text:
    ESTHER FARR, as Administratrix, etc., of ASA FARR, Deceased, Respondent, v. CHARLES MORRILL, Appellant.

      Partnership, when it exists — agreement under which onepa/rty contributes a patent-right and the other the money to manufacture the patented article — right of the latter to continue the business after the death of the former.

    One Morrill, having invented new and important improvements in saw-sets, in December, 1879, entered into an agreement with Asa Farr, reciting that a patent . had been allowed for the improvements, and that he was desirous of having saw-sets made in sufficient quantities to keep the market fully supplied at all times, and thereby assigned, in consideration of one dollar paid to him by Farr, and for other considerations therein specified, one undivided half of all his rights, title and interest in and to the said patent, and also for all improvements that were already made, or might be made, by him in said saw-sets.
    Farr agreed to furnish funds necessary to take out patents and for the manufacturing of the said saw-sets in sufficient quantities to keep the market fully supplied, and to keep a correct account of all receipts and disbursements. It was further agreed that neither party should have the independent right to make, manufacture or dispose, in any way or manner, of any right, title or interest in the said improvements in saw-sets without the written consent of the other, and that the net profits should be divided between them, share and share alike.
    After the execution of this agreement the parties entered upon its performance and the business was carried on until the death of Farr, in July, 1885, upon which event Morrill took possession and control of the business, and prosecuted and carried on the same, and received the profits and income thereof, and refused to acknowledge that Farr’s administratrix had any right or interest in the said business.
    In an action, brought by Farr’s administratrix, to compel an accounting upon the part of the defendant for the business thus done since the death of Farr:

      Held, that it was the intention of the parties to enter upon a joint adventure, Morrill having his patents and Farr having the money.
    That, although the assignment was made of an undivided one-half interest, it was not intended to make the parties tenants in common in the patents in the ordinary acceptation of the term, but it was clearly intended to be a contribution by Morrill of his patents to the business, precisely the same as Farr was to contribute his time and money to the business.
    That, upon the death of Farr, the partnership was dissolved and the surviving partner held the assets of the firm, as a trustee, for the purpose of liquidation; that his duty was to liquidate the affairs of the partnership, settle its obligations, sell its assets and divide the proceeds.
    That the use of such assets, in the continuation of the business by the surviving partner, constituted a breach of trust and a misappropriation of such property, and that the personal representative of the deceased partner had a right to call him to an accounting and compel a liquidation of the business and sale of its assets.

      Hooley v. Gieve (9 Daly, 104; affirmed, 83 N. Y., 635) followed.
    Appeal from an interlocutory judgment recovered at the New Fork Special Term, which was -entered in the office of the clerk of the city and county of New York on the 1st day of November, 1888, determining the rights of the parties and ordering the defendant to account.

      J. E. Parsons, for the appellant.

      W. C. Beecher, for the respondent.
   Van Brunt, P. J.:

This action was brought to compel an accounting upon the part of the defendant for the business done in the manufacture and sale of certain patented articles since the death of one Asa Farr, of whom the plaintiff had been appointed administratrix. The defendant denied the right to an account, and the court below held that there was a copartnership between said Farr and the defendant, and gave judgment for the accounting, and from such judgment this appeal is taken.

The facts which it is necessary to consider in the determination of this appeal seem to be undisputed, and they are that, in December, 1879, the defendant was the inventor of new and important improvements in saw-sets, and at that time entered into an agreement with Asa Farr, now deceased, by which agreement it is recited that Charles Morrill had invented new and valuable improvements in an instrument called a saw-set, for which a patent was allowed by the United States and on which further improvements had been made, and for which additional patents were to be applied for, and that he was desirous of having said saw-sets made in sufficient cpiantities to keep the market fully supplied at all times; therefore, in consideration of one dollar paid to him by Farr, and for other agreements in said agreement specified, he assigned to Farr one undivided half of all his rights, title and interest in and to said patent, and, also, for all improvements that were already made or might be made by him in said saw-sets and for which patents were to be applied for. Fan-agreed to furnish the funds necessary to take out patents and for the manufacturing of said saw-sets in sufficient quantities to keep the market fully supplied, and to keep a correct account of all receipts and disbursements, and to attend to the business, of which a statement was to be made out whenever the defendant required. The defendant agreed to travel and introduce said saw-sets to mechanics and to the trade, during which time he was to have the privilege of drawing fifteen dollars a week in addition to his expenses. It was further agreed that neither party should have the independent right to make, manufacture or dispose of, in any way or manner, of any right, title or interest in said improvements in saw-sets without the written consent of the other. And it is further agreed that the net profits should be divided between them, share and share alike.

After the execution of that agreement the parties entered upon its performance, and Farr carried out and performed the terms and conditions of the agreement by him to be carried out until his death in July, 1885. Upon the death of Farr, Morrill took possession and control of the business and prosecuted and carried on the same and received the profits and income thereof, and continued to do so until the appointment of a receiver in this action. For a time the defendant paid certain profits to the plaintiff, but finally refused to acknowledge any right or interest of the plaintiff in said business. The main questions involved are: Did Farr and the defendant become partners by reason of the agreement mentioned ? And what were their rights and interests in the patents under which the business was carried on? It is undoubtedly true that the nature of property in patents is peculiar, and that the assignment of an undivided half interest in a patent gives simply an equal right to manufacture, and a right to one-half of the damages for infringements, and that such an assignment does not make the joint owners partners, but they are treated as tenants in common, unless there are some distinguishable features in the transaction which show that it was intended that different rights should be conferred. It appears, from the recitals of the agreement, that Morrill was the owner of these patents, and that he was desirous of having goods manufactured thereunder, and it is to be inferred that he had not the capital so to do, and for that reason he entered into the arrangement with Farr, whereby Farr was to furnish all the funds necessary, not only to take out the patents, but for the manufacture of the saw-sets in sufficient quantities to keep the markets supplied. In other words, jt was the intention of the parties to enter upon a joint adventure, Morrill having his patents and Farr apparently having the money. Now, for the purpose of carrying out this adventure, the agreement referred to was made, in and by which the defendant assigned on e-half of all his right, title and interest in the patents to Farr. If there had been nothing else in this agreement, it might be very well held, under the rule adverted to, that Farr and Morrill held these patents as tenants in common, and that each had an equal right to manufacture and sell thereunder. But by the very terms of the agreement itself it is provided that neither party to this agreement shall have the independent right to make, manufacture or cause to be made or manufactured or to dispose in any way or manner of any right or title or interest in the within named improvements in saw-sets without the written consent of the other; taking away the right which each one of them would have had to manufacture or sell independent of the other.

It is, therefore, clear that it was the intention of these parties that the manufacture under these patents was to be carried on for their joint benefit, and although this assignment was made of an undivided one-half interest, yet it was not intended to make the parties tenants in common, in the ordinary acceptation of the term, in the patents, but that it was clearly intended to be a contribution of these patents to the business by Morrill, precisely the same as Farr was to contribute his time and his money to the business.

This, it seems to us, is the necessary conclusion upon reading this instrument and upon considering the purposes which evidently were to be attained; and then they were to divide the profits equally. It is true that nothing was said about the losses. Probably it was not thought there would be any losses in the business, and it does not appear that there have been ; but that they were to share equally in the joint adventure, participating in the profits, is apparent, and that they, therefore, became partners as between themselves as well as to all the world. This being the condition of affairs, the result was upon the death of Farr that the partnership was dissolved and the surviving partner held the assets of the firm as a trustee for the purpose of liquidation. Ilis duty was to liquidate the property, settle its obligations, sell its assets and divide the proceeds. The use of such assets in the continuation of the business by the surviving partner constitutes a breach of trust and a misappropriation of such property; and the personal representatives of the deceased partner had a right to call him to an account and to compel a liquidation of the business and a sale of its assets. These principles are distinctly laid down in the case of Hooley v. Gieve (9 Daly, 101), affirmed by the Court of Appeals in 82 New York, 625, upon the opinion of the court below.

It seems to us that the learned judge who tided the cause in the court below was clearly right in holding that the relations between tlie parties to this agreement were those of copartners, and, also, in holding that, under the peculiar circumstances of the agreement constituting the partnership and the assignment of the interest in these patents, they became assets of the firm and were to be treated as such.

Undoubtedly the death of Mr. Farr dissolved the copartnership. Not only would this be the ordinary rule, but it was evident that his personal attention to the business was part and parcel of the consideration for the entering into «the copartnership, and it could not be continued against the wish of the defendant after his death and after he was deprived of such personal assistance as it was intended that Farr should give; but he having continued the business made himself liable to an accounting for all the profits of the business during the time that he continued it; and this is the relief which the court below gave, and to this the representatives of the deceased partner were clearly entitled.

