author: By the Cottet.—Fbeedman, J.

text:
    ALVIN J. JOHNSON, et al., Appellants, v. ROBERT N. DONNELL, et al., Respondents.

      Agency.—Special indorsement upon draft—■when constructive notice that payment to agent must be made by check.

    P., an employé of plaintiffs, whose duty it was to indorse drafts received by plaintiffs, and present the same for payment or acceptance, through a messenger bound to obey his instructions, his (P.’s) authority to receive payments not being limited to payments by check to plaintiffs’ order, sent to defendants for payment or acceptance certain sight drafts, with instructions to the messenger to take money if he could get it,—Held, that a payment in currency to such messenger was a good payment, notwithstanding a special indorsement placed by P. upon the back of the drafts, as follows: “ for deposit in National Broadway Bank,” &c., intended to secure the deposit thereof in a certain bank, in case they should be accepted merely, and not paid; and, therefore, that defendants cannot be held for a conversion of the drafts because P. failed to pay the money to his principal.
    Before Speib and Fbeedman, JJ.

      Decided February 7, 1881.
    Appeal by plaintiffs from a judgment in favor of the defendants, entered upon the report of a referee.
    The facts appear in the opinion of the referee, as follows :
    “ J. S. Boswobth, Referee. This action is brought to recover of the defendants for the conversion by them of six several drafts, amounting to the principal sum ef $1,366.29, being the property of the plaintiffs at the time of the alleged conversion.
    “ Each of these drafts was drawn by persons residing out of this State, and was drawn on the defendants, who were private bankers in the city, and was drawn to the order of the plaintiffs by the -description of A. J. Johnson & Son ; except that one of them was drawn to the order of A. J. Johnson, and except, also, that some of them were drawn payable to the order of a third person, and were by such third person indorsed, making the same payable to the order of the plaintiffs.
    “These drafts were mailed at the place where they were drawn, by the persons procuring them, and were mailed to the plaintiffs as payments of like amounts owing to the plaintiffs by the person who so procured and mailed them. They were received by the plaintiffs by due course of mail, and, when thus received, became their property. At the time these drafts were re - ceived by the plaintiffs they had a bookkeeper and confidential clerk by the name of J. D. Payne.
    “It was a part of Payne’s regular duties to open all letters directed to and received by the plaintiffs at their place of business, and take out any drafts contained in them, and indorse them. Each of these drafts, upon so being received by the plaintiffs, was indorsed by Payne in this form, viz.: ‘ For deposit in the National Broadway Bank for acc. of A. J. Johnson & Son. A. J. Johnson, per J. D. Payne.’
    “The firm, as such, kept no bank account, but the bank account on which the funds of the firm were deposited was kept in the name of J. A. Johnson.
    “The plaintiff had another clerk at this time by the name of Herman Heilbut; when he was employed by the firm Mr. A. J. Johnson told him that he had to obey Payne. Mr. Johnson said, “ John (Payne) is the head man, obey all his orders.” It was a part of Heiltmt’s regular duty to take the pass-book to the bank and deposit what was at the time to be deposited, and to take out drafts received by the firm, which were drawn on private bankers, and obtain the acceptance by the latter, or payment thereof. ■ Payne, after he had indorsed these drafts in the form before stated, handed them to Heilbut, with instructions to take them to defendants and get them certified, or if, instead of certifying them, they paid the amount in money, to bring the money to him. Each of these drafts was paid by the defendants to Heilbut under these circumstances, and he paid over to Payne the money he received, and Payne withheld it from the plaintiffs. This was probably done, in each case, on a Saturday, on which day Mr. A. J. Johnson was not at his store. Mr. A. J. Johnson knew that Heilbut was intrusted with drafts, to be presented to the drawees for accepts nee or payment, for in speaking of Payne and Heilbut he testifies thus:
    “ ‘Q. Payne had the general management of the labor and drudgery of making up the bank deposits ?
    “ ‘A. Yes, sir; he opened all my letters and took out the drafts and indorsed them, and then this boy was sent down ; the same as I do now.’
    “ Whatever may be the legal import of an indorsement in the form in which these drafts were indorsed, or whatever of restriction it may impose upon their negotiability from hand to hand, it is quite clear that it was not designed or intended to be a notice to the drawees not to pay the drafts either to Payne or to any other employee of the plaintiffs whom they might instruct to present them.
    “Mr. A. J. Johnson, in his testimony, testifies thus:
    “ ‘ Q. You may tell me what Mr. Payne’s general instructions were in regard to drafts received by your firm?
    i “‘A. The instructions were that these drafts were to be deposited in the Broadway Bank. If they were drawn upon a broker, not upon a bank, the drafts were to be taken to the broker for a draft on a National Bank, or for certification.
    “ ‘ Q. When you say if the drafts were on brokers, you. mean private bankers or brokers %

