author: Martin, J.: XeNNedy, J.

text:
    THE PEOPLE OF THE STATE OF NEW YORK v. E. REMINGTON & SONS. In the Matter of the Claim of the LEE ARMS COMPANY. ADDISON BRILL and ALBERT N. RUSSELL, as Receivers, Appellants and Respondents, v. THE LEE ARMS COMPANY, Appellant and Respondent.

      Royalties■ — duty of a receiver to pay them — when they are preferred claims — pledge and chattel mortgage distinguished.

    Under a contract, by which, the sole and exclusive right’ or license to manufacture, use and vend to others certain fire-arms mentioned and described therein is given, upon the payment of a certain sum for each arm manufactured and sold, “ to be-paid tri-monthly at the end of each and every three months,” a receiver of the' corporation which has manufactured, but has not sold, certain arms thereunder is bound to pay royalties upon the manufactured arms which have thus come into his possession.
    Creditors of said manufacturing company, who, prior to the appointment of the receiver, for money loaned, have acquired possession of certain of said arms, and hold the same by virtue of the provision of a chattel mortgage given to secure: such indebtedness, are purchasers of such arms within the contemplation of the contract, and are not liable for such royalties. (Kennedy, J., dissenting on the-ground that the paper in question constituted a pledge, and not a chattel mortgage.)
    The receiver is not obliged to pay in full the licenses for arms covered by such chattel mortgage, as having a preference over other claims existing against the' manufacturing company.
    Under such a contract the licensor has no lien upon the arms manufactured for the payment of the license fee.
    The question whether the instrument creates a pledge or a chattel mortgage,, considered.

      Appeal by the Lee Arms Company from so much of an order entered, in the above-entitled matter, in the office of the clerk of the county of Herkimer on the 29th day of September, 1890, as denied the prayer of the petition of the said Lee Arms Company.
    The application was made in the above-entitled matter, on behalf of the Lee Arms Company, for an order allowing a claim made against the estate of E. Remington & Sons, and directing the receiver of E. Remington & Sons to pay such claim, which was for royalties upon ‘‘ Lee Arms,” so called, manufactured by E. Remington & Sons, and upon which royalties had not been paid when the corporation was dissolved.
    The royalties were provided for by an agreement between the parties, bearing date May 9, 1884, which contained, among others, the following provisions:
    “ Second. The parties of the first part (The Lee Arms Co.), have granted, bargained and conveyed, and do, by these presents, grant, bargain and convey, to the parties of the second part (E. Remington & Sons), and their successors, the sole and exclusive right and license to manufacture, use, and vend to others to be used, firearms.” etc.
    “ Fourth. The parties of the second part, in consideration, etc., and for the right to manufacture, use and sell as aforesaid, shall yield and render to the parties of the first part the sum of $1.55 for each and every arm manufactured and sold, etc., the same to be paid tri-monthly at the end of each and every three months from the date of these presents; and the parties of the second part shall render to the parties of the first part, at the expiration of each said three months, a statement in writing, verified by some one of the officers of the parties of the second part, if required thereto, of all the arms, etc., manufactured and. shipped to purchasers during the three months then next preceding. But in case the same shall not be actually delivered to and accepted by such purchasers, so that they are thrown back on the hands of the parties of the second part, they shall be entitled to have such payments refunded by the' parties of the first part.”
    “ Fifteenth. Should the parties of the second part fail to manu-' facture and sell in any one year five thousand of said arms, or, failing so to do, shall fail to pay the sums herein provided for as part royalties or license fees on five thousand arms, which they shall have the privilege to do in lieu of making the same when there is no demand for said arms at reasonable prices, then the parties of the first part may put an end to this agreement,” etc.
    The Lee Arms Company made application to this court by petition, for an order instructing the receivers in this action to pay to the petitioner in full certain royalties claimed by it under the ■aforesaid contract.
    Temporary receivers of E. Remington & Sons were appointed April 21, 1886. The corporation was dissolved and the temporary receivers were made permanent receivers June 4, 1886. At the time the receivers were appointed the corporation had, at its works, 156 finished and nine unfinished Lee arms, making 165 mail. The Lee Arms Company has purchased some of these arms of the receivers, and has been allowed royalties, on thirty leaving 135 upon which no royalties have been paid or allowed.
    At the time of the appointment of the temporary receivers, as well-as when such corporation was dissolved, there were in the possession of certain creditors of the corporation 8,310 Lee arms. These arms were held by such creditors under bills of sale previously given by E. Remington & Sons to them as security for money loaned to E. Remington & Sons. The arms so held have been disposed of, in some instances, by the creditors who held them, and in other cases, after default, they have been redeemed by the receivers and disposed of by them.
    On the hearing of this motion the court denied the motion of the petitioner, but held that the Lee Arms Company was a creditor •of the estate of E. Remington & Sons to the amount of $11,990.80 for royalties on 7,736 arms; that the petitioner was entitled to have its claim for this amount, and have the same rights and benefits thereon, so far as the assets of E. Remington' & Sons remaining undistributed might render it possible, and that the receivers should pay the Lee Arms Company the same pro rata dividends on said •claim that had been paid by them to general unpreferred ereditoi’s of the corporation, so far as the assets of the corporation then remaining undistributed might render it possible, and such further pro rata dividends as should thereafter be by them paid to general unpreferred creditors. From the order denying the prayer of its petition the Lee Arms Company appealed, and from the remainder of the order an appeal was taken by .the receivers.
    . Thomas Richardson, for the receivers, appellants and respondents.

      Hornblower <& Byrne, for the Lee Arms Company, appellant and respondent.
   Martin, J.:

We concur in the conclusion of the Special Term, that if there were assets in the hands of the receivers sufficient to pay the proper-dividend upon the claim of the Lee Arms Company that it should be paid, although the time to prove debts against the estate had expired; and, therefore, are of' the opinion that that part of the order which was appealed from by the receivers should be affirmed.

This leaves for consideration that, portion of the order which denied the petition of the Lee Arms Company for a direction to-the receivers to pay to the petitioner its royalties in full. The question presented at the outset is, whether the royalties which were due the Lee Arms Company constituted a debt against the estate in the hands of the receivers to be paid by them as other debts against the estate were paid, or whether its claim for such royalties could properly be made against the receivers'and should be paid by them in full.

By an examination of the contract under which these royalties were claimed, it becomes quite obvious that it was not the intent or purpose of the contract to give the Lee Arms Company any lien upon the arms manufactured under the license therein for the royalties agreed to be paid. It contained, at most, a simple agreement by E. Remington & Sons to pay the royalties therein mentioned. The agreement was but the personal agreement of the corporation to pay, and no lien was given or intended. Nor dp we find anything in this case, as presented on this appeal, which would justify the conclusion that the Lee Arms- Company had any legal or equitable lien on the arms in question for such royalties which entitled it to its pay in full or in preference, to other creditors.

In determining whether the petitioner’s claim for these royalties; was against the estate, or against the receivers, it becomes material to ascertain when the claim first came into existence. If it came into existence before the receivers were appointed, then it seems to be admitted by all that it is against the estate only, and has no preference over claims of other creditors. If, however, it arose subsequent to their appointment, then it is claimed that the receivers should be directed to pay it in. full.

The manifest purpose of the license contained in the contract between these corporations was to convey to E. Remington & Sons the right to manufacture and sell arms under the Lee patents. The license given was not alone to manufacture, but to manufacture and sell. For the right to manufacture and sell a royalty of one dollar and fifty-five cents was to be paid on each arm manufactured and sold. These royalties were not to be paid until the arms were both manufactured and sold. The claim that the debt or liability arose when the arms were manufactured, and that its payment only was postponed until after a sale, cannot, we think, be sustained. We are of the opinion that no debt or liability existed until the arms were both manufactured and sold.

It appears by the papers read on this motion that 165 arms were on hand at the armory of E. Remington & Sons when the receivers in this action were appointed. Upon thirty of these, royalties have been paid or allowed by the receivers. On the remaining 135 no royalties have heen paid. The royalties on that number amounted to the sum of $199.25. As it is not claimed that there was any sale of these arms until after the receivers were appointed, it follows, we think, that this sum should be paid by the receivers in full, if they have sufficient funds in their hands.

The appeal-book also discloses that when this action was brought all the other arms in question had been transferred by bills of sale, given by E. Remington & Sons as security for money borrowed by it, at the time, of the several persons, firms or corporations to which they were given. There had been a default in each case in the payment of the debt thus secured, or some portion thereof.

It is, perhaps, proper, before proceeding further witli the examination of this question, to determine the nature and character of the transactions between E. Remington & Sons and the several creditors to whom such transfers were made, and whether they were mere pledges of the arms in question so that the title remained in E. Remington & Sons, or whether they were in the nature of chattel mortgages, by which the title passed to the several creditors, subject to be defeated only by a payment of the debts which they were given to secure.