The judgment appealed from should be affirmed, with costs.

Brady and Bartlett, JJ., concurred.

Judgment affirmed, with costs.


source: Caselaw Access Project

author: Van Brunt, P. J.:

license: Public Domain

text:
    ISABEL S. TRIPLER, Respondent, v. THE MAYOR, ALDERMEN AND COMMONALTY OF THE CITY OF NEW YORK, Appellant.

      Becord of an assessment — when not void upon its face because of its containing a letter, signed by the officer transmitting it to the assessors, stating facts which establish its illegality.

    In an action brought to recover an amount paid by the plaintiff to satisfy an illegal assessment imposed upon her property, the question at issue was whether the assessment was void upon its face. Proof was made, that accompanying the transmission of the assessment-list, map and certificate of the cost of the work, to the board of assessors for their action, by the commissioner of public works, there was a letter, signed by him, stating that the work was done by day’s work, which fact, if true, would render the assessment void.

      Held, that such letter did not establish the fact that the record of the assessment was void upon its face, as the letter constituted no part of the public record, and would be no evidence of the fact in proceedings brought to attack the assessment.

      Appeal by tlie defendant from a judgment, rendered at a Special Term of the Supreme Court held in tbe county of New York in favor of the plaintiff, which judgment was entered in the office of the clerk of the county of New York on the 21st day of May, 1888.
    The action was brought to have an assessment declared void, and the only question presented thereby was whether 'it appeared upon the face of the record that the assessment was void. Accompanying the transmission of'the assessment-list, map and certificate of the cost of the w<?rk to the board of assessors for their action by the commissioner of public works, there was the following letter signed by him:
    “New York, July 12, 1878.
    “ Thomas B. Asten, Esq., Chairman of Board of Assessors :

    “ Sir. — Herewith I transmit, for your action thereon, the assessment-list, map and certificate of the cost of sewers in Sewerage District No. 11 B, ‘ Sewers in the Boulevard, between 92d and 106th streets,’ amounting to $290,958.68.
    “In transmitting this assessment-list and certificate, I deem it proper to say that the work was commenced in 1873, by day’s work, and was so nearly completed when it came under my charge in January 1876, that it was impracticable to make contract lor the remainder of the work, as I should have done if any considerable quantity of work had been left uncompleted.
    “ Yery respectfully,
    (Signed.) “ALLAN CAMPBELL,
    “ Commissioner of PubUo WorhsP

      G. E. Sterling, for the appellant.

      James A. Deering, for the respondent.
   Van Brunt, P. J.:

This action was brought to recover the amount paid by the plaintiff to satisfy an assessment imposed upon her property for constructing sewers in the boulevard. Questions arising upon cases of this nature have been so frequently to the Court of Appeals that it is not at all necessary to discuss the principles which are to' govern recoveries in cases of this character. It has been established that

where the payment has been voluntary no recovery can bo had. Such payment is deemed to be voluntary where it is made in a case in which the assessment is void upon its face and without compulsion or duress; and that a payment made, as in the case at bar, by a mortgagee upon making a loan upon the property out of the moneys of the mortgagor, is not to be deemed a payment under compulsion. The only question then left to be considered is, was the assessment void upon its face ? It is conceded by both parties that the assessment was void because the work was done by day’s labor and not by contract, and the only contention is as to whether such defect appears upon the face of the assessment. It is claimed by the appellant that it does, because of the letter of the commissioner of public works accompanying the transmission of the assessment-list, map and certificate of the cost of the work to the board of assessors for their action. But the difficulty with this position is that such letter formed no part of the assessment record and was not at all necesary in order to confer jurisdiction upon the assessors to act. All that it was necessary that the commissioner of public works should do was to transmit to the assessors the assessment-list, map and certificate of cost; and all that the commissioner attached to his communication other than this has no validity as a public record and formed no part of the assessment-list. What the commissioner of public works said, therefore, in transmitting this assessment-list and certificate would be no evidence of the fact, and it would be necessary in attacking the assessment to prove this fact otherwise than by the admission contained in the letter of the commissioner of public works. The assessment was not, therefore, void upon its face although it did contain this letter, because upon the production of this assessment-list the fact that the work has been done by days work did not appear by legal evidence.

We think, under this view of the case, therefore, that the assessment was not void upon its face; that the payment was not, therefore, a voluntary one and that a recovery may be had.

The judgment appealed from must be affirmed, with costs.

Bartlett and Macomber, JJ., concurred.

Judgment affirmed, with costs.


author: Van Bkunt, P. J.:

text:
    KOKOMO STRAW-BOARD COMPANY, Respondent, v. HORACE INMAN and HARRY A. INMAN, Appellants.

      Attachment — an affidavit therefor made Try thw plaintiff’s attorney■ — what pn'oof of his Icnoioledge as to counter-claims required.

    An affidavit upon wfiiefi an attachment is applied for, when made by the plaintiffs attorney, must, under the provisions of section 636 of the Code of Civil Procedure, show that the attorney had such knowledge that the plaintiff was entitled to recover the sum stated therein over and above all counter-claims known to him, as that he could give legal evidence of the facts necessary to authorize the court to act.
    Where an affiant does not necessarily have knowledge of, and cannot be presumed to know, the several facts stated in his affidavit, he must disclose the information upon which it is founded, and the sources thereof, so that the court may see whether or not legal evidence exists of the necessary facts.
    Appeal by tbe defendants from an order, made at a Special Term of the Supreme Court in the county of New York, and entered in the office of the clerk óf the county of New York on the 23d day of April, 1889, denying the defendants’ motion to vacate a judgment in favor of the plaintiff.

      A. G. Smith, for the appellants.

      W. F. Upson, for the respondent.
   Van Bkunt, P. J.:

The attachment in this case was issued upon the ground that the defendants had disposed of their property with intent to defraud their creditors, and the motion to vacate was made because of the alleged insufficiency of the papers upon which such attachment was issued.

It is claimed that the affidavit upon which the attachment was issued was made by the attorney of record, and nothing appears from the affidavit that he had either any personal knowledge as to the matter of counter-claims, nor, if the allegation is to be deemed to be made upon information and belief, is the information or the source thereof disclosed. The provision of the Code (§ 636) requires that it must appear by affidavit that the plaintiff is entitled to recover a sum stated therein, over and above all counter-claims known to him, and it has been repeatedly held that where such affidavit is made by attorney it must appear that tbe attorney has such knowledge as that he can give legal evidence of the facts necessary to authorize the court to act. (Tim v. Smith, 93 N. Y., 91.)

It is in this case held that where an affiant does not necessarily have knowledge of, and cannot be presumed to know, the several facts attempted to be established by his affidavit, he must disclose the information upon which it is founded, and the sources thereof, so that the court may see whether or not legal evidence exists of the necessary facts. In the case at bar it does not appear that' the affiant had ever acquired any information upon the subject from the plaintiff, and all that we have is his conclusion that because of his interviews with the defendants he would know, as fully as the plaintiff could do, the particulars of any and all claims of the defendants, and, therefore, avers that there are no offsets or counter-claims to the knowledge of deponent or of the plaintiff.

The allegation leaves the affiant the absolute judge as to whether he has the necessary information or not, and the court must take his word for it, without being able to form any judgment upon the merits. This it seems to us is insufficient, and the motion to set aside the attachment should have been granted.

Order appealed from reversed, with ten dollars costs and disbursements, and attachment vacated.

Brady and Daniels, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and attachment vacated.


text:
    LOUIS M. CORNISH AND CHARLES A. TINKER, Respondents, v. MAURICE S. WORMSER, Appellant.

      Discovery and inspection allowed to prepare a bill of particulars —particularity of description required in the moving affdavit.

    The court has power, in a proper case, to order a discovery or inspection of books and papers to enable a party to frame a bill of particulars.
    The affidavit and order in such a proceeding should definitely describe the books and papers to be produced, so that the party proceeded against may know what to admit or deny, and tnat die court may know, when books and papers are produced, whether or not they are such as the order calls for.

      Appeal by tbe defendant from an order, made at a Special Term of tbe Supreme Court in the county of New York, and entered in the office of the clerk of the county of New York on the 12th day of February, 1889, denying a motion made by the plaintiffs for a dis. covery and inspection of certain books and papers alleged to be in the possession of the defendant.

      Henry Melville, for the appellant.