    “ ‘A. I mean anything but National Banks ; some we get on dry-goods men.’
    “ This shows that it was no part of the purpose of this form of indorsement to make it necessary that the drafts should be deposited in the Broadway National Bank. If Heilbut had received the check of Donnell, Lawson & Co. for the amount of the draft, and had then left the draft with them, there would have been, no departure from Payne’s delegated authority, as Mr. Johnson understood it.
    “The testimony of Turner, the defendants’ cashier, imports that they at times paid cash when it was more convenient at the time to do so than to draw a check. Turner testified thus : ‘ I remember that on one or two occasions, late in the day, when I was very busy and about preparing to make up my cash, drafts were presented from Johnson’s, and to save time of drawing a check I paid cash for them.’ He paid them to a boy that he recognized as coming from Johnson’s. He does not remember that he paid him money prior to these one or two occasions.
    “ ‘ Q. Do you say that you had seen him at your window with drafts for Mr. Johnson, seeking payment of them ? A. 1 am confident that I did.’
    “Under these circumstances it is a very significant fact that Heilbut, who had been instructed by Mr.Johnson to obey the orders of Payne, went to the defendants with these drafts or some of them, instructed by Payne that if the defendants offered payments in cash, instead of certifying the draft, to take the money and bring it to him. It is unavailing to urge that the plaintiffs did not thereby intend to enlarge any authority previously conferred on Payne ; the fact remains that Heilbut’s receipt of the money for the drafts was in strict conformity to the plaintiffs’ instructions to him. He obeyed Payne’s orders in receiving it, and was under instructions to obey Payne’s orders.
    “It will also be borne in mind that when a draft thus indorsed was sent to the drawees, it was sent with the expectation or understanding that it might be paid and retained by the drawees, instead of being certified by them, and returned thus certified to the plaintiffs’ messenger. The messenger was, therefore, authorized to receive payment. He was not instructed, nor was Payne instructed, to see to it that payments, if made,should be made by checks, not in currency.
    “The form of the indorsement was used only for the purpose of securing the deposit of the draft in the Broadway Bank, if it should be merely accepted, instead of being paid on presentation. The course of business between the plaintiffs and the defendants was notice from the plaintiffs to the defendants that they need not regard the special indorsement either as an objection to or as an excuse for not actually paying the draft on presentation. On all the evidence I think it a just conclusion as between the plaintiffs and the defendants, that the defendants paid these drafts to an agent of the plaintiffs authorized to receive payment thereof, and that, therefore, they paid them to the plaintiffs.
    “I agree with plaintiffs’ counsel that an action of trover and conversion would lie if it had appeared the defendants came to the possession of the drafts wrongfully, and paid them to a person having no actual or apparent .authority to receive payment. The drafts have, in effect, been paid by the drawers thereof to the defendants- in the settlement of accounts had between them since the drafts came to the defendants’ possession. These facts would amount to a wrongful possession, if the drafts, while in the defendants’ possession, continued to be the property of the plaintiffs.
    “A cause of action would be complete upon the conversion being made, and it would not be necessary to demand a return.of the drafts before suit brought (People ex rel. v. Bank of North America, 75 N. Y. 547-564).”

