text:
    NANCY TREBILCOX, Respondent, v. EZRA McALPINE, as Executor of REBECCA BENEDICT, Deceased, Appellant.

      Fraud — confession of judgment, without process in a foreign State, entered upon a note procured by fraud — the judgment is open to a defense of fraud when sued, upon here.

    Upon a reference, under the statute, of a claim disputed by an executor, it appeared that his testatrix, Rebecca Benedict, and one Abigail Yan Deusen, while residents of the State of Perinsylvania, executed and delivered, under duress and without consideration, a promissory note to one Joseph Trebilcox, payable in five years, which note authorized any prothonotary or attorney to confess judgment thereon in favor of the payee against them at once, a procedure authorized by the statutes of Pennsylvania; that judgment upon the note was confessed and entered against the makers within a month, and that the note was transferred to the plaintiff in consideration of a past indebtedness existing between her and Joseph Trebilcox.

      Meld, that the note did not constitute a valid claim against the estate of the testatrix.
    That the confession of judgment, valid in Pennsylvania, was valid in the State of New York.
    That the note was merged in the judgment, but that the plaintiff’s rights were no greater than those of Joseph Trebilcox.
    That as the consideration of his transfer to the plaintiff was a pre-existing debt, the question of the validity of the claim was open to question.
    That the executor of the maker, Benedict, was entitled to attack the claim for duress and lack of consideration.
    That the absolute verity imported by a judgment rests upon the idea that the parties thereto had had an opportunity to be heard.
    That the Pennsylvania judgment, taken by confession and without process, had afforded the makers of the note no opportunity to defend.
    That, in an action upon a judgment, fraud may be set up as an equitable defense. That the court of one State, having jurisdiction of the parties, may declare a judgment in another State to be void because of fraud.
    That it was not necessary for the executor to take proceedings in Pennsylvania to vacate the judgment for fraud, where the owner of the judgment had come into this State to enforce it.
    That, upon the facts, it was error for the referee to find that the note was not extorted by duress.
    Appeal by tbe defendant Ezra McAlpine, as executor of the last will and testament of Rebecca Benedict, deceased, from an order, entered in the office of the clerk of Rennselaer county on the 6th day of July, 1891, confirming the referee’s report in the above entitled action and denying defendant’s motion to set aside said report and grant Mm a new trial upon a case and exceptions made, settled and signed; and also from the direction in said order allowing the plaintiff costs as in an action, five per cent extra allowance, and the direction therein for judgment against the defendant in the sum of $493.15 ; and also from the judgment, entered, in tliis-action on the order appealed from herein, in the office of the clerk of Rensselaer county on the 6th day of July, 1891, awarding the plaintiff $493.15 damages and $489.79 costs, amounting in all to $982.94, after a trial before a referee.
    The referee, among other things, found as facts:
    “ That, by section 28 of chapter 2634 of the Statute Law of the State of Pennsylvania, entitled £ An act to alter the judiciary system of this commonwealth,’ passed February 24,1806, and recorded in law book there of No. X, page 223, it is enacted and provided as follows, to wit: £ That it shall be the duty of the prothonotary of any court of record within this commonwealth, on the application of any person being the original holder (or assignee of such holder) of a note, bond or other instrument in writing in which judgment is confessed, or containing a warrant for any attorney at law, or other person to confess judgment, to enter judgment against the person, or persons who executed the same for the amount, which, from the face of the instrument, may appear to be due, without the agency of an attorney, or declaration filed, with such stay of execution as may be therein mentioned, for the fee of one dollar to be paid by the defendant, particularly entering on his docket the date and tenor of the instrument of writing, on which the judgment may be founded, which shall have the same force and effect as if a declaration had been filed and judgment confessed by an attorney, or judgment obtained in open court and in term time; and the defendant shall not be compelled to pay any costs or fee to the plaintiff’s attorney when judgment is entered on any instrument of writing as aforesaid.’ ” Which said statute law has ever since the enactment thereof remained, and now is, in full force and effect in said State of Pennsylvania.
    According to the practice and decisions of the courts of the State of Pennsylvania, under said section 28 of chapter 2634 of the Statute Law of said State, judgment could be legally and properly entered, under said section 28, upon the note or instrument in writing in question.

      Under the laws and practice of the courts in the State of Pennsylvania the judgment entered on said note or instrument in writing in the Court of Common Pleas, in Bradford county, in the State of Pennsylvania, September 28, 1880, by the prothonotary of such court, on filing such note in his office, and without service of process or proof of other appearance By the makers of such note, was under the laws of that State, in every respect a valid, binding, personal and sufficient judgment of á court of general jurisdiction.
    „ It is customary and proper, under the laws of the State of Pennsylvania, to enter judgment in such way on such a note at any time before the maturity of the note.
    Under the laws and practice of the courts of the State of Pennsylvania the judgment entered upon said note was legally and properly entered, and became, and is, a valid and binding personal judgment against said Abagail Yan Deusen and Rebecca Benedict of a court of general jurisdiction, possessing jurisdiction of the subject-matter and of the persons of the judgment-debtors.
    The following is a copy of the note:
    “ $300.00. • Sheshequim, August 31, 1880.
    “ Five years after date, for valué received, I promise to pay Joseph Trebilcox, or bearer, the sum of three hundred dollars, with interest, and without defalcation, waiving' stay of execution, right of appeal, errors, inquisition and all exemption laws prior to this date, and I hereby authorize the Prothonotary, or any attorney of any Court of Record in Pennsylvania, or elsewhere, to confess judgment against--for the above sum, interest and costs of entering judgment on this note, as witness hand and seal.
    “ABAGAIL YAN DEUSEN. “REBECCA BENEDICT.”
    Indorsed: No. 170, Dec. T. 1880.. Joseph Trebilcox v. Abagail Yan Deusen, Rebecca Benedict.

      F. B. Hcvrder, for the appellant.

      A. Frank B. Ghace, for the respondent.
   Learned, P. J.:

This is an appeal from a judgment on the report of a referee in proceedings to establish a claim against the estate of a decedent.

The plaintiff’s claim is based upon what is claimed to be a judgment in the Common Pleas of Bradford county, Pennsylvania, in favor of plaintiff’s assignor Joseph Trebileox, against the defendant’s testator, Rebecca Benedict. This judgment was entered, December Term 1880, on what is called a judgment note filed September 27, 1880, dated August 31, 1880, and payable five years after date. The note was signed by Rebecca Benedict and another, and was payable to Joseph Trebileox. There was no appearance by the deceased in that proceeding and no process was served on her. The judgment was entered as by confession, and, as appears above, it was entered some five years before the note became payable. Dpon this trial the plaintiff proved the statute of Pennsylvania, which is claimed to authorize such entry of judgment. He also proved, by the testimony of a counselor of that State, that under the law of the State such judgment might be entered at once and before the maturity of the note. The judgment becomes a lien then, and may be enforced by execution after such maturity. It was also proved that, at the time of the execution of the note, Rebecca Benedict was a resident of Pennsylvania, and that the note was executed and delivered in that State.

The case of Teel v. Yost (40 N. Y. State Rep ,110), involved the consideration of a judgment similar to that above described. And the whole subject of such confessions of judgment is discussed so fully that it is useless to examine the matter further as to anything there decided. That decision affirmed one reported in 29 New York State Reporter, 272. And, from an examination of the opinion in both courts, the decision appears to be that such judgment con. stitutes a valid confession of judgment in Pennsylvania and is enforceable here.

As this was a judgment on the note, the note is merged. Therefore, the claim is no longer negotiable, and the transfer gives the plaintiff here no better rights than Joseph Trebileox had. Furthermore, the transfer to the plaintiff was to pay an old debt, and no new consideration passed. Therefore, the whole question of the validity of the claim is open, as much as if Joseph Trebileox were the plaintiff.

The question, then, arises whether the defendant can attack this claim on the ground, that the note was obtained without consideration and by threats. The principle that a judgment imports, as the phrase is, absolute verity, or that it is conclusive on all parties thereto, rests on the fact that all such parties have been heard or have had an opportunity to be heard. "When a defendant has been duly served with process and has defended unsuccessfully, or has failed to defend, or 'has, after such service, admitted the plaintiffs claim, then he is bound. (Stilwell v. Carpenter, 59 N. Y., 423.) After the party has thus had an' opportunity to be heard before a lawful tribunal* then he must be bound conclusively by the judgment, unless there was a fraud of which he could not have availed himself in the court giving judgment, or a fraud which prevented him from availing himself of his defense. (Same Case, 2 Abb. N. C., 263 ; Ward v. Southfield, 102 N. Y., 292.) But it is manifest that the ground of this sound principle does not exist in the case of such a judgment as the one in question. The defendant had no opportunity to defend in the court of Pennsylvania. She had no notice of the action. She, therefore, has not neglected to make her defense when she could do so. The authority which she gave for the entry1 of the judgment was given at the time of signing the note and was a part of the note.

If the note was void for'want of consideration or for duress, so was the power of attorney contained therein. Yet the defendant has never had, nor has her executor had until this time, an opportunity to allege such fraud or want of consideration.

This may be illustrated by the case of Wilcox v. Howell (44 N. Y., 402), where a mortgagor, at the time of executing the mortgage, gave a certificate that the mortgage was given for a good consideration and for full value. The mortgage being, in fact, tainted with fraud, the certificate did not estop the party from showing such fraud.

