author: O’Brien, J.: Van Brunt, P. J.:

text:
    George Bliss and Others, as Executors, etc., of Elizabeth Fogg, Appellants, v. Charles B. Fosdick, Individually, etc., and Others, Respondents, and by Others, Appellants.

      Appeal by any patty aggrieved — trust, void if there is no benefieia/i'y — creation of a trust■ — granting of anew trial.

    In an action brought by executors to compel a person acting as trustee to transfer to them certain certificates of stock, the question presented for decision was whether the executors or the trustee were entitled to the certificates.

      Held, that the question was one of title, and a decision against the plaintiffs’ title placed them in the position of parties aggrieved, and that they had a right to appeal therefrom.
    It is doubtful if a judgment rendered upon an answer of one defendant against his co-defendants leaves the persons against whom the judgment is awarded, though in default in their answer to the plaintiff, in such a position that they have no right to appeal.
    Under the laws of the State of New York a trust which is without a certain beneficiary who can claim its enforcement is void, whether good or bad, wise • or unwise.
    Elizabeth Fogg died, leaving a will and codicil, which werfe admitted to probate; they provided that out of the proceeds of the sale of certain shares of stock, to transfer which a power had been given to one Fosdiok, a certain sum was to be divided among certain specified charitable associations. Upon the decedent’s death the stock certificate in question was found in her safe deposit box with her other securities.

      An action was brought by the executors of the decedent against Fosdick and others to compel the transfer of such certificate of stock.
    The defendant Fosdick answered alleging that the testatrix had requested him to-accept from her, in trust, the certificate of stock, and to distribute the proceeds thereof among certain charitable organizations to be designated, in such proportions as she should direct. Tliat she indorsed the certificate to him that he might carry out the trust, and that she delivered to him a letter, signed by her, as follows:
    “I this day place in your individual possession, conveying to you all my right, title and interest in one thousand (1,000) shares of stock of the Guita Percha and Rubber Manufacturing Company. From the proceeds thereof I desire that you do appropriate the sum of one hundred thousand dollars in the name of Elizabeth Fogg, in sums of five thousand dollars each, to the various chalky organizations of which a list is hereto annexed.” There was no list of beneficiaries attached to the letter.

      Held, that, if a trust was created, the beneficiaries acquired an interest which could not be divested by any act, either of the trustee or of the creator of the-trust;
    That whether a valid trust was created depended upon whether it was completed,, by the designation of the beneficiaries.
    The granting of a new trial is a matter resting in the sound discretion of the-court, which should be exercised whenever justice requires it.
    Appeal by the plaintiffs, George’ Bliss and others, and by the-defendants, Iiiram H. Fogg and Benjamin Phipps, as executors, etc., of Mary J. H. Phipps, from a judgment of the Supreme Court, entered in the office of the clerk of the county of New York on the-12th day of July, 1893, rendered upon the decision of the court, after a trial at the New York Special Term.

      J. Hampden Dougherty, for the plaintiffs, appellants.

      Levi 8. Tenney, for the defendants, appellants.

      William W. Oromwell and Eckoard B. Hill, for respondent: Fosdick.

      James E. Ohcmdler, for respondent St. John’s Guild.
   O’Brien, J.:

This action was brought to compel the transfer to plaintiffs of' 1,000 shares of the capital stock of the Gutta Percha and Bubber Manufacturing Company, once the property of Elizabeth Fogg, plaintiffs’ testatrix, but assigned by her to the defendant Fosdick. Defendant Fosdick answered, setting up that the stock was transferred to him by the plaintiffs’ testatrix, in trust, to divide among-certain, charitable institutions. The other defendants are Mrs. Fogg’s residuary legatees, and charitable institutions, which, except St. John’s Guild, are beneficiaries under a codicil to decedent’s will, which purported to dispose of said stock, and, including St. John’s Guild, are likewise beneficiaries of the trust alleged by defendant Fosdick. St. John’s Guild was not originally a party defendant, and was not named in the codicil, but, as it appeared on the trial that it was a beneficiary of the trust, if any, whereof the defendant Fosdick is trustee, it was made a party by order of court, and has .answered, setting up the trust in said defendant, and claiming to be entitled to share in the proceeds of the stock in question.

It is insisted that neither the executors nor the residuary legatees have a right to appeal, and this argument is supported by the state7 ment that the charitable institutions, which, with one exception, are entitled to take under both the codicil and the trust, do not appeal. The case of Bryant v. Thompson (128 N. Y. 426) is cited as authority for this contention.

In that case the executors and trustees brought an action -for the construction of a will, asking the court to determine which of two parties was entitled to a certain fund in plaintiffs’ hands as trustees. The judgment rendered decided the question, which was acquiesced in by both parties to the fund, and it was therein held that the plaintiffs, executors, were not parties aggrieved, and, therefore, under section 1294 of the Code, had no right to appeal.

The distinction between that case and this, we think, is apparent. This is an action brought by the executors for the purpose of compelling the defendant Fosdick, as trustee, to transfer the certificate of stock, and the question presented for decision is, whether the executors or the said defendant are entitled to the certificate. Thus, the question is one of title, and we think that a decision against plaintiffs’ title placed them in the position of parties aggrieved, within the meaning of the Code of Civil Procedure, and, therefore, that they have the right to appeal.

The right of the residuary legatees to appeal is more uncertain. There can be no doubt that a judgment rendered in plaintiffs’ favor, upon a defendant’s default for failure to answer, would not leave to such defendant a right of appeal. But where, as here, the judgment rendered was not for the plaintiffs by reason of a default in answering, but resulted from the service of the answer of a co-defendant demanding affirmative relief, which by the judgment was granted; and when we remember that under the Code practice there is no such thing as a defendant, upon whom a co-defendant so serves his answer, interposing any defense thereto, it is doubtful if a judgment awarded upon the answer of one defendant against his co-defendant leaves the person against whom the judgment is so awarded, though in default in his answer to plaintiff, in the position that he has no right to appeal.

It is not necessary, however, to determine the question whether the residuary legatees can appeal. Upon the motion made to dismiss the appeal of the executors on the ground that they had no appealable interest, we held adversely to such contention, and after a re-examination of the question we adhere to our former opinion in holding that, upon the facts here appearing, which distinguish it from the case of Bryant v. Thompson {supra), the executors have the right to appeal.

With this preliminary question thus disposed of, it remains to he determined whether the stock of the G-utta Percha and Rubber Manufacturing Company is to be distributed under the codicil, or whether the stock vested in the defendant Fosdiclc as trustee for certain charitable corporations.

Upon the trial it appeared that on January 3, 1891, Elizabeth' Fogg died, leaving a will executed in 1888, and also a codicil executed December ■ 21, 1890, both of which instruments were admitted to probate.

The codicil, after certain bequests to servants in her employ, provided as follows : “ Second. Out of the proceeds of sale of one thousand shares of the Gutta Perdía and Rubber Manufacturing Company, * * * and to transfer which a power has lately been given to Mr. Charles B. Fosdick, I do hereby give and bequeath the sum of one hundred thousand dollars to be equally divided among the following charitable associations,” naming them.

Upon the death of Mrs. Fogg the certificate of stock was found in her safe deposit box with other securities belonging to her estate. She having died within two months after the execution of the codicil, the residuary legatees, in order to carry out her wishes, executed a release of all claim to this stock.

All the parties, except the defendants Fosdick and St. John’s Guild, thought that the prayer of the complaint should be granted, requiring the transfer of the certificate by Fosdick to the executors for the purpose of having its proceeds distributed under the terms of the codicil, the residuary legatees going so far in that direction as not to interpose any answer. The defendant Fosdick, and subsequently St. John’s Guild, answered, alleging that on December 19, 1890, Mrs. Fogg had requested him to accept from her in trust the certificate of stock and to distribute the proceeds thereof among certain charitable organizations to be designated, in such amounts and proportions as she should direct; that she indorsed the certificate to him that he might cany out the trust, and that on December twentieth she delivered to him a letter, signed by her, as follows : “ I this day place in your individual possession, conveying to you, all my right, title and interest in one thousand (1,000) Shares Stock of the Gutta Percha and Rubber Manufacturing Company.

From the proceeds thereof I desire that you do appropriate the sum of one hundred thousand dollars in the name of Elizabeth Fogg, in sums of five thousand dollars each, to the various charity organizations of which a list is hereto annexed.”

As correctly held by the learned trial judge, if a trust was created, the beneficiaries acquired an interest which could not be divested by any act of either the trustee or the creator of the trust, and he cites with approval the language of the opinion in Levy v. Levy (33 N. Y. 107), that “ if there is a single postulate of the common law established by an unbroken line of, decisions, it is that a trust without a certain beneficiary who can claim its enforcement is void, whether good or bad, wise or unwise.” While this may not be strictly so at common law, it is unquestionably the rule under our statute.

So far as Mrs. Fogg was concerned, it would appear from the testimony given as to the way in which the codicil came to be executed that she intended to have the stock disposed of thereunder; but as said, if a valid trust was created prior thereto, it was irrevocable, and the beneficiaries had the right to require its enforcement, notwithstanding the subsequent execution of the codicil.