      Payson Merrill, for appellants.
    Arthur, Phelps, Knevals & Ransom, attorneys, and Rasius 8. Ransom, of counsel, for respondents.
   By the Cottet.—Fbeedman, J.

The testimony clearly shows that it was part of the regular duties of Payne, as an employee of the plaintiffs, to open all letters directed 'to and received by the plaintiffs at their place of business, to take out any drafts contained in them and indorse them, and to present said drafts through a messenger bound to obey his instructions to the drawees for acceptance or- payment. Iiis authority to receive payment was not limited to payments made by checks drawn to the order of the plaintiffs.

When, therefore, the defendants paid to the messenger, who had been sent by Payne to present the drafts in suit which were payable at sight, for acceptance or payment, and who had been expressly instructed to take the money, if he could get it, the amount of the said drafts in currency, it was a good payment, notwithstanding the special indorsement placed by Payne upon the back of the drafts, which was intended to secure the deposit of the drafts in a particular bank for collection in case the defendants should only accept and not pay. This being so, the defendants cannot be held for a conyersion of the drafts, because Payne failed to hand the money over to his principals.

The judgment should be affirmed, with costs.

Speib, J., concurred.


source: Caselaw Access Project

author: By the Court.—Freedman, J.

license: Public Domain

text:
    MARSHALL ROBBINS, Respondent, v. LOUIS S. ROBBINS, Appellant.

      Statute of uses and trust.—Statute of frauds.—Equitable assignment of, or trust in bond and mortgage—when established by acts and unwritten declarations of obligee.

    Where the deed of certain premises is, at the request of A., who pays the consideration therefor, delivered to B. as the grantee therein named, and B., in pursuance of a previous understanding with A., and at his request, and without consideration, conveys such' premises to C. (the son of A.), who pays no consideration therefor, and who at the time agrees verbally to hold the title to the said premises for the use, benefit and convenience, and subject to the order of A.,— under the statute relating to uses and trusts, no trust results to A.; and mere acts and oral declarations of C. áre insufficient to establish the existence of such a trust. If 0. thereafter, and upon the request and direction of A., conveys the premises, and takes as part consideration therefor, the grantee’s bond running to himself (C.), secured by mortgage upon the premises, such bond and mortgage are the property of 0.
    What acts and declarations of 0. in such case, in regard to the real estate and the bond and mortgage, will establish a trust in said bond and mortgage, in favor of A., or an equitable assignment thereof to A., considered by the court.
    The act in relation to uses and trusts, and its nature and purpose, considered by the court.
    Before Speib and Fbeedman, JJ.

      Decided February 1, 1881.