In Dobson v. Pearce (12 N. Y., 157), one Olney had recovered,, in this State, a judgment against Pierce which had been assigned to-the plaintiff. Olney had previously sued this judgment in Connecticut, whereupon Pierce had brought an action in chancery, in Connecticut, alleging that the judgment had been obtained by fraud, and he had thereupon obtained a decree declaring the judgment fraudulent, and perpetually enjoining the action commenced thereon. Such action was thereupon discontinued. Then Olney assigned to Dobson, who brought this action. The court held that “whether, therefore, fraud or imposition in the recovery of a judgment could heretofore have been alleged against it collaterally at law or net, it may now be set ujd as an equitable defense to defeat a recovery upon it.” And they held, also, that the decree in Connecticut was ■conclusive in this State on the question of fraud.

Thus it will be seen that the court recognized two principles: First, that in an action on a judgment-fraud may now be set up as an equitable defense; second, that the court of one State having juris■diction of the parties may adjudge that a judgment in another State is void because recovered by fraud.

Hence it follows that it would have been competent for Rebecca Benedict to bring an action in this State against Joseph Trebilcox to declare the judgment void for fraud. And it also follows that in an action on that judgment the equitable defense of fraud may be set up as a defense. . ,

Now, it is true, as above stated, that where a defendant has'been duly served with process, and a judgment thereupon has been recovered, the kinds of fraud on which such judgment can be attacked are few. But we have already pointed out that such a limitation can not be applicable where a judgment has been entered, as in this case, without either the appearance of the defendant or the service of process on him. If a plaintiff by duress compels a 'defendant to execute what is called a judgment note, and then enters a judgment thereon without service of process, to say that such a judgment is absolutely binding on the defendant is to sanction a wrong and to deprive the injured party of the opportunity for redress.

It is argued that the only remedy qf the defendant is to take ■proceedings in Pennsylvania to Vacate the judgment. ¥e have •only to refer to the case last cited. That shows that when the plaintiff in a judgment fraudulently obtained in one State comes into another to enforce the same, the courts of the latter State may redress the fraud according to the system of practice prevailing there, that is, by an injunction action if law and equity are kept distinct, or by an equitable defense if the two systems are united. The plaintiff has come into this State to enforce in these proceedings the collection of this judgment alleged by defendant to be fraudulent. Under our present practice it is not necessary that the defendant should bring an equitable suit to restrain these proceedings on the judgment. He may show in these proceedings the fraud which he alleges, which neither he nor his testatrix have had an opportunity before of proving in court.

The referee found, as a fact, that the note was wholly without consideration; and that, at the time it was given, no demand was made upon the makers of any existing indebtedness from them, and that the makers were not indebted to the payee at all.

Abagail Yan Deusen, one of the signéis of the note, testified on the .trial that Trebilcox, the payee, came to her when no one was present but herself, Mrs. Benedict and Trebilcox, and told her he would roll the balls ” upon her; “ that what she had done was fraud, and he would break it all up,” and made other threats. She testified that she and Mrs. Benedict signed the note under fear and in consequence of threats made by him. There is no contradiction of this testimony. The referee, however, refused to find that the note was signed solely through fear and ,in consequence of these threats; and it seems that he refused to find that these threats were made.

We do not understand this refusal. The testimony of Mrs. Yan Deusen was corroborated by evidence showing that Joseph Trebilcox was dissatisfied with a will made by the deceased husband of Mrs. Yan Deusen, and brother of the present plaintiff. Mrs. Yan Deusen was, perhaps, a prejudiced witness, as she was a signer of the note. But the undoubted facts that there was no consideration for the note, and that the two signers were over seventy years old, give force to her testimony. It seems to us that, in this refusal to find, the referee must have been influenced by the view that the judgment had a controlling effect, which we cannot give to it.

We-are of opinion that the judgment must be reversed and anew trial granted, referee discharged, costs to abide event.

Mayham and Kellogg, JJ., concurred.

Judgment reversed, new trial granted, referee discharged, costs to abide event.


source: Caselaw Access Project

author: Learned, P. J.:

license: Public Domain

text:
    HARRIET H. VILAS and Others, as Administrators of SAMUEL F. VILAS, Deceased, Appellants, v. JULIA A. McBRIDE and Others, Respondents.

      Usury — an agreement that a mortgagee should, in addition to intwest, receive the manure made upon the premises — estoppel.

    One Witlierill owned premises upon winch lie, in 1867, built a hotel, which was. opened in 1868. In November, 1867, he mortgaged the property to one Yilas, and it was agreed that, in addition to legal interest, Vilas should have the manure made at the hotel, which was worth $100 per annum. Yilas received the manure for many years.
    In an action brought to foreclose the mortgage,

      Seld, that, as a contingent advantage was reserved to Yilas without putting either capital or interest at risk, the agreement relative to the manure made the mortgage usurious.
    In 1884 Witherill sold the premises to one McBride by warranty deed, the consideration named being $20,000. At this time there were upon the premises the mortgage in question and another, each of $7,000. McBride paid $6,000 cash. The deed was silent as to the existence of the mortgages Semble, that, as against a warranty deed, parol evidence was inadmissible to show that the purchaser assumed the payment of the mortgages.
    The evidence tended to show that McBride expressly refused to assume the payment of the Vilas mortgage upon the ground that the agreement as to the manure made that mortgage usurious.

      Seld, that the subsequent acts of McBride in paying interest upon the Vilas mortgage, and in insuring the premises for its security, did not, as matter of law, estop him from alleging usury as a defense to it.
    Appeal by tbe plaintiffs, Harriet H. Yilas, Samuel H. Yilas and Henry Orvis, as administrators of Samuel F. Yilas, deceased, from a judgment of the Supreme Court, entered in the office of the cleric of Clinton county on the 12th day of January, 1891, dismissing the complaint in the above-entitled action, with costs, and discharging a mortgage therein described from record, after a trial at the Clinton County Circuit before the court after the submission of certain questions to a jury, with notice of an intention to bring up for review upon such appeal an order denying a motion for a new trial.
    The action was brought for the foreclosure of a mortgage upon certain premises situate in the village of Plattsburgh, which had been owned by one ’Witherill, ivho, in 1867, built a hotel thereon, which was opened in 1868; which premises were, thereafter, in 1884, sold to one McBride.

      O. II. Beckwith, for the appellants.

      Edgcur T. Brackett, for the respondents.
   Learned, P. J.:

This is an appeal from a decisión in an action of foreclosure. Two questions were submitted to the jury, the first whether the mortgage was usurious, the second whether David McBride, grantee, assumed payment of the mortgage as part of the consideration. The jury found the first in the affirmative, the second in the negative. The learned justice adopted these findings as correct, and decided in favor of the defendants. It seems hardly necessary to add anything to the careful opinion written by him. But the amount involved is considerable and the points in the case have been strongly presented on both sides. ' We will, therefore, state our views.

The bond and mortgage in question were executed November 9, 1867, by Hiram D. Witherill to Samuel F. Vilas, now deceased, for‘$8,000, payable in installments, the last in 1871, with interest at seven per cent. The property mortgaged was the Witherill Hotel. The testimony of Mr. Wever is that, when Witherill applied to Vilas for the loan, Vilas objected on the ground that money was worth more than seven per cent, and that he could not make the loan unless he had more than the legal rate; that they then agreed thar the manure from the house should be called worth $100 per year; and that so long as Vilas carried the mortgage he should have the manure from the house as extra interest. The hotel was opened in 1868. It was proved that Vilas did have the manure year after jear and that it was, in fact, worth $100 per year. In 1881, one Velsey kept the house and Vilas claimed the manure as his right; said he had it all along ; but Velsey refused to let him have it unless he paid fifty dollars per year, which he did for one year.

The plaintiffs urge that as the house was not then finished and the manure would not be in existence until the house was finished, .and as Vilas was to have it only as long as he carried the mortgage, the contract was not usurious. The proof, however, establishes that this was intended as an additional compensation for the use of the money, and it was actually received for many years. Where a ■contingent advantage is reserved to the lender without putting capital or interest in any kind of risk the contract1 must be usurious. (Barnard v. Young, 17 Ves., 44; Cleveland v. Loder, 7 Paige, 557; East River Bank v. Hoyt, 32 N. Y., 119; Heidenheimer v. Mayer, 42 N. Y. Supr., 506.) There seems to be no room to doubt here that the agreement was that the lender should, at the least, have the probability of getting an additional advantage, and that this agreement was made in order that he might have more than legal rate. We think the verdict and the decision on this point were correct.

The next question is whether, when Witherill sold the premises, to McBride, the latter agreed, as part consideration, to pay this mortgage. On the face of the deed he did not. Witherill gave a warranty deed. The consideration expressed therein was $20,000. No mention of the mortgage is made in the deed. No paper other than the deed was executed between the parties. The amount actually paid by McBride to Witherill was $6,000. The mortgage in question had been, or was then reduced to $7,000 of principal by a payment of $1,000 by Witherill or Mrs. Witherill. There was another mortgage on the premises of $7,000. That also is not mentioned in the deed.