There can be no doubt that on the 19th of December, Í890, and up to the time that the letter to Mr. Fosdick was signed, Mrs. Fogg contemplated tlie creation of a trust, and the serious question in this case is, -whether it was ever completed or rendered definite by the designation by Mrs. Fogg of the beneficiaries.

After the signing of the letter it would appear that Mr. Fosdick concluded not to accept the trust, and suggested to Mrs. Fogg that the proper way to accomplish her purpose was to make some change in her will, and it was in accordance with this suggestion that the codicil was subsequently executed. All the elements essential to constitute a valid trust, the subject being personal property, were present except the designation of the beneficiaries. And whether these were or were not designated is the difficult question in this case. The letter states that thereto annexed is a list of the charity organizations which are to be the beneficiaries, but it is conceded that no list of beneficiaries was attached to that letter. The question, however, still remains whether a list which was prepared by a Miss Norton, who was an attendant on Mrs. Fogg, was ever delivered by Mrs. Fogg to Mr. Fosdick.

The learned trial judge states in his opinion, and has found, that “on the morning of the 20th of December, 1890, when said Fosdick called at her said residence, the said list was delivered to the said Fosdick by said Elizabeth Fogg.” If there is evidence sufficient, to sustain this finding, then his conclusion is correct. And this involves an examination of the testimony given upon the trial to determine whether such finding is supported.

It is apparent that the only persons in a position to give testimony upon this subject are Mr. Fosdick and Miss Norton. The. former, in testifying respecting this list, says: “ If my recollection serves me now, when I went there in the morning [that is the 20th], Miss Norton had possession of that paper and she handed that paper to me, and I handed it back again to her and told her she should keep it among Mrs. Fogg’s papers, and be sure that it was preserved. That is my recollection of that paper. * * * It was on the morning I went there with that letter * * * to. be signed, and that letter is dated the 20th; that is the only way I can remember it.” And in another portion of his testimony he repeated again that Miss Norton handed him the paper containing a list of the charity organizations.

Miss Norton testified that during the night of December nineteenth she was occupied in making out lists of charitable institutions; that she made different lists until she got one pretty straight, and in the morning of the twentieth gave it to Mrs. Fogg, and that Mr. Fosdick came there about nine o’clock. Being asked as to this list the direct question whether Mrs. Fogg gave it to Mr. Fosdick, she answered as follows: “She gave it to Mr. Fosdick, I believe; 1 camit be sure about it.” And she testified that Mr. Fosdick gave the paper back to her and told her to take care of it, and that it remained in her possession up to Sunday, the day of the execution of the codicil, and that she afterwards burned it, having copied the names onto another paper which she marked “ original,” and which was offered in evidence as Exhibit 3.

The only evidence that could be construed into a statement by either witness that the paper had been handed by Mrs. Fogg to Mr. Fosdick is found in one question and answer in the testimony of Miss Norton : “ Q. That is a list and it is a correct copy of the one you handed Mrs. Fogg and which she gave Mr. Fosdick ? A. It is a correct copy.” Nowhere in the testimony is there any clear or definite statement on-the part of either Mr. Fosdick or Miss Norton of a ‘delivery of the list of beneficiaries by Mrs. Fogg to Mr. Fosdick, nor does it clearly appear that such delivery was made by any one else, either with the letter or at any other time.

Whether the trust, therefore, was ever completed or not is a question of considerable doubt. But upon the testimony we would not perhaps be called upon to interfere with the conclusion reached by the trial judge, were it not for other considerations which we think justify a new trial.

The granting of a new trial is a matter resting in the sound discretion of the court, which should be exercised whenever justice requires it; and we think that such an instance is presented in this case, not resulting so much from any error in any ruling or conclusion reached by the trial judge, but from the conduct of the parties and the way iu which the questions were presented and tried before the court. As already stated, all the parties, except the defendant Fosdick, who set up this trust, including the residuary legatees, proceeded upon the theory that the stock should be transferred by Mr. Fosdick, to whom it had been assigned under an uncompleted trust, for distribution under" tlie terms of tlie codicil: and tlie good faitli of the residuary legatees, who are directly affected and interested in the judgment appealed from, rested upon the notion that this would be the disposition made, and they did not put in any answer.

The importance of the inquiry as to the delivery of the list of beneficiaries does not seem to have been sufficiently impressed upon .counsel at the trial, although it does appear that both endeavored to elicit testimony upon the question; but as shown by the condition of the record, from which quotations have been made, the whole subject was left in a hazy, doubtful and uncertain state. This doubt and uncertainty, in a matter of so much moment and involving so much money, we think should be cleared up by a new trial.

It is, with less reluctance that we reach this conclusion, because there should be a modification of the judgment in respect to allowing, in addition to the $100,000, the dividends which were declared upon the stock to those held to be entitled to share as beneficiaries.

In the letter, the beneficiaries were to receive $100,000, and in addition thereto they might be entitled to interest. It would seem, both from the terms of the letter and of the codicil, which speaks of giving $100,000 out of the proceeds of sale of the stock, that it was worth more. There is no intention expressed, however, of giving such beneficiaries more than the $100,000. It appears that large dividends were paid upon this stock, and it is clear that the dividends would follow the stock. The certificate would become the property ■of the trustee, who was directed to sell the same, and out of the proceeds of sale to divide $100,000. This amount, with the possible exception of interest thereon, is all that we think the beneficiaries were entitled to. The value of this stock, over and above the $100,000 and interest, we think should have gone to the executors to be distributed under the terms of the will.

"Upon the whole case, therefore, we think that justice requires that an opportunity should be afforded to the residuary legatees to interpose an answer, when, with all the parties before the court, and with the issue clearly defined, it can be clearly and definitely determined whether or not Mrs. Fogg delivered the list upon which appeared the names of the beneficiaries.

Our conclusion is that the judgment should be reversed and there should be a new trial, without costs to any of the parties upon this appeal.

Follett, J., concurred.

Van Brunt, P. J.:

I concur upon the ground that there was no sufficient evidence to> show that the list of beneficiaries was ever delivered to Mr. Fosdick by Mrs. Fogg or at her request.

Judgment reversed and new trial ordered, without costs to any of the parties upon this'appeal.


source: Caselaw Access Project

author: O’Brien, J.: Follett, J.:

license: Public Domain

text:
    Georgiana Upton, Appellant, v. Abram N. Bernstein and Another, Respondents.

      Will — when admitted to probata conclusive evidence of title to personal property — prima facie evidence of title to realty — it may, to show title to land, be established by the testimony of a single witness.

    Sections 2618 and 2619 of the Code of Civil Procedure require that in all proceedings relating to the probate of a will two witnesses at least must be examined if within the State and competent and able to testify.
    A will cannot be given in evidence to show title to personal property until it. has been admitted to probate, but such title is conclusively established by the probate of the will. In regard to real property, however, the will, even if admitted to probate, is but prima facie evidence of title.
    In an action in the Supreme Court upon the single issue as to the ownership of real estate, the due execution of a will can be prima facie established by the-testimony of a single witness.
    If, upon the trial of an action, the title to personal property derived from a. testator, no matter how small its value, is involved, such title must be established by the probate of the will under which the title is derived, but a devisee of real estate under a will not admitted to probate is not required to establish his title under the proceedings for probate, but in an action in the Supreme Court wherein a single witness is produced, and without any explanation of the, failure to produce another subscribing witness, he may establish the will.
    Appeal by tlie plaintiff, Georgiana Upton, from a- judgment of tbe Supreme Court in favor of tlie defendants, entered in tlie office of the clerk of the county of New York on the 26th day of Decernher, 1S93, upon the decision of the court, rendered after a trial at the New York Circuit before the court without a jury, dismissing the plaintiff’s complaint.

      L. A. Gould, for the appellant.

      Moffett & Kramier, for the respondents.
   O’Brien, J.:

The plaintiff, as devisee of one Crescentia Mueller, brought this action to recover moneys received by defendants, who were real estate agents employed by Mueller in her lifetime to collect rents of real property of which she died seized.

To establish her title, plaintiff called one of three subscribing witnesses to a paper which purported to be the will of Mueller, and which, it appeared, had been presented to the surrogate of New York county for probate, but not probated at the time of the trial of the action. This one witness testified to the drawing and execution and publication of the will, after which the plaintiff offered the paper in evidence as the will of Mueller. If thq factum of the will was established, the contents having been admitted, as containing a devise of the premises to plaintiff, she would have made out her cause of action. But the objection was made to the admissibility of the paper in evidence as a will, that the testimony of two witnesses was necessary to establish its validity. The court sustained this objection and dismissed the complaint, and it is from the judgment entered thereupon that this appeal is taken.

The single question presented, therefore, is whether in an action in the Supreme Court, upon the single issue as to the ownership of real estate, the due execution of a will can be established prima facie by the testimony of a single witness, or whether there must be, as held by the trial court, two witnesses.

Section 2618 of the Code of Civil Procedure provides that <c before a written will is admitted to probate, two at least of the subscribing witnesses must be produced and examined, if so many are within the State and competent and able to testify.” And the succeeding section (2619) provides the mode of procedure in case of the death, absence from the State, lunacy, or other incompeteney of a witness required to be examined.

