing to return the property upon tender, he became liable to the bailor in replevin, in trover, in assumpsit; or in action for the debt the bailor might recoup or counter-claim. (Stearns v. Marsh, 4 Den. 227 ; Jones on Pledges, §§ 543, 566; Code, § 501; Tuthill v. Morris, 81 N. Y. 95.) It is no objection that the counterclaim arose after suit brought. ( Willis v. Chipp, 9 How. Pr. 568.) Any act which negatives or is inconsistent with owner’s right of property or possession amounts, in law, to a conversion. (Boyce v. Brockway, 31 N. Y. 493; Laverty v. Snethen, 68 id. 524; Pease v. Smith, 24 Alb. L. J. 535.) Delivery to party entitled protects bailee, and he may defend in the right of such party after such delivery. (Jones on Pledges, §§ 568, 569 ; Bates v. Stanton, 1 Duer, 79; W. T. Co. v. Barber, 56 N. Y. 552; Stowell v. Otis, 71 id. 36; Blivin v. Hudson R. R. R., 35 Barb. 188; 36 N. Y. 403; Barnard v. Kobbe, 54 N. Y. 517; Rogers v. Weir, 34 id. 463.) A reasonable excuse for temporary withholding made in good faith is no conversion, but refusal on a ground, false or deceptive, is conclusive evidence of conversion. (Holbrook v. Wight, 24 Wend. 177; Carroll v. Mix, 51 Barb. 212; McEntie v. Steamboat, 45 N. Y. 37; Ball v. Lincy, 48 id. 6; Mitchell v. Williams, 4 Hill, 13.) It is essential to interpleader whether in equity or under the Code, that the party asking the relief shows affirmatively that he is free from collusion and that he brings the property in dispute into court. (Story’s Eq. Jur., §§ 809, 812; Story’s Eq.’Pl., §§ 291, 294, 297; Code, § 820.) Defendant could have brought an action in the nature of a bill of interpleader in equity. (McKay v. Draper, 27 N. Y. 256 ; Ball v. Lincy, 48 id. 6 ; Bedell v. Hoffman, 2 Paige, 199 ; Leucas v. London Dock, 4 B. & S. 378.)
    Wm. Henry Arnoux for respondent.
    The Court' of Appeals has no jurisdiction over this action and the appeal should be dismissed. (Boreel v. Lawton, 90 N. Y. 293.) Damages arising from a conversion cannot be counter-claimed against an action on contract. (Chambers v. Lewis, 10 Abb. 206; 11 id. 510 ; Riser v. Stearns, 1 Hilt. 86.) The only available tender that can. be made after action brought is prescribed by section 732 of the Code, which requires that, in case of such a tender, it shall be made with costs to the time of tender, and that, if not accepted, it must be paid into court and written notice of such payment must be served upon the attorney within ten days thereafter. (Becker v. Boon, 61 N. Y. 317; Brown v. Ferguson, 2 Denio, 196; Simpson v. French, 2 Hill, 538 ; Tidd’s Pr. 669; Graham’s Pr. 249, 257.) The tender was not well pleaded because it was made after suit brought. (Kunzler v. Kohans, 3 Hill, 317; Torins v. Wilcox, 12 Wend. 303 ; Lee v. Levy, 4 Barn. & Cres. 390 ; Morris v. Cook, 19 Wend. 699 ; Wheeler v. Allen, 51 N. Y. 37; Heidenheimer v. Wilson, 31 Barb. 636; Rice v. O'Conner, 10 Abb. 362.) As matter of law, the alleged tender being conditional, was not a valid tender for any purpose. (Brooklyn B'k v. DeGrauw, 23 Wend. 341; Wood v. Hitchcock, 20 id. 47 ; Roosevelt v. Bull's Head Bk., 45 Barb. 579; Story v. Krewson, 55 Ind. 397; Cushman v. Martin, 50 How. Pr. 33.7; Heclas v. Slevin 53 id. 357; Clark v. Mayor, etc., 1 Keyes, 9 ; Rose v. Duncan, 49 Ind. 269.) A demand after suit brought is not suffi- " cient to make a conversion. (Goodwin v. Wertheimer, 99 N. Y. 149.)
   Miller, J.

There is no ground for the contention of the respondent’s counsel that this court has no jurisdiction over the appeal in this action.

The claim of the defendant which is sought to be interposed as a defense to the plaintiff’s demand arose out of the contract between them, and was connected with and constituted a part of the transaction. It would have been a defense by way of recoupment before the Code, and it now comes within the provisions of the Code of Civil Procedure.

The principal question arising upon this appeal relates to the validity of the tender made by the defendant of the amount due upon the note and his demand of the property which had been pledged as collateral security for the same. This tender was made for the amount of the note, interest and costs, after the commencement of the action, upon condition that the plaintiff return the property pledged. The plaintiff sets up in reply to the defense of the tender, that before the tender was made an action had been commenced against him by a third party (the wife of the defendant) for a portion of the property, and the defendant in this action was notified of that actioú and had become a party thereto, and that plaintiff, at the time of the alleged tender, had offered to return to the defendant the property for which suit had not been brought, upon payment of the note, but defendant had refused to accept such portion and to make payment.