It is very evident, then, that, so far as the deed goes, the land was. not taken as subject to any mortgage, and the purchaser assumed the payment of no mortgage. Of course, mortgages were, in fact,, upon the land. But the deed was a warranty deed, which bound Witherill to protect the title. If the deed had stated that the land was taken subject to the mortgage, then, of course, no eviction by virtue of such mortgage would be a breach of the covenant of warranty. (Belmont v. Coman, 22 N. Y., 438.) We do not see, there-' fore, why Witherill would not be liable on his covenant of warranty should the defendants be evicted under a foreclosure of this mortgage. Hence it would seem that parol evidence showing that McBride took, as subject to the mortgage, and still more evidence' showing that he assumed its payment, would vary the effect of the written instrument. (See Marsh v. McNair, 99 N. Y., 174; Wilson v. Deen, 74 id., 536: Estabrook v. Smith, 6 Gray, 579.)

There are some cases in this State holding that the agreement of the purchaser to pay the mortgage may be shown by parol. (Taintor v. Hemmingway, 18 Hun, 458; affirmed, 83 N. Y., 610.) It will be seen, however, in that case, that the conveyance was made, in terms, subject to tbe mortgage. So that tbe agreement by parol of tbe purchaser did not vary the terms ■ of tbe written instrument. The same facts existed in Murray v. Smith (1 Duer, 412), where a similar doctrine was held. Such evidence was held to be only proof of what tbe actual consideration was. It would seem that a. different case must be presented when tbe grantor gives a warranty deed without mentioning tbe mortgage. Such is tbe view of Berdan v. Sedgwick (40 Barb., 359 ; affirmed, 44 N. Y., 626).

In tbe present case, however, tbe question does not arise. The-¡earned justice allowed tbe plaintiff to give evidence tending to show an oral agreement on the part of McBride to pay tbe mortgage: On conflicting evidence, tbe jury found that be made no such agreement. ’ Their verdict and tbe decision of tbe learned justice are sustained by tbe evidence. Tbe testimony of Mr. Wever, who negotiated tbe sale for Witberill with McBride, is positive. He says McBride declined absolutely to assume any mortgage, of any name or nature, on tbe property; that be, Wever, urged him bard to do this, but be positively declined. He insisted on a warranty deed, and declined buying subject to tbe mortgage. He said there was usury in tbe mortgage, and stated bow it came to be so in regard to tbe manure. He said be wanted to take all tbe rights that Witberill bad to defend against either or both mortgages. If he bought Witherill’s rights be would give $6,000 ; otherwise, be would give less.

The opposing testimony is tbe statement of Mr. Newton, that McBride told him that be bad bought tbe property subject to this mortgage which he assumed and expected to pay. Tbe jury were justified in placing more confidence in tbe testimony of tbe man who negotiated tbe contract than in tbe testimony of a witness to a. mere admission of McBride. McBride may have said that tbe property was subject to tbe mortgage and he expected to pay it. But that be assumed tbe mortgage is in contradiction to the deed,, as we have abeady seen. And it is hardly possible that Mr. Wever, who desired to have McBride assume tbe mortgage, could be mistaken in saying that be failed to/accomplish this result.

In Bennett v. Bates (94 N. Y., 354), the reason for bolding a purchaser liable in cases like tbe present is discussed at length. But tbe fact on which such liability is based must always be tbe agreement of tlie purchaser to pay the mortgage, or his recognition of its validity. Without such agreement or such recognition he assumes no liability personally, and has full right to defend his land against an invalid incumbrance. Of course, the grantor can, in his conveyance, subject the land to the payment of anything which he ■chooses; to the payment of a valid debt; to the payment of a claim which is invalid. But he has not done so in this case. On the contrary, he has warranted the title to the land without any reservation. It- is true that a consideration of $20,000 is expressed in the deed, which the testimony shows to be father more than the actual value. But it is well known that the expressed is often not the real consideration.

So in this case the actual consideration is shown by proof to have been $6,000. The plaintiff urges that as the nominal consideration was $20,000, and as only $6,000 was paid it must be assumed that McBride was to pay the other $11,000 by paying these mortgages. But this, at best, is only slight evidence, and is ■overthrown by the proof. Indeed, if the expressed consideration had been $6,000, it might with equal force have been urged by plaintiff that the defendant bought only the equity of redemption subject to both mortgages. And, perhaps, it was to exclude such argument that the deed expressed as consideration the whole value, showing that McBride took all the rights which Witherill had to defend against this mortgage.

The subsequent acts of McBride in paying interest to Yilas, and insuring the property for the security of the Yilas mortgage in no respect estop him from this defense. Payment of interest on a usurious claim, does not- prevent the debtor from subsequently showing the fact of usury. As evidence these matters could have been, and doubtless were, considered.

We think the judgment should be affirmed, with costs.

Mayham, J., concurred; Kellogg, J., not acting.

Judgment affirmed, with costs.


author: Putnam, J.: Learned, P. J.:

text:
    THOMAS H. GREER, Individually and as Executor of ANNA L. GREER, Deceased, Respondent, v. ALDEN CHESTER, Executor and Trustee of ANNA L. GREER, Deceased, Appellant, Impleaded with Others, Defendants.

      Will — legal separated from, illegal trusts — an estate in a trustee and the remainder in the henefieia/ry, not inconsistent — 1 M. 8, m. p. 780, sec. 63; m. p. 727, secs. 47 and 48.
    A testatrix, by a clause of her will, gave the rest, residue and remainder of her property to a trustee to receive the rents, issues and profits thereof, and to pay the net income to her husband for life, and after his death to pay one-half of it to her grandson for life, the other half to be added to the principal of the estate. The direction for accumulation was conceded to be unlawful.
    The will further provided that after the death of the grandson the whole estate should pass to charitable and benevolent corporations. This devise was conceded to be unlawful because not made two months before the death of the testatrix.
    The only heirs and next of kin of the testatrix were her husband and grandson.
    In an action brought by the executor to obtain a construction of the will:

      Held, that where several trusts are created in a will which are complete in themselves, and the legal can be separated from the illegal trusts without defeating the intention of the testatrix, the legal trusts will be sustained.
    That the bequest to the trustee to pay the rents and income to the husband for life was valid.
    ’That the direction putting in the hands of the trustee one-half of the income of the share of the grandson during life, presumably to secure it from risks or improvidence, was legal and should be carried out.
    That the provision directing an accumulation of one-half of the estate after the death of the husband, during the life of the grandson,’ was void, and that the testatrix died intestate as to this remainder.
    'That the property of the deceased passed, subiect to the two trusts, to her heir-at-law and next of kin, and to her husband, according to the laws of descent and distribution.
    'That there was nothing inconsistent .in the fact that the trustee should have an estate in trust for the life of the grandson, and that the latter should have the remainder in fee, and that there was no merger.
    Appeal by the defendant Alden Chester, as executor and trustee under the last will and testament of Anna L. Greer, deceased, from ■a judgment, entered, after a trial by the court without a jury at the Albany Circuit, in the office of "the cleric of Albany county on the 7th day of October, 1891, except from so much thereof as adjudged that the third, fifth and sixth clauses of said will were valid, and except from so much thereof as adjudged that the seventh, eighth, and tenth clauses thereof were void.

      Robert G. Scherer, for the appellant.

      James J. Forren and D. Oacly Female, for the respondent.
   Putnam, J.:

The action was brought to obtain a construction of the will of' Anna L. Greer, deceased. Certain provisions therein are conceded to be void by the parties, and were so held by the court below.

The question in the case arises out of the ninth clause in the will, which the trial court held invalid, and which, as far as necessary to set out, is as follows, viz. :

Finth. I give, devise and bequeath all the rest, residue and remainder of all my property and estates, real and personal, of whatever name, nature or kind, to Alden Chester, of the city of Albany, N. Y, in trust, nevertheless to receive the interest, income, rents, issues and profits thereof, and after paying there-out all taxes, assessments, costs of repairs and insurance, and all expenses and commissions for the management of said trust, to pay the balance of said interest, income, rents, issues and profits quarterly to my said husband, Thomas H. Greer, for and during the term of • his natural life ; and from and after the death of my said husband to pay one-half of the said balance of said interest, income, rents,, issues and profits quarterly to my said grandson, Thomas Day Greer, during the term of his natural life, and the other one-lialf thereof to be added to the principal of my estate.”

The will then provides for, or contemplates an accumulation of one-half of the income of the estate of the testatrix specified in said ninth clause, after the death of plaintiff, until the death of her grandson, Thomas Day Greer, when the whole estate is devised to certain charitable and benevolent corporations. The direction for the accumulation is conceded to be unlawful and also the devise to such benevolent corporations, the will not having been executed two. months prior to the death of the testatrix.

After the bequest or devise to the defendant, Alden Chester, as. trustee, to pay over the income of all her said estate to her husband, Thomas H. Greer, for life, and after his death one-half of said income to her grandson, Thomas Day Greer, the residue or remainder of the estate of the testatrix was, in fact, undisposed of, the direction for the accumulation and the devise to said charitable associations being void.

The plaintiff, the husband of the testatrix, and the defendant Thomas Day Greer, are the only heirs and next of kin.

The Special Term held the ninth clause of the will invalid. And as to the property therein bequeathed and devised to said defendant Alden Chester, in trust, that testatrix died intestate, and adjudged that such property should be divided between the husband and grandchild, one-third to the former and two thirds to the latter. In effect, the court below held that the legal portion of the will in the ninth clause could not be separated from the illegal parts of the will therein or subsequent thereto, and that hence the whole was void. (Knox v. Jones, 47 N. Y., 390.)