These sections require, therefore, that in all proceedings relating to the probate of a will, two witnesses at least must be examined, if within the State and competent and able to testify. And it is equally well settled that a will cannot be given in evidence to show title to personal property until it has been probated, but that such title is conclusively established by the probate of the will. In regard to real property, however, the will, even if probated, is but prima facie evidence of title.

As the result of this difference of weight to be given to the probate of a will in respect to personal as distinguished from real property, appellant contends that a different rule prevails as to the number of witnesses required. The authority relied on to sustain this contention is said to be that of Harris v. Harris (26 N. Y. 440).

In that case the plaintiffs sought to partition the property which the defendants claimed to own by virtue of a will alleged to have been lost or destroyed. As shown by the statement of facts, the defendants gave evidence tending strongly to show that the will was made and executed with all the formalities required by the statute, and that the instrument was lost or fraudulently destroyed in the testator’s lifetime. “ The provisions or contents of this will were proved distinctly and clearly by one witness, who drew it at the request of the testator, and who was one of the subscribing witnesses to it.” According to this testimony the will contained a devise of testator’s lands described in the complaint to the defendants. To meet this the plaintiff introduced in evidence the judg7 ment roll in a suit brought by the defendants for the purpose of having such will established as a lost or destroyed will, and it was shown that such action was brought and judgment finally entered dismissing the complaint, and this judgment was claimed to be a bar. It was held that the defendants were not concluded by this judgment obtained against them in their action, and in the course of the opinion, upon the question whether one or more witnesses were necessary to establish the contents, as distinguished from the factum of the will, the court say: “ Nor can it be claimed that the probate of a will not lost or destroyed, in a Surrogate’s Court, or one lost or destroyed, in the Supreme Court, under the provisions of the Revised Statutes, is in either case conclusive as to real estate. It is conclusive as to personal, but prima facie only as to real estate, and a failure to liave a will probated * * * does not prevent those Claimants under it from setting up and establishing their -title by common-law evidence in an action in any court, either of law or equity, where the title to the real estate thereby devised may be involved or come in question, unless some statutory provision has altered the common-law rules of evidence in respect to the proof of a will lost or destroyed by accident or design, and made it incumbent in all cases to prove the contents of such will by at least two credible witnesses or by one witness and a correct copy or draft of the lost instrument. About the only question in the present case is whether such a statutory rule exists.”

It was accordingly held in that case that no such statutory rule exists, and that the common-law rule of evidence which allowed the proof of the contents of a will in the same manner as that of a deed, by a single credible witness, remained unaffected by statutory provisions relating to the mode of proof relative to probate proceedings.

Probably as the result of the misstatement in the head note of the decision in that case, it has been frequently quoted as authority for the proposition that it directly decided that, upon the single issue of ownership, the due execution of a will might be established jprima fade upon the testimony of a single witness. The reporter, however, failed to make the distinction which exists in the case between proving the factum of a will and the contents, which are two very different things. That case,, therefore, is authority only for the proposition that the contents of a will may be proved by the common-law rules of evidence.

In the case at bar the contents of the will were admitted, and it is conceded that if the factum of the will was established the plaintiff, as devisee, by virtue thereof was entitled to maintain the action and recover.

Apart, however, from the case of Harris v. Harris there is abundant authority" among the earlier cases for the proposition that a will of real property in the Supreme Court might be proved and established by one witness, according to the common-law rule of evidence. (Jackson v. Le Grange, 19 Johns. 386; Dan v. Brown, 4 Cow. 483; Jackson v. Vickory, 1 Wend. 406 ; Caw v. Robertson, 5 N. Y. 134.)

In this last case (p. 134) Gray, J., says: “ If the title to real •estate devised should be contested one only of the subscribing witnesses, who can prove the execution of the will, need be examined.”

The only case where a contrary view is seemingly indulged in is that of Chapman v. Rodgers (12 Hun, 342), wherein the plaintiff brought an action to have his title declared valid, or, if this -were not done, that a partition and sale of the premises might be had. It was therein held, one of the judges dissenting (head note), that the ■action was one in equity to establish the validity of a will of real estate conclusively as against all the heirs, and that the rule in such •cases was that all the witnesses thereto must be called and examined, except in the event of death, insanity or absence, or unless the heir waived his right, and that the court below erred in this case in holding that it was sufficient to call and examine only one witness. In the course of the prevailing opinion the judge says : But where the object of the action, as in this case, is to establish a will forever and conclusively against all the heirs, the rule requiring the production of all the witnesses * * * on probate before the surrogate, why should not all be produced in an action like this, -which is conclusive even as respects real estate ? ”

The difference between the rule of evidence which prevails upon probate proceedings and that in actions in the Supreme Court is based upon the fact that with respect to probate proceedings they •are controlled by a statute, while in actions in the Supreme Court the common-law rule of evidence prevails. The jurisdiction of the two courts with respect to questions arising as to the establishment or construction of a will, and the difference in the evidence that may be resorted to, have been discussed by the Court of Appeals in The Matter of Keleman (126 N. Y. 79) and Matter of O’Hara (95 id. 403).

It would thus appear, to put it most strongly, that if the title to personal property derived from a testator, no matter how small or insignificant its value, is involved, such title must be established by probate of the will under and through which the title is derived, which, as we have seen, would require at least two witnesses, if within the State and competent and able to testify; while, on the other hand, a devisee of real estate under a will not probated is not required to establish his title under the proceedings for probate, but, in an action in the Supreme Court, wherein a single witness is pro■ducecl, and without any explanation of the failure to produce at least another subscribing witness, he may succeed in establishing the will.

'Whatever anomaly may in reason seem to exist, growing out of the difference in the number of witnesses required in the different forms, we do not regard the question upon authority as an open one.

Our conclusion is, therefore, that the judgment must be reversed and a new trial ordered, with costs to appellant to abide the event.

Yan Brunt, P. J., concurred; Follett, J., concurred in the result.

Follett, J.:

April 2, 1893, the owner of the fee of No. 1,001 Broadway in the city of Brooklyn died. For sometime before that date the defendants had been employed by the owner to collect the rents from the tenants occupying the property, which they continued to collect after her death. This action was brought to recover the rents which had accrued and were collected by the defendants after the death of the owner To prove title to the realty and establish the plaintiff’s right to recover rents accruing and collected by the defendants since April 2, 1893, a paper, purporting to be the last will and testament of the late owner of the property, was produced by which No. 1,001 was devised to the plaintiff. The plaintiff called the draughtsman of the will, who was one of the three subscribing witnesses, who testified that the testatrix signed, sealed, published and declared the paper to be her last will and testament in his presence and in the presentee of two other persons who were subscribing witnesses; and that he and said two other witnesses, at her request and in her presence, and in the presence of each other, subscribed their names as witnesses thereto. The will was then offered in evidence, but on the objection of the defendants that “the statute requires that the testimony of two witnesses to a will shall be necessary. to establish its validity,” it was excluded, and the plaintiff excepted. This was error. At common lawq in an action where the plaintiff sought to establish his title to realty through a will, it was sufficient to prove its due execution by one of the subscribing witnesses. (Bull. N. P. 264; 3 Phill. -Ev. [Edwards’ ed.] 754 and cases cited.) Such was tlie rule under the revised laws, when the statute required that there should be three subscribing witnesses to a will. (Jackson v. Le Grange, 19 Johns. 386; Dan v. Brown, 4 Cow. 483; Jackson v. Vickory, 1 Wend. 407.) Such is the rule under the Revised Statutes. (Caw v. Robertson, 5 N. Y. 134; Harris v. Harris, 26 id. 433; Chapman v. Rodgers, 12 Hun, 347; Colligan v. M’Kernan, 2 Dem. 421.) This rule has not been changed by sections 1860 and 2621 of the Code of Civil Procedure.

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

Judgment reversed, new trial ordered, costs to appellant to abide event.


text:
    The People of the State of New York, Respondent, v. The Saint Nicholas Bank of New York, Hugh J. Grant, as Temporary Receiver, Petitioner, Appellant.

      Temporary receiver of corporation —to act under the instructions of the court— right of set-off between a bank and its depositor.

    The temporary receiver of a bank has no power, without the instructions and order of the court, to surrender collaterals pledged as security for a loan, and to permit the offset of an amount on deposit therein. (Van Brunt, P. J., dissenting.)
    A temporary receiver is an officer and representative of the court, and is at all times entitled to and must receive the advice and protection of the court. His powers are limited by the provisions of the Oode of Civil Procedure (§§ 1788, 1789), which expressly confer upon the court.the duty of enlarging them from time to time, as the exigencies of the situation may require.
    The right of set-off exists between a bank and its depositor upon cross demands, when both are due.
    It is only in the case of proved or admitted insolvency that a person, liable upon a call loan, can set off his deposit against the same, where he has not demanded payment thereof.
    Appeal by Hugb J. Grant, as temporary receiver of The Saint Nicholas Bank of New .York, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 16th day of January, 1894, denying the defendant’s motion for instructions.