“A pledge differs from a chattel mortgage in three essential characteristics: 1. It may be constituted without any contract in writing, merely by delivery of the thing pledged. 2. It is consti-' tuted by a delivery of the thing pledged, and is continued only so : long as the possession remains with the creditor. 3. It does not: generally pass the title to the thing pledged, but gives only a lien to the creditor while the debtor retains the general property.” (Jones on Pledges; § 4.) “Whenever there is a conveyance of the: legal title to personal property upon an express condition subsequent, whether contained in the conveyance or in a separate instrument, the transaction is a mortgage.” (Id., § 8.) A delivery must always accompany a pledge, while a mortgage may be valid without a delivery. (Jones on Chattel Mortgages, § ?.) ■ “A decisive test of a legal mortgage of personal property is the use of language which makes the instrument one of sale, conveying the title of the property to the creditor conditionally, so that the sale is defeated by the debtor’s performance of his agreement.” (Id., § 8.)

Where A gave a regular bill of sale of three horses to B for the consideration of $210, and B, at the same time, gave to A a writing of defeasance, engaging, on the payment of the $210 to him by A in fourteen days, to deliver the horses to A, it was held that this was a mortgage of the property, and not a technical pledge; and that A not having paid, nor tendered, the $210 within the fourteen days, the condition became forfeited and the mortgagee had an absolute interest in the property, so that A, on a subsequent tender of the money to B, and demand of the property and refusal, could not maintain trover for it. (Brown v. Bement, 8 Johns., 96.) In Thompson v. Blanchard (4 N. Y., 303) A, a manufacturer, purchased wood, to be paid for by his note indorsed by B. The note was made accordingly, and indorsed by B for A’s accommodation. At the same time .A executed to B a writing reciting that B had indorsed the note to be used in purchasing the wool and declaring that the wool and the cloth to be manufactured therefrom should belong to B. until the note was paid. It was held that the writing was a mere mortgage. In Wooster v. Sherwood (25 N. Y. 278), a brewer sold sufficient barley now in my brewery to make malt enough, to be made in the brewery, to pay ” a sum then advanced by the plaintiff, to whom a delivery was made of a specific mass of barley, more than enough for the payment. The plaintiff did not remove it, but it remained until the brewer sold his brewery and the contents, with notice of the facts and subject to the plaintiff’s claim. The purchaser sold the barley to the defendant, and by his direction put it upon a railroad for transportation to the latter. Held, the legal title and general ownership of the barley passed to the - plaintiff. The transaction was an executed sale in the nature of a mortgage.

“ A bill of sale absolute upon its face, transferring property to be held as security for the payment of a debt due the vendee, is, in character and effect, a mortgage, and is to be treated as such.” (Smith v. Beattie, 31 N. Y., 542; see, also, Yennie v. MacNamee, 45 id., 614; Farmers and Mechanics’ Bank of Buffalo v. Lang, 87 id., 209; Siedenbach v. Riley, 111 id., 560.) The transfer by E.. Remington & Sons to the National Mohawk Yalley Bank was as follows:

“ IlioN, N. Y., 9th April, 18S5.
“ H. D. Alexander, Cashier, National Mohawk Yalley Bank, Mohawk, N. Y. Bought of E. Remington & Sons, * * * 1,000 Lee rifles, 433 Cal., A. B., 4 Boxes — $ 15,500. Above goods are sold to H. D. Alexander, Cashier, and are held by him, as collateral security to and for the payment of our note C, No, 10,151, dated April 9th, 1885, at three months from date to order of and indorsed by P. Remington for ten thousand dollars and all renewals of the same. Said rifles are stored in the warehouse at the N. Y. C R. R. freight depot, Ilion, N. Y., contained in 50 cases, each case marked ‘A’ and covered by receipt No. 163. Signed by C. R. Mentz.
“E. REMINGTON & SONS.
“ By E. Remisgtok, TrP

The transfers by E. Remington & Sons to their several creditors were all substantially alike except as to the name of the. creditor*, the1 amount of debt and the number of arms transferred. We think it is quite obvious that these transfers were in the nature of chattel mortgages and were not mere pledges of the property. It will be observed that by. the express provisions of each of these transfers, E. Remington & Sons sold to the creditor the arms mentioned therein, to be held as collateral security for the payment of its debt. The property was in no case delivered to the creditors, but it remained in the possession of the New York Central and Hudson River Railroad Company. Such a transaction did not constitute a pledge, as there was no delivery of the property pledged, and there was a sale by which the title passed. We are of the opinion that within the doctrine of the authorities cited the transactions between E. Remington & Sons and their creditors were, in effect, chattel mortgages of the property. If we assume, as we think we must, that they were chattel mortgages, then the question arises whether they constituted sales within the intent of the agreement between these corporations. A chattel mortgage is more than a mere security. It is a conditional sale of chattels, and operates to transfer the legal title to the mortgagee, to be defeated only by full performance of the condition contained in the mortgage. Upon default, the legal title in the mortgagee becomes absolute and he may treat the property as his own and dispose of it as he may see fit. After default the only right which remains in the mortgagor is an equitable right to redeem — a mere right of action.

Ve think it must be held that the transactions between these parties in giving such bills of sale constituted the vendees mortgagees of the property in question; that when the debts of the mortgagees became due and the mortgagor made default the absolute legal title to the property passed to the mortgagees, and that-such transfer 'of title amounted to a sale within the intent and! meaning of the contract under which the claim of the Lee Arms Company is made. If it be said that such a transfer does not amount to-a technical sale, still the question is, whether they were sales within the intent and meaning of the contract. If E. Remington & Sons had exchanged the arms in question for other property, it may be that it would not have constituted a sale if the word sale was used in a restricted or limited sense, and yet no one would doubt that, under such circumstances, the corporation would have been liable under the contract to pay the royalties mentioned. .When E. Remington & Sons mortgaged this property and made default, we think the. Lee Arms Company could have required E. Remington & Sons to pay royalties on the property thus mortgaged, although it might still have had a right in equity to redeem. If this were not so, then E. Remington & Sons could have avoided the payment of the royalties provided for by the contract, by mortgaging the arms manufactured by them for their full value, then .suffering default and not redeeming therefrom. ~We think the word “ sale ” in this contract was used in a broader sense, and was intended to include any transmutation of the legal title to the property from E. Remington & Sons to another.

If wre are correct in our conclusion that these transfers amounted to sales, it follows that the right to the royalties on the arms thus mortgaged came into existence when such mortgages or bills of sale were given, or at least when default was made by the mortgagor, and that the royalties claimed were due before the receivers in this ■action were appointed. "We do not think that the fact that tho receivers availed themselves of the equity which rested in E. Remington .& Sons, and redeemed a portion of the property mortgaged, in any way changes the question. It will be observed that this ' question does not arise between the mortgagor and mortgagee, and is not a question whether, as between them, the title would be reinvested in the. mortgagor by redemption or the satisfaction of the mortgagor’s debt, but the only question here is, whether giving the mortgage and suffering default effected a sale of the arms in question so that the Lee Arms Company was entitled to the royalties thereon. If so, then the fact that the title again vested in the mortgagor or its representatives, in no way affects the question. If the title passed, a sale was complete and the royalties became due .at that time.

These considerations lead us to the conclusion that the royalties upon the arms thus transferred by E Remington & Sons to its creditors became due before the receivers were appointed, and, thereforej the claim of the Lee Arms Company is against tho estate, to be paid in the same proportion and in the same manner as the other debts against the estate are paid$ and that it is not a claim ■against the receivers which should be paid in full or in preference to the claims of other creditors.

~Wo are of the opinion that that portion of the order from which the receivers appealed should be affirmed, but that the remainder of the order should be modified by directing the receivers to pay the Lee Arms Company $199.25, the royalties in full on the 135 arms which came into their hands instead of a dividend thereon; and that upon the remainder there should be paid a dividend as provided by the order of the Special Term, and that the order as modified should be affirmed, with ten dollars costs to the appellant, payable out of the funds in the receivers’ hands.

MeRWIN, J., concurred.

XeNNedy, J.

(dissenting):

By the agreement between the Lee Arms Company and E. Remington & Sons the one dollar and fifty-five cents royalty to be paid by the latter to the former was only to be. paid for each and every gun manufactured and sold, the same to be paid tri-monthly, and at the end of each and every three months from the date of the contract. The actual sale of each gun by E.Remington & Sons was a necessary condition precedent to entitle the Lee Arms Company to be paid said royalty.

Among the arms not sold, as claimed by the Lee Arms Company at the time the receivers were appointed, were the following, which E. Remington & Sons had pledged to the several persons named, and to the number mentioned, as collateral security for the payment of -certain debts owing by them ;

R. J. Dean & Co., 1,600 rifles; Tradesman’s Bank, 2,000 rifles ; Hartley & Graham, 500 rifles; Thomas Richardson, 220 rifles; National Mohawk Yalley Bank, 1,000 rifles; Oanajoharie National Bank, 10 rifles.