The doctrine is well established that where several trusts are created by a will, which are independent of each other and each complete in itself, some of which are legal and others illegal, and the legal can be separated from the illegal and upheld without doing injustice or defeating what the testator might, in the emergency, be presumed to wish, the illegal trusts may be cut off and the legal permitted to stand.” (Kennedy v. Hoy, 105 N. Y., 134; Van Schuyver v. Mulford, 59 id., 426 ; Underwood v. Curtis, 127 id., 542.) The bequest to the defendant Chester, as trustee, to pay over the rents and income to the plaintiff for life, and after his death to pay one-half of said income to the - defendant, his grandson, is legal and does not violate any statutory provision. Being lawful the intent of the testatrix should be carried out and effect given to such provisions of the will, if said lawful provisions can be separated from the parts of the will that are unlawfiil, without defeating what the testatrix might, under the circumstances, be presumed to wish. (See Van Schuyver v. Mulford, ut swpra.)

The lawful provisions in the will so contained in the ninth clause,, bequeathing to defendant Chester property upon the trust to pay over the income to plaintiff for life, are plainly separable from the-subsequent unlawful provisions within the cases above cited. There seems to be no connection between said lawful bequest and the unlawful provisions of the instrument. As before stated, the will is the same as if, after the bequest for the benefit of her husband and grandson, testatrix had failed to devise or bequeath the residue and remainder of her estate. The bequest for the benefit of the plaintiff being lawful, the intent of the testator should be carried out. (See Manice v. Manice, 43 N. Y., 384.)

This bequest being lawful and not inconsistent with other portions of the will, or with the presumed intentions of the testatrix, there seems no difficulty in giving it effect. But it is claimed by plaintiff that the remainder of the estate of deceased, not being disposed of by the will after the life interest of the plaintiff, he became, from the death of the testatrix, seized of a one-third interest in the remainder of the personal estate left by deceased, and as to that part of the personal estate, being entitled to the income, and also the owner of the remainder as next of kin, he should receive the same divested of the trust. There are certain cases cited by the plaintiff holding that where all the objects and purposes of the trust have been accomplished, the court can terminate it, all the parties beneficially interested desiring its termination. (Sears v. Choate, 146 Mass., 398 ; Inches v. Hill, 106 id., 575.)

This is not such a case, however. The intent of the testatrix was that defendant Chester, as trustee, should hold all the property described in the ninth clause of her will for the life of plaintiff, and pay over to him the rents and profits for that period. It is an active trust. Besides, the defendant Thomas Day Greer has an interest in the carrying out of the trust, and does not consent to the termination of the trust as to any part of the trust estate. (Asche v. Asche, 113 N. Y., 232; S. C., 47 Hun, 285; S. C., 18 Abb. N. C., 82.)

The personal estate of the testatrix, being left, after the life interest of plaintiff therein has expired, undisposed of, probably on her death the husband acquired an interest in one-third of the same, subject to the trust. As held in Asche v. Asche (113 N. Y., 232), by such acquisition the plaintiff acquired a future estate dependent upon the precedent estate of the trustee, which he cannot enjoy in possession. He might devise it, but cannot possess an estate conditioned upon his own death. It follows that the ninth clause, as far as it devises or bequeaths to the defendant Alden Chester the residue of the estate of tlie testatrix, in trust, to manage and control, and pay the income to the plaintiff for the period of his natural life, should be deemed and held valid, and the intent of the testatrix, as therein stated, should be carried out. But the ninth clause, in addition, provides that the trust of one-half of the estate shall continue during the life of the defendant Thomas Day Greer, also. This is valid, as is shown in the opinion of Judge Learned.

The decree should be modified in accordance with these opinions. Costs of both parties on appeal to be paid out of estate.

Learned, P. J.:

The provision is “ from and after the death of my said husband to pay one-half of the said balance of said interest, income, rents, issues and profits quarterly to my said grandson, Thomas Day Greer, during the term of his natural life.” This devise and bequest in trust is valid, as it does not extend beyond two lives in being.

The further clause, and the other one-half thereof to be added to the principal of my estate,” is invalid. So it is conceded are the bequests and devises after the death of the husband and grandson to certain societies.

Assuming, then, that as to the one-half of the estate after the trust life estate for the husband, and as to the other half after the trust life estate of the grandson the testatrix was intestate, the grandson would take this undisposed of property as heir-at-law and next of kin, excepting such personal as went to the husband. But I see no reason why this inheritance and succession should affect the valid trust estate for his life. Suppose, as might be the case, that he were not the only next of kin and heir-at-law, would not the trust for his life remain undisturbed notwithstanding the failure of these other provisions %

The testatrix contemplated giving to a trustee an estate for life in one-half of her property for Thomas Day Greer. This estate went to the trustee. Thomas Day Greer had no estate therein, legal or equitable. (1 R S., J29, § 60.) Why, then, should the failure of the intentions of the testatrix in other respects defeat this provision % She may have thought it best to protect the grandson as to the income of half of the estate against loss or improvidence. We need not defeat that intention because he inherits and succeeds to property which she had intended should go elsewhere.

There is nothing inconsistent in the fact that the trustee should have an estate in trust for the life of the beneficiary Thomas Day Greer, and that the beneficiary should have the remainder in fee. There is no merger. (1 R. S., m. p. 727, §§ 47, 48. He is not the ■owner of a particular estate as mentioned in 1 Revised Statutes, 732 -(§ 81). He can dispose of the remainder in the half of the estate in which he lias a beneficial interest, subject to the trust. (1 R. S., 729, §61.)

But, notwithstanding this, the object of the testatrix (as we may suppose), viz., to secure the income to the grandson for life, against the risks of business or improvidence, should be carried out. (1R. S., 730, § 63.)

When a valid devise in trust is plainly given and can be carried into effect, although other parts of the will fail, we should not endeavor to ascertain what the testatrix might have done if she had known that these other parts of the will were invalid. So far as her will is valid it should be performed. In that way we shall come .nearer to giving her wishes effect.

I think, therefore, that the judgment should be modified by •declaring the two trusts above mentioned to be valid, and that, subject to these two trust estates in the trustee, the property of the ■ deceased went to her heir-at-law and next of kin and husband, according to the laws of descent and distribution.

Mayham, J., concurred.

Decree modified according to opinion; costs of appellant to be paid out of the estate; order to be settled by Putnam, J.


author: Mayham, J.:

text:
    In the Matter of the Judicial Settlement of the Accounts of HARRISON C. MAINE, as Executor of CLARK MAINE, Deceased.

      Will — legacy— when interest is payable thereon.

    A testator, by his will, proved in November, 1885, bequeathed $5,000 to his daughter, Mrs. Baker, and to her children, which sum he directed should be invested in a house, to be deeded by his executor to her for life, and upon her ■death to be sold and the avails to be divided equally among her children. The testator further directed that Mrs. Baker and her husband might reside upon his farm in Bussell so long as her husband fulfilled the terms of a certain lease, and that immediately upon the sale of the farm, and the receipt by his executor of sufficient money for that purpose, the executor should purchase a home for Mrs. Baker and her children, and that until he did so purchase he should pay her interest on $5,000; and that, in case she and her husband left the farm before a home was purchased, the executor should pay interest upon said sum of $o,000.
    Mrs. Baker died in July, 1886, while residing upon the farm, and her husband, with her children, remained there until November, 1886. The executor never purchased a home for them under the provisions of the will.
    Upon a settlement of the executor’s account:

      Held, that the children of Mrs. Baker were entitled to interest upon the legacy from November, 1886, to the time of the accounting, and annually thereafter, until the legacy was paid.
    That the rule that interest is not payable upon a legacy until it is due had no application to this case.
    That, upon the death of Mrs. Baker, the bequest vested in her children, and that they were entitled to the interest in her right, though it was not specifically stated in the bequest that they were tube so entitled thereto.
    Appeal by Harrison C. Maine, as executor of Clark. Maine, deceased, from a decree entered in the office of the surrogate of the •county of St. Lawrence, on the 2d day of May, 1891, except from so much thereof as adjudged that the executor retain the sum of $100 for his costs and expenses of the accounting upon which the decree was made.

      John O. Keeler, for the executor, appellant.

      A. Z. Squires, for the infants and their general guardians, respondents.
   Mayham, J.:

The testator, Clark Maine, died in the year 1885, leaving a last will and testament in which he nominated and appointed Clark C. Main as executor and trustee, which will was admitted to probate by the surrogate of St. Lawrence county, on the 9th of November, 1885, and the executor named therein thereupon duly qualified and entered upon the discharge of his trusts.

On the i5th of December, 1890, the executor filed an account with the surrogate and asked that the same be judicially settled by and before the Surrogate’s Court of St. Lawrence county. To the account, as filed, the respondents Mina, Minnie and Mabel Baker, infants, by their guardians, filed certain specific objections, and the surrogate, after hearing the proofs and allegations of the parties, made a decree, the substance of which appears in his summary statement, from which decree this appeal is taken. The main contention on this appeal arises out of the construction of certain provisions of the testator’s will.

By the terms of the will the testator gave to his wife, after his debts were paid, the exclusive use and occupaucy of his home lot of about twenty acres, with the rents and profits of the same, and all his personal property on the same at the time of his death, to have and to hold such real and personal property during her lifetime; and gave also to his wife an annuity of $200, which he directed his testator to pay to her annually during her life.