      Job')i M. Bowers, for Hugh J. Grant, as temporary receiver,, appellant.

      Theodore E. Ha/nooeTi, Attorney-General, for the People,, respondent.
   O’Brien, J.:

On the 26th of December, 1893, the applicant was appointed temporary receiver of the St. Nicholas Bank in an action brought upon the relation of the Attorney-General, pursuant to sections-1785 and 1786 of the Code of Civil Procedure, to dissolve the corporation because of its insolvency. At this date one Charles Kurzman had to his credit in the bank $1,145.14, and he was indebted to-it upon three demand loans amounting to $3,000, which were-secured by a pledge of collaterals. Kurzman notified the receiver that he was prepared to pay off the demand loans upon the receiver applying such balance as an offset. Thereupon the receiver, being; in doubt as to the propriety of granting such request, applied to-this court for instructions as to whether he should make such application and surrender the securities.

The court, while stating that a depositor who was indebted to the-bank had a right to have the amount of his deposit offset against his debt, denied the application of the receiver and refused to-instruct him in the premises, for the reason, as stated in the opinion, that there is no necessity for the Receiver to make a special application to the court in such cases.”

In this, we think, the learned judge overlooked the express provisions of the Code. As some question has arisen, and the practice has not been definitely announced, we think it proper to refer at length to the sections of the Code which we regard as controlling.

Preliminary thereto, it is to be remembered that the distinction between temporary and permanent receivers is a very old one, and the reason for it becomes apparent when we consider the duties-which each has to perform, and the powers essential and necessarily given to each to enable him to perform such duties. We do not-deem it necessary to examine at length the powers and duties of a temporary and permanent receiver respectively, prior to the Code,, for the reason that the subject is fully discussed in the case of Herring v. N. Y., L. E. & W. R. R. Co. (105 N. Y. 340), and because-.the Code itself is explicit as to what are the duties and powers of -such officers.

Thus, by section 1Y88 it is provided that in the action brought by the Attorney-General the court, as was done in this case, may appoint a receiver, who, by the express language of the section, “is a temporary receiver until final judgment is entered. A temporary receiver has power to collect and receive the debts, demands and ■other property of the corporation, to preserve the property and the proceeds of the debts and demands collected, to sell or otherwise dispose of the property, as directed by the court. * * * Unless additional powers are specially conferred upon him, as prescribed in the next section, a temporary receiver has only the powers specified in this section and those which are incidental to the exercise thereof.”

Section 1Y89 provides as follows: “ A temporary receiver '* * * is in all respects subject to the control of the court. In •.addition to the powers conferred upon him [as temporary receiver], * * * the court may, by the order or interlocutory judgment appointing him, or by an order subsequently made in the action, or by the final judgment, confer upon him the powers and authority and subject him to the duties and liabilities of a permanent receiver, •or so much thereof as it thinks proper, except that he shall not make any distribution among the creditors or stockholders before final judgment, unless he is specially directed so to do by the court.”

From a reading of these sections, we think it clear that the receive!’, without the instructions and order of the court, would have no power to surrender the collaterals which were pledged as security for the loan, and permit the offset of the amount on deposit. Hence the necessity in a proper case of applying to the court. As correctly argued by counsel for the receiver, the latter is an officer and representative of the court. He is at all times entitled to and must receive the advice and protection of the court. The provisions of the Code referred to, moreover, limit his powers and expressly confer upon the court the duty of enlarging them from time to time, as the exigencies of the situation may require, As said, therefore, by Daneoeth, J., in The People ex rel. Atty.-Gen. v. Security Life Ins. & Annuity Co. (79 N. Y. 270): “Since the receiver is an officer, or, as he is sometimes called, the hand,’ of the court, it would be singular if lie could not at any time go to it with bis complaint or for instructions in regard to any matter touching the fund placed, in his custody.”

It will be seen, moreover, that it was the view of the lawmakers^ that the assets of the corporation could be more wisely administered, by not conferring general powers upon a temporary receiver, but by' practically placing the corporation in the hands of the court, and: conferring upon the court the right to enlarge the powers of or give-additional authority to the temporary receiver when in a given case it was shown to be necessary for the wise and proper administration, of the affairs of such insolvent corporation.

The theory of the law providing for a temporary receiver is, that; until the final judgment is entered in the action declaring the corporation to be insolvent and that its affairs are to be wound up and. its assets distributed, the temporary receiver may have to be discharged, and that he should only interfere with the assets pending-the litigation just so far as is necessary to preserve them, and. that' he should not be allowed to sell or dispose of them except from, necessity, and then upon application to the court.

With respect to the present application, the law was correctly laid down by the court, because the right of set-off exists between, the bank and its depositor upon cross demands where both are due.. Here no demand having been made by the depositor, his claim was. not due unless such demand is excused by the insolvency of the-bank..

Now, it is not admitted or proved in the case at bar that the Saint Nicholas Bank is or was insolvent. It has yet to be determined, and the temporary receiver has nothing to say on that subject, nor ought he to be called upon to admit or deny that allegation. Tet it is only in the case of proved or admitted insolvency that the person, liable on the call loan can set off his deposit where he had not; demanded payment thereof.

The denial of the motion of the receiver upon the ground that there was no necessity for any instructions was in effect a denial of his right in a proper case to allow a set-off. Even though we assume that there was no doubt as to the right, upon the facts stated, of the depositor to the set-off, the temporary receiver, being without, power, could not allow it without the authorization of the court.. Hence the necessity of the application, leaving it for the court to ■determine upon the facts presented whether it should grant or refuse it. But the refusal to either grant or deny the application ■of the receiver upon the ground that there was no necessity for it ■seems to us to have been error.

The order appealed from should, therefore, be reversed, and the receiver is instructed to apply the balance due to Charles Kurzman, ■and upon receiving the difference surrender the securities.

Eollett, J., concurred.

Van Brunt, P. J.:

The petitioner herein was appointed in December-, 1893, temporary receiver of the St. Nicholas Bank, and he thereupon duly qualified ■and entered upon his duties. On the-day of January,- 1894, said receiver presented his petition to this court, alleging that one •Charles Kurzman was indebted to the bank upon certain demand loans aggregating $3,000, for the payment of which he had deposited •certain collateral securities. He also alleges inferentially that said Kux’zman Avas a depositor in said baxxk, axxd that at the time said bank ceased to do busixxess there was standing to his credit as such •depositor the sum of $1,145.14. The petitioner further shows that •on the 28th of December-, 1893, he was notified by said depositor that he was prepared to pay off said loans, applying his balance with said baxxk as an offset against said loans. The petitioner further alleges that, being in doubt as to the propriety of granting the request of said Kurzman to pay. off said loans, and allow the offset ■of the balance of his deposit as against the amount due and owing by him to said bank on accoxxnt of said loan and to return said col-latex’als, he prays the instructions of the court in the prexnises; and with said petition subxnitted an order which he desired, directing him to make such offset and to sux-render said securities upon payment of the balance rexnaixxing due upon said dexnaxid loans. The court below refused to make the direction, holding that if the books of the bank shoAved the facts above set forth, the receiver would be protected in the absence of any suggestion of fraud; and, thex-efore, it could see no reason for gx’anting the oi’der applied for in this case; and an order was thereupon entered denying said application, and from such order this appeal is taken.

It is admitted by tbe appellant tliat if tlie petitioner ivas a permanent receiver, there would be no necessity for the application to the court; but it is claimed that what the receiver desired to do in reference to the receipt of this loan he was not permitted to do under his appointment as temporally receiver, because he had no right to assume to dispose of the property of which he was the temporary receiver. ,

I am unable to see that by the procedure which was desired by the temporary receiver there is any disposition made of any property of the corporation. On the contrary, he is simply collecting debts due to the corporation, which he is in duty bound to do whether he is temporary or permanent receiver.

By the provisions of the Code (§ 1788) under which temporary receivers are appointed, a temporary receiver has power to collect and receive the debts, demands and other property of the corporation, to preserve the property and the proceeds of the debts and demands collected, to sell or otherwise dispose of the property as directed by the court, to collect, receive and preserve the proceeds thereof (namely, of such sales) and to maintain any action or special proceeding for any of those purposes (namely, for the collection, receipt, etc., of the debts, demands and other property of the corporation, or for the collection, receipt and preservation of the proceeds of any sales of property of the corporation made by direction of the court).

Now, the temporary receiver having the right to maintain an action to recover a debt due the corporation, what would be the judgment which the temporary receiver could procure in case he brought suit to recover the loan in question ? Clearly for the balance which would be due to the bank after offsetting the amount of the depositor’s balance, upon payment of which the receiver would be required to give up the securities pledged as collateral. Now, lie having the power to collect and the power to sue, it is difficult to see why he has not power to receive payment upon the same terms which lie could get by suit. If a receiver has no power, independent of special directions of the court in each particular case, to surrender the collaterals pledged for a loan with the bank of which he has been appointed temporary receiver, many of the securities of the corporation would be placed in great jeopardy. If a receiver holds indorsed notes for the payment of which negotiable collaterals have been pledged, in order to charge the indorser the receiver must not only present the notes, but have the collaterals in readiness to be surrendered in case the maker pays the note; and unless these conditions are complied with the indorser is discharged. (Ocean National Bank v. Font, 50 N. Y. 474.) If upon payment of loans due to the bank the collaterals held as security for these loans cannot be surrendered by the temporary receiver, how many indorsers may be discharged ? This illustration simply shows that a temporary receiver has ample authority to receive payment of loans and surrender collaterals held as security, and he needs no direction from the court to perform these duties.