Were these arms so pledged by E. Remington & Sons as security for the payment of the several obligations, the pledges, respectively, held against said firm, and which had not been sold or disposed of by them at the time the receivers were appointed, sold by E. Remington & Sons, within the intent and meaning of the contract for royalty between it and the Lee Arms Company ?

We think the disposition of the'guns by E. Remington & Sons in the manner stated did not amount to a sale, and that the title to each remained in them and passed to the receivers at the time of their appointment, subject only to the pledge.

This transfer of the guns was not in effect a mortgage. The correct definition of a chattel mortgage is, that it is an instrument of sale, conveying the title of the property mortgaged to the mortgagee, with terms of defeasance, and if the terms of redemption are-not complied with, then, at law, the title becomes absolute in the-mortgagee. To make it a mortgage, the effect of the agreement must be such that, by the mere non-performance of the conditions by the mortgagor, the title will be transferred to the mortgagee, by force of the agreement. (Story on Bailment, §§ 287, 288 2 Kent’s Com., 582 ; Brownell v. Hawkins, 4 Barb., 491; Langdon v. Buel, 9 Wend., 83 ; Brown v. Bement, 9 Johns., 96; Garlick v. James, 12 id., 146 ; Stearns v. Marsh, 4 Denio, 227; Cortelyou v. Lansing, 2 Caine’s Cas., 200.)

On the other hand, a pledge consists of a delivery of goods by a debtor to his creditor, to be held until the debtor’s obligation is, discharged and then to be delivered to the pledgor, the title not being changed during the continuance of the pledge. (Story on Bailment, § 286.)

In case of a pledge, as security for the payment of a debt, the only way the pledgee can avail himself of the pledge, is to demand payment after default, and if refused, to sell the property, after notice to the pledgor, at public sale, and apply the proceeds to discharge the obligation or to foreclose the lien in equity. Until this is done the title remains in the pledgor. The 500 guns held by Hartley & Graham and the ten by the Canajoharie National Bank were subsequently returned by the respective pledgees to the-receivers without anything being paid to either of them, the debts for which they were pledged having been paid out of the proceeds of other securities held by the creditors. These guns were subsequently sold by the receivers, and the proceeds formed a part of the assets in their hands. These 510 rifles, separated from the remainder of those pledged, were not, therefore, sold by E. Remington & Sons before the appointment of the receivers, and as to them no royalty had become due or owing to the Lee Arms Company at the time of their said appointment. We are, therefore, of the opinion that as to these the receivers contracted the debt for the royalties after their appointment, and that the same should be paid in full, provided the condition of the estate will permit the same to-be made out of the assets remaining in their hands.

"We are also of the opinion that the remaining arms which had been pledged, as aforesaid, by E. Remington & Sons, as collateral security for the payment of debts owing by them, and which had not been actually sold by the pledgees, cannot be regarded as having been sold by E. Remington & Sons, within the meaning of the contract, at the time the receivers were appointed; and said guns having either been returned by the pledgees to the receivers, or subsequently sold by the pledgees, and the proceeds applied to discharge the debts, the receivers became liable to pay the royalties, •and that such royalties upon these other guns was an obligation contracted by the receivers after their appointment, and for the benefit of the estate, and that the same should be paid in full upon -the condition and in the manner provided for the payment of the royalties upon the 510 rifies mentioned.

If correct in the conclusions reached, it follows that the order made at Special Term should be so modified as to direct the receivers, out of any property or assets in their hands, to pay the Lee Arms Company the royalty of one dollar and fifty-five cents upon the whole 8,410 rifles pledged by E. Remington & Sons to their creditors for the payment of debts owing by said firm and remaining in the possession •of the pledgees undisposed of at the time the receivers of E. Remington & Sons were appointed, in full if the assets remaining in their hands are sirfficient for that purpose, with ten dollars costs and disbursements, to the Lee Arms Company.

Order modified by directing the receivers to pay the Lee Arms Company $199.25 royalties on 135 arms, and that upon the remainder they pay it a dividend as directed in the order of the Special Term, .and as modified, order affirmed, with ten dollars costs and disbursements to Lee Arms Company, to be paid out of fund in the receivers’ hands. .


source: Caselaw Access Project

author: MeRwiN, J.:

license: Public Domain

text:
    JENNIE R. SHERMAN, Respondent, v. THE VILLAGE OF ONEONTA, Appellant.

      Evidence — as to the direction given by a city official in regard to the repair of a street after an accident — res gestee.

    In an action to recover for personal injuries, alleged to have been sustained by the plaintiff because of the negligence of the defendant in leaving a ridge or elevation near a gutter crossing Centre street, in the village of Oneonta, resulting from the filling up of a trench in which a water pipe had been laid some months before, it appeared that plaintiff’s carriage was broken in passing over this ridge on April 28,1880, and that his horse was frightened and ran away, throwing the plaintiff out and injuring him.
    On the trial a witness, called by the plaintiff, was allowed to testify, under objection, that he was employed by the street commissioner of the defendant, a short time after April 28, 1886, to do some work on Centre street, and he was asked: “ What did he say to you as to what work it was he wanted you to do? ” To which, under objection, the witness, answered: “ He said, go on Centre street to such a place and clean up that dirt there (there was a high mound, he said), before somebody else got hurt.”

      Held, that neither the. subsequent declarations, nor the act of changing or removing the ridge, were in any sense a part of the res gestee.

    That the evidence was incompetent, and its admission constituted an error for which a new trial should be granted, as the jury might well infer therefrom that the ridge was dangerous.
    Appeal by the defendant, the Village of Oneonta, from a judgment of the Supreme Court, entered in the office of the clerk of the county of Otsego on the 21st day of July, 1890, in favor of the plaintiff; and also from an order denying a motion for a new trial, made by the defendant upon a case and exceptions, which was entered in the office of the clerk of the county of Otsego on the 3d day of July, 1890.
    The action was tried at the Otsego Circuit before the court and a jury, and a verdict was rendered by the latter for the plaintiff for the sum of $4,000 damages.

      Burr Mattioe, for the appellant.

      F. FT. Gilbert, for the respondent.
   MeRwiN, J.:

This action is brought to recover damages for personal injuries sustained by plaintiff by reason of the negligence, as the plaintiff claims, of tbe defendant. On tbe 23d of April, 1886, tbe plaintiff, with two other persons, was riding in a carriage westerly along Centre street in tbe village of Oneonta, At tbe intersection of that street with Elm street there was a gutter which crossed Centre street on tbe easterly line of Elm street, aud on tbe westerly side of this gutter there was, as claimed by plaintiff, a ridge, or an elevation of . .the surface of tbe street, which bad been left there tbe fall or summer before upon the filling up of a trench or ditch made for the purpose of laying a water-pipe. As the horse and carriage of the plaintiff passed over this gutter and elevation something about the carriage was broken, the horse was frightened and ran away and the plaintiff was thrown out and injured. The condition of the gutter and of the elevation or ridge upon the 23d of April, 1886, were matters of controversy at the trial. The main question here relates to certain declarations of the street commissioner of the defendant made sometime after the accident.

Carson Emmons was street commissioner of the village for the year commencing April 1, 1886. The plaintiff called as a witness Cornelius Denny, who testified that he was employed by the street commissioner, Mr. Emmons, to do some work upon Centre street a short time after the twenty-third of April. The following then took place, as the record shows:

Question : What did he say to you as to what work it was he wanted you to do ? (Objected to as incompetent and improper; that it appears to be at a time subsequent to this alleged injury and that the statement of the street commissioner in no way affects the liability of the village of Oneonta; that the village is not bound by anything said by one of its officers when not associated with the others.)
The Court — Objection overruled. (Exception taken.)
“ Answer : We were at work cleaning up some of the streets, and I think we were on Centre street or Church street, or off that way and he told us, some one or more with me; he said, go on Centre street to such a place and clean up that dirt there (there was a high mound, he said), before somebody else got hurt.
“DbpeNDANt’s Counsel — We move to strike out the latter part ' of the answer wherein the witness said the street commissioner said * before somebody else got hurt ’ as improper and incompetent j that the statement of the street commissioner in no way tends to bind the village, as he was not authorized to speak for the defendant.
“The Couet — Reserve the motion at present.
“ That is all —■ he said, go to such a place on Centre street on the corner where Elm street comes up there, and then pick off the dirt; he said he wanted to go there and pick that mound off there; I think he said he would send a team soon to draw it away; I don’t recollect that he said anything further; that is all he said; he said go to that place and pick that dirt off, and he would send a team there ; we would take it off. before somebody else got hurt there; that is all I recollect; I don’t think he said in that connection that one lady liad already been injured there, and he wanted us to go and take it off before somebody got hurt; my recollection is, he said before somebody else got hurt.
“ DbfeNdaNt’s Counsel — To each one of those separate questions we desire the stenographer to enter an objection to the statement of the witness on the ground that it is improper and incompetent, and that any statement made by the street commissioner is not binding upon the defendant.
“ The Couet — Do I understand this place was the corner of Centre and Elm street ?
'Witness — Yes, sir.
“ The Couet — The stenographer may enter any objection and an exception to the ruling of the court admitting the evidence to each one of the questions, viz., on the ground that the street commissioner had no authority to make an admission for the city.
“ Defendant’s Counsel — And also that it was after this accident in question.
“ The Couet — I think it appears there you have your objection and exception.
“ Defendant’s Counsel — We ask to strike out from the testimony of this witness that part of the statement referred to, what the street commissioner said in reference to some one else getting hurt.
“ The Couet — No; I think it may stand. (Exception taken.) ”
The witness then testified that he went and did some work at the intersection of Centre and Elm streets. The question was then asked: “ Now tell the jury what you done and who helped you do it ?
Defendant’s Counsel — We object to any evidence relating to the removal of this mound on the ground that it is not covered by the pleadings, ’ and what repairs they made are incompetent and improper and immaterial.
“ The Coubt — He may answer. (Exception taken.) ”

The witness then stated that he and another laborer picked off the dirt from the mound; that one load was drawn away and they picked off more.

Among other things, the defendant’s counsel asked the court to ■charge “that the declarations of defendant’s commissioner- made subsequent to the accident are not competent evidence against the defendant, and the jury have no right to consider the same in determining whether the defendant was or was not guilty of negligence.”

The court declined to so charge and the defendant’s counsel excepted. The defendant’s counsel then asked the court to charge ■“that the fact, if it be a fact, that the defendant caused the ridge to be removed after the accident occurred is not proper to be considered on the question of negligence,” and the court so •charged.

It is now claimed that the court erred in admitting the declarations of the street commissioner made after the happening of the injury, and in refusing to charge as requested in regard to such ■declarations.

It is quite apparent from the case, that the declarations referred to in the request are those above set out. They wore made several ■days at least after the accident.

There is no doubt about the general proposition that the declarations of an agent, like the street commissioner in this casej are not admissible to bind the corporation except when they are part of the transaction which gives rise to the controversy. (Cortland County v. Herkimer County, 44 N. Y., 22, 24; Stone v. Town of Poland, 11 N. Y. Supp., 498.) In this case, however, their admission is .sought to be justified upon the theory that, at the time of their admission in evidence, it was proper for the plaintiff to show that the ridge or elevation in controversy had been lowered or changed since the accident, and that for the purpose of showing this change it was proper to show not only, what the-street commissioner and his employees did, but also what the street commissioner said while so-engaged.

It may be assumed that the fact of the change after the accident was properly shown, hot, however, as bearing on the negligence of the defendant, but by way of explanation of evidence previously given in regard to the height of the ridge. And the court held and charged that the fact that the defendant may have caused the-ridge to be removed after the accident should not be considered on the question of negligence. The court, however, refused to charge that the declarations should not be considered on that question. The fact of the change, whether brought about by the defendant- or some other party, was the only thing competent. It was not a. question whether the street commissioner was then engaged in the line of his duty. His duty at that point of time was wholly immaterial, and was not an issue in the case. It was not a part of the transaction in controversy. The liability of the defendant, if there-was one, ;was perfect and complete before that time. . In no sense were the subsequent declarations or the act of changing or removing the ridge a part of the res gestee.

The declarations were received generally in the case. Their effect was not limited. We think they were not competent. But it is urged that they were not of sufficient materiality to affect the case. The height of the ridge, and whether or not it was of a dangerous-character, were vital questions in the case. The evidence was conflicting and both sides were very much in earnest. The plaintiff -claimed there was a high ridge and a dangerous place. The defendant claimed the contrary. If, therefore, as the witness Denny, in substance, testified, the defendant’s street commissioner said there-was a high mound there and directed the dirt to be picked off and cleaned up before somebody else got hurt, the jury might well infer that the commissioner thought the situation a dangerous one, and that the ridge was a dangerous obstruction. Such a declaration from the officer managing the streets of the village would be liable to affect materially the minds of the jury.

We cannot fairly say that this evidence did not affect the result or prejudice the defendant. (Carroll v. Deimel, 95 N. Y., 252, 256 ; Furst v. Second Av. R. R. Co., 72 id., 542, 547.)

We are, therefore, of the opinion that, in the admission of the declarations and the refusal to charge the request referred to, error was committed that requires the reversal of the judgment.

Habdin, P. J., and MabtiN, J., concurred.

Judgment and order reversed on the exceptions and a new trial ordered, with costs to abide the event.


author: HakdiN, P. J.:

text:
    THE PEOPLE OF THE STATE OF NEW YORK, Respondent, v. CASSIUS C. CORNER, Appellant.

      Bet-off — not allowed in an action brought by the State

      A party sued by the State to recover for brushes and materials sold and delivered. to the defendant from the State Eeformatory, at Elmira, interposed by his. answer a counter-claim for loss of profits alleged to have been sustained' by him by reason of the discontinuance of the manufacture of brushes at the reformatory, under the provisions of chapter 21 of the Laws of 1884 prohibiting convict labor by contract in the penal institutions of the State.

      Held, that the defendant was not entitled to set off a loss thus sustained.

      Danolds v. State (89 N. Y., 36) distinguished.
    Appeal by the defendant Oassius O. Oorner from a judgment of the Supreme Court, entered in the office of the clerk of the county of Chemung on the 31st day of May, 1890, in favor of the plaintiff, upon the report of a referee, who found that the plaintiff was entitled to judgment against the defendant for the sum of $10,409.63, with interest, together with costs and disbursements.
    The action was brought to recover a balance of account for goods, and merchandise sold and delivered by the plaintiff to the defendant at the New York State Reformatory, at Elmira.
    The defendant interposed an answer alleging, among other'things,. that, for a period of several years prior to the 2d day of August, 1888, the defendant had been engaged in the business of manufacturing, or having manufactured for him for the public market, brushes of various kinds and descriptions at said reformatory under certain contracts or agreements made between him and the superintendent and board of managers thereof. That, relying upon such contracts and agreements made by the plaintiff with him, the-defendant had entered into contracts and obligations relating to. such brushes and goods, and for the sale thereof to other parties, put •of which he would have realized a .profit which he had lost by reason of the failure of the plaintiff to carry out the contracts or agreements which the plaintiff had entered into with said defendant, which amount so lost he claimed to deduct from any claim existing in favor of the plaintiff.
    The referee found : “ That the plaintiff, between July 9, 1888, and January 21, 1889, inclusive, sold and delivered to the defendants, at the New York State Reformatory at Elmira, brushes and brush materials at and for the price and of the value of $11,627.97. All of said materials were so sold and delivered after August 2, 1888, and all of said brushes after that date, except $1,262.39, in value of the same.” He also found that a payment had been made of $2,085.13, and that the defendant was indebted in seven dollars and eighty-eight cents for moneys expended to the use of the defendant.
    As conclusions of law the referee found: First: “ That the counter-claim set up in the defendant’s answer is not available to the defendant or allowable against the State in this action or court.”
    In the defendant’s answer it wTas stated that sundry orders had been delivered to the officers of the New York State Reformatory .at Elmira, and that the same had been accepted by the superintendent ; that the orders had not been filled and that “ the plaintiff herein had, for a good and valuable consideration, agreed to make, manufacture and produce for the defendant and deliver to him a large quantity of brushes, many thousand gross in number, and of various kinds and descriptions, which particular kinds and descriptions this defendant is now unable to designate. That of said orders, contracts and agreements some, on the said 2d day of August, 1888, had been partially carried out and kept by the said plaintiff; and a partial number of the brushes so to be manufactured by the plaintiff and delivered to the defendant only have been so manufactured and delivered, while other of said orders or agreements the said plaintiffs had not even partially complied with or carried out on the said 2d day of August, 1888, and they had not manufactured or delivered to the defendants any of the brushes or goods which, under such orders or agreements, they had contracted to manufacture and deliver. * '* * And defendant further alleges that, by reason aforesaid set forth in this-second answer and defense, all of which matters are herein set forth upon information and belief, he, the said defendant, has been damaged in at least the sum of $10,000 ; and such sum this defendant asks this court to set off against any sum the plaintiffs may, upon the trial of this action, show themselves entitled to by reason of the matters set forth in the said complaint; and defendant asks that such damages as said defendant may show himself entitled to by reason of the matter set forth in this second answer and defense-upon the trial of this action may be used to cancel or offset to the extent thereof the damages which the plaintiffs may, upon the trial hereof, show themselves entitled to by reason of the matters set-forth in'their said complaint, and that plaintiffs’ said complaint be-dismissed, with costs, and for such other or further relief as to the court may seem just and proper.”
    Defendant gave some evidence tending to establish the allegations of his answer. The case states: “ Plaintiff’s counsel seasonably objected to all testimony offered by defendant tending to-prove the counter-claim or cause of action alleged in the answer, on the ground that such claim was not available to the defendant or allowable against the State in this action, and at the close of all the evidence duly requested the referee to so find and hold.” The defendant requested the referee to find: “ The defendant is-entitled to recoup or counter-claim against the claim of the State and the amount due from defendant to the State in this action, the-said sum of damages, or so much thereof as may be necessary.” The referee refused so to find. An exception was taken to such refusal.