The testator also bequeathed absolutely and contingently to various legatees the sum of $12,200, among which bequests was one of $5,000 to his daughter, Ella L. Baker, or her children in case of her death. The real controversy here is as to the provisions in the decree which directs the executor to pay to the respondents, who are the only surviving children of Ella L. Baker, to whom the testator bequeathed this legacy of $5,000, and who died soon after the testator, the interest on this $5,000 legacy after they removed with their father from the Bussell farm, November 1, 1886, up to the time of this accounting, and annually thereafter until the principal sum shall be paid. The language of the will upon the subject of this bequest is as follows:

“ I give and bequeath to my daughter, Ella L. Baker, and to her children, whether now born or hereafter born, the sum of $5,000, which said sum I direct my executor hereinafter named (or any other person lawfully acting in his stead and concerning my estate) to invest in a home to be concurred in and approved of by her, and to be deeded to her and her children, and to be held by her during her lifetime, and then to descend to her children, to be divided or sold, and the avails thereof to be divided between them, share and share alike; and I further direct that the said Ella L. and her husband, Byron Baker, have the right to continue in the use of my farm of about 338 acres in Bussell, in said county, with the personal property thereon, so long as they fulfill the conditions of a certain lease to said Byron Baker, dated November 15th, 1884, and signed by said Baker and myself;-and I direct that, immediately on the sale of said farm and property, and on receipt of a sufficient sum of money for that purpose, my said executor shall purchase such named home for my said daughter and her children, and that, until such home is purchased and ready for- her, he shall pay to her annually the interest on said sum of $5,000; and in case she and her said husband, Byron Baker, cease to remain on and occupy said property previous to the sale thereof thereof,’then, and in that case, my said executor is to pay such annual interest until such sale is made, or such home is purchased for her from other means ”

On the hearing before the surrogate it Was stipulated between the parties, among other things, as follows: That at the timé of the testator’s death his daughter, Mrs. Ella L. Baker, was residing on the 338-acre farm in Russell, and that she, her husband and children continued to reside there until Mrs. Baker’s death, July 2, 1886, and that thereafter her husband and children continued to reside on said farm until November 1, 1886, when they removed therefrom.”

“ That the real estate left by the testator was the 338-acre farm in Russell, the Marshville home lot left to his widow for life, a half interest in the Chilton farm in Russell, containing 140 acres, subject to the life estate of Mrs. Chilton, who is still living.”

That in 1887 there was an agreement made between the executor, the widow of the testator and Mrs. - Olarinda Bellows, whereby Mrs. Bellows was to have the Marshville property in payment of her legacy of $2,000, and sixty dollars interest then due. That the executor was to take care of the testator’s widow during her life, and that at the death of the testator’s widow Mrs. Bellows should pay the estate the sum of $440, the interest on the legacy, in the meantime, to be applied towards the support of the widow; that the executor conveyed in fee to Mrs. Bellows the Marshville property January 7, 1887, and that since then she has been in possession thereof; the testator’s widow is now aged seventy-six years, and that no other real estate has been sold, and that the executor has not charged himself, in his accounts, with the real estate sold to Mrs. Fellows.”

TJpon these facts the surrogate made a decree, in the summary statement of' which he charged the executor with the sum of $10,961.68, the amount of the inventory and accumulations thereon, and credited him with disbursements in all amounting to the sum of $9,029.05, leaving a balance in his hands and chargeable to him at the time of the accounting of the sum of $1,872.63, out of which the decree provided that the executor should retain the sum of $100 for his costs and expenses, and pay to the guardian of the respondents the sum of seventy dollars for his costs and expenses on the accounting, and out of the balance so found in his hands the executor should pay to the general guardian of the respondents the sum of $1,200, as interest on the $5,000 legacy from November 1, 1886, the time they removed, with their father, from the Russell farm, to November 1, 1890, and that the executor retain the balance of $302.63 to be paid out according to the provisions of the will, and accounted for hereafter.

It is contended by the appellant that the learned surrogate in making his decree failed to give effect to all of the provisions of the will, and did not carry out the intention of - the testator as •expressed in that instrument; and that it was error to hold that the respondents were entitled to be paid interest on their legacy from the time of the removal of their father from the Russell farm. While, in some of its provisions, this will is obscure and the intention of the testator not clearly expressed, yet in the provisions relating to the legacy to Ella L. Baker and her children there seems no ambiguity.

The scheme of the testator, as to that bequest, is quite apparent. Tie bequeaths to her absolutely the sum of $5,000, but directs that it be invested by his executor in the purchase of a home for her, and directs the executor, on the sale of the Russell farm and property, and on receipt of sufficient money for that purpose, to purchase such home; then follows the two conditions on the happening of each of which, interest is to be paid by the executor on this legacy. First After the sale of the property and farm, and until such home is purchased and ready for her, lie shall pay her annually interest on the legacy. Second. In case she and her husband shall cease to remain on and occupy said property previous to the sale thereof, then, and in that case, my said executor is to pay such annual interest until'sucli sale is made or such home is purchased from other means.

Under these provisions the evident intention of the testator was to forbear the payment of interest on this legacy so long as his daughter and her husband occupied the Russell farm under the existing lease. If the same was sold so that she could no longer enjoy the use of. that farm, then until its place was supplied hy the purchase by the executor of another home for her, she and her children were to be paid annual interest on this $5,000. Or if she and her husband ceased to remain on and occupy this farm, if the same was not sold, then, and in that case, the executor was required to pay the annual interest on this legacy until the home' was purchased with the proceeds of the sale of the Russell farm or from some other means.

We find no other provision of this' will which stands in the way of, or is inconsistent with the foregoing interpretation. The appellant, as executor, had it in his power to stop the payment of this interest out of the bulk of the estate by selling the Russell farm and investing in the purchase of a home for these legatees under the provisions of the will. This authority is clearly conferred by the terms of the will; and failing to do so, his duty to pay interest on the happening of the events above suggested is clearly enjoined in that instrument. We are referred by the appellant to the cases of Ritch v. Hawxhurst (114 N. Y., 515); Roe v. Vingut (117 id., 212); Goebel v. Wolf (113 id., 412) as authority upon the construction of a will, where the provisions are ambiguous; that the whole will must be read together to ascertain the intention of the testator.

That rule is well-settled by a uniform line of decisions, but it is equally well settled that when the language of a provision of a will is unambiguous it must be construed according to its natural import.

In Ritch v. Hawxhurst (supra) Bradley, J., says: When the language of a provision of a will is plain and free from ambiguity, effect must be given to its import.” It is also insisted by the appellant that this $5,000 legacy is a general legacy, and, as such, it can have no preference over other general legacies given in the will. That contention would be sound- if interest were not given by the express terms of the will on this particular legacy under and in pursuance of the provisions above referred to.

But, as we have seen, after the legatee and her husband cease to occupy the Russell farm, the executor is required to • pay annual interest on this legacy, whether the Russell farm is sold or not, until a home is purchased.

It is also insisted by the appellant tfiat interest is not payable until the legacy itself is due, and as the legacy is not due until the farm is sold, or the money realized from some other source, the legacy is not, by the terms of the will, payable. "While this, as a general rule, may be true, yet the sjiecial provisions of this bequest takes it out of that class of cases and makes the interest payable before the legacy-falls due.

We have discussed this case thus far upon the theory that Ella" L. Baker was living and to be the recipient of this interest. Does the fact of her death, or the 'devolution of her interest upon her children, change the obligation of the executor in reference to the payment of this interest %

On the death of the testator the legacy vested in Ella, who survived him, although the payment of the legacy may have been postponed pending the sale of the Russell farm; Ella had, by the will, but a life estate,"and, on her death, the bequest, which was primarily’ to her, vested in the children.

There is nothing in the provision of the trust created in this will that postpones the payment of this interest. The trust is for the payment of the testator’s just debts and the legacies thereinbefore specified, with full power to sell and dispose of the estate at public or private sale, at such times and in such manner as to Mm shall seem meet. Then follows the provision for his purchase of the residue of any interest in my lands in that county’ in which he has an interest, with the consent of two-thirds of his children.

This provision does not seem to qualify or restrict the duty of the executor to pay this interest to the persons entitled to the interest of Ella on the happening of the event which, by the terms of the will, made it payable. It is true that the children of Ella are not mentioned in connection with her name in this provision relating to the payment of interest on this legacy, but as the whole interest bequeathed to her was, on her death, to be divided between them equally, there seems to be no reason why that clause did not, on her death, enure to their benefit. We are, therefore, of the opinion that the decree of the surrogate is right and should be affirmed.

Decree affirmed, with costs to the respondent payable out of the estate.

Learned, P. J., and Kellogg, L, concurred.

Decree affirmed, with costs.


author: Hayham, J.:

text:
    NATHAN KLEIN, Respondent, v. THE CONTINENTAL INSURANCE COMPANY, of New York, Appellant (and Seventeen Other Cases).

      Referee — not discharged where a new trial is granted upon the ground of newly discovered evidence — agreement of parties — when the court has power to discharge a referee.