      Frederick Seymour, for the respondents.
   Van Brunt, P. J.:

We are of the opinion that the court in a proper case has the power to order a discovery or inspection of books and papers to enable a party to frame a bill of particulars. (Ball v. Evening Post Publishing Co., 48 Hun, 149.) It is true that Rule 14 speaks of applications for discovery for the puipose of enabling a party to frame his complaint or answer; but it also provides that either party may be compelled to make discovery as provided by article 4, title 6, chapter 8 of the Code of Civil Procedure. This rule is passed pursuant to section 804 of said Code, which provides that the general rules of practice must prescribe the cases in which discovery may be had in any case authorized by the Code. Section 803 authorizes such a discovery in any action in reference to any books and papers relating to the merits of the action or of the defense therein. Thus Rule 14 contains no restriction, but the general authority exists to order such discovery at any stage of the action in furtherance of justice.

We think, however, the order appealed from was right because there was no specification of the books and papers as to which discovery is sought, and nothing but surmises as to their contents. The affidavits and order should definitely describe the books and papers to be produced, so that the party proceeded against may know what to admit or deny, and, also, so that the court may know when books and papers are produced whether or not they are such as the order calls for. An order for discovery must be reasonably definite and explicit and cannot be so vague that what books and papers are desired cannot be determined by the court upon a reading thereof.

For these reasons the order appealed from must be affirmed, with ten dollars costs and disbursements, with leave to renew motion upon payment of these costs and disbursements.

Brady and Daniels, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements, with leave to renew motion upon payment of these costs and disbursements.


text:
    BERTHA E. MARTIN, as Administratrix, etc., of HOWARD A. MARTIN, Deceased, Appellant, v. SPENCER C. PLATT and NATHAN C. PLATT, Respondents, Impleaded with ANNIE R. PLATT, as Executrix, etc., of WILLIAM H. PLATT, Deceased.

      Case to be used on a motion for a new trial — within what time to be made.

    A case to be used on a motion for a new trial must be made, if the trial is before a jury, within ten days thereafter, and the extension, under Rule 32, for the service of a case, until ten days after notice of the decision of the motion for a new trial, refers only to motions made at the trial.
    Appeal by the plaintiff from an order, made at a Special Term of .the Supreme Court in the county of New York, and entered in the office of the clerk of the county of New York on the 11th day of April, 1889, which denied the plaintiff’s motion to vacate an order made, ex pcwle, on February 21, 1889, extending the time of the defendants, Spencer C. Platt and Nathan C. Platt, to serve a proposed case.

      Edward S., Clincy, for the appellant.

      William G. Wilson, for the respondents.
   Van Brunt, P. J.:

That a motion may be made for a new trial on the ground that the verdict is against the weight of evidence, after the hearing of the exceptions at the General Term, seems to be expressly sanctioned by section 1006 of the Code. Section 997 prescribes the practice in the making and settling of a case preparatory to a motion for a new trial. It provides that the moving party must make a case and procure the same to be settled as prescribed by the general-rules of practice.

Buie 32 of the General Buies of Practice provides that whenever it shall be necessary to make a case it shall be made and served, if the trial has been before a jury, within ten days after the trial, or within ten days after notice of the decision of a motion for a new trial, if such motion be made and be not decided at the time of trial, or within ten days after notice of judgment under section 1185 of the Code. Section 1185 refers only to cases where a verdict is taken subject to the opinion of the court and has no bearing upon the question now before the court.

It would appear, therefore, that a case must be made, if the trial is by a jury, within ten days after the trial, and that the extension until ten days’ notice of the decision of a motion for new trial, refers only to motions made at the trial, because it speaks of the contingency of such motions being not decided at the time of trial, which could not refer to motions for new trial which were not made until after the trial. We think, therefore, that the time to make a case had expired, and that leave to make a case could only be granted upon motion as a matter of favor and not as a matter of right.

The order appealed from should be reversed, with ten dollars costs and disbursements.

Daniels and Brady, JJ., concurred.

Order reversed, with ten dollars costs and disbursements.


text:
    JAMES H. FAY, as Assignee, etc., of MARSHALL LEFFERTS & CO., Respondent, v. HUGH J. GRANT, Sheriff, etc., and LAZARUS LISSBERGER and Another, Appellants.

      Assignment by a firm — retention by the assignors of money for future living expenses — to vitiate the assessment a fraudulent intent must be shown.

    Immediately prior to the making of a general assignment by a copartnership the partners drew $557.80 from the funds of the firm because they had nothing to live upon. This amount was less than one per cent of the assets of the firm, and as soon as the assignee learned of this misappropriation of the money he made a demand upon the assignors therefor and the same was returned.
    The assignors testified that in making this disposition of the money they had no intention to cheat their creditors.
    In an action brought by the assignee to recover property of his assignors, levied upon under attachments issued in favor of creditors of such assignors:

      Reid, that a question was presented for the consideration of the jury as to whether this amount was dishonestly, and with a fraudulent purpose of benefiting the assignors at the expense of the creditors of the firm, retained by such assignors.
    That such evidence did not justify a dismissal of the complaint, as unless a fraudulent intent was established at the time of the execution of the assignment it could not be set aside.

    Appeal by the defendants from a judgment, entered at the New York Circuit upon the verdict of a jury, for the recovery of property, the value of which was assessed at $12,576.79, and the damages for its unlawful withholding at $679.09, which judgment was entered in the office of the clerk of the county of New York on the 8th day of February, 1888, and from an order denying the defendants’ motion for a new trial, entered in the said office on the 1st day of February, 1888.

      Mr. Kingsbury, for the appellants.

      John E. Parsons and George Walton Green, for the respondent.
   Van Brunt, P. J.:

This action was brought by the plaintiff as assignee of Marshall, Lefferts & Co., under a general assignment for the benefit of creditors, to recover possession of personal property taken by the sheriff on attachment in five suits against Lefferts & Co., by the defendants Lissberger and Schultz upon an indemnity given by them to the sheriff. The defense was that the assignment was fraudulent. The charges of fraud were submitted to the jury and no complaint is made as to the manner in which these questions were presented to the jury, and the only exceptions which raise the questions argued upon this appeal arise upon the denial of the motion to dismiss the complaint upon the termination of the plaintiff’s case, and upon the refusal of the learned judge to charge the requests of the defendant.

Various other questions are argued upon the points of the defendants, but they do not appear to have been raised by any sufficient exception and consequently are not considered in the disposition of this appeal. The grounds upon which the defendants claimed a dismissal were that the evidence showed a withdrawal of moneys for the personal use of the assignors after the assignment had been determined upon, and in contemplation thereof, and a withholding of money from the assignee, which withdrawal and withholding is entirely unexplained. It appears that immediately prior to the making of the assignment the copartners drew $551.30 from the funds of the firm because they had nothing to live upon. It was testified to by the assignors that in making this disposition of the money they had no intention to cheat their creditors, and that the amount was less than one per cent of the actual assets of the firm, and that as soon as the assignee learned of this appropriation of the money he made a demand upon the assignors and the same was returned. The question presented is whether, as matter of law, upon the evidence in this case, fraud was established. It is said by all the cases cited that fraud is a matter of fact, although from certain facts a presumption of fraud must necessarily arise. Under circumstances like those in the case at bar, it was held in Shultz v. Hoagland (85 N. Y., 464), that unless a fraudulent intent is established at the time of the execution of the assignment, it cannot be set aside, and that facts which are, when taken together and aggregated, consistent with an honest intent cannot form the basis of an allegation of fraud. Acting upon the rule as thus laid down, the learned judge correctly decided that this was not a question of law upon which he could pass, but that it should be submitted to the jury for their consideration. He submitted the question clearly and distinctly to the jury, and the question presented to them was whether this amount was dishonestly, and with the fraudulent purpose of benefiting the assignors at the expense of the creditors, retained by the assignors. And they were instructed that if they found that there was a fraudulent purpose in this particular that it would vitiate the entire assignment. The jury found no such fraudulent intent, and that this money was taken in entire good faith by the assignors. And upon this finding we cannot say, as matter of law, that from the simple facts proven, a fraudulent intent necessarily followed the taking of this money for the purposes to which the assignors have testified. These questions of fraud are peculiarly such as should be passed upon by the jury, and if any inference consistent with good faith can be drawn from the testimony, it is the duty of the court to submit such a question to the jury. If this question had been tried before the court without a,jury, and the court had found upon the evidence that such fraudulent intent existed, it may be that such a finding would be upheld. Or, if the jury had so found, the court would not interfere with that verdict.