The evidence upon the trial established the fact that the diamonds held by the plaintiff were pledged to him by the defendant as security for the paymen t of the promissory note in suit. The plaintiff, therefore, was a bailee of the same and only had the right to retain them until his debt was paid. Upon payment being made he was bound to return the, goods, and upon refusal to do so, became liable to the bailor in replevin or in an action of trover or assumpsit. If he sued upon the note the bailor would have had a clear right to recoup or counter-claim against his demand the value of the property pledged, if a tender had been made before suit brought. If the action was for a recovery of the goods, then the court, no doubt, would have the right to make provision that the debt be paid before the property was delivered. (Tuthill v. Morris, 81 N. Y. 95.) If the action were for trover then the debt should be deducted from the actual value of the property pledged. The tender here was made after the suit was brought and included the principal and interest of the debt and the costs of the action as far as it had proceeded. Being a conditional tender, and depending upon the return of the property, which was demanded, there would seem to be no obligation on the part of the defendant to pay the money into court, as in that event the plaintiff would have been entitled to the money absolutely. He had no right to it without the return of the goods and, as that was refused, no reason exists why the defendant should, pay the money into court. The plaintiff was fully protected without the defendants so doing, as he retained the property in his possession. The obligations of the pledgor and pledgee are mutual, concurrent and reciprocal. Where either party performs, he is entitled to performance by the other as a condition of his own performance. The refusal of either, where performance is tendered, furnishes ground for an action. (Holmes v. Holmes, 12 Barb. 138.) Tender is not required in such a case by a deposit in court for the reason that a payment into court is unconditional, and from that time the money becomes the property of the plaintiff absolutely. (Becker v. Boon, 61 N. Y. 322.)

If a deposit were made without a delivery of the goods the pledgor might lose his money and afterward fail to obtain his goods or he left to an action for the recovery of the same. A tender of performance may always be restricted by such conditions as by the terms of the contract are conditions precedent, or simultaneous, or proper to be performed by the party to whom tender was made. (Wheelock v. Tanner, 39 N. Y. 481.) It may also be made at any time and place and even after suit brought. Where the tender has only the effect of extinguishing the lien and does not discharge the debt, bringing the money into court is not required (Kortright v. Cady, 21 N. Y. 343), and the debt may be enforced after the lien is discharged.

The Code has made no radical change in the law of tender. It refers only to that class of tenders which are considered as satisfying and discharging debts. It has no application to cases where a tender is made of purchase-money on condition of the delivery of the deed, and tender of debt, on condition of a return of pledge, and cases of a similar character.

It follows that it was not necessary to bring the money into court to make the tender valid, and if the defendant had title to the property the lien of the plaintiff on the same was discharged and he became liable to the plaintiff for the goods or the value thereof.

We have examined the cases cited by the respondent’s counsel which it is claimed sustain a different doctrine in regard to the tender in a case like the present, and we think none of them are applicable to the facts presented in this case.

The claim that the defendant has no right to embody in his answer, without leave of the court, any matter arising after the commencement of the action in a case like this, and that the same can only be properly pleaded in continuance of the action and not as a bar, is not well founded. The defendant had clearly a right in a proper manner to set up the defense interposed by answer. Having done so and the answer having been received and not returned, and no objection made to the same before trial, and the plaintiff having allowed the trial to proceed without any objection and obtained judgment, even if originally it 'was necessary to apply to the court to set up the defense interposed, it is now too late to insist that it was improperly pleaded because leave was not obtained from the court. By consenting to the proceedings had, the plaintiff acquiesced in their regularity and waived the objection urged, if it had any merit whatever. He is not in a position now to claim that leave of the court should have been obtained to set up the defense set forth in the answer.

It only remains to be considered whether the conceded facts in the pleadings and the proof upon the trial show a conversion of the property. Unless the refusal to return the property was justified there was clearly a conversion of the same by the plaintiff, and the defendant had a right of action for the recovery of the valuefihereof or of the property itself, or to interpose the defense set up by him as a counter-claim to the plaintiff’s demand. We are unable to discover any ground upon which the plaintiff could establish a right to retain the property after a demand, if the defendant was entitled to the same as the owner thereof. The fact that a portion of the property was claimed by another person, and that a suit had been brought for a recovery thereof, and that the defendant had been made a party defendant in said action, furnishes no justification for the refusal. If the defendant was the owner of the property he had a right to it, and the plaintiff was not justified in refusing to comply with his demand for the reason that it was claimed by, and a suit had been brought for the recovery thereof by a third person. If he unlawfully refused to surrender the goods to the true owner, when demanded, he must abide the consequences of his own act. So long as the plaintiff retained possession without right he was liable to the true owner for the same or the value thereof. A delivery to the true owner would have been an entire protection to the plaintiff and a complete defense to the action brought against him.

The plaintiff as bailee had no right to deny the title of the defendant as bailor, if he, the bailor, was the true owner of the property. If there were conflicting claims to the same, the plaintiff had a complete remedy by bringing an action in the nature of a bill of interpleader, making the claimants parties thereto, and in that form of an action it could be determined who was the true owner of the property. In that way he could have avoided all risk or hazard. Having thus failed to assert his rights, he is in no position to claim that the action brought against him bars the right of the defendant to counterclaim his demand in this action. ( Welch v. Sage, 47 N. Y. 143.)

The action brought by the wife of the defendant and to which the defendant was made a party was no protection to the defendant. She had a right to discontinue it at any time. If determined adversely to her, defendant was without any relief whatever in that action. He would still be left to an action against respondent to recover the property or the value thereof. The controversy might thus be extended beyond reasonable limits to the defendant’s injury if he was the true owner, and possibly to his eventual loss by the long delay. The pendency of this action was clearly no answer to the defense interposed by the defendant. By a bill of interpleader the whole matter could have been disposed of in a single action.

It follows that the ruling of the court on the trial, that the plea of tender was not good because the money was not brought into court and kept there, was clearly erroneous as well as the decision of the court directing a verdict in favor of the plaintiff.

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

All concur, except Ruger, Ch. J., dissenting.

Judgment reversed.