The idea in obtaining an order of the court undoubtedly is to protect the receiver under all circumstances. But it is only where there are doubtful questions that the receiver is entitled to come to the court for instructions. Where, upon a given state of facts his duty is plain, there is no more reason for a receiver coming to the court for instructions than there is for any other trustee. And gross abuses have grown up because of the facility with which the courts have granted these orders in particular cases. If a receiver is entitled to any instructions they should be in the nature of a rule of action, and not a direction to do a particular thing in a particular case. The court is supposed to know what it is doing when it lays down a rule of action, but it by no means follows when it directs a. particular thing to be done in a particular case.

It is undoubtedly true that a temporary receiver is a mere custodian, standing in the place of the court, and is not in any way a. trustee for the creditors of the corporation. But he is supposed to be an intelligent custodian, able to manage the ordinary affairs of collecting and preserving the assets of a corporation without specific, directions from the court in individual instances as to what should be done. Great stress is laid upon the remarks of Judge Danfobth in the case of The People ex rel. the Attorney-General v. The Security Life Ins. Co. (79 N. Y. 263). At page 270 he says: “ Since the receiver is an officer sometimes called ‘the hand’ of the court, it would be singular if he could not at any time go to it with his complaint, or for instructions in regard to any matter touching the fund placed in his custody, and more especially when, as in the case before us, it is in danger, through his own error, of being unfairly distributed.”

This language is to be construed, having in view the facts of the case. In that case, because of the faulty advice given by the receiver, certain creditors were in danger of losing their claims, and the receiver applied to the court to know what should be done, and the court pointed out the way in which the rights of these creditors might be secured. It was this question which was being discussed, and in such a case the court held that the receiver was justified in coming to the court for instructions •— a case very different from those which continually arise in the ordinary administration of the affairs of a corporation in the process of liquidation.

That this is the policy of the law is strikingly evidenced by the provisions of section 1189 of the Code, which provides that in addition to the powers conferred upon him by the provisions of the last section, the court may, by the order or interlocutory judgment appointing him, or by an order subsequently made in the action, or by the final judgment, confer upon him the powers and authority and subject him to the duties and liabilities of a permanent receiver, or so much thereof as it thinks proper.

This language clearly shows that if the necessity exists that the temporary receiver should have the powers of a permanent receiver in addition to that which he enjoys as a temporary receiver, the proper course is for the court to give him such powers, and not to direct him to do a particular thing which he would be able to do if he were a permanent receiver. A temporary receiver is no more under the control of the court, and is no more an officer or hand of the court, than a permanent receiver. And it being conceded that if the petitioner were a permanent receiver, he would have the authority to do that which he by his petition in this proceeding asks the court to direct him to do, it seems evident that if any order were necessary (which it seems to me clear it was not) the proper course would have been to confer upon him the powers -of a permanent receiver in respect to the subject involved.

As already suggested, this is the clear intention of section 1189. It says that in addition to the powers conferred upon him by the last section (referring to the section which treated of the powers of a temporary receiver) the court may confer upon him the powers and authority of a permanent receiver or so much thereof as it thinks proper; except that he shall not make any distribution amongst the creditors and stockholders before final judgment unless specially directed so to do by the court. And this is the only case in which special directions are contemplated to a temporary receiver in respect to subjects over which a permanent receiver would have authority by virtue of his appointment.

I repeat that it seems to me clear that it was the intention in the framing of this section, to prevent applications in special cases by a temporary receiver; and to provide, where necessary, that his powers should be enlarged by conferring upon him the powers of a permanent receiver.

In the case at bar, it being conceded that a permanent receiver would have had the right to do that which the petitioner asks to be directed to do, the manifest course to pursue would have been in any event to do nothing more than confer upon the temporary receiver the powers of a permanent receiver in respect to the subject involved. And the court was entirely right in refusing to grant the order asked for, directing the receiver to do a specific thing in a specific case. But, as already stated, it seems to me to be apparent that the temporary receiver had just as full authority to act as any permanent receiver could have had.

The view that it was the intention of the Code that in case additional authority was to be conferred upon •■the temporary receiver, it was by giving him the power of a permanent receiver, and that for the purposes of the collection of the debts due to the corporation the temporary receiver had the right to do everything that a permanent receiver could do, is further evidenced by the provisions of section 1186. It is there provided that unless additional powers are specially conferred upon him as prescribed in the next section (the next section prescribing how additional power is to be conferred upon the temporary receiver, viz., by giving him the powers of a permanent receiver) a temporary receiver has only the powers specified in this section, and those which are incidental to the exercise thereof. What does this last clause mean ? Evidently that the temporary receiver has the right to do everything which is ordinarily necessary to be done in order to collect the debts of the corporation of which he is the receiver. And one of the necessary powers in order to collect such debts is to be at liberty to surrender the collaterals pledged for the debts, and another is to allow the credits and offsets to which the debtor is by law entitled.

I think, therefore, that the order appealed from should be affirmed.

Order reversed.


author: Van Brunt, P. J.:

text:
    Caroline A. McCready et al., as Trustees, etc., et al., Respondents, v. The Metropolitan Elevated Railway Company and Others, Appellants.

      Measure of damages to real property by the operation of an elevated railroad— disadvantages and advantages considered — decrease in rental.

    In an action brought to recover past and fee damages caused by the appropriation, of the easements appurtenant to certain premises, by an elevated railway, the court found that the maintenance and operation by the defendants of their elevated railway structure and the additions thereto, including the switch tower and track house and planking between the tracks for the convenience of the defendants’ employees, and the third and extra set of ties over the avenue-in front of the plaintiffs’ premises, and the passage of numerous and frequent trains over such elevated structure constituted an inconsistent and excessive street use and trespass upon the plaintiffs’ easements and rights of property for which the plaintiffs were entitled to damage.

      Held, that such conclusion was erroneous; that the existence of all the elements recited in the finding did not absolutely entitle the plaintiff to damages;
    That the plaintiff was not entitled to damages except to the extent, if any, by which the disadvantages caused by the railway exceeded the advantages thereof to the premises in question.
    A decrease in the rental value of property abutting on a street over which an elevated railroad is constructed, which occurred long after the elevated railroad had been built and in operation, cannot be attributed to it, but must necessarily have arisen from other causes.
    Appeal by the defendants, The Metropolitan Elevated Railway Company and others, from a judgment of the Supreme Court in' favor'of the plaintiffs, entered in the office of the clerk of the county of New York on the 1st day of September, 1893, rendered upon the decision of the court after a trial at the New York Special Term.

      A. O. Tcnunsend, for the appellants.

      W. P. Prentice, for the respondents.
   Van Brunt, P. J.:

This action was brought to recover past damage and fee damage caused by the appropriation of the easements appurtenant to the premises on the northwest corner of Ninth avenue and Sixty-third street by the defendants for their elevated railway.

The questions presented are as to the excessive amount of damage allowed, and as to the error of the court in its finding. The court found that the maintenance, use and operation by the defendants of their elevated railway structure and the additions thereto, including the switch tower and track house and planking between the tracks for the convenience of the defendants’ employees, and the third and extra set of ties over the avenue in front of plaintiffs’ premises, and the passage of numerous and frequent trains over such elevated structure, constituted an inconsistent and excessive street use and trespass upon the plaintiffs’ easements and rights of property for which the plaintiffs are entitled to damages.

In making this finding it seems to us that the learned court erred. The existence of all the elements recited in the finding does not absolutely entitle the plaintiff in cases of this description to damages. Other elements must be proved, as has been established by repeated decisions of the court of last resort, and, notwithstanding the existence of all the elements mentioned, a party may not be entitled to damage. In this statement the question of benefits seems to have been entirely lost sight of. It is true that in other parts of the conclusion of law the court found that the plaintiffs are not entitled to i'tyxonetive relief, unless they have proved that the interference with the easements appurtenant to the premises in suit resulted in substantial pecuniary damage to the same, and that the actual market value of the premises would be greater if the defendants’ railroad in front thereof had not been built, and that the plaintiffs are not entitled to recover damages in this action except to the extent, if any, by which the disadvantages of the defendants’ road have exceeded the advantages thereof to said premises. But in view of the award which has been made in this case it would seem that the first proposition found was the one upon which the court below acted. Prior to the year 1888 the premises had virtually been vacant, being used as a coal yard. There is no claim that their rental value for such purpose was affected by tbe presence of the elevated railroad. The apartment house and stores which were upon the premises at the time of the trial appear to have been built about 1888, and the premises were bought by the plaintiff in 1889, eleven or twelve years after the elevated railroad had been in operation, and the tracks in substantially the same condition as they were at the time of the trial. And yet it lias been found by the court that between 1889 and 1893 the rents of the premises in question have decreased in consequence of the maintenance and operation of the elevated railroad. We are unable to see how it is possible that to conditions existing in substantially the same state can be ascribed a fall in the rents of the premises in question. In fact it would rather appear that the fall arose from the fact that too high rents were demanded by the plaintiffs on their purchase, and when they had to take less it ivas claimed that the rents had fallen. And that such was the case is evidenced by the testimony of the witness Hughes, who was in charge of the premises in question.