      Frederick Oollin, for the appellant.
    , Charles F. Tabor, attorney-general, and Erastm F. Babcock, for the respondent.
   HakdiN, P. J.:

■ Appellant’s answer set up new matter, and under the answer he sought to establish new and independent orders given to the plaintiff; accepted by the plaintiff; a failure to perform in accordance with the orders and acceptances, and by reason of the breach to be allowed such prospective profits as would have come to him in the event of a fulfillment of the orders. Such new matter constituted a counter'claim. ( Wilder v. Boynton, 63 Barb., 547.) Assuming that such, mew matter constitutes a cause of action in favor of the defendant, •and that equitably and justly he was entitled to recover, by reason ■of such new matter, damages from the State, the question here presented is, whether or no such recovery or allowance can be had in this action. If the plaintiff had not commenced this action, it is very •clear and well settled by an unbroken line of authorities that the defendant could not have brought and maintained an action against the State. In seeking redress for the injuries sustained by him, if .any, by reason of a breach of the terms of the orders referred to in his answer, his remedy would necessarily have been sought in a court of claims established by the State for the ascertainment of damages in .such and other cases. (The People v. Denison, 59 How. Pr., 157; S. C., affirmed, 84 N. Y., 272.) Judge Rapallo, in speaking of the counter-claim in the case just cited, says : “Another mode of redress is provided by statute in such cases, and if the defendants háve any just claim against the State, they must apply for relief to the board of audit, the tribunal instituted by the State for passing upon such claims. As their claim was not triable or recoverable in this action, the judgment rendered herein does not conclude the defendants in respect thereto.” In Reeside v. Walker (11 How. [U. S.], 290), it was said: “ To permit a demand in set-off against the government to be proceeded on to judgment against it, would be equivalent to the permission of a suit to be prosecuted against it. And however this may be tolerated between individuals, by a species of reconvention, when demands in set off are sought to be recovered, it could not be as against the .government, except by a mere evasion, and must be as useless in the end as it would be derogatory to judicial fairness.” In (O'Hara v. State (112 N. Y., 154), it was said: “ There is but little analogy between the position of a State in reference to the prosecution of claims against it and the condition of a citizen, subject at all times and in numerous tribunals to be brought into court and prosecuted for his liabilities. The State can be prosecuted, in a legal sense, only by its own consent, and after it has created a tribunal to hear and decide claims against it.” In Rexford v. State (105 N. Y., 231), it was said: “ The State can only he sued by its own consent and for liabilities which it chooses to assume (People v. Dennison, 84 N. Y.,. 272, 2S1), and this has been expressly held where the cause of action alleged rested upon some misfeasance or nonfeasance.” Appellant has called our attention to Danolds v. State (decided in this court in December, 1881, and affirmed by the Court of Appeals, 89 N. Y., 36). We -find nothing in that case which sustains the contention of the appellant, it haying been held in that case that after a valid contract has been entered into by the State it cannot destroy or avoid the obligation of the contract.” The case involved an inquiry into the force and validity of a contract and the measure of damages for a breach of it. These questions had been presented to the board of audit, and no question arose during the progress of that litigation akin to the one now before us. In United States v. Giles and Others (9 Cranch, 228), a somewhat similar question to the one now befere us was under discussion, and in the course of the argument it was said: “ This defendant could not maintain a suit against the United States. To give him the benefit of the set-off would be a violation Of the prerogative of the United States.” Thereupon, the court stopped the counsel for the United States upon this point, saying they were satisfied.” In the course of the opinion delivered by Livingston, J., it was said at page 237: “ If, then, in a suit against Giles himself, a claim for these credits, under existing circumstances, could not be sustained, neither can it in an action on this bond, without permitting the defendants to do indirectly what the marshal could not have done directly, and in this way avail themselves of what the law seems to regard as a default, or at least a negligence on the part of their principal.”

Concurring, as we do, in the result reached by the learned referee, which he has fortified by an extensive opinion, citing and reviewing numerous authorities, and the learned counsel for the appellant having conceded in the argument that he has “ been unable to find any New York State authorities squarely responding to the question,” we may very appropriately omit further comment. W e think the case was properly disposed of by the referee, and we therefore sustain his report.

The judgment must be affirmed, with costs.

Martin and Merwin, JJ., concurred.

Judgment affirmed, with costs.


author: MeewiN, J.:

text:
    In the Matter of the Application of PETER McFARLAND for a Writ of Habeas Corpus.

      Territorial jurisdiction, to commit for a crime — offense of grand larceny, where it is'commiited.

    Upon appeal from an order, made upon tie return to a writ of habeas corpus discharging one McFarland from custody, it appeared that McFarland had been committed upon the charge of grand larceny in the second degree by the recorder of Oswego city, who had in criminal matters, under section 2 of chapter 134 of the Laws of J 849, the powers of a justice of the peace, and who was a magistrate, under section 147 of the Code of Criminal Procedure.
    It was claimed by McFarland that he lived in Cayuga county, and that the crime, if any, was committed outside of the county of Oswego.
    The offense charged consisted in McFarland’s having obtained, in the city and county of Oswego, an Irish setter dog under an agreement to return the same, his having refused to do so, and his having converted the said dog to his own use, with intent and purpose to cheat and defraud the owner out of the value thereof:

      Held, that the case, under the view most favorable to McFarland, came within section 134 of the Code of Criminal Procedure, providing that “when a crime is committed, partly in one county and partly in another, or the acts or effects, thereof constituting or requisite to the consummation of the offense occur in two or more counties, the jurisdiction is in either county,” and that the recorder of Oswego city consequently had territorial jurisdiction to make the commitment.
    Appeal by tbe People from an order of tbe Hon. L. 'W. Barer, special surrogate of tbe county of Oswego, made in tbe above-entitled matter, under date of June 23, 1890, and entered in the Oswego county clerk’s office on tbe 25th day of June, 1890.
    Tbe order appealed from discharged McFarland from tbe custody of the sheriff of Oswego county, who held him under a commitment made by the recorder of Oswego county, to await tbe action of the grand jury of that county.
    Tbe complaint made before tbe recorder was as follows : “ That on or about tbe 10th day of September, 1889, at tbe city of Oswego, in said county, one Peter McFarland obtained from deponent an Irish setter dog, owned by deponent and worth about fifty dollars, and agreed to return tbe said dog on tbe 1st day of January, 1890; that said McFarland has neglected and refused to surrender said dog to deponent, and has converted said dog to his-own use with intent and purpose to cheat and defraud deponent out of the value of the same, wherefore ■ this deponent prays that the said offender may be dealt with according to law.”
    On the 24th of March, 1890, the recorder, upon information upon oath, issued a warrant for the arrest of McFarland for the crime of grand larceny in the second degree. The arrest was made and a hearing had before the recorder, evidence being given on behalf of the people and also on behalf of the defendant therein. The recorder was satisfied that the crime charged had been committed and that there was sufficient ground to believe the defendant guilty thereof, and ordered that he be held to answer in the sum of $300 and be committed to the sheriff of Oswego county until he give such bail. The recorder accordingly issued a warrant of commitment to the sheriff, who thereupon took the defendant. The latter then applied to the special surrogate of Oswego county for a writ of habeas corpus, alleging that the commitment was illegal, for the reason that no evidence was given before the recorder tending to show the defendant guilty, and also that the recorder had no jurisdiction territorially to make the order of commitment Upon the hearing before the special surrogate the evidence taken before the recorder was read. The grounds upon which the order of discharge was made, as recited in it, are, “ it appearing upon such examination that the said Peter McFarland is unlawfully imprisoned and restrained of his liberty by reason of want of jurisdiction on the part of the committing magistrate, to make the order of commitment on which said Peter McFarland is held upon, the evidence and facts, and of evidence to sustain the same,” etc.

      George T. Glark, assistant district attorney, for the People, appellants.