The only other .question presented by the exceptions is to the refusal of the request to charge that as a number of promissory notes, forming a part of the claim preferred in favor of the plaintiff in the assignment, were not paid and retired from the banks that held and owned the same until the maturity of the notes, several months after the execution of the assignment, and as a prompt compliance of the assignee with the directions contained in the assignment, in so far as he was therein directed to pay, would, of necessity, have resulted in an improper diversion of the funds, that the unqualified direction in the assignment to make such disposition, of the funds of the estate was, therefore, invalid and rendered the assignment void in law. This proposition is claimed to be established by the evidence showing that certain notes which had been delivered by Lefferts to Fay for borrowed money, had been discounted by Fay in several banks, which fact was not known to the assignors at the time of making the assignment. This clearly was no fraud upon the creditors. It was intended to prefer the claim of Fay, and simply because the notes given to him for security, and which he had indorsed upon being discounted in the banks, were not in his possession at the time the assignment was made did not indicate a fraudulent intent, nor was a fraudulent preference established thereby; and the court, therefore, was justified in refusing to charge that simply because Fay had parted with the notes, upon which he was liable, to the persons who had discounted them, and that, too, without the knowledge of the assignors, that the assignment thereby became fraudulent.

It was further claimed, in support of the motion for a new trial, that the assignors, although knowingly insolvent for years, in anticipation of the assignment, bought an extra quantity of goods immediately prior to the assignment, and this was not explained. There was disputed evidence upon this point. Explanations were given by the assignors in regard to these purchases and different deductions might be drawn from the transactions in regard to the purchases made by the assignors during the period anterior to the insolvency. The question was laid before the jury as to whether these purchases were made with any fraudulent intent or with the ultimate purpose of making an assignment with preferences, whereby the goods might be disposed of for the purpose of paying their preferred creditors, and the jury found that the evidence did not justify any such conclusion and we see no reason for disturbing their finding.

There was some question raised upon the point in regard to the amount preferred — that it was $200 more than was actually due. It appears from the evidence that it was intended to make it somewhat less than the amount actually due, and explanations were given as to how the amount was arrived at. This question was disposed of by the jury contrary to the contention now made, and their finding is final. All the questions involved were simply questions of fact; the evidence was of that character as to which different conclusions might be drawn; and as the question of intent is the question which underlies the whole transaction, and as a fraudulent intent must be made out, the jury were justified in coming to the conclusion which they did. The labor in the examination of this case has been greatly magnified by the totally inadequate index, not a single exhibit being indexed.

We are of opinion that there were no errors appearing on the record which call for a reversal, and that the judgment and order must be affirmed, with costs.

Bartlett, J., concurred.

Judgment and order affirmed, with costs.


text:
    JOHN BRUSNAHAN, Respondent, v. MANHATTAN COLLEGE, Appellant, Impleaded with ABRAM WAKEMAN, as Executor of and Trustee Under the Last Will and Testament of JOSEPH M. LINEHAN, Deceased, AND THE SISTERS OF THE POOR OF ST. FRANCIS.

      Section 10 of chapter 184 e/1853 — institutions incorporated thereunder are not subject to the provisions of chapter 319 of 1848.
    Section 10 of chapter 184 of the Laws of 1853 provides that every institution incorporated under this act shall have and possess all the powers and privileges, and be subject to the provisions, liabilities and restrictions of the eighteenth chapter of part 1 of the Revised Statutes, so far as the same are applicable and have not been repealed.
    Chapter 18 of part 1 of the official edition of the Revised Statutes relates to the powers, privileges and liabilities of corporations, as well as to other matters relating to corporations, but does not contain the sixth section of chapter 319 of the Laws of 1848, rendering devises unlawful unless given by a will which was made and executed at least two months before the death of the testator.
    At the time of the passage of the act of 1853 there was a compilation of the statute law, known as the fourth edition of the Revised Statutes, published by private publishers, which had the official certificate of the secretary of state, and had the legislative permission to its publication so far as it referred to the Revised Statutes.
    The sixth section of the act of 1848 was incorporated in the eighteenth chapter of part 1 of this edition of the Revised Statutes.

      Held, that, in the absence of any indication that the legislature intended to refer to the fourth edition, which contained the prohibitory words of the act of 1848, the court would decide that it was the intention to refer to the eighteenth chapter of part 1 of the official Revised Statutes.
    That the act of 1848 did not apply to the Manhattan College, which was incorporated in April, 1863, by the- charter of the Regents of the University of New York, under and by virtue of chapter 184 of the Laws of 1853 and the Revised Statutes.
    Appeal by the defendant, Manhattan College, from a judgment, entered upon an order made at the New York Special Term, overruling a demurrer interposed to the complaint, which judgment was entered in the office of the clerk of the county of New York on January 15, 1889.

      C. E. Miller, for the appellant.

      John Townshend, for the respondent.
   Van Brunt, P. J.:

One Joseph M. Linehan made his will on the 9th day of May, 1886, and died on the 1st day of July, 1886, unmarried and without issue. By his will, after making various bequests, he gave to Manhattan College $5,000. The Manhattan College was incorporated in April, 1863, by charter from the Regents of the University of New York, under and by virtue of chapter 184 of the Laws of 1853, and the Revised Statutes. It is claimed that the devise to Manhattan College was void upon the ground that the will was not executed at least two months before the death of the testator.

By section 10 of chapter 184 of the Laws of 1853, it was provided that every institution incorporated under this act shall have and possess all the powers and privileges, and be subject to the provisions, liabilities and restrictions of the eighteenth chapter of part 1 of the Revised Statutes, so far as the. same are applicable and have not been repealed. It is because of this provision it is claimed that the devise to Manhattan College was void, in that the sixth section of chapter 319 of the Laws of 1848 rendered unlawful, devises unless under a will made' and executed at least two months before the death of the testator.

At the time of the passage of the act of 1853 there was a compilation of the statute law known as the fourth edition of the Revised Statutes, published by private publishers. This edition had State official recognition by certificate of the Secretary of State, and had the legislative permission to its publication, so far as it refers to the Revised Statutes, and by like authority may be read in evidence. And in the eighteenth chapter of part 1 of this edition of the Revised Statutes (1 R. S. [4th ed.], p. 1194, § 6), is found incorporated the provisions of the act of 1848 referred to. This provision is not found in the Revised Statutes themselves. There is an eighteenth chapter of part 1 of the Revised Statutes, to which the descriptive words of the act under consideration would apply. Its subject-matter relates to powers, privileges and liabilities of corporations, as well as other matters relating to corporations; but it does not contain, as already said, the prohibition by means of which it is sought to invalidate the bequest to the appellant. Under these circumstances, it is impossible for us to say that the legislature did not intend to refer to the eighteenth chapter of part 1 of the Revised Statutes; and there is nothing to indicate that they intended to refer to the fourth edition which contained these prohibitive words.

In the case of the People ex rel. Furman v. Clute (50 N. Y., 451) it was held that, in an act which enacted that a certain section of part 1 of the Revised Statutes (4th ed.) should be amended, referenco was undoubtedly intended to be made to the edition of the Revised Statutes published as above mentioned. But in that case the court held that if the words “fourth edition” had not appeared, they could not have said that the legislature did not intend to refer to the Revised Statutes themselves.

Applying the rule of construction, which seems to be laid down in the case cited, we see no reason for holding that the fourth edition of the Revised Statutes was intended by the legislature when it was not nientioned. We think, therefore, that the restriction did not exist prohibiting the appellant, the Manhattan College, from taking the legacy in question.

The judgment appealed from must be reversed and the demurrer sustained, with costs.

Brady and Bartlett, JJ., concurred.

Judgment reversed and demurrer sustained, with costs.


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    LOUISE M. KERNOCHAN, as Administratrix of JOHN A. KERNOCHAN, Deceased, Plaintiff, v. ANGELINE A. MURRAY, as Executrix, and ROBERT A. De MILL, as Executor or RICHARD M. De MILL, Deceased, Defendants.

      Guaranty — when it continues after the death of the guarantor and of the party guaranteed.

      A vendor of certain stock delivered to liis vendee the following instrument in writing:
    “In consideration of your having purchased upon my representation as to their value forty shares of stock of the Albemarle Swamp Land Company, and of one dollar to me in hand paid, I do hereby guaranty that you shall receive, as long as you hold said stock, dividends, equal to seven per cent per annum, or I will make good to you all deficit from such amount. “ De MILL & CO.
    “New York, August 21, 1871.
    “Witness: John S. Leng.”

      Held, tliat tlie guaranty therein contained was not terminated by the death oí the guarantor, nor was it terminated upon the death of the person in whose favor the guaranty ran, so long as the stock therein referred to was not parted with, and that the devolution of the stock by operation of law to the legal representative of the vendee was in no sense a parting with the stock such as was contemplated by the agreement.
    Case submitted without action upon an agreed statement of facts.