    An action was brought against the defendant upon a policy of fire insurance. The plaintiff resisted a motion for a reference therein which the court ordered; the parties then agreed upon a referee. A number of other actions by the same plaintiff, against other insurance companies interested in the same loss, were at the same time referred to the same referee. A trial was had of the first action, and the plaintiff recovered judgment, from which an appeal was taken. While this appeal was pending the defendant in the action moved for a new trial upon the ground of newly discovered evidence, which motion was granted.
    The defendants in all the actions then moved for the discharge of the referee. Held, that he should not be discharged. _ .
    That as nothing appeared showing liim'to have been unfair or unfit to decide the case upon the trial of the first action, and as the new trial had been granted only upon the ground of newly discovered evidence, it was improper to remove him.
    That the court had power, under proper circumstances, to remove a referee agreed upon by the parties, where such agreement was reached only after the court had ordered a compulsory reference. That a referee so appointed was, in fact, appointed by the court, the parties merely suggesting a name which the court approved.
    Appeals by the defendant, the Continental Insurance Company, ■of New York, and by seventeen other insurance companies, defendants in similar actions brought against them by the plaintiff Nathan Klein, from an order, entered,, in this and in each of said actions, in the office of the clerk of the county of Rensselaer on the 25th day of September, 1891, denying motions in this and in each of said actions to change the referee and appoint a new referee.

      This action was brought upon a policy of insurance, issued by the defendant to the plaintiff, against loss and damage by fire.. Seventeen other actions were brought against that number of insurance companies, all of which had issued policies to the plaintiff.. The actions were all referred to the same referee to hear and determine, and this action was tried before such referee and resulted in a report in favor of the plaintiff, from the judgment entered upon which an appeal was taken, pending which a motion was. made at Special Term by the defendant for a new trial, on the-ground of newly discovered evidence, which was granted.
    The defendant in each of said actions then moved for the discharge of the referee heretofore appointed in these actions, which motions were denied, and the defendant in each of said actions appealed to this court.

      A. II. Sawyer, for the appellants.

      Levi Smith, for the respondent.
   Hayham, J.:

As is contended by the appellants on this motion, the practice of discharging the referee, when a judgment entered upon his report is reversed on appeal, is almost or quite universal. But the Code of Civil Procedure clothes a referee with all the powers of a judge of the court in the hearing and determination of cases referred to him, and a judgment in common law actions follows upon his report without any motion to the court, in the same manner as upon the decision of a judge; and as he is usually selected by the court, or upon stipulation of the parties with reference to his character, learning and fitness for the position, he should not be removed by the court pending the trial of a case in which he has been appointed, accepted and qualified, without good and substantial reason.

The affidavits and papers used on this motion show that these actions were all referred by order of the court on motion of the defendants against the objection and opposition of the plaintiff, but that after the Special Term had determined that they were referable actions, the parties agreed on the referee, and he was by consent named as referee in the orders of reference.

There is nothing in the affidavits used on this motion which shows that the referee has not in all respects conducted the trial had before him with judicial fairness and impartiality, or that he has been guilty of any' misconduct as referee; nor does the notice of motion make partiality, unfairness or misconduct of the referee grounds of the motion; but the principal ground set out in the notice of motion are that the referee, having tried one of these actions involving substantially the question that will arise in the other cases, has fixed and settled opinions of the law and facts which he has expressed in his former decision and report which he would entertain and enter upon the trial of the other seventeen cases with strong bias against the defendants.

The affidavits used on this motion, on both sides, show that the referee made-rulings on the trial adverse to the claims and contention of the respective sides, but they failed to show that they were unfair, partial or even erroneous. As the new trial, in this case, has been granted on the ground of newly discovered evidence, there is nothing in this case to show that the referee, if such evidence shall be submitted to him on another trial, will not fairly consider the same, in connection with any evidence which may be offered which has already been before him, and reach such a conclusion as the whole evidence will justify on any other trial. Upon the facts before us, we see no reason to doubt the fairness aud impartiality of the referee; and this brings us to the consideration of the propriety and legal right to remove a referee who-has heard and decided a case in which a new trial has been ordered, not on account of any error committed by the referee either in the trial or determination of the referee on a former trial, but solely on the ground of newly discovered evidence. The first case referred to, by the learned counsel for the appellant in his points, is that of Dorlon v. Lewis (9 How. Pr., 1). That was a motion to set aside the report of the referee for irregularity and improper conduct on the part of the referee, in allowing himself to be interviewed, after the case was submitted to him and he had reached a conclusion adverse to the plaintiff, privately, by the attorney and witness of the plaintiff, and after such interview changed his mind or report and decided in favor of the plaintiff. For such gross impartiality the report was set aside; and the court in discussing that case likens the decision of the referee, upon questions of fact. to the verdict of a jury, and very properly condemn any tampering with a jury or referee.

The same criticism could be passed upon a judge who would allow any proper communications between himself and a party or his attorney after a case was submitted to him and held by him for consideration ; such improper conduct would disqualify a juror or referee, and might furnish ground for the impeachment of a judge. But no such fact is established here. The next case cited by the appellant is Burrows v. Dickinson (35 Hun, 492). In that case the Special Term refused to set aside the report of a referee and the General Term reversed the decision of the Special Term and set aside the report. The case showed that during the progress of the trial before the referee he frequently importuned the defendant to aid him in procuring an appointment from the governor, and these importunities continued after the case was submitted; and there was reasonable cause to believe that the referee was prejudiced by the failure of the defendant to answer the last letter of the referee, which was written shortly before the report was made. That letter speaks of compensating the defendant for services, and was clearly such a communication as ought not to have been made between a referee and a party, and disclosed such relations as might well arouse suspicions in the mind of the court or of the parties.

Judge Daniels, in commenting upon it, says: “ This was the relation which the referee voluntarily placed himself in with the defendant. It was done with the expectation of securing substantial benefit, by means of his solicited exertion, and it was certainly very improper for the referee, having this action before him, to have placed himself in that situation.” Other communications upon the subject of the appointment of the referee to office appear from the record, and for this reason the court set aside the report. "We fail to see any analogy between the case and the one at bar. In Livermore v. Bainbridge (47 How., 354) the report of a referee was set aside for alleged misconduct, although the court exonerated the referee from any intentional wrong, on the ground that the referee might have been influenced in his report by the fact that he had suggested a settlement which had been disregarded by the plaintiff.

All these cases relate to the setting aside of reports of referees, and not to their removals, although a cause that would justify the setting aside a report for misconduct, bias or partiality of a referee would, doubtless, be good reason for not appointing him in a similar case between the same parties, and, perhaps, good grounds for removal.

But it is insisted, on the part of the respondent, that the court has no power to remove this referee; that he is not a referee appointed by the court, but agreed upon by the parties, and that the court, in the absence of fraud or- misconduct, has no power to set aside the agreement of the parties in this respect. The reference having been ordered by the 'court, the agreement of the parties upon the person is but a nomination by the parties, acquiesced in and appointed by the court, so that the referee was, in fact, appointed by the court, and could, in a proper case, be removed by it.

It is also insisted that this was not a proper case for a compulsory reference, but that question was passed upon adversely to the plaintiff’s contention on the motion for a reference, and from that determination no appeal was taken, and must, for the purposes of this motion, be deemed res adjudioata.

In Maicas v. Leony (113 N. Y., 619) the power of the court to set aside an order of reference arbitrarily is denied.

But we do not put this decision upon the question of power. We agree with the learned Special Term judge that a proper case is not made for the removal of the referee in this case.

The order should be affirmed, with ten dollars costs.

Learned, P. J., and Kellogg, J., concurred.

Order affirmed, with ten dollars costs and printing disbursements.


text:
    ELLEN CLARK, Respondent, v. THE SAUGERTIES SAVINGS BANK, Appellant.

      Savings bank depositor — payment to the wrong person — authority of such person.

    In an action by a depositor against a savings bank it appeared that one Ellen Clark had a deposit in the bank; that her husband went to the bank with her book and asked for the deposit; that the bank officer replied that it was the money of his wife. The husband then said that it belonged to him, and that his wife had sent him for the money. The officer gave him a check upon a national bank, payable to the wife’s order. The national bank refused to pay the check without the wife’s indorsement. The husband returned to the savings bank; he had a further conversation with its officer; and stated that he was authorized to do business for his wife. An indorsement was thereupon made as follows:
    “Ellen Clark, as authorized by William X Clark. Witness: Prank Russell.” Upon this indorsement the national bank paid the check to the husband.
    In the transaction both the husband and the savings bank acted upon the assumption that Ellen Clark was the owner of the funds on deposit.

      Held, that Ellen Clark was entitled to recover the deposit from the savings bank. That it was not error to exclude evidence offered to show that the deposit was the property of the husband.
    Appeal by tlie defendant, the Saugerties Savings Bank, from a judgment of the Supreme Court, entered in the office of the clerk of the county of Ulster on the 17th day of April, 1891, upon a verdict for the plaintiff for $591.25, after a trial at the Ulster Circuit before the court and a jury, with notice of an intention to bring up for review upon such appeal an order, entered in said clerk’s office on the 15th day of April, 1891, denying the defendant’s motion for a new trial.
    The action was brought to recover the amount of a savings bank deposit standing in the name of Ellen Clark.
    The answer contained, among others, the following allegations: The defendant alleges that the said money deposited by plaintiff with defendant was the money, or the greater part thereof was the money, of William Clark, the husband of the plaintiff, which had been deposited in said bank by said plaintiff in her own name and to her own credit. * * *
    That said officer of defendant believed said William to be the agent of the plaintiff for the purpose of drawing said $500, when he paid out said check, and entered said credit to the defendant on its books, and upon said pass-book produced by said William Clark; and defendant further alleges and insists that said payment is a full satisfaction and discharge of the sum of $500 of said deposit of $1,030, and is a bar to the plaintiffs alleged cause of action.