      Peter McFa/rlcmd, respondent in person.
   MeewiN, J.:

The questions on this appeal are (1), whether the recorder of Oswego city had jurisdiction territorially to make the commitment, and (2), whether there was such a lack of evidence before him as to the guilt of the defendant that his discharge upon habeas corpus was 'proper.

Upon, the first proposition the claim of the respondent here is, that he lived in Cayuga county, and that the crime, if any, was committed outside of the county of Oswego. The recorder of the city of Oswego has, in criminal matters, the powers of a justice of the peace. (Chap. 134 of 1849, § 2.) He is a magistrate under section 147 of the Code of Criminal Procedure. The substance of the crime charged was the wrongful appropriation of property by a ■bailee. The bailment, if there was one, was made in Oswego county, and the property was to be returned there. If we take the view most favorable to the respondent, it was a case within section 134 of the Code of Criminal Procedure, which provides that, “ when a crime is committed, partly in one county and partly in another, or the acts or effects thereof, constituting or requisite to the consummation of the offense, occur in two or more counties, the jurisdiction is in either county.” It follows that the recorder had jurisdiction territorially.

Upon the second proposition the claim of the respondent is, that the evidence before the recorder did not tend to establish the commission of any crime. Under section 528 of the Penal Code, a person who intentionally appropriates to his own use property held by him as a bailee is guilty of larceny. Within this definition there was before the recorder evidence, given on the part of the complainant, which the recorder had a right to believe, which tended to show the commission by respondent of the crime of larceny. There was conflicting evidence, but the weight of that was for the magistrate to determine, and should not be rejudged, in any ordinary case at least, in habeas corpus proceedings.

We think the contention of the respondent is not sustained, and .that the order of discharge was improperly made.

HaRdiN, P. J., and MartiN, J., concurred.

■Order reversed.


author: MeRWIN, J.:

text:
    THE PEOPLE OF THE STATE OF NEW YORK v. E. REMINGTON & SONS. In the Matter of the Claim of the ILION NATIONAL BANK.

      Beceiver, refusing, upon an untenable ground, to pay a dividend to a creditor, is chargeable with interest — that the receiver has money on deposit in the bank (the creditor), is no answer.

    When the payment of a dividend, made by a receiver for the benefit of the creditors of an insolvent corporation, is deferred by reason of an unsuccessful contest, made by the receiver, as to whether certain collaterals held by the creditor should • first be applied in reduction of the claim before the dividend to be paid to such creditor should be computed, the creditor is entitled to interest on the amount of the dividend, to which he is finally adjudged to be entitled, and the payment of which has been deferred by reason of the refusal of the receiver to pay it.
    It is no answer, on the part of the receiver, to such a claim for interest during the time that the payment of the dividend is deferred, that the claimant is a bank, in which a very large sum of money, constituting part of the assigned assets, has during such time been on deposit at a low rate of interest.
    Appeal by Addison Brill and Albert N. Russell, receivers, etc., from a judgment of tbe Supreme Court, entered in tbe office of tbe clerk of the county of Herkimer, in October, 1890, with notice of an intention to bring up for review, upon such appeal, an order allowing and directing tbe payment of interest to tbe Ilion National Bank upon its dividend.
    The order was made at the Jefferson Special Term, October 25, 1890, and was entered m Herkimer county prior to November 8,1890. It ordered and adjudged “ that the said Ilion National Bank is, as matter of law, entitled to have allowed and paid to it interest upon the sum of $48,351.82, at the rate of six per cent per annum, from March 10, 1889, to July 10, 1890, being the interest upon the amount of the dividend of twenty-five per cent upon the claim of the said Ilion National Bank, as allowed in this action, which dividend was withheld and the payment thereof delayed during the said time,” and the receivers are authorized and directed to pay the same out of the funds in their hands, as receivers, applicable thereto.

      W. <& K. E. Kerncm, for tbe receivers, appellants.

      A. M. Mills, for tbe Ilion National Bank, respondent.
   MeRWIN, J.:

The Ilion National Bank was a creditor of E. Remington & Sons,, and its debt was established and allowed by and before the referee appointed to bear and establish the claims of creditors, at the sum of $195,525.56. The report and findings of the referee were filed January 2,1889. The bank held some collaterals, and it was claimed by the receivers before the referee that these should be exhausted and the proceeds applied on the debt, and the balance only be allowed as the claim upon which dividends should be made. The bank claimed that it had the right to prove its entire debt without reference to the collaterals and receive dividends on the amount so proved. The referee so held and allowed the entire debt. The receivers excepted, but their exceptions were overruled at a Special Term, held February 12, 1889, and the report of the referee confirmed. The order of confirmation was entered July 1, 1889, and it contained a provision that no dividends upon the claim of the bank should be paid until the collaterals held by it should be exhausted and the proceeds applied, and that then only so much of the dividends going to said bank should be paid as would, with the proceeds of the collaterals, fully satisfy the claim of'the bank.

The receivers appealed to the General Term from so much of the order as overruled their exceptions. The General Term affirmed the order (People v. Remington & Sons, 54 Hun, 505) as did also the Court of Appeals upon a further appeal. (121 N. Y., 328.)

In February, 1889, and while the said exceptions were pending,, the receivers presented to the court at Special Term their petition, in which they stated, among other things, the amount of funds they had on hand and the amount of debts established by the referee, and that a part of the claims, among which was that of the Ilion Bank, were being contested as to their amount, and they suggested that a. dividend of twenty-five per cent be declared, and that such dividend, so far as it applied to the contested claims, be delayed and withheld until the exceptions were disposed of. Thereupon the court, without notice to the Ilion Bank, by order entei’ed, on or about March 1,1889, authorized and instructed the receivers to declare and pay a dividend' of twenty-five per cent upon tbe claims mentioned and set forth in the petition, “ except that the said receivers are hereby authorized and instructed to delay and withhold the payment for the present of any dividend upon the said disputed claims mentioned in the said petition now before the court on exceptions to the referee’s report, as set forth in the said petition, until, the exceptions shall have been disposed of by the court, and then only on such amount as shall be allowed by the court at Special Term, or in case of appeal by the appellate court or courts.” Thereafter, from the 7th to the 10th of March, 1889, the receivers paid to the various creditors the dividend, but paid none to the Ilion Bank.

The order and decision of the Court of Appeals were entered in Herkimer county on the 20th of June, 1890. On or about the 15th of July, 1890, the receivers and the bank agreed upon the amount of the value of the collaterals to be applied on the debt at the sum of $20,777.13, and on the 16th of July, 1890, the receivers paid to the bank the dividend upon its claim, being the sum of $48,351.82. At this time the bank claimed interest on the dividend from March 10, 1889, but the receivers declined to pay it. The question of the right to interest was reserved and the payment of the face of the dividend was agreed to be without prejudice. Thereupon a motion was made by the bank to the court, which resulted in the order appealed from.

When the payment of a dividend is deferred by reason of an unsuccessful contest of a claim, the creditor so delayed should be allowed interest on the dividend. (Armstrong v. American Exchange Nat. Bank, 133 U. S., 433, 470.) In that ease it is said that the allowance of interest is necessary to put the delayed creditor on an equality with the other creditors.

But it is suggested by the appellants that, as the bank could not obtain its dividend until the collaterals were adjusted, and as this was not done till July 15, 1890, and the dividend was, in fact, paid July 16, 1890, the receivers were- not in default and the bank was not entitled to interest. Under the provision of the order obtained by the receivers, the dividend, in effect, was to be withheld until the final disposition of the contest. Any adjustment, therefore, of the collaterals would be futile until after such disposition. The order upon the final adjudication was entered in Herkimer county on tbe 20tb of June, 1890. TJp to that point of time, very evidently, the delay was by reason of the unsuccessful contest by the receivers, and furnishes no good reason for refusing to pay interest. The further delay from the twentieth of June to the fifteenth of July may very properly be attributed to the failure of the bank to perform the condition of the order requiring it to exhaust and apply its collaterals before it would be in a position to demand payment. This would call for a modification of the order appealed from so that interest would only be allowed to. June 20, 1890.

But it is urged by the appellants that, equitably, the Ilion Bank is not entitled to interest by reason of the fact that it was one of the banks in which the receivers kept their funds on deposit, and that during all this time it had on such deposit an amount of the funds of the receivers largely in excess of the dividend coming to it. It appears that on the 29th of March, 1888, the receivers, being about to receive the sum of $200,000 upon the sale of certain property, applied to the court and obtained an order that one-half of this sum might be deposited in the Ilion Bank upon its giving as security therefor a bond, with sufficient sureties, in the sum of $200,000. The bond was given and the deposit made, and about the 1st of July, 1888, it was agreed between the bank and the receivers that interest on this deposit should be paid by the bank at the rate of two and one-half per cent per annum. After this time, and to July, 1890, the bank had of such deposit the sum of about $98,000 and allowed interest at the agreed rate. This deposit was at all times subject to be drawn out upon the check of the receivers, with the order of the court. The cashier of the bank testifies it was. held and treated as a regular deposit, was subject to the provision of the national banking law requiring fifteen per cent of deposits to be kept on hand and in reserve, and that the bank was not then paying interest on any other deposits.