      Appeal from judgment, for plaintiff, entered npon decision at special term.
    The action was to obtain possession of a bond and mortgage, drawn payable to plaintiff, and to restrain defendant from parting therewith, &c. Title thereto was claimed by both plaintiff and defendant.
    The facts in the case, as found by the court below, on defendant’s requests, are substantially as follows:
    In September, 1869, Benjamin Loder sold certain lands and premises, situated at Bye, Westchester county. Defendant paid the consideration therefor, and the deed thereof was executed and delivered to A. Goodrich Fay, a counselor at law employed by the defendant in and about the purchase of said property.
    Said Fay accepted the conveyance of said property at the request and for the convenience of the defendant, and upon an oral understanding that he (said Fay) would hold the premises subject to the order and convenience of the defendant.
    In December, 1871, said Fay conveyed said premises to the plaintiff. There was no pecuniary or valuable consideration for such last-mentioned conveyance, but it was made only in consideration of the request of the defendant, and in execution of the trust and confidence (not expressed in any writing) reposed in said Fay and the plaintiff by the defendant.
    At the time of said conveyance by Fay to the plaintiff, plaintiff expressly agreed, verbally, to hold the title to the said lands for the use, benefit and convenience, and subject to the order of the defendant. Plaintiff was a son of the defendant, who then had, and now has, two other sons, and a wife.
    In October, 1872, plaintiff executed and delivered to one Ferris and one Shillito a conveyance of the said premises ; the consideration expressed in the deed was $100,000; and such conveyance was made by plaintiff at the request of the defendant, and for his benefit and convenience.
    A part of the consideration expressed in such last-mentioned deed was furnished by said Ferris and Shillito, by giving their two certain bonds, one for $15,000 and one for $45,000, each secured by a mortgage upon the said premises.
    The custody of said bond and mortgage for $45,000 (for the recovery of which this action was brought), was, a few days after execution and delivery to plaintiff, with the knowledge and consent of the plaintiff, given to the defendant, and they have ever since ermained in his custody.
    Thereafter defendant acted in procuring a sale of the $15,000 bond and mortgage, and plaintiff executed an assignment thereof, to enable defendant to raise money thereon, defendant at the time of the-transaction stating, in plaintiff’s presence, that he (defendant) had bought the property, and stating the reason why he had it in plaintiff’s name.
    Defendant was in actual possession of said premises, except when tenants were in actual possession, and defendant at all times received the proceeds and rent of the land, and always solely, and without direction from plaintiff, managed the property.
    On or about the year 1875 or 1876, and before the-commencement of this action, the plaintiff stated to-one Pultz that the said Shillito was indebted largely to-his father, the defendant; and said Pultz inquired in what way and how the indebtedness arose, and the plaintiff said that it was on a bond of said Shillito and Mr. Ferris. And on that occasion the plaintiff spoke to said Pnltz cf the property in Westchester, covered by said mortgage of said Shillito and Ferris, as belonging to the defendant, and that the title thereto was in the plaintiff’s name, and had been in his name, and. that the said property had been sold; and that Mr. Shillito had bought it from the defendant subject to quite a large amount of indebtedness secured by a mortgage upon the property, and had given back their bond for the balance of the consideration.
    The court, at plaintiff’s request, among other things, found: ' “That the plaintiff has never voluntarily parted with the possession of the said bond and mortgage, or his interest therein, nor any part thereof.”
    And as conclusions of law: “That the plaintiff is, and always has been, the sole owner of the said bond and mortgage, and that he is entitled to the immediate possession thereof from the defendant, and that plaintiff is entitled to judgment that the defendant deliver the said bond and mortgage to the plaintiff, or his attorneys herein.”
    “That the defendant, his agents and attorneys, be enjoined from parting with said bond and mortgage, or either of them, except as aforesaid, or from settling with said Frederick J. Ferris and John Shillito, Jr., or either of them thereon; or from commencing any action or proceedings thereupon ; or selling, pledging, or otherwise using or disposing of the said bond and mortgage, or either of them, against the rights of the plaintiff.”