As already intimated, we cannot understand how a decrease in rents which has occurred long after the elevated road has been built and in operation, can be attributed to it. Such decrease must necessarily arise from other conditions, not from those which have been in existence for years.

We think that this is the difficulty which has pervaded the conclusion of the learned judge throughout the whole of this case; and that the fee damage has been largely augmented by a supposed decrease in rents, arising from the operation of the elevated railroad, when such decrease must necessarily be ascribed to some other cause, for the reason that a cause existing for ten or twelve years cannot, without some change in its conditions, evolve additional damages.

We think, therefore, that error was committed which has pervaded this judgment, and which calls for its reversal.

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

O’Brien and Follett, JJ., concurred.

Judgment reversed and new trial ordered, with costs to the appellants to abide the event.


author: Bradley, J.:

text:
    Eliza B. McGowan, Plaintiff, v. Supreme Council of the Catholic Mutual Benefit Association, Defendant.

      Mutual beneficial certificate — waiver of default in the payment of an assessment — estoppel.

    While- the unconditional receipt by a mutual benefit association of an assessment from one of its members, after the time had expired for its payment, may constitute a waiver of the default of such member and operate to reinstate him in its membership, the receipt thereof by an officer of such association with qualified power will not, in the face of a provision in its constitution that he should not receive such assessment except where it is tendered in an open meeting ,of the association, have that effect unless the payment to him is in some manner ratified by the association.
    To support an estoppel the person asserting the same must establish that he was ■induced by the course of dealing of the person against whom he asserts the estoppel to rely upon it for his protection.
    Motion by the plaintiff, Eliza B. McGowan, for a new trial on a caée containing exceptions ordered to be heard at the General Term in the first instance, after a verdict in favor of the defendant, rendered by direction of the court, on a trial at the Erie Circuit, on the 3d day of May, 1893.
    This action was brought to recover $2,000 upon a certificate issued to Richard B. McGowan upon his life, payable to the plaintiff, his mother. McGowan died February 27, 1892.

      Adolph Idebadow, for the plaintiff.

      Frcmh O. LougKlvn, for the defendant.
   Bradley, J.:

Tlie plaintiff’s son, Richard B. McGowan, became a member of the Holy Angels’ Branch No. 7 of the defendant, and certificate of membership was issued to him May 7, 1888. It was to the effect that he was entitled to all the rights and privileges of membership in the defendant and to participate in the beneficiary fund of the association to the amount of $2,000’, which should at his death be paid to his mother, the plaintiff. The certificate, by its terms, was issued upon the condition that Richard B. McGowan should in every particular, while a member, comply with all the laws, rules and requirements of the association.

The defendant ivas incorporated by chapter 196, Laws 1879, in which it was provided that the corporation should have power to make such constitution, by-laws, rules and regulations as it should judge proper for regulating and fixing the amount and time of payment of all fees, dues and funds of the corporation and for its grand council and branches, and that they respectively, as well as the defendant, should have the power of suspending any of its members (§ 3); that it should be lawful for the association to create, hold and disburse a beneficiary fund sufficient to pay all losses and expenses incident to the corporation and for the relief of members and their families of the branches and grand councils (§ 6); and that such beneficiary fund as may be deemed suitable may be set apart and provided to be paid over to the families, heirs or representatives of deceased member's, or to such person as they may while living have directed; and that the collecting, managing and disbursements, as well as the term and manner of payments on the death of a member, shall be regulated by the constitution, by-laws, rules and regulations of the corporation (§ 7).

The alleged defense is that Richard B. McGowan was in default in payment of assessment known as No-. 18, made in January, 1892, and as the consequence was suspended from the rights of membership and remained so at tire time of his death. It appears that such a-n assessment was made and that he became in default. The main question is whether as against him tlie assessment was legally made. This is matter of defense. It appears that it was the custom to keep the amount of an assessment in advance so far as it was practicable to do it, so that when a call from the grand lodge to pay beneficiaries on the death of members should be made, the branches could, without the delay attending the taking in of the assessments made on account of such deaths, remit the amount through the proper channel to the depository of the defendant for distribution among the beneficiaries. In practical effect, therefore, the payment of the assessments was a reimbursement of the respective branches preparatory to another call from the defendant for a like purpose.

This method was permitted by the fact that on initiation each member was required to pay the branch in which he was received one beneficiary assessment. This initiation fee was paid by McGowan, and it may be assumed that he liad paid all assessments made upon him prior to No. 18. The plaintiff challenges that one for the reason that McGowan, by the payment of them, including that paid at the time of initiation, had already contributed an assessment to the payment of the beneficiaries on account of whom the call was made, and that he could not be legally assessed to contribute to a beneficiary fund which might be required by future deaths of members, because such an assessment was not within the provisions of his contract of membership. While it is true that he could not properly be assessed to pay the beneficiaries of members whose deaths had not occurred, such in fact was not the assessment which the plaintiff seeks to repudiate. The constitution of the defendant provides that “the supreme recorder shall on the first of each month, or as soon thereafter as possible, issue one or two assessments, as may be required, to pay beneficiaries of deceased members then on record in his office, and shall notify the grand secretary of each grand council and the recording secretary of each branch in his immediate jurisdiction of the same ; said notice shall contain "the names of the deceased members, the number and location of the branch, date of death, cause of death, date of initiation, amount of certificate, and shall also state the deaths if any upon said notice that will be paid by surplus ” (§ 7). It then provides for assessments and notice to contain the statements mentioned in section 7 (§ 9).

And further that all moneys so paid by members shall be retained by the treasurer of the branch until call is made, and that the money so collected shall be remitted, etc. (§ 11).

The assessment No. 18 conformed to the requirements before mentioned, and was dated January 6, 1892. Tlie notice annexed to it was dated January 11, 1892, and it was served upon McGowan by mail on the day of the date of the notice. It may be observed that monthly assessments are provided for, and that they are made to pay the beneficiaries of deceased members mentioned in it. Such was the assessment in question. It thus necessarily appears that the beneficiary fund produced by the payment of the initiation fees of members is held as a reserve, except so far as it- may be reduced by payments required to be made by surplus. This evidently is the policy of the corporation, as it is required to make an assessment early in each month to meet the demands of beneficiaries arising from deaths of members reported since that of preceding month. The purpose for which assessment is made rather than the fund from which it is paid is the important fact bearing upon its legitimacy. And inasmuch as the branch is permitted to have a reserve beneficiary fund originating from the payment of the initiation fee, it is quite unimportant for the purpose of the question here whether compliance with the call upon it is delayed until the assessments are paid in, or in anticipation of the receipt of them the amount is paid from that fund and remitted without such delay.

The proposition made by the plaintiff’s counsel that, inasmuch as the defendant or the branch of which McGowan was a member had sufficient funds to pay the assessment, he could not he chargeable with default prejudicial to his relation to the defendant, is not supported by the case of Knight v. The Supreme Council, etc. (24 N. Y. St. Repr. 845), and Evarts v. U. S. Mut. Accident Assn. (40 id. 878). There the assured had paid assessments illegally made and for which it was held they were entitled to credit by way of. relief from those for the non-payment of which the defendants sought to charge them with default.

In the present case McGowan had paid such sums only as the contract represented by the constitution and by-laws required of him, and the assessment in its purpose and effect was legitimately made. The effect, upon his relation as member, of default in payment of an assessment is declared by the contract, which provides that within twenty days after the date of the notice, which shall be mailed not later than five days after its date, each member must pay into tbe beneficiary fund of liis branch the amount of the beneficiary assessment as stated in the notice; and that if the assessment is not paid before the time of the next meeting of the branch “ after the expiration, of the said twenty days he is hereby declared to be suspended from all the rights of the association, and if a member die while suspended he is not entitled to participate in the beneficiary fund ” (§ 10). McGowan did not pay his assessment within the time, prescribed, nor was it paid at tlie meeting of the branch which was held February 1, 1892. He was there reported as in default, and by force of the provisions of the constitution before mentioned he was suspended. Afterwards, on February twenty-third, the sister of McGowan handed to the person wdio was the financial secretary of the branch before mentioned, money sufficient to pay his assessment, and it was handed to him for that purpose. He gave no receipt for it, and he testified that lie informed her that he could not, as he had no authority to do so, but would take it to the branch the following Monday and ask that the member be reinstated, and if that ivas done he would mail a receipt for the money. The sister says he gave no reason for not giving her a receipt. This fact, however, may not be important. McGowan died before the next Monday, and the money was returned and left at the residence of plaintiff.