The arrangement between the bank and the receivers was one of mutual convenience and benefit. "Whether one received more-benefit than the other we cannot here inquire. It was satisfactory to each and was entirely distinct from the matter here in controversy. It was in the nature of a contract between the parties, and we have no right to interfere with it. It should not be considered in this controversy.

Tbe order should be modified so that it will allow interest from March 10,1889, to June 20,1890, and as modified affirmed, without costs upon this appeal.

Martin, P. J., and Kennedy, J., concurred.

Order modified so as to allow interest only from March 10, 1889, to June 20, 1890, and as modified affirmed, without costs of this-appeal to either party.


author: Merwin, J.:

text:
    JAMES VAN CAMP, for Himself and all Other Legatees under the Last Will and Testament of ANN JENNETTE VAN CAMP, Deceased, Appellant, v. ALBERT FOWLER, as Executor of the Last Will and Testament of OLIVER H. PERRY, Deceased, and Others, Respondents.

      Estate in remainder — when it rests — heirs and, next of kin, determined as of what date.

    A testator, by his will, gave “ All the rest, residue and remainder of both my real and personal estate unto Albert Fowler, my executor hereinafter named and appointed, in trust for and during the natural lifetime of my wife, Ann Jennette Perry, for the uses and purposes hereinafter specified.”
    After making provision for the support of his wife and child from the income, and if necessary from the principal of the trust estate, he further provided as ‘ follows:
    “And from and immediately after the decease of my said wife, unless such decease shall occur before my said son arrives at the full age of twenty-one years j and in such case when he, my said son, shall arrive at such age of majority, I give, bequeath and devise all that shall then remain of said trust estates, and the use and profits thereof, unto my said son, Walter T. Perry, his heirs and assigns, forever.”
    Prior to August 22, 1866, the widow married James Van Camp, and on that day the son, Walter T. Perry, died leading his mother his only heir-at-law and next ' of’kin, to whom letters of administration upon his estate were subsequently granted.

      Meld, that the bequests to Walter T. Perry passed an interest in the estate wdiicli vested at the time of the death of the testator.
    That, in any event, the heir and next of kin of the testator must be determined as of the time of his death, and that the fact that a party entitled to his estate died before the time of the distribution thereof would not affect the rights of the legal representatives of such party to claim the interest to which he would have been entitled therein had he lived.

      Appeal by the plaintiff James Van Camp from a judgment of the Supreme Court, entered in the office of the clerk of the county of Onondaga on the 8th day of October, 1890, whereby, among other things, it was adjudged that, under the provisions and language of the will of Oliver Ii. Perry, deceased, his son, Walter T. Perry, had no vested estate therein, and that upon the death of the said Walter T. Perry, before attaining his majority, and upon the death of Ann Jennette Van Camp, the said fund belonged to, and was still vested in, the estate of the testator, Oliver H. Perry, as undisposed of and not bequeathed under said will.
    The appellant also gave notice of an intention to bring up for review upon such appeal all the exceptions taken upon the trial, the exceptions to the findings and conclusions of law found by the trial court, its refusals to find as requested, as well as all questions relating to the correctness of the judgment, both upon the law and the facts; but the appellant did not appeal from that portion of said judgment therein contained in the following words, namely: “ That the said judgment and decree heretofore set forth, rendered and entered in said action brought by Ann Jennette Van Camp, as plaintiff, against Albert Fowler, as executor of the will of Oliver H. Perry, deceased, as defendant, is not a bar to this action, and the plaintiff is not bound or concluded thereby.”
    This action was brought for the construction of the will of Oliver H. Perry, who died at Truxton, Cortland county, N. Y., on the 24th of January, 1864, leaving real and personal estate, and leaving a widow, Ann Jennette Perry, and as his sole heir and next of kin, a son, Walter T. Perry, then about three years old. In his will, after providing for debts and funei’al expenses, he gave and devised “ all the rest, residue and remainder of both my real and personal estate unto Albert Fowler, my executor, hereinafter named and appointed in trust, for and during the natural lifetime of my wife, Ann Jennette Perry, for the uses and purposes hereinafter specified; ” and he then provided that his executor should pay annually to his wife, as long as she remained his widow, the clear uses, profits and increase •of the trust estates for the support and maintenance of herself and his son, and, in case that was not sufficient for that purpose, then he •directed his executor to make up the deficiency out of the trust estate. In case his wife remarried, he directed his executor, during the minority of the son, to pay annually to his wife out of the trust ■estates, or the uses and profits thereof, sufficient to provide for the support and maintenance of the son. In case his wife, after her remarriage, should not have any other legal source from which to derive a comfortable support, he directed his executor to pay to her from time to time out of the trust estates, or the uses and profits thereof, sufficient to supply such deficiencies. In case his wife died before -his son arrived at twenty-one, he directed his executor to provide for his support and maintenance during minority. Then •came the following provision: “And from and immediately after the decease of my said wife, unless such decease shall occur before my said son arrives at the full age of twenty-one years, and in such case when he, my said son, shall arrive- at such age of majority, I give, bequeath and devise all that shall then remain of said trust • estates, and the use and profits thereof, unto my said son, Walter T. Perry, his heirs and assigns forever. And I further order and direct ■that my said wife receive the payments hereinbefore ordered to be > made to her in lieu of dower.” He then appointed Albert Fowler sole ' executor, giving him full power to sell and convey any of the real ' -estate at such time or times, and in such manner as to him should .seem best.
    ■ ;The will was duly proved on February 5, 1864, and letters testar mentary issued to the defendant, Albert Fowler. He afterwards -s.pld and converted the real and personal estate into money. Prior to August 22, 1866, the widow married the plaintiff, James Yan Camp. On the 22d of August, 1866, the son, Walter T. Perry, died, leaving his mother, Mrs. Yan Camp, his only heir and next of kin. She took out letters of administration on his estate on the 14th of ■October, 1867. Soon after this, Mrs. Yan Camp brought an action in the Supreme Court in her own name, as plaintiff, against Albert Fowler, as executor, setting forth in her complaint the foregoing ■facts, -and that the executor had in his hands about $3,000, and she .alleged that the executor had no right to the possession of this, but that upon the death of Walter T. Perry the estate passed to her as his heir-at-law and personal representative, and that she, as such, was entitled to the same. She also alleged that she had no other legal source of support and that the executor had neglected to provide for her. She asked for an accounting and for a construction of the will, to-the end, that it might be determined what were the rights of herself and of the executor, and that the executor be adjudged to pay her the amount of the estate, or such part thereof as she might be adjudged to be entitled to, annually or otherwise. The defendant therein, put in a general denial. The case was .tried at Special Term February, 1868, and the decision, after fixing the amount in the defendant’s hands, decreed that the plaintiff therein was legally entitled to be paid the accumulations of interest on the balance of the fund as the same became due, and to have the principal applied to her comfortable support whenever she should be unable to derive such support from any other legal source, and directed the defendant to safely invest the fund and pay the interest to the plaintiff and, under the order of the court, apply the principal whenever necessary. It was not decided as to who was the owner of the balance of’ the fund. After this, and down to the time of her death on March 28, 1889, Mrs. Yan Camp received from the executor the interest on the fund. . The executor now has in his hands $2,L11.63, besides some interest. Mrs. Yan Camp left a will, which was proved on the 3d of June, 1889, and letters testamentary issued to the defendant, Levi Fowler. In this will the plaintiff is given a legacy of $1,000 and is also residuary legatee of the personal estate. Mrs. Yan Camp left no property, except her interest as heir-at-law and next of kin of Walter T. Perry, in the estate of Oliver H. Perry. Upon application of the plaintiff, the defendant Levi Fowler, as executor of Mrs. Yan Camp, declined to bring an action for the construction of the will of Oliver LI. Perry, and the defendant Albert Fowler, as executor, etc., also declined. Thereupon the plaintiff brought the action. The defendants, other than Levi Fowler and Albert Fowler, are the present heirs and next of kin of Oliver H. Perry, being his brothers and sisters or their representatives, and they claim to be entitled to the fund in controversy.
    Upon the trial it was decided that under the will of Oliver H. Perry no estate in the fund and no legacy vested in Walter T. Perry during his minority and the lifetime of the widow, and that during such minority the whole of the estate was in the trustee, and that Walter T. had no vested estate therein ; that upon the death of Walter T. before attaining his majority, and upon the death of Mrs. Yan Camp, the fund belonged to and was still vested in the estate of Oliv.er H. Perry as undisposed of and not bequeathed under his will; that the fund now in the hands of the executor, the defendant Albert Fowler, was to be distributed among the defendants, as next of kin of Oliver H. Perry, as property undisposed of by the will; that the judgment in the action brought by Mrs. Yan Camp was not a bar to this action, and the plaintiff is not bound thereby;, that the complaint be dismissed with costs. The plaintiff appealed from the judgment, except as to the provision in regard to the-judgment in the action brought by Mrs. Yan Camp.