      J. Frederich Kernochan, for the plaintiff.

      Sidney V. Lovell, for the defendants.
   Van Brunt, P. J.:

In view of the decision of the Court of Appeals in Kernochan v. Murray (111 N. Y., 306), construing the instrument upon which this action was brought, there remains but one question to be determined upon the trial of this case, and that is, did the personal representatives of John Kernochan, upon his death, acquire any rights by virtue of this agreement, he not having ever parted with the stock in question ? The Court of Appeals have already held that this guaranty had no personal quality; that it was an original and not a collateral undertaking, and that although it read I do hereby guaranty, etc., the personal representatives of the guarantor were bound. Applying the same principle of construction, if the guaranty was not terminated by the death of the guarantor, neither would it terminate upon the death of the person to whom the guaranty ran.

It is true that it guaranteed him as long as he held the stock, but this clearly meant as long as the stock was not parted with, and the devolution of the stock by operation of law was in no sense a parting with the stock such as was contemplated by the agreement. As the court of Appeals say in the case cited, the guaranty protected the purchaser while his interest should continue, in other words, until he voluntarily parted with his interest. Upon his death, it is true, he parted with the stock, but it cannot be assumed that he voluntarily did so, and his interest devolved by law upon his personal representative, and she stood in precisely the same relation to the contract as the deceased. The claim made by the defendant that the guaranty was merely personal, and that the guarantor was a surety, seem to have been determined adversely to him in the case cited.

The plaintiff is entitled to judgment, with costs.

Brady and Daniels, J J., concurred.

‘ Judgment for plaintiff, with costs.


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    THE HOLMES & GRIGGS MANUFACTURING COMPANY, Respondent, v. THE HOLMES & WESSELL METAL COMPANY, G. LIVINGSTON MORSE and FREDERICK SHONNARD, Appellants. SAME v. G. LIVINGSTON MORSE.
    Ultra vires — in what action the defense cannot he raised — tender of stocJc toa pwchaser who gives a note in payment therefor.

    In an action, brought upon a promissory note, bearing date December, 1884, for $25,000, made by the defendant, the I-Iolmes & Wessell Metal Company, payable to the order of Frederick Shonnard, one of the defendants, and indorsed by the defendants Shonnard, Morse and Wessell, and delivered to the plaintiff, a manufacturing company, the defendants claimed that the contract was -ultra vires.

    Upon the trial it appeared that, in July, 1881, one Holmes, the president, and one Edwards, the secretary of the plaintiff, entered into an agreement with the defendants Morse, Shonnard and Wessell, by which it was agreed that a new company should be organized with a capital stock of $100,000, three-fourths thereof to be subscribed and paid for by the said Holmes and Edwards, and the remaining one-fourth by the other parties to the agreement. It was also agreed that the president and secretary of the plaintiff were to subscribe for 3,000 shares of the capital stock of the new company, and to pay for the same out of the proceeds of the sale to the new corporation, of the plant and materials of the plaintiff company and to hold the said stock, as trustees, or to transfer the same directly to the plaintiff.
    The note in suit was made in pursuance of an agreement, dated December 1,1884, executed by the plaintiff and the defendants Morse, Shonnard and one Charles Wessell, by which the plaintiff agreed to sell to them 1,440 shares of the stock of the defendant (the new corporation), standing on thebooks of the said company in the name of Edwards, as trustee, for the sum of $30,000, payable $5,000 in cash on signing the agreement, and the balance by certain promissory notes, of which the note in suit was one.
    The agreement provided that the stock should be delivered on the payment of the note in question to the defendant Shonnard.

      Held, that the claim made by the defendants that the plaintiff, being a domestic manufacturing corporation, could not acquire any ownership in or title to the stock, either by original subscription in its own name or in the name of its officers, assuming to act as trustees, and that the contract was ulVra vires, could not be sustained.
    That, conceding that the plaintiff was prohibited by its charter from entering into such an arrangement, or dealing in such securities as the stock of the defendant company, the validity of that transaction was not the subject of investigation in this action.
    That the action before the court was not upon any illegal contract which the plaintiff had made for the purpose of acquiring the stock of the defendant corporation, but was to recover upon a promissory note given in payment of stock, the title to which was vested in the plaintiff.
    That as the contract in this case had been completed, and the title to the stock had passed to the plaintiff, it had a right to sell it and to take as a part of the purchase-price such securities as it saw fit, provided it acted in good faith.

      Sistare v. Best (88 N. Y., 527) followed ; Crocker v. Whitney (71 id., 170); Pratt v. Short (79 id., 437) distinguished.
    None of the stock represented by the note in suit had been delivered and none of it had been tendered, although the plaintiff had been and was ready and willing to deliver it after the payment of the notes.

      Held, that in this case it was not necessary for the plaintiff to tender the stock in question, as the stock was to be delivered to a third party and not to the maker of the note, and that,(under such circumstances, it could not have been the intention of the parties that the delivery of the stock and the payment of the note should be simultaneous acts.
    In an action brought upon two other promissory notes made by the defendants Morse and one Charles 'W'essell, jointly and severally, whereby they promised, for a good consideration, to pay to the order of the plaintiff certain sums of money, the facts and defenses were the same as in the foregoing case, except that in this case the stock, tobe delivered upon the payment of the notes in suit, was to be delivered to the makers of the notes.

      Held, that the payment of the notes and the delivery of the stock were intended to be simultaneous acts, and that the makers of the notes were entitled, on payment thereof, to receive the stock.
    That in order to entitle the plaintiff to the payment of the notes, it was bound to have the notes present, ready to be delivered up, and to offer to deliver the stock upon payment thereof, and that as no tender of the stock had been shown, the plaintiff in this latter case was not entitled to recover.

      Ocean National Bank v. Fant (50 N. Y., 476) followed.
    Appeal from a judgment, entered in the office of the clerk of the county of New York on the 17th day of September, 1888^ upon the report of a referee in favor of the plaintiff.

      Adam C. Ellis, for the appellants.

      Sidney S. Harris, for the respondent.
   Van Brunt, P. J.:

This is an action on a promissory note bearing elate December, 1884, for $2,500, made by the defendant the Holmes & Wessell Metal Company, payable to the order of Frederick Shonnard, one of the defendants, and indorsed by the defendants Shonnard, Morse and Wessell and delivered to the plaintiffs. The defenses were ultra vires, failure of or no consideration and non-tender of certain stock for the purchase-price of which the note in suit was given. The case was tried before a referee, and upon his report a judgment was entered in favor of the plaintiff from which this appeal is taken. In view of the rule of law applicable to the facts developed upon the trial it may be entirely unnecessary to recite many of the facts found by the referee, but it may be best to do so in order that the whole transaction may be understandingly set forth. The plaintiff was organized in July, 1869, under the manufacturing act of 1848, the objects of the corporation being the manufacture and sale of sheet and roll brass, wire and other articles composed wholly or in part of metal. In July, 1881, one Holmes, the president, and one Edwards, the secretary of the plaintiff, entered into an agreement with the defendants, Morse, Shonnard and Wessel, by which they agreed to organize a new company under the manufacturing act, to be known as the Holmes & Wessell Metal Company, with a capital stock of $100,000, three-fourths thereof to be subscribed and paid for by said Hoknes and Edwards, and the remaining one-fourth by the other parties to the agreement.

The agreement further provided that the new company should buy from the plaintiff its plant at the price of $50,000. In pursuance of this agreement the parties signed and acknowledged the certificate incorporating the Holmes & Wessell Metal Company, which certificate was duly filed, and in which were named the said Holmes, Edwards, Shonnard and Wessell as trustees. .On the 20th of July, 1881, a meeting of the plaintiff’s stockholders was had at which a resolution was adopted authorizing the sale of the plant for $50,000, and also authorizing a sale of all the stock and material owned by the plaintiff at certain prices, amounting to about $31,000. The further resolution was adopted authorizing the president and secretary to subscribe for 3,000 shares of the capital stock of the Holmes & Wessell Company and to pay for the same out of the proceeds of the sale of the plant and materials of the plaintiff company, and to hold the same as trustees or to transfer the same directly to the plaintiff. The first meeting of the stockholders of the defendant company was held on July 23,1881, at which meeting all of its capital stock was subscribed for, and a resolution was adopted authorizing the purchase from the plaintiff of its plant, machinery and stock of metal at the price of $81,333.96. The stock of the defendant company was issued to the respective parties as subscribed for by them. Neither Holmes nor Edwards paid any cash for the stock subscribed for by them, but the stock subscribed for by Shonnard, Wessell and Morse was paid for in cash. On the 1st of September, 1881, the plaintiff company transferred to the defendant company its entire plant and machinery, etc., at the agreed price — $75,000 of that amount was in payment of stock subscribed for in the names of Holmes and Edwards, and the balance $6,333.96, was paid in cash by the' defendant company. After the transfer of its plant the plaintiff discontinued its business and has not carried on the same since that time.