The money was not received by the defendant, nor was the payment of it to the person who was such officer effectual to support or restore McGowan’s relation of membership. Upon that subject the constitution for the government of branches of the defendant provides that the financial secretary “ shall not receive any beneficiary money from any suspended member unless the same is tendered in open branch meeting ” (art. 6, § 5). This was one of the conditions upon which McGowan became a member. While an unconditional receipt by the association of an assessment after the time has expired might constitute a' waiver of the default and operate to reinstate the member, the receipt of it by an officer with qualified power will not, in the face of the provision before mentioned, have that effect unless its payment to him is in some manner ratified by 'the association. There was in the case at bar no waiver nor any estoppel by recognition of him as a member after his default in payment of the assessment. (Ronald v. M. R. F. L. Assn., 132 N. Y. 378; 23 Abb. N. C. 271; Mitt P. L. Ins. Co. v. Laury, 84 Penn. St. 43 ; Rice v. N. E. Mut. Aid Soc., 146 Mass. 248.)

It is seen that tlie payment of assessments within the time prescribed was by the contract made a condition of the continuance of membership, and when that condition is not observed the default operates to suspend the relation which the member had assumed to-the association, and without some act on its part, effectual as a waiver, or having the effect to reinstate- him, his death gives noriglit of recovery to his beneficiary under the certificate. (Lyon v. Royal Society of G. F., 153 Mass. 83; Harvey v. Grand Lodge, etc., 50 Mo. App. 472.) The plaintiff offered to prove that it had been the custom of this branch of the defendant to receive assess-' ments and dues after the expiration of the time designated in the constitution for payment; that such payments were made to the financial secretary after members had been suspended, and received outside the lodge, and were.adopted and ratified by it, and that such members were not afterwards disfranchised of their rights in the-lodge. And to the exclusion of the evidence exception was taken. The constitution provides for reinstatement of a suspended member and how it may be done. The evidence offered would not tend to-prove that McGowan had any knowledge of any such custom, or that, he had ever been indulged in that manner. The mere, fact that it. had been granted to others does not enable the plaintiff to effectually assert a waiver of the default on the part of the assured, of whom she: was beneficiary. The waiver asserted by the plaintiff is in the nature of estoppel, and to support it the plaintiff must be able to say that lie. was induced by the course of dealing of the defendant to rely upon it for the protection of his membership. The evidence offered Avould not support any claim of the plaintiff to waiver or estoppel.. (Appleton v. Phœnix Mut. L. Ins. Co., 59 N. H. 541; 47 Am. Rep. 220; Crossman v. Mass. B. Assn., 143 Mass. 435.) There was no error in the ruling, and the verdict was properly directed for the defendant.

The plaintiff’s motion for a new trial should be denied, and judgment directed for the defendant on the verdict.

Dwight, P. J., Lewis and Haight, J.J., concurred.

Plaintiff’s motion for a new trial denied, with costs, and judgment ordered for the defendant upon the verdict.


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    S. Hobart Dorr, Respondent, v. August Beck, as Sheriff, etc., et al., Appellants.

      Transfer by a debtor — evidence of fraudulent intent — when the purchaser is protected— improper admission of evidence — when disregarded on appeal.

    The fact that the creditors of a person had brought suit on their claims against him, and two days after he made a transfer of his stock of goods and fixtures in a drug stcre recovered judgment thereon, is some evidence of intent on the part of the debtor to hinder, delay and defraud his creditors by such transfer.
    Whatever may be the design of a judgment debtor in disposing of his property, good faith on the part of the purchaser in making the purchase will protect him and his title to the goods.
    Upon the trial of an action brought against a sheriff to recover a stock of goods alleged to have been transferred by a judgment debtor to the plaintiff and to have been taken possession of by such sheriff under an execution, the plaintiff, as a witness, was asked to state what was the fair market value of the property at the time of the levy and sale by the sheriff, to which an objection was made that it was not the proper measure of damages, which was overruled and the defendant excepted.

      Held, that if the evidence offered was to'prove the value at retail prices of the goods, its reception was error, but that such was not necessarily the import of the question which the witness was called upon to answer;
    That the measure of damages was the value of the property at the time referred to in the question, and it could not be assumed that the witness could or did include in his answer anything beyond its then valúe.
    Where upon a trial immaterial evidence is improperly received over objection, if it does not prejudice the person objecting it is not upon appeal a ground for reversal of a judgment rendered against him.
    Appeal by tlie defendants, August Beck, as sheriff of Erie county, and others, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Erie on the 28th day of August, 1893, upon the report of a referee.

      F. M. Inglehart, for the appellants.

      William J. Cramer, for the respondent.
   Bradley, J.:

The defendant Beck, as sheriff, by virtue of an execution issued upon a judgment in favor of the other defendants against one Charles Skinner, levied upon the goods in question and afterwards sold -them at the instance of the other defendants. The property consisted of a stock of goods and fixtures in a drug store, at the time of the levy in the possession of the plaintiff, who was engaged in the business of selling the goods at retail. Skinner, having been the former owner, had carried on the business there until two days before the levy was made. He then sold out to the plaintiff. The defense is mainly founded on the charge that the sale to the plaintiff and the purchase by him were made with the intent to defraud the creditors of Skinner. The referee found otherwise. And his-conclusion in that respect was supported by the evidence.

The fact that the defendants Hubbard were proceeding to judgment against Skinnér, and recovered it two days after he made the. sale, is some evidence of intent on the part of the latter to hinder, delay or defraud his creditors by his sale made of the property, and if the question had rested wholly upon his purpose the referee would have been fairly justified in finding the fact of such intent in support of the levy and sale. But whatever may have been the design of Skinner in disposing of the property, good faith on the part of' the plaintiff in making the purchase and paying the consideration would give protection to him and his title as purchaser. The purchase price was $2,000. He at the time paid $500 and assumed an indebtedness of Skinner for the goods amounting to $1,500, and substituted his own notes with his mortgage to the creditor in place of those before held against Skinner. There is no evidence tending to prove that the plaintiff had any knowledge of the indebtedness of Skinner to the defendants Hubbard, or of any action pending to recover it at the time of the purchase, but there was evidence which permitted the conclusion that he had no such knowledge or information and that he neither knew or believed that the sale was intended by Skinner to defraud his creditors. The price he paid and undertook to pay for the property was equal in amount to its fair value. Hpon the evidence in view of the findings of the referee it must be assumed that the plaintiff was a purchaser in good faith for value. And, therefore, his title was sufficient to support his action for relief against the defendants. (Jaeger v. Kelley, 52 N. Y. 274; Starin v. Kelly, 88 id. 418 ; Stearns v. Gage, 79 id. 102; Parker v. Conner, 93 id. 118; Zoeller v. Riley, 100 id. 102; Bush v. Roberts, 111 id. 278.) The facts as found by the referee were supported by the evidence, and no consideration of any of the exceptions to them is required. It is, however, urged that he erred in some rulings admitting evidence on the trial.

"When the plaintiff, as a witness, was asked to state what was the fair market value of the property at the time of the levy and sale by the sheriff, the objection was taken that it was not the proper measure of damages. The objection was overruled and defendant excepted. If the evidence so offered was to prove the value at retail prices of the goods as claimed by the defendants, its reception was error. ( Wehle v. Haviland, 69 N. Y. 448.) But such was not necessarily the import of the question which the witness was’ called upon to answer, and if it had subsequently appeared that such was the effect of the evidence given by him, a motion could properly have been made to strike it out.

The measure of damages was the value of the property at.thé time referred to in the question, and it cannot be assumed that the witness could or did include in his answer anything beyond its then value. The retail prices would necessarily embrace uncertain or indefinite profits in the futuro, and involve the labor and expense attending the disposition in that manner of the stock. There was no apparent error in the ruling.

The plaintiff’ was permitted to introduce some evidence of the average daily sales and expense of the business of selling goods from the stock at the store a short time before the levy was made, and exception was taken. This evidence, abstractly considered, 'was immaterial, and its reception error, but it is not seen that it could. have prejudiced the defendant in any respect. It had no bearing upon tbe question of value of the property, and the amount of the recovery was based solely upon the value of it as found by the referee. The evidence was evidently harmless.

And the examination of the other rulings upon the trial discloses no error to the prejudice of the defendants. There was some conflict in the evidence upon the question of value of the property, presenting quite a difference of opinion upon that subject.

The referee adopted that midway between the two extremes as its •value. In this it cannot be said, in view of the entire evidence, that in determining that question of fact he did any injustice to the defendants. And liis opinion indicates that the evidence was carefully considered by him.

The judgment should be affirmed.

Dwight, P. J., Lewis and Haight, JJ., concurred.

Judgment appealed from affirmed.


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    Elmer E. Bunker, Respondent, v. Washington W. Langs, Appellant.

      Allegation of defendant’s residence in a complaint in a County Court — waiver oj defect — recovery against the guarantor, Try the indorser of a note.