    The following opinion was delivered at special term:
    “ Sedgwick, Ch. J.—On the facts testified to by the defendant, the plaintiff was the absolute owner in fee of the land at Rye, and the defendant had no beneficial interest in it. Whatever the obligations between the defendant and Fay were before the conveyance to the plaintiff, the conveyance by Fay to plaintiff was made by defendant’s direction, and according to his intention. If defendant paid no consideration for the deed by Fay, no trust or use resulted in favor of Fay or defendant. • Ordinary deeds in modern use, like the one in question, avoid the effect of raising a resulting use in favor of the grantor, first by inserting therein an acknowledgment of a consideration received by the grantor, and secondly, by declaring thereby the uses of the estate granted in favor of the grantee (2 WasTib. It. P. 104; Rathbun v. Rathbun, 6 Barb. 107; Van der Yolgen v. Yates, 9 JV. 7. 219).
    “Or if it be supposed that the defendant has the position of one paying a consideration, the statute is. conclusive that no trust or use results therefrom. The verbal statements by plaintiff as to defendant’s interest in the land, of course did not create or prove the existence of a trust, or lessen plaintiff’s rights as owner in fee. I do not understand that counsel for defendant disputes these propositions in their application to the real estate ; I understand his claim to be that the evidence as to the actual relation of defendant to the real estate, and the actual intention of defendant in placing the title in Fay, and then in the plaintiff, and plaintiff’s acquiescence in that relation, and his verbal promise to observe that intention, the plaintiff’s declarations as to defendant’s interest in the land, and his-other acts, are competent for the purpose of determining whether or not the delivery of the bond in question to the defendant was a delivery by or on behalf of the plaintiff with an intention on his part of transferring his property in it to the defendant.
    “ Assuming the validity of this claim, the evidence referred to must be considered with the other facts of the case, and from them all it must result that there was in fact a delivery by the plaintiff, with intent to transfer the title to the bond. The position necessarily assumes that before the assignment to the defendant, the plaintiff was owner of the bond. The circumstances antecedent to the execution of the bond disclose no obligation on the part of the plaintiff to assign the bond, and there could be no trust that affected the title. The defendant’s testimony should be credited that when he informed the plaintiff that he would put the title in the plaintiff’s name, for his convenience, the plaintiff assented, virtually promising to hold it for the defendant’s convenience. But if this is supposed to be a promise that plaintiff would assign the proceeds of the sale of the land, it would be void by the Statute of Frauds. No doubt there was strong circumstantial and direct evidence that the plaintiff intended to give to his father the entire management and benefit of the land, and of its proceeds, and I think there can be little doubt that he remained of that mind long after the bond had been executed and placed in defendant’s possession. In such a case very slight evidence would be enough to prove a kind of delivery that must be made to transfer the title or property. .
    “But the testimony strongly repels the notion of such a delivery. It shows that the intention of both parties was that the title and the rights of the plaintiff to the bond should remain perfect, and the defendant should have no title to or right in the bond until some time in the future, and it was expected and intended that in that future time a competent transfer of the bond should be made either to the defendant or for his benefit. When the custody of the bond was transferred from Mr. Cushing to Mr. Shillito, and then to the defendant, with the knowledge of the plaintiff, the property was not and was not intended to be changed. The general reason that it was not, is that there is no fact in the case that gave rise to the adoption of an unusual and, in a sense, a doubtful mode of transferring property, at the time when there was no reason, if it was meant to transfer the property, that it should not have been done by the usual and explicit method •of written assignment, and, indeed, when there was no other reason for not making the bond payable to the defendant in the first place, than that it was the intention of the parties that the property in the bond should remain in the plaintiff for an indefinite period.