The note in suit was made in pursuance of an agreement dated December 1, 1884, executed by the plaintiff and the defendants Morse, Shonnard and one Charles Wessell. In that agreement the plaintiff agrees to sell to the other parties thereto 1,440 shares of the stock of the defendant company standing on the books of said company in the name of Edwards, as trustee, for the sum of $30,000, payable $5,000 in cash on signing the agreement, and the balance by certain promissory notes, of which the note in suit is one, being a note given by the defendant company and indorsed by Shonnard and others. The agreement provided that the stock should remain in the name of Edwards or some other officer of the plaintiff, as trustee, and might be voted on by him until delivered; also, that the stock should be delivered as follows: On payment of notes one and two, $6,000 of the par value thereof, and as each of said other notes was paid at maturity, $2,500 to the maker thereof, except that for the notes of said defendant company the stock was to be delivered to said Shonnard. None of the stock represented by the note in suit, which was a note made by the defendant company and indorsed by the individual defendants, has been delivered, and none of it has been tendered although the plaintiff has been ready and willing to deliver tbe stock called for by tbe contract under which the notes were given at the maturity of the notes, and at all times since upon the payment of the notes. There were various other provisions in the agreement in regard to'the election of trustees, and the salaries of the officers etc.

Upon this state of facts the defendant claimed that the plaintiff, being a domestic manufacturing corporation, could not acquire any ownership in or title to the stock, either by original subscription in his own name or in the name of its officers, assuming to act as trustees; and in considerering this proposition it is conceded that the plaintiff company were the real owners of this stock, and the persons in whose name the stock stood were simply acting as its trustees. And the case is to be determined upon the assumption that the plaintiff was the real owner of the stock and that the stock was being held for it.

Our attention has been called to numerous authorities going to show that the acquirement of this stock was contrary to law, and, therefore, void. Conceding that the plaintiff corporation was prohibited by its charter from entering into such an arrangement or dealing in such securities as the stock of the defendant company, the validity of that transaction is not the subject of investigation in this action. If the plaintiff company has violated its charter by this transaction, upon a proper action brought by the people, its franchise may be forfeited, the corporation dissolved and its business wound up. But the action now before the court is not upon any illegal contract which the plaintiff company has made for the purpose of acquiring the stock of the defendant corporation, but is to recover upon a promissory note given in payment of stock the title to which was vested in the plaintiff.

That this is the true situation is distinctly held by the Court of Appeals in the case of Sistare v. Best (88 N. Y., 521). In that case the plaintiff was employed as a broker to sell certain stock, the title to which the bank of which the defendant was receiver had acquired in violation of the provisions of its charter, and the plaintiff was held entitled to recover because in accepting the employment he was not bound to inquire in respect to the title of the bank to the stock. In that case it was held that, although the transaction by which the bank acquired possession of the stock in question was in violation of its charter, that the title of the stock was vested in the bank as pledgee, and that it was not void, bnt, at most, was voidable only. Whether, under such circumstances, the pledgors could reclaim the stock without paying the lien the court declined to consider. In the case at bar, therefore, the title to the stock in question was vested in the plaintiff company. It had a right to sell the same, as was held in the case of the savings bank, and to contract in reference thereto, and it could be held to the obligations of such a contract.

The position of the defendant might be well taken if the plaintiff were suing to compel the defendants to deliver the stock in pursuance of an agreement so to do. It might very well be then held that the contract for the sale of the stock was an illegal one, and that an action to enforce an illegal contract could not be maintained. But in the case at bar the contract had been completed, the title to the stock had passed to the plaintiff; it had a right to sell it, as was held in the case of Sistare v. Best (supra) ; and having the right to sell it, it had a right to take as a part of the purchase-price such securities as it saw fit, provided it acted in good faith.

Questions of public policy as to the right of one corporation to invest in the shares of another are not questions which need to be considered in the determination of this appeal, because the contract under which the corporation acquired the title is not now under con sideration; and, whatever may have been the decision in other States, it is clear that contracts of this kind are not absolutely void, but, at most, are voidable only.

Our attention is called to the case of Crocker v. Whitney (71 N. Y., 170) where it was held that a mortgage given to a national bank to secure future advances was void, and could not be enforced for advances which were subsequently made, because the act under which such banks are incorporated prohibited them from taking a mortgage on real estate except to secure a pre-existing indebtedness. In that case there was an attempt to enforce an illegal contract. So the case of Pratt v. Short (79 N. Y., 137), and all the other cases cited on this point, were cases where an attempt was made to enforce a contract which was illegal. There was no illegality in the contract of the plaintiff, being the owner of the stock, to sell the same in the manner in which it was proposed to do, and which it attempted to do by the agreement of December, 1881.

The only other question which it is necessary to consider is the necessity of a tender of the stock in question. The ordinary rule in reference to the payment of promissory notes is that where by the form of the note stock, or merchandise is to be delivered, or where collaterals have been deposited for the note, a tender of the collaterals or stock and merchandise at the time of the demand of payment of the note is necessary in order to make a complete default. But in all these cases it would appear that .the maker of the note upon payment was to be entitled to the collaterals, or to the stock or merchandise, and, therefore, it is assumed that the payment of the note and delivery of the consideration thereof are to be simultaneous acts, and one cannot be demanded without a tender of the other.

But in the case at bar the stock was to be delivered to a third party not the maker of the note. The plaintiff, therefore, could not, upon demanding the payment of the note, deliver the stock, because it was not to be delivered to the maker, but, as already said, to a third party, and, therefore, it must have been the intention of the parties that after the payment of the note, then the claim to a delivery of the stock should become vested in the third person, and it could not have been the intention in that case that the delivery of the stock and the payment of the note should be simultaneous acts.

Ve think, therefore, for the reasons above stated, that there was a good consideration for the note in question, and that there was no failure thereof, and that a tender of the stock was not necessaiy before claiming payment of the note.

Judgment must be affirmed, with costs.

Bartlett and Macomber, JJ., concurred.

Judgment affirmed, with costs.


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    THE HOLMES AND GRIGGS MANUFACTURING COMPANY, Respondent, v. G. LIVINGSTON MORSE, Appellant.
    Appeal by the defendant from a judgment in favor of the plaintiff, entered upon the report of a referee, in the office of the clerk of the county New York on the 11th day of September, 1888.
   Van Brunt, P. J.:

This is an action, brought upon two promissory notes made by the defendant Morse and one Charles Wessell, jointly and severally, whereby they promised, for a good consideration, to pay to the order of the plaintiff certain sums of money. The defenses in this action were the same as in the case of the Holmes & Griggs Manufacturing Company v. The Holmes & Wessell Metal Company and others, and the notes were given as part and parcel of the same agreement referred to in the above case.

It is not necessary to recite the reasons for the conclusion arrived at, that the Holmes & Griggs Manufacturing Company had a right to sell the stock in question, and to recover upon the notes given in payment thereof. There is one distinction, however, which it is necessary to consider, and that is that the stock which was to be delivered upon the payment of the notes in suit was to be delivered to the makers of those notes. The terms of the agreement were, that on payment of said note stock to a certain amount should be delivered to the makers thereof.

It was conceded upon the trial, as in the other action, that none of the capital stock had been tendered to the defendant or to said Wessell, although the plaintiff was ready and willing to deliver the stock called for by the contract under which the notes in suit were given at the maturity of the notes, and at all times since, upon the payment of the notes; and the only question arising in this case which differs from the one previously decided is whether, as a condition of demanding payment of the notes, the plaintiff was bound to tender the stock to the makers thereof, who were entitled to receive it. We think in this case that it was. The payment of the notes and the delivery of the stock were to be simultaneous acts. • The makers of the notes were to be entitled to receive the stock on payment thereof. They were not required to go anywhere else or seek anybody else for the securing of the stock when they paid the notes. And in order to entitle the plaintiff to demand payment of the notes, it must have the notes present so as to deliver them up, and, also, offer the stock which it was to deliver upon such payment. There does not seem to have been any tender of the stock at any time before the trial, nor, so far as we can find out, was there any tender of the stock upon the trial. And under the rules laid down in the case of Ocean National Bank v. Fant (50 N. Y., 476) it was incumbent upon the plaintiff, claiming payment of these notes, to tender the stock which it agreed to deliver upon such payment, and the makers were not required to pay the notes and then trust to their legal remedies against the plaintiff. We think that the learned referee erred in the conclusion at which he arrived in this case, that a tender of this stock was not necessary before a recovery could be had. It is true that the learned referee has refused to find, as matter of fact, that the stock to be delivered on payment of the notes had not been tendered by the plaintiff or by anyone on its behalf; but upon the stipulation given during the trial of the case it is apparent that such refusal was error.