    In an action brought in a County Court it is necessary that there should be an allegation in the complaint that the defendant is a-resident of such county in order to enable the court to assume jurisdiction of the person of the defendant, and in the absence of such allegation the defendant may demur or decline to appear and answer the complaint, but if the defendant appears and answers on the merits, without objection, he waives the defect, and jurisdiction is.’ thereby conferred upon the court.
    A defendant may submit himself to the jurisdiction' of the court, although the process by which the plaintiff has attempted to begin an action against him is ineffectual, and if he appear and plead on the merits without objection, the want of jurisdiction of his person is waived.
    Upon the trial of an action brought upon a promissory note guaranteed by the defendant it was shown that before the maturity of the note the plaintiff indorsed and transferred it to a third person, who, after default in its payment, ’ recovered judgment thereon against the plaintiff as an indorser. The plaintiff thereupon paid the judgment and took the note from such third person.

      Meld, that the plaintiff’s contract of indorsement was a new and independent one to pay the amount of the note upon condition that he should become charged in the manner prescribed by the law merchant;
    That the promise of the makers, as such, of the note was not, nor was the defendant’s undertaking of guaranty, the subject'of the recovery of the judgment against him, or necessarily affected thereby or merged therein;
    That when the plaintiff discharged his liability by payment to such third person f and took from him the note and guaranty, the right was restored to him to resort to his action upon either the note or guaranty.
    Appeal by the defendant, Washington W. Langs, from a judgment of the Steuben County Court in favor of the plaintiff, entered in the office of the clerk of the county of Steuben on the 24th day of June, 1893, upon the report of a referee.

      A. M. Burrill, for the appellant.

      FrcmJc, II. Robinson, for the respondent.
   Bradley, J.:

The action was brought in the County Court upon a guaranty by the defendant of a promissory note, dated March 25, 1890, made •by Ernest Trowbridge and George B. Emory, for seventy-two dollars, payable to the order of the plaintiff one year after its date, at the bank of Porter & Davis, at Canisteo, N. Y.

The plaintiff failed to allege in the complaint that the defendant was a resident of the county of Steuben, which was a requisite fact to enable the court to assume jurisdiction of the person of the defendant (Code Civ. Proc. § 340, subd. 3); and for that reason the latter might have demurred or declined to appear and answer the complaint. He did, however, appear and answer it upon the merits, without objection.

After the issues had been referred, and upon the hearing before the referee he sought to raise the question, and upon motion of the plaintiff amendment of the complaint was allowed, and made so as to allege the residence of the defendant in the county.

It is now urged that the objection was available at the trial, and that the allowance of the amendment by the referee was error. And in support of that view, reference is made to the provisions of the statute that an objection to the jurisdiction of the court, although not taken by demurrer or answer, is not waived. (Code Civ. Proc. § 499.) This evidently has relation’ to jurisdiction of the subject-matter, which, if not within the jurisdiction of the court, cannot be conferred upon it by consent of the parties.

The rule is otherwise as to the person. A defendant may submit himself to the jurisdiction of a court, although the process by which the plaintiff has attempted to institute an action against him is ineffectual for the purpose, and if he appear and plead to the merits without objection, the want of jurisdiction of his person is waived. This is the general rule. (Clapp v. Graves, 26 N. Y. 418.)

The present case comes within this doctrine. And while a demurrer or objection in the outset or failure to appear and answer would have been effectual to prevent a valid recovery, without amendment of the complaint in the respect in question, when the defendant did, without objection, appear and answer the complaint on the merits, he waived the question of jurisdiction of his person, and it was thereby conferred upon the court. (Dake v. Miller, 15 Hun, 356; McMahon v. Sherman, 14 N. Y. St. Repr. 637; Ross v. Konor, 17 id. 465.)

The cases cited by the learned counsel for the defendant have no necessary application to the question.

In Frees v. Ford (6 N. Y. 176) the defendant pleaded want of jurisdiction of the County Court, and upon demurrer the plea was sustained.

In Judge v. Hall (5 Lans. 69) the question arose upon demurrer to the complaint, which was held bad for want of averment that the defendant was a resident of the county.

And such was the case of Gilbert v. York (111 N. Y. 544).

The question was not in Burns v. O’Neil (10 Hun, 494).

No amendment of the complaint in the present case was necessary, and, therefore, the defendant was not prejudiced by it.

Before the maturity of the note, the plaintiff indorsed and transferred it to one Shaw, who, after default in its payment, recovered judgment against the plaintiff as indorser. The latter paid to Shaw the judgment and took from him the note.

It is now insisted that the note was merged in the recovery, and that the defendant’s guaranty is not the subject of an action by the plaintiff. It may be observed that the plaintiff’s contract of indorsement was a new and independent one to pay the amount of the note upon the condition that he should become charged in the manner presci’ibed by the law merchant. The action and recovery against him were upon his contract of indorsement. The promise off the makers, as such, of the note was not, nor was the defendant’s undertaking of guaranty, the subject of the recovery by the judgment, or necessarily affected by it; and when the plaintiff discharged liis liability by payment to Shaw and took from him the note and guaranty, the right was restored to him to resort to his action upon either. No question of merger, therefore, arises here.

In Lancey v. Clark (64 N. Y. 209) the plaintiff paid the amount of the note there in question to the holder and took it up at tiie request of one of the parties for whom the defendant was an accommodation maker of it. And it was held tliat the plaintiff did not derive any right to the note by transfer from the holder, but from the party primarily liable by the payment of it at his request, and the same defense which could be made against the latter by the defendant was available to him as against the plaintiff for the obvious reason that the plaintiff stood in no better position for the purpose of the action than did the person at whose instance he took up the note.

In the present case the plaintiff discharged his liability as indorser, and thereupon received the note with the guaranty from the holder for his own benefit. lie says he indorsed the note and let Shaw have it, and after it became due I took it up at that time; I paid him for it and he gave me the note.” There is no difficulty in the way of his having the beneficial interest in, and title to, the note and .guaranty. The further question raised, whether or not an alteration •after its delivery was made by inserting words which changed the terms of it from a joint to a joint and several note, was one of fact •arising upon a conflict of evidence, and was disposed of by the findings of the referee adversely to the defendant.

The judgment should be affirmed.

Dwight, P. J., Lewis and Haight, JJ., concurred.

•Judgment appealed from affirmed.


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    Wilbur J. Manley, Appellant, v. Albert D. Ackler, as Treasurer of The North Leon Cheese Factory, Respondent.

      Action to recover damages for a breach of vsa/rranty on « sale — evidence as to the authority of an agent.

    Upon the trial of an action brought to recover damages for an alleged breach of warranty in the sale of a quantity of cheese, the agent of the defendant testified that he did not state to the jilaintiff that the defendant had told him to guarantee the cheese as “fine.” He was then asked whether the defendant told him to guarantee the same. This question was objected to on the ground that any conversation between the defendant and the witness was incompetent. The ■objection was overruled and exception taken. The witness answered “ No.”
    Held, that the evidence was not material between the parties to the action on the question of the authority of the agent to warrant the cheese, as his power to sell carried with it, as against the plaintiff, the authority to warrant;

      That the admission of such evidence might have heen prejudicial to the plaintifE, and was not an error that could he disregarded upon appeal.
    Appeal by tbe plaintiff, Wilbur J. Manley, from a judgment of tlie County Court of Cattaraugus county in favor of the defendant, entered in tbe office of tbe clerk of tlie county of Cattaraugus on tbe 3d day of April, 1893, upon tlie verdict of a jury.

      E. A. Wash, for tlie appellant.

      William II. Henderson, for the respondent.
   Bradley, J.:

The action ivas brought to recover damages for an alleged breach of warranty in the sale of a quantity of cheese to William E. Smith & Co. The plaintiff is assignee of the claim. He made the purchase of the cheese for them through Harrison Franklin, who was authorized to make the sale. The evidence on the part of the plaintiff is that in the interview or negotiation between Franklin and the plaintiff the latter inquired of him about the quality of the cheese and Franklin said that the defendant had “ told him to guarantee the cheese fine.” Thereupon the plaintiff said to Franklin that if the quality of the cheese was “ fine ” he would give seven and a half cents per pound for it. The offer was afterwards accepted, the sale made, the cheese paid for and delivered; upon inspection the cheese was found to be in quality of a lower grade than “ fine,” and consequently not worth as much as it would have been if of that specified quality.

On the defense Franklin testified that he did not say to the plaintiff that the defendant had told him to guarantee the cheese fine. He was then asked: “ Did Mr. Acker tell you to do so ? ” The objection to this on the ground that any matter of conversation between the witness and Acker, the defendant, was incompetent, was overruled and exception taken. The witness answered “No.”

This evidence was not material between the parties to the action on the question of the authority of Franklin to warrant the cheese. His power to sell carried with it as against the plaintiff in behalf of the purchaser the authority to warrant.

It evidently was offered in con-oboration of the evidence of the witness, and may have had some effect upon the question 'of fact presented, by the conflict in the evidence of the two witnesses and of their credibility. The evidence whether or not such conversation was had between Franklin and the defendant was not competent in behalf of the latter for any purpose. And as it may have been prejudicial to the plaintiff upon that question, the error cannot be disregarded.

No other question seems to require consideration. The judgment should be reversed and a new trial granted, costs to abide the event.

Dwight, P. J., Lewis and Haight, JJ., concurred.

Judgment of the County Court of Cattaraugus county, appealed from, reversed and new trial granted, costs to abide the event.