      Egbert Whittaker, for the appellant.

      Brmnier <& Weweomb, for the respondent.
   Putnam, J.:

The defendant claims that the judgment should be reversed because the court below erred in excluding evidence offered to show that the $500 for which plaintiff recovered was the property of her husband, William Clark.

The offer on the trial was not to show that William Clark had acquired an interest in said deposit for which the action was brought, subsequent to the delivery of the money to defendant, by assignment or otherwise; but that when deposited it was the property of William Clark, in whole or in part, as alleged in the answer.

It may be doubted whether a bank which has received money on deposit, and is sued for the money, can set up as a defense that the depositor was not the owner, ¡ at least, unless it proposes, also, to show that the person claimed to be the true owner has, in some legal way, asserted his claim to such money, or prosecuted the bank therefor; or taken some proceeding or action to enforce his claim to said deposit. (Lund v. Seamen’s Bank, 37 Barb., 129 ; First Nat. Bank v. Mason, 95 Pa. St., 113; Sinclair v. Murphy, 14 Mich., 392.)

In this case, under the answer and the facts appearing on the trial, it is difficult to perceive how the testimony offered by defindant could be competent or material. It does not appear that William Clark ever legally asserted any claim against the bank for the money on his own behalf. It is true he made a statement to the officers of the bank that he owned it. But he went there as the agent of his wife, carrying her bank-book, and claimed only to draw the money as her agent. The bank officers declined to pay him as-it belonged to his wife. The officer of the bank, Mr. Russell, testified in this regard, as follows, viz.: “ Q. What next ? What occurred on the 26th day of March, 1888 ? . A. On that day her husband, William Clark, brought the book to the bank and asked for $500 ; I told him I could not pay him that money; it belonged to his wife; it was deposited in her name, and he said that it was money lie had earned; it belonged to him; she had taken it to the bank and put it in her name, although it belonged to him. Then I told him it was necessary for him to get an order from her to draw the money; he said to me, ‘You know she can’t write an order;’ I asked him if she sent him for the money, and he said £Yes;’ they had bought a little place and wanted to pay for it in the morning. Q. Wanted to pay $500 in the morning? A. Yes, sir; I did not have the money, so I drew a check on the Saugerties National Bank for $500, payable to the order of Ellen Clark; the Savings Bank had deposits there; he went out with the check; afterward he came back and said they would not pay the check at that bank unless Mrs. Clark’s name was on it; I told him that it was payable to her order, and, of course, necessary for her to indorse it; lie asked why he could not do that; I asked him if he was authorized to do business for Mrs. Clark, and ought to indorse for her; he said he was, but that he could not write; so he requested that her name be written on the back; indorsed on the check by him; her name was written on the check, as authorized by William Clark, to which he made his mark before witness.”

The money was deposited in plaintiff’s name. William Clark took her book to the bank as her agent and received a check payable to her order. The defendant insisted that she was the owner and that he could only draw the money as her agent; to which Clark assented.

The defendant, therefore, not having paid the money to William Clark or acknowledged his title, but having paid it by delivering a check to the party it assumed was plaintiff’s agent, payable to her order- it cannot be competent or material to show that William Clark was the owner of the deposit in the bank. Both the defendant and William Clark in the transaction of giving the clieck, agreed and acted upon the assumption that plaintiff was the owner of the funds in question. The bank, the defendant, decided that plaintiff was the owner of the deposit and acted upon such decision.

This view of the case rendered the evidence so as aforesaid offered by the defendant, and excluded by the court, immaterial; and makes it unnecessary also to consider the claim of the learned counsel for the appellant that the ruling of the judge below was erroneous in excluding said evidence as based upon constitutional grounds.

The defendant also insists that there was no sufficient evidence of a want of care and diligence of defendant as required under by-law 24 of the bank to justify the submission of the case to the jury. Said by-law is as follows, viz.: Article 24. “ Although the bank will endeavor to prevent frauds and impositions, yet all payments to persons producing the pass-books issued by it shall be valid payments to discharge the bank.” .

It has been held by the Court of Appeals in Kummel v. Germania Savings Bernik, of Kings County (40 N. Y. State Rep., 252), in which case the by-law of the defendant contained a provision that “ the bank will not be responsible to any depositor for any fraud committed on the officers in producing the pass-book and drawing money without the knowledge or consent of the owner; ” that assuming that the by-laws printed in the book are binding upon the depositor and constitute a contract between the parties, the duty still devolves upon the officers to exercise care and diligence in order that their depositors may be protected from fraud and larceny. That case also holds that such clause in the contract between the parties does not permit the officers to carelessly close their eyes and pay any person presenting the pass-book, but, on the contrary, they owe the depositors active diligence in order to detect, fraud and forgery.

We think that, on the evidence given in the case, the question of defendant’s negligence in delivering the check to William Clark, on which he obtained $500, was properly submitted to the jury, and that the verdict in favor of plaintiff is supported by the evidence. On the evidence given the case could not have been taken from the jury upon this question of negligence. The plaintiff was called as a witness and testified as follows, viz.:

“ On the 13th of February, 1888, 1 deposited in the Saugerties Savings Bank $1,030; I gave the money to Mr. Jeremiah P. Russell, the secretary and treasurer of the bank; I told him not to give that money to any one but me; he did not make me no answer ; I says, ‘Mr. Russell, give this money’to no one but me;’ he said all right; my husband drawed out $500 on March 26th, 1888; I.did not consent to any person drawing any portion of this money; of the $1,080 I myself drew out $515, and one $15 before that, malting $530; the other $500 I never had.”

The deposit, was headed “ Saugerties Savings Bank in account with Ellen Clark, Special.” The jury who saw and heard the plaintiff as a witness might have believed her statement, and not the testimony of the officer of the bank, who contradicted her. Assuming that the jury believed plaintiff’s statement, there was an express direction, assented to by the defendant, not to give the money in question to any one but the plaintiff. And yet, notwithstanding this agreement, defendant gave a check to William Clark, on which he received the money. There was evidence in the case justifying the jury in believing that William Clark had never before drawn money of plaintiff’s, and never had any authority whatever to act as her agent.

On such evidence the question of defendant’s negligence in delivering the check to William Clark was properly submitted to the jury. (Kummel v. The Germania Savings Bank, 40 N. Y. St. Rep., 252; Allen v. Williamsburgh, Savings Bank, 69 N. Y., 314; Boone v. Citizens' Savings Bank of N. Y., 84 id., 88 ; Appleby v. Erie Co. Savings Bank, 62 id., 12; Smith v. Brooklyn Savings Bank, 101 id., 58.)

In the Kummel and Allen cases, above cited, there were rules of the respective banks similar to the article on which defendant relies in this case. But the courts hold, as above' stated, that the defendants owed the duty to the depositors of active diligence.

In a case like the present, where the deposit was marked “ special,” where the plaintiff testifies that notice was given to the bank to pay no one but herself, which direction was assented to by the officers of the bank.— where it does not appear that William Clark had ever drawn money before, and the evidence leads to the conclusion that he was not, in fact, authorized to draw any, a court or jury could properly reach the conclusion that defendant had not exercised the care it should to protect the depositor’s interests. The giving by the defendant to William Clark of the check on another bank, payable to the order of plaintiff, and the indorsing of said check in defendant’s bank with the aid of an officer of defendant, is the same as if the bank had paid the $500 in money to Clark in defiance of the notice that plaintiff had given the bank when making the deposit.

The judge submitted the matter to the jury by a fair and impartial charge. ITis remark as to the plaintiff’s being “ a poor old lady ” can hardly be deemed an error on which a valid exception can be taken; and if so, the error was cured by the statement made by the judge when his attention was called to such remark. The plaintiff having made the deposit with the defendant and duly demanded payment thereof, the defendant having declined to,pay the same, and the jury having found the facts in favor of the plaintiff, she was entitled to recover. It was no defense to the action that the bank had given the check to "William Clark, payable to plaintiffs order, unless it appeared that "William Clark was authorized to obtain and receive the said check. The evidence in the case was such that the jury could find that William Clark had no authority whatever to act for plaintiff, and was not, in fact,'authorized to do so. Hence the obtaining and receiving the check by William Clark is no defense in the action. Plaintiff deposits $500 with defendant and demands it. Defendant cannot successfully defend because it gave a check payable to plaintiff’s order to a person who was not authorized to receive it, and which check never comes to plaintiff’s hands.

On the whole, we think the case was properly disposed of in the court below, and that the judgment should be affirmed, with costs.

Learned, P. J.:

In concurring with the foregoing opinion of my Brother Putnam, I wish to add a few words:

I do not feel confident that when William Clark presented plaintiff’s book to the bank, defendant, and the defendant gave a check payable to plaintiff's order, there was any negligence. The check could not be drawn without plaintiff’s indorsement. The defendant did not make the check payable to William Clark, but to plaintiff. The defendant authorized and requested the Saugerties National Bank to pay the money to the plaintiff. Thus defendant protected the plaintiff against a payment to any other person. And I should be inclined to hold that when a bank-book, with such a by-law therein, was presented by a person other than the depositor, the bank had endeavored to prevent fraud and imposition when it gave a check on a bank of deposit, payable to the depositor’s order.