We think, for these reasons, the judgment must be reversed and a new trial ordered, with costs to the appellant to abide the event.

Bartlett and Macomber, JJ., concurred.

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


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    EMIL NEUBERGER, and Others, Appellants, v. HENRY G. KEIM, KATE BOLLER and MARY KEIM, Respondents.

      Voluntary conveyance to a wife — right of a creditor of the grcmior, whose debt has been subsequently incurred, to set it aside.

    In an action, brought by certain creditors of one Henry G-. Keim, to set aside a deed on the ground that it was made to hinder, delay and defraud them, it appeared that the property was conveyed by Keim to his wife through the defendant Boiler. The plaintiffs claimed that the conveyance was a voluntary one and made in contemplation of a new enterprise and for the purpose of removing- the defendant’s property from the risk of such enterprise. At the time of such conveyance the plaintiffs were not creditors of the defendant Keim.
    The conveyance was not secret, and there was no evidence that the defendant Keim obtained any credit from the plaintiffs because of the ownership of this property, or that the business which he was about to engage in was hazardous, or that there were debts due to the plaintiffs incurred soon after the conveyance, or that Keim had obtained any property of the plaintiffs, while they were relying upon his apparent possession of the property which lie had conveyed to his wife.

      Held, that the action could not be maintained.

      Appeal from a judgment dismissing the complaint, upon the decision of the New York Special Term, which judgment was entered in the office of the clerk of the county of New York on the 15th day of January, 1889.

      David Hayes, for the appellants.

      F. R. Coudert, for the respondents.
   Van Brunt, P. J.:

This action was brought in equity to set aside a deed on the ground that it was made with intent to hinder, delay and defraud the plaintiffs, who are creditors of Henry G-. Keim. The property in question was conveyed by the defendant Henry G. Keim to his wife, the defendant Mary Keim, through the defendant Kate Boiler; and the claim made upon the part of the appellants is that the evidence establishes that the conveyance was a voluntary one, and made in contemplation of a new enterprise for the purpose of removing the defendants’ property from the risk of said enterprise, and that although the plaintiffs were not creditors of the defendant Henry GKeim at the time of such conveyance, yet that, under such circumstances, 'they were entitled to have the same set aside as made to hinder, delay and defraud creditors of said defendant Henry G. Keim. This conveyance was recorded immediately after it was made.

In view of the decision of the Court of Appeals in the case of Todd v. Nelson (109 N. Y., 316), it is not necessary to discuss the application of cases previously decided to the questions involved in the case at bar. In that case the court held that the following facts did not justify the conclusion that a deed was colorable only and made with intent to defraud the creditors of the grantor, namely, that such deed was executed without consideration by a daughter, who was about to be married, to her parents, who knew of the contemplated marriage and that the grantor intended after marriage to occupy and carry on the farm conveyed through the agency of her intended husband; and that, believing the marriage was hazardous and that indebtedness would arise and losses be sustained, to save the farm to the grantor, it was agreed that she should so convey it, the grantees promising to hold the title in trust for her, she to continue m possession and enjoy the proceeds and income thereof. The deed was put on record within four days after its execution. *At the time of its execution the grantor had no debts; she owned personal property, about $19,000 in value, and the farm was worth about $6,000. After her' marriage she occupied the farm with her husband engaged in farming, sustained heavy losses and became totally insolvent. Four years after the conveyance was executed she executed a mortgage to the plaintiff’s intestate, making an affidavit at the time that she was the owner of the farm. The court say that the theory upon which deeds conveying the property of an individual to some third party have been set aside, as fraudulent in regard to subsequent creditors of the grantor, lias been that he has made a secret conveyance of his property while remaining in the possession and seeming ownership thereof, and has obtained credit thereby while embarking in some hazardous business requiring such credit, or that the debts which he has incurred were incurred soon after the conveyance, thus making fraudulent intent the natural and almost necessary inference ; and in this way he has been enabled to obtain the property of others while they are relying upon appearances wholly delusive.

Applying this rule to the case at bar, the facts, as proven, in no way come up to the requirements stated in the case cited. The conveyance was not secret; there is no evidence that the defendant Henry G. Keim obtained any credit from the plaintiffs because of the ownership of this property; there is no evidence that the business which he was about to engage in at Rochester was hazardous, nor were the debts due to the plaintiff incurred soon after the conveyance, nor has lie obtained any property of the plaintiffs while they were relying upon an appearance which was wholly delusive.

The case cited seems to control the decision of the case at bar, and the judgment must be affirmed, with costs.

Beady and Babtlett, JJ., concurred.

Judgment affirmed, with costs.


author: Vann Brunt, P. J.:

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    RICHARD J. MORRISON, Public Administrator of the City of New York, as Administrator of the Goods, Chattels and Effects of HARRY C. LOGAN, Deceased, Respondent, v. DOMINIQUE F. VERDINAL, Appellant.

      Usury —presumption against interest, from what date computed.

    In an action, brought upon a promissory note given by the defendant to the plaintiff’s intestate for the sum of $4,082.59, the defendant alleged the taking of usury-, upon the giving of such note, to the amount of thirty-seven dollars and fifty cents, as a defense to the action.
    The defendant testified upon the trial that early in March, 1886, one Philip II. Yail, the clerk of Mr. Logan, the plaintiff’s intestate, came to him with an old note of $3,000, which bore date the 28th day of May, 1880, whereby, on demand, the defendant promised to pay, to the order of himself, $3,000, and stated that Mr. Logan wanted a new note as this one was nearly outlawed. The witness told him that he would see Mr. Logan about it, and subsequently he saw Mr. Logan. After that Mr. Yail came with the note in suit, which the defendant signed and received back the old note. He also testified that the interest upon the old note, up to the time of the giving of the new note, was included in the new note at thirty-seven dollars and fifty cents in excess of the legal interest.

      Held, that, although no legal obligation existed for the payment of such interest, the voluntary payment of such interest by the giving of the new note would not constitute usury, as the presumption was that the law was not violated in the transaction.
    That all the presumptions in relation to the contract would be against the violation of the law, and that the defense of usury must be made out by proof rebutting the presumptions of innocence which would naturally arise.
    That, as no evidence was given as to the transaction between Logan and the defendant out of which the note in suit arose, and there was none to show upon what ground the new note was increased to the extent it was, no ground was shown upon which a recovery upon the note could be resisted.
    The judge directed that interest from the date of the note to the date of the trial should be included in the judgment.

      Held, that as the note did not become due until demand was made, and as such , demand was not made until after the death of Mr. Logan, he erred in so doing, and that interest upon the said note from its date to the time of the said demand should be stricken from the judgment.
    Appeal by tbe defendant from a judgment, entered in fayor of the plaintiff, upon a verdict directed at the New York Circuit, in the office of the clerk of the county of New York on the 28th day of November, 1888.

      Albert A. Abbott, for the appellant.

      Osborne E. Bright, for the respondent.
   Vann Brunt, P. J.:

This action was brought to recover upon a promissory note given by the defendant to one Harry C. Logan, for the sum of $4,082.59. On or about the 16th of April, 188T, Logan died intestate, and letters of administration upon his estate having been duly issued to the public administrator, a demand was made for the payment' of the note on the 15th of June, 1887, and this action was brought by him upon such note. The defense alleged the taking of usury upon the giving of such note to the amount of thirty-seven dollars and fifty cents. Upon the trial, the court having directed a verdict in favor of the plaintiff for the principal of said note, with interest from its date to the day of trial, from the judgment thereupon entered this appeal is taken.