      “The postscript of plaintiff’s letter, in which he writes of defendant getting money on the bond, is consistent with the title in the bond being in either the plaintiff or defendant.
    “I am of opinion, therefore, that title to the bond having been in the first place in the plaintiff, the evidence does not show that he has parted with the title.”

      Walter Edwards, Jr., for appellant, urged:
    I. The conveyance by Fay to Marshall Robbins was not within the provisions of the statute. The statute reads : “ Where a grant for a valuable consideration shall be made to one person and the consideration therefor shall be paid by another, no use or trust shall result in favor of the person by whom such payment shall be made, &c., &c.” (1 Edm. Stat. 677, § 51). The conveyance to Marshall Robbins was not for a valuable consideration. The consideration was “ the request of Louis S. Robbins, and in execution of the. trust and confidence reposed in said Fay and Marshall Robbins.” All the conditions expressed in tile statute must concur in order to prevent a resulting trust. This grant not being “for a valuable consideration,” it fails to fall within the direct verbal provisions of the statute.
    II. This case would be excluded from the operation of the statute by the established rules of construction. (a) The statute prohibiting a trust which would other- • wise result or be implied, is in derogation of the common law and must be construed strictly. “If their terms” (the terms of such statutes) “admit of two interpretations, that which will most nearly conform to rules of the common law is in all cases to be adopted” (22 Wend. 395, and cases cited; 5 Add. Dig. [new ed.] 601, &c. ; Rathburn v. Acker, 18 Bard. 393). (5) This statute imposes substantially a penalty upon the person paying the consideration, by depriving him of the trust which resulted at common law (29 N. Y. 611). “In statutes giving a penalty, if there be reasonable doubt of the case, made upon the trial or in the pleadings, coming within the statute, the party of whom the penalty is claimed i's to have the benefit of such doubt ” (Chase v. N. Y. Central R. R. Co., 26 N. Y. 523, 525). (c) To apply the statute in the present case would enable the plaintiff to appropriate to his own use and benefit the property which he procured to be conveyed to him by an express verbal agreement to hold the same ‘ ‘ for the use, benefit, and convenience, and subject to the order, of the defendant.” This would be manifestly unjust. A construction contrary to natural justice and equity . . . is to be rejected unless the language of the lawgiver is so plain as not to admit of a different construction (Donaldson v. Wood, 22 Wend. 395, 397). A fraudulent use of a statute for the prevention of frauds will not be permitted, and a court of equity will interfere against a party intending to make such a statute an instrument of fraud (Ryan v. Dox, 34 N. Y. 307, cited with approval, 45 N. Y. 596; also-see Carr v. Carr, 52 N. Y. 251, 260). Our courts have construed this very statute more than once with a special view to prevent the perpetration of a fraud and to promote justice and fair dealing (Siemon v. Schurck, 29 N. Y. 598). In which case it was held “ that the statute is not necessarily prohibitory of a resulting trust for the benefit of a third person” (Id. 611; see also Foote v. Bryant, 47 N. Y. 544). A statute similar in all respects to the one under consideration, except that the word ‘! valuable” is omitted, exists in Kentucky, and has been construed by the court of appeals of that State in Martin v. Martin, (5 W. P. D. Bush, 47); in which case the court says: “In case one party shall receive a deed at the instance, of another who has paid the consideration, although the policy of the statute forbids a resulting trust- in the land, its object was not to enable one party to rob another of his substance by undertaking a trust that the law would not enforce, and at the same time refuse both to execute the trust or return the money. It neither conflicts with the policy of the statute nor its integrity of purpose, to require a party thus receiving a title to" refund to the party paying for the land, the money thus laid ont and expended by his consent.” (d) In this case a trust is implied or results from the conveyance to plaintiff upon the trust and confidence reposed in him by defendant, which plaintiff accepted by his verbal promise (Willard,’s Eq. [Potter’s ed.] 599; Hill on Trustees, 144; Ryan v. Dox, 34 N. Y. 307 ; Foote v. Foote, 58 Barb. 258; Foote v. Bryant, 47 Id. 544; Carr v. Carr, 52 Id. 251-260). In such a case equity makes the one accepting the confidence a trustee. The statute of fraud, has no relevancy to the case (Section 50 ; Foot v. Foote, 58 Barb. 258, 262 ; Willard’s Eq,. 599 ; Hill on Trustees, 144 ; Foote v. Bryant, supra). All the preceding points apply only to the real estate while it remained in the name of the plaintiff ; if any of them are well founded it clearly follows that while-the title to the land remained in Marshall Robbins, he held it as trustee for his father, the defendant.