      William M. Boss, for the appellant.

      Lewis <Sa Wilson, for the respondents.
   Merwin, J.:

It was apparently assumed by both parties at the trial, and is here,, that if the legacy or devise to Walter T. Perry vested, so that upon his death it went to his heirs or representatives, then the estate of Mrs. Yan Camp, represented by her executor, the defendant Levi Fowler, would be entitled to the fund. The controversy was between the representatives of the estate of Mrs. Yan Camp, holding the vested rights, if any, of Walter T. Perry upon the one hand, and the defendants, the present heirs and next of kin of Oliver IT. Perry, upon the other.

The claim of the plaintiff is, that the bequest and devise to Walter T. Perry passed an interest that vested at the time of the death of the testator. We think that this position is sustained by authority. There is here a direct gift to Walter T. Perry, his-heirs and assigns, and it is within the rule laid down in Matter of Accounts of Mahan (98 N. Y., 376), that, if there be a direct gift to legatees, a direction for payment at the happening of - a certain event should not prevent its vesting, and, therefore, the personal representatives of a legatee dying before the event happened shall be entitled to receive it when' payable. In that case, as also in Goebel v. Wolf (113 N. Y., 405), there was an intervening trust for the support of the widow and of children until majority. This did not prevent the vesting. The use of the expression “ when he, my said -son, shall arrive at such age of majority ” did not prevent the vesting. (1 Jarman on Wills [5th ed.], 806 ; 4 Kent’s Com., 232.) Nor did. the expression, “from and after the decease of my said wife.” (Livingston v. Breene, 52 N. Y., 118; Bedell v. Guyon, 12 Hun, 396.) The bequest was residuary. The circumstance that the principal might be reduced in the operation of the trust does not -change the result. (Mitchell v. Knapp, 54 Hun, 500, and cases there referred to.)'

But suppose, as is claimed by defendants, the gift did not vest, but passed as undisposed of property, it would not go to the defendants, the present so-called heirs and next of kin. It would go to -and vest in the heir and next of kin, according to the situation at the time of the death of the testator. (Rose v. Clark, 8 Paige, 574; 2 Wms. Exrs. [6th Am. ed.], 1591, note.) The fact that the distributee died before the time of distribution would not affect the rights of Ms representatives. It follows that the heirs or representatives of Walter T. Perry are entitled to the fund.

But it is urged by the defendants that the plaintiff is not in a position to maintain this action. The court below passed upon the merits and did not in terms consider this question.

The claim of the defendants is, that if any one could bring the .action it must be the personal representative of Mrs. Van Camp. Still her executor refused to bring it, and in such a case the benefi•ciary has a right, somewhat within the discretion of the court, to bring an action for the benefit of the estate. This discretion, so far •as it was exercised by the trial court, was in favor of the maintenance of the action. This result should not be here disturbed. Assuming, then, that the plaintiff has the same standing that the ■executor of Mrs. Van Camp would have, the case of Wager v. Wager (89 N. Y., 161, 166) is authority for the maintenance of the action. 'This is on the assumption that Mrs. Van Camp succeeded to all the rights of her son. No point was made at the trial, and is not here, that there was any occasion for the appointment of an administrator <de bonis non of the estate of the son in order to fully vest in the mother’s estate the rights of the son. She was the sole beneficiary ■of his estate.

The defendants further claim that the judgment obtained by Mrs. Van Camp in 1868 is a bar. The court at Special Term held otherwise, and the defendants did not appeal. The plaintiff, in his-notice of appeal, expressly excepted that provision in the judgment.. We do not consider that question. The pendency of proceedings-in the Surrogate’s Court was not pleaded as a defense, and is not available here to the defendants.

. It follows that the judgment should be reversed.

Hardin, P. J., and Martin, J., concurred.

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


author: Meewin, J.:

text:
    MARY ENGLISH, Respondent, v. WILLIAM MAJOR, Appellant.

      Action for malicious prosecution — evidence of statements made to the defendant prior' to the pi'osecution.

    Upon the trial of an action brought for the recovery of damages resulting from an alleged malicious prosecution of the plaintiff by the defendant, by whom the-plaintiff was charged with having committed the offense of poisoning chickens, the defendant was called as a witness on his own behalf. He testified that he employed one McLaughlin to investigate the matter of the poisoning, by whom he was informed that ho had found meal along the plaintiff’s fence, and that lie-had had a conversation with the plaintiff Mrs. English. He was then asked, “what did he state was the conversation which he had had with Mrs. English.”' This question was objected to as hearsay and excluded.

      Held, that the question was competent, as the communication was made to the; defendant prior to the commencement of the prosecution, and tended to show the impression made upon his mind and the materials he had before him in forming an opinion, and properly bore upon the question as to whether the-defendant had reasonable ground to believe that the plaintiff was guilty of' the offense charged.
    Appeal by the defendant William Major from a judgment of the Supreme Court, entered in the office of the clerk of the county of Onondaga on the 2d day of June, 1890, after a trial at the Onondaga Circuit before the court and a jury, and from an order denying-the .defendant’s motion for a new trial made upon the minutes-of the court.
    The action was brought for malicious prosecution. On the 26th day of July, 1889, upon the complaint of the defendant, charging-the plaintiff witli the offense of poisoning animals, the plaintiff was .arrested, taken before a magistrate, and on the 3d of September, 1889, was tried and acquitted, and thereupon this action was commenced.

      George Barrow, for the appellant.

      M. E. & G.W. Driscoll, for the respondent.
   Meewin, J.:

Upon the trial of this case the plaintiff gave evidence showing, in effect, that she was innocent of the charge made against her by the defendant. She then rested and defendant made a motion for a nonsuit, which was denied and exception taken. The plaintiff had not shown a want of probable cause and had not made a case for recovery. (Thaule v. Krekeler, 81 N. Y., 433.) The defendant, however, instead of relying on his exception, proceeded with evidence upon his part, and thereafter the plaintiff gave further evidence. So that at the close of the evidence a case was probably presented for the action of the jury within the rule laid down in Heyne v. Blair (62 N. Y., 19). The case was, however, a close one, .and, in that view, some rulings upon evidence, about which the defendant complains, are to be more closely considered.

The plaintiff and defendant occupied adjoining village lots. The defendant kept chickens, and upon the evening of July 24, 1889, quite a number of them were found dead along the line between the parties. The charge against plaintiff was that she had thrown poison upon the ground adjacent to the line, with the intent to poison 'the chickens, and which they had, in fact, eaten. The defendant was called as a witness on his own behalf, and testified that he returned home that evening about six o’clock and found his wife crying. He was then asked to state what occurred that evening in reference to conversation with his wife and in reference to chickens. The conversation was objected to by the plaintiff as hearsay and incompetent and inadmissible, and was excluded and exception taken. The defendant further testified that the next morning he employed one McLoughlin to investigate the matter; that the latter ■did so and informed defendant that he found meal, or something of that kind along plaintiff’s fence, and also told defendant that he had .a conversation with the plaintiff. The defendant was then asked the question : What did he state was the conversation which he had had with Mrs. English? This was objected to as hearsay and excluded, and exception taken.

In Miller v. Milligan (43 Barb., 30, 47) it is said that the real question is whether the defendant had reasonable ground to believe that the plaintiff was guilty of the charge, and this belief may be founded upon facts- within the knowledge of the party or upon information derived from other persons. In 2 Addison on Torts (Dudley & Bay lies’ ed.), 766, it is said that in order to show good faith on the part of the defendant, it is competent for him to prove any communication that may have been made to him prior to the commission of the grievance, to show the impression made on his mind and the materials he had before him in forming an opinion. A like view was.taken in Bacon v. Towne (4 Cush., 217, 240), and in Lamb v. Galland (44 Cal., 609).

Both of the communications excluded very evidently related to the matter in controversy, and were made to the defendant before he commenced any proceedings against the plaintiff. The record shows that McLoughlin was afterwards called as a witness by the defendant and testified generally that he stated to defendant the conversation he had with the plaintiff. This did not cure the error, if it was one, in not permitting the'defendant to state it, especially as the credibility of McLoughlin was attacked. The defendant had a right to give his own testimony on the subject.

We think the rulings above referred to were not correct, and that as the case stands they are of sufficient importance to call for a new trial.

Hardin, P. J., and Martin, J., concurred.

Judgment and order reversed on the exceptions and a new trial ordered, with costs to abide the event.