If a check given under such circumstances were shown to be outstanding and not accounted for, I am not willing to say that the savings bank would be liable for the amount. For the depositor might have indorsed the check and it might be remaining in the hands of some third party. In which case the savings bank would be liable thereon as drawer if the bank of deposit should refuse to pay. And the payment by the bank of deposit would be a charge against the account of the savings bank therein.

But in the present case the check is shown to have reached the bank on which it was drawn, to have been presented and not to have been refused or protested. Hence no liability of defendant thereon can arise.

The Saugerties National Bank paid the check without the indorsement of the payee. Hence such payment did not authorize that bank to charge the amount paid against the defendant. And the defendant has lost nothing.

The check was indorsed as follows : Ellen Clark as authorized by "William X Clark. Witness : Frank Russell.”

Russell, then, was simply a witness to the fact that William Clark had affixed his mark to the indorsement. He was not a witness to any authority possessed by William Clark. One who witnesses an instrument executed by an agent does not, in any way, by such witnessing, assert or guaranty that the agent is authorized by the principal. He only asserts that the agent signed the instrument. Frank Russell, who witnessed the signature, does not appear to have been an officer of the defendant. But, even if he were, the act of witnessing signatures could hardly be within the scope of his duty. So that his act would not bind the defendant. And I have already stated that it bound the witness to nothing but the genuineness of William Clark’s mark. The Saugerties National Bank was not misled. It saw that a check to the plaintiff’s order had an indorsement purporting to be made by William Clark as her agent. It was for that bank to determine, at its own peril, whether he was such agent. It failed to do this.

The defendant, therefore, has not paid the sum in "question to plaintiff or to any one. The money still remains, so far as appears in this action, to the credit of defendant in the Saugerties National Bank.

The plaintiff is entitled to recover. For, as the case appears, the National Bank had no right to charge against defendant’s account the money paid on this check. .

Mayham, J., not acting.

Judgment and order affirmed, with costs.


author: Kellogg, J.:

text:
    EMMA JONES, Respondent, v. THE CITY OF ALBANY, Appellant.

      Municipal corporations — action for the negligence of a city — construction of a charter — what is a “ reasonable time ” within which a law depa/rtment must act.

    The charter of the city of Albany provides that all claims against the city for injuries sustained by reason of defects in highways shall be presented to the common council m writing within three months after the injury is received; that the failure to make such presentation shall be a bar to an action against the city; that the law department of the city shall consider the claim and report on it within three months from the date of the reference of such claim, and that such a claim may be paid or settled by the consent of the mayor and board of finance.
    There was a further provision that no action -should be brought upon the claim until it had been 'presented and a reasonable time should have elapsed within which it might have been passed upon by the common council or chamberlain.
    Such a claim was presented to the common council on January twenty-fourth; was referred to the law department on February third, and before any report had been made upon it by the latter was put in suit March eighteenth.

      Held, that the action was prematurely brought.
    That, in the absence of any proof that the law department had been negligentun delaying action upon the claim, the “ reasonable ” time given it by the statute for investigation must be taken to mean three months from the time the claim was referred.
    Appeal by the 'defendant, the City of Albany, from a judgment, entered in the office of the clerk of the county of Albany on the 12th day of May, 1891, upon the verdict of a jury in favor of the plaintiff for $3,500, after a trial at the Albany Circuit before the court and a jmy> with notice of an intention to bring up for review upon such appeal an order, dated the Yth day of May, 1891, and entered in said clerk’s office, denying a motion for a new trial; also an order -denying tlie motion of defendant to dismiss plaintiff’s complaint and an order denying the motion of defendant for a nonsuit.

      D. Oady Herrioh, for the appellant.

      Hugh Reilly, for the respondent.
   Kellogg, J.:

The plaintiff brings her action for damages for personal injuries sustained through the negligence of defendant. The negligence alleged is the failure to repair a defective sidewalk within the city limits. The questions of negligence and damages were submitted to the jury and a verdict was rendered in favor of plaintiff for $3,500.

At the opening of plaintiff’s case the defendant moved to dismiss the complaint generally upon the ground that the complaint did not state facts sufficient to constitute a cause of action; and, specifically, upon the grounds that it did not allege a compliance with certain provisions of the city charter touching the presentation of plaintiff’s claim to the common council, and lapse of statutory or reasonable time for its consideration before action brought; also a failure to allege notice to or knowledge in defendant of the defect in the .sidewalk. The motion to dismiss was denied.

Defendant moved for a nonsuit at the close of plaintiff’s case, .'again bringing up the questions as to compliance with the provisions of the city charter stated.

At the close of the case the defendant renewed the motion for nonsuit on the same grounds, and the motion was again denied.

The questions involved in this appeal are the questions raised by these motions. The charter of the city of Albany (chap. 298, Laws of 1883, tit. 3, § 45) provides :

“All claims against the city for damages for injuries to the person, claimed to havp been caused or sustained by defects, want of repair, or obstructions from snow or ice, or other cause in the highways, streets, sidewalks or cross-walks of the city, because of the negligence of the city as to the highways, streets, sidewalks or cross-walks of the city, shall be presented to the common council in writing within three months after said injury is received. Such writing shall describe the time, place, cause and extent of the injury, so far as then practicable, verified by the oath of the claimant. The omission to present said claim, as aforesaid, witliin three months shall be a bar to any claim or action therefor against the city; and the law department shall consider said claim and report thereon to the common counci] within 'three months from the date of the reference of such claim, but no such claim shall be settled or paid, except as prescribed in section 10 of title 5 of this act.”

Section-10 of title 5, above referred to, in substance, provides that the corporation counsel may, with the approval of the “ mayor and hoard of finance,” compromise and settle claims against the city.

Another section provides: “No action or suit shall be brought or maintained until the claim shall have been presented and a reasonable time shall have elapsed within which such claim might have been passed upon by the common council or chamberlain as herein provided for.” (Id., tit. 3, § 51.)

"We are of opinion that the restrictive clause is applicable to claims for personal injuries as well as to other claims presented against the city. If it were not so, there seems to be ndthing to prevent suit on such claims immediately upon the happening of the injury and before any claim is presented to the common council. The provision that such claim shall be presented with due particularity as to “ time, place, cause and extent of injury,” within three months, or action thereon shall be barred, might be complied with as well after suit brought as before. Indeed, the service of a verified complaint containing the particulars required upon the common council might well be determined to be a substantial compliance with this provision. To give any utility or beneficial effect to these provisions of the charter a construction must be given to bear out the plain purpose of the enactment.

We are of opinion that these provisions clearly contemplate an opportunity on the part of the city to investigate the merits of the claim for personal injuries before any action can be brought and opportunity to negotiate a compromise or settlement to save cost and expenses to the taxpayers. That the first step must be taken by the claimant, and within three months of the date of the injury received the claimant must present to the common council, in writing, a verified statement setting forth the time, place, cause and extent of the injury. The commoil council must then refer such claim for investigation to the law department-, and the law department must within three months thereafter investigate and report back to the common council for further action the results of their inquiry. The common council is held in suspense, so far as relates to the claim, until such report is made; and the right to bring action in the courts is also held in abeyance until such report can with reasonable diligence be made, but not beyond the three months given by statute to the law department for investigation. Any other construction, it seems to us, would defeat the manifest object of the provisions, viz., opportunity to investigate and opportunity to compromise or settle.

It seems to us it can rarely, if ever, be determined, as a matter of law, and certainly not upon the evidence in this case, that the full three months given to the law department by the statute was more time than was needed and was not “ a reasonable time.” Unless there is some allegation in the complaint of lack of diligence on the part of the law department and some proof to sustain such allegation, the legal inference, must remain that this department has discharged its full duty if it reports within the time limited by statute.

The claim of the plaintiff was presented by plaintiff to the common council on January twenty-fourth; it was referred to the law department on February third. The action was commenced March eighteenth, and before any report had been made by the law department. And the learned justice, at the trial, held, as a matter of law, that this afforded reasonable time ” for investigation as contemplated by the provisions of the charter referred .to. In this we think the court erred. If it were permissible- — -which we seriously doubt — to make proof that the law department, which is given three months by statute in which to investigate, was not diligent and might have made an earlier report upon a claim for so large a sum, still there was, in fact, no proof offered showing or tending to show lack of diligence in the law department or affording any ground for curtailing the statutory time of three months to less than two months.

For the reason stated we are of opinion that the motions for non-suit should have been granted. The conditions to which we have alluded, to wit, the presentation of the claim to the common council, and the opportunity for three months to investigate the merits of the claim and" to compromise or settle, are precedent conditions to any standing in court; and the performance of these should be in the complaint alleged, excused or failure charged to defendant’s neldeet; and it becomes a part of plaintiff’s duty to establish by proof .such allegations. Nothing of this appears either in the plaintiff’s complaint in this action or in the evidence on the trial; hence the request of plaintiff on this appeal to so amend the complaint to conform to the proof would, if granted, avail her nothing.

The judgment must be reversed, new trial granted, costs to abide event.

Learned, P. J., and Mayham, JJ., concurred.

Judgment reversed, new trial granted; costs to abide event.