The evidence in the case is brief. The plaintiff, to sustain the issues on his part, produced the note in suit. The defendant was then sworn as a witness upon his own behalf, and testified that he delivered the note to one Philip IT. Vail, Mr. Logan, the payee’s clerk; that Mr. Vail came to him early in March, 1886, with an old note of $3,000, which bore date the 28th of May, 1880, whereby, on demand, the defendant promised to pay to the order of himself $3,000, and stated that Mr. Logan wanted a new note as this was nearly outlawed. The witness told him that ho would see Logan about it and he left. Subsequently the witness saw Logan, and after that Mr. Vail came with the note in suit, which defendant signed and received back the old note. The defendant testified that Vail did not give him any other consideration for signing the note, and, also, that the interest upon the old note to the time of the giving of the new note was thirty-seven dollars and fifty cents in excess of legal interest. The wife of the defendant was also sworn. She stated that she knew Logan, and that in the spring of 1886 he was at their house, and she said to him: I understand you made the defendant give you a new note, and it has made me feel very blue ; was not the old note good enough ? ” To which he replied, that she need not worry about it at all, that the old note was nearly outlawed, and that the defendant was interested in so many mining matters that he might make a lot of money sometime and then he conld pay, but that he should never trouble him about it; and he said that if anything happened to him he wanted her and her husband to go to his rooms and take possession of everything and destroy all letters and pictures, and this note which he said she would find there. This is substantially all the evidence.

The question presented is, was usury made out ? It may be conceded that where an excess of interest is intentionally taken, and is not done by mistake, that the contract becomes usurious, and the bargain becomes a corrupt and usurious bargain by the mere fact of the violation of the law, and that no active corrupt intent is necessary to be established. Where the law is violated the corrupt intent is necessarily inferred. As to the question of the interest upon the old note from the time of its date to the giving of the new note, although no legal obligation existed for the payment of such interest, yet still the voluntary payment of such interest by the giving of the new note would not constitute usury. The presumption is, of course, that in the transaction the law was not violated. There is no evidence whatever, and there could not possibly be, because Logan was dead, and the defendant coxdd not be allowed to testify as to what took place between Logan and the defendant to show whether any additional money was loaned, and we have no evidence to show upon what ground the new note was increased to the extent in which we find it. There is nothing certainly in the case or the associations of the parties to show any intention on the part of Logan to exact a hard or a sharp bargain as against the defendant. Upon the contrary, the evidence would tend to prove that he was kindly disposed towards him, and was treating him with the greatest leniency. There is no presumption, therefore, that there was any intention upon his part to exact usurious interest upon the note to the paltry extent of thirty-seven dollars and fifty cents; and we have no reason to infer, from the nature of this transaction, that the addition to the old note consisted entirely of interest. It is just as probable, and, if we are to conjecture, seems to be more probable, that the increase in the note arose from additional accommodation rather than from the incorporating therein of excessive interest. All tbe presumptions in relation to tbe contract would be against tbe violation of tbe law, and tbe defense of usury must be made out by proof rebutting innocent presumptions wbicb would naturally arise; and if tbe proof is not of that character, tbe infraction of tbe law is not to be deemed proved." ¥e tbink, therefore, that there being no evidence whatever as to tbe transaction between Logan and tbe defendant, out of wbicb tbe note in suit arose, there can be no presumption of usury simply because tbe transaction originated in a request upon tbe part of Logan that an old debt might be renewed so as to take it out of tbe statute of limitations. There seems to be, therefore, no ground upon wbicb a recovery upon tbe note in suit can be resisted.

Tbe learned judge, however, included interest from tbe date of tbe note to tbe date of tbe trial. This was evidently error, because tbe note did not become due until demand was made, and such demand was not made until after tbe death of Mr. Logan, namely, on tbe 15th of June, 1887. As far as tbe record shows, tbe attention of tbe court was not called to this feature of tbe. case; and it is evident, from tbe manner in wbicb the record is made up, that bad bis attention been so called, tbe error would not have been committed.

Tbe interest, therefore, upon said note.from its date to tbe 15th of June, 1887, should be stricken from tbe judgment, and upon tbe respondent consenting to that reduction tbe judgment, as modified, should be affirmed, without costs.

Brady and Bartlett, JJ., concurred.

Judgment, as modified, affirmed, without costs.


author: Macomber, J.:

text:
    PITTSBURG CARBON COMPANY (Limited), Appellant, v. FRANK C. McMILLIN, as Receiver of the United Carbon Companies, Respondent.

      Illegal combination among corporations —rights of a receiver of the assets of the combination to enforce the illegal agreement as against one of the combining corporations.

    A manufacturing corporation which, with other corporations engaged .in the same business, has entered into an agreement that the business of all the companies shall be exclusively managed and directed by one person, and has, during the continuance of such agreement, sold certain ¿manufactured articles which, by the terms thereof, were to be considered as sold on behalf of all the parties to such agreement, cannot set up, as against a receiver of the assets of the several combined companies, that the agreement thus entered into was invalid, and that, therefore, such receiver is not entitled to collect the purchase-money of the articles so sold.
    Such receiver represents primarily the creditors of the insolvent combination, as well as the combination itself, together with the stockholders and parties who may be interested in the payment of its debts, and the court may properly interpose, in such case, to save whatever property there maybe belonging to the combination for the protection of its innocent creditors.
    Appeal by the plaintiff from a judgment, entered upon a decision in favor of the defendant, rendered at a Special Term of the Supreme Court, held in Erie county, which judgment was entered in the office of the cleric of the county of Erie on the 23d day of November, 1888.

      C. S. Crosser, for the appellant.

      Ansley Wilcox, for the respondent.
   Macomber, J.:

This appeal presents questions arising upon exceptions only, and not upon the case. Prior to the 1st day of March, 1887, the plaintiff had a contract for supplying the Brush Electric Light Company of Buffalo with certain electric light carbons as they should be required. In the month of March, 1887, the plaintiff, together with eight other companies manufacturing electric light carbons, entered into an agreement by which the business of the nine companies should be exclusively managed and directed by one Edward C. Hawks. Between the 30th day of April, 1887, and the 27th day of June,. 1887, the plaintiff furnished to the Brush Electric Light Company electric light carbons, in several installments, at a contract-price of $1,080, which sum, at the time of the beginning of the action, was unpaid. Hawks was subsequently superseded, as the manager of this trust or combination, by one L>. A. Dangler, of Cleveland, Ohio. Erom this time to the appointment of the defendant as receiver, the combination or organization of said nine companies was known as the United Carbon Companies. In the month of June, 1887, the plaintiff notified the Brush Electric Light Company of Buffalo that it should no longer continue its combination or relation with the other companies after the first day of July of that year, and subsequently claimed that the Brush Electric Light Company 'Of Buffalo should pay directly to the plaintiff, and not to the trustee or agent of the several combined companies, the amount owing by it for the electric light carbons.

Payment not being made, this action was brought. The defendant McMillin was appointed receiver of the United Carbon Companies by a court of competent jurisdiction in the State of Ohio, upon the ground that, as an organization or combination, it was insolvent, owing a large number of debts. Such receiver also brought an action against the Brush Electric Light Company, to recover for the same cause of action stated above, whereupon the two actions were consolidated and the receiver made the defendant in place of the Brush Electric Light Company, upon the latter' depositing the amount claimed against it by the present parties to this action.

The principal argument advanced by the counsel for the appellant is based upon the proposition that, inasmuch as the original combination or trust of the nine manufacturing companies was an illegal combination, no action by the receiver of such combination can be maintained to enforce any liability to it. It seems to us, however, that the plaintiff is not in a position which will enable it to assert, successfully, the invalidity of the original illegal contract and thus prevent the payment to the receiver of such combination of the debts justly due to it. The receiver represents, primarily, the creditors of the insolvent combination as well as the combination itself, together with the stockholders and parties who may be interested in the payment of the debts. He is empowered to recover the assets of the combination wherever they are to be found. In him are united all the rights of the creditors and of the parties interested in the combination. This combination or trust, so-called, was a combination of several incorporated companies or copartnerships, and was itself a copartnership composed of such companies.

Though its general purpose was unlawful under the common law, as administered alike in Ohio and New York, yet the court is not powerless, when set in motion, to interpose its hand and .save whatever property there may be in the copartnership for the protection of innocent creditors. The plaintiff cannot take advantage of its own participation in this wrong and deny its liability to any of the creditors, to which the combination, if it had been a lawful body, would have been liable. Each company, composing the trust or consolidated copartnership, was separately liable to all creditors of the trust for the payment of its just debts. Any one of the creditors -represented by this receiver could have maintained an action against this plaintiff, or against any other member of the concern as a copartner, to recover whatever indebtedness the copartnership owed to him. The creditors of the trust are not in any sense m pari delioto with the several contracting companies.

Under these circumstances, the receiver stands in a light much more favorable than the combined copartnership of which he was appointed receiver, for the simple reason that he is charged with the duty of distributing the assets among the lawful creditors of the concern.

The judgment should be affirmed, with costs.

All concurred.

Judgment affirmed, with costs.