    III. But, whatever view the court may take as to the application of the statute to the real estate in the hands of the plaintiff, still the two facts remain that the plaintiff accepted the title to said land upon an express verbal agreement to hold the same for the use, benefit and convenience, and subject to the order of the defendant; and also that he has always recognized the obligation imposed by said promise and has completely performed the same by his conveyance to Ferris and Shillito.. The court below has found that-such conveyance was “at the request and for the benefit and convenience of the said Louis S. Robbins.” If, therefore, we assume for the moment that there was no trust in the lands, and that plaintiff’s verbal promise was void by the Statute of Frauds, still that promise imposed a moral obligation of a high character, the recognition of which has been repeatedly commended by the courts of the State, and conveyances pursuant to which have been sustained even as against the creditors of the person in whom the title to the land was (Ocean Natl. Bank v. Hodges, 9 Hun, 161, 165 ; Davis v. Graves, 29 Barb. 480, 485. See also the language used by court of appeals in 29 N. Y. 612, 613; and 47 Id. 549). The real estate having been held and conveyed by the plaintiff in recognition and performance of the trust and confidence reposed in him ; and the subject of controversy in this action being a bond and mortgage, personal property, part of the proceeds of such conveyance, it is not easy to see how the statute, so often quoted, has now any relevancy to the question before the court. The statute of uses and trusts has to do only with real estate, and is not applicable to personal property (Kane v. Gott, 24 Wend. 641 ; Savage v. Burnham, 17 N. Y. 561 ; Brown v. Harris, 25 Barb. 134 ; Tracy v. Tracy, 3 Brad. 57).
    IV. The bond and mortgage in controversy being personal property, and so unaffected by the statute of uses and trusts, a trust in them may be established by parol (Day v. Roth, 18 N. Y. 448, 453, and cases there cited; Tracy v. Tracy, 3 Brad. 57). The circumstances under which plaintiff took- the real estate ; his verbal promise made at the time, and the high moral obligation imposed thereby, clearly furnish a meritorious consideration (Ocean Bank v. Hodges, 9 Hun, 161-165 ; Davis v. Graves, 29 Barb. 480-485 ; 29 N. Y. 612, 13 ; 47 Id. 549 ; Tracy v. Tracy, 3 Brad. 57). The facts in Tracy v. Tracy are almost identical with the one at bar, except that in the present case the proceeds of the sale, standing in the name of the plaintiff, have, with the plaintiff’s consent, been delivered to, and constantly remained in, the custody of the defendant. The fact is one of those upon which is founded the claim made and position taken in the next point.
    V. But it is insisted that all the facts and circumstances of this case, the conduct and declarations of the plaintiff, the constant possession of the bond and mortgage by defendant, with plaintiff’s consent; the use by defendant of such portion of the proceeds of the sale of the land as were realized ; his constant use, enjoyment and occupation of the land before it was sold ; his payment of all charges and expenses thereon, and receipt of all income or profit therefrom, are all only consistent with, and go to prove, an absolute, equitable and beneficial ownership of the bond and mortgage in question by the defendant. It is submitted that all the facts and all the testimony point to the conclusion that the delivery of the bond and mortgage to the defendant was with the intention of thereby acknowledging defendant’s ownership ; that against all these the only reason suggested in the opinion is, “ that there is no fact in the case which gave rise to the adoption of an unusual and, in a sense, doubtful mode of transferring property.” It has been repeatedly held that a bond "and mortgage will pass by delivery without any written assignment (Wilson v. Troup, 2 Cow. 195-231; Penfield v. Thayer, 2 E. D. Smith, 305-309 ; Allerton v. Lang, 10 Bosw. 362 ; Malins v. Brown, 4 N. Y. 403-409; Power v. Lester, 23 Id. 527-531).

      Royal S. Crane, for respondent.
   By the Court.—Freedman, J.

The case presents no conflict as to the material facts, and the findings originally made, together with the findings made at the request of the defendant,, correctly set forth all the facts that could properly be found. The conclusions of law based upon these facts follow as a necessary consequence, under the application of the statute relating to uses and trusts, which was designed to render a verbal trust in such a case impossible. The object of the statute was to put an end' to the practice of abuses, the defrauding of creditors and purchasers, the defeating of dower and curtesy, and the great confusion and obscurity of title, which before its enactment were so prevalent;. and though in individual cases, and perhaps in the present case, a strict enforcement may involve great hardship, the courts must enforce it in a case which clearly falls within its provisions. Whatever, therefore, our opinion may be of the conduct of a son who violates the confidence reposed in him by his father, by invoking the statute, it can have no weight with us in opposition to the plain mandate of the law. The statute abolished all uses and trusts ■ except as authorized and modified by it, and the one relied upon by the appellant belongs to the prohibited class. The case of Tracy v. Tracy (3 Bradf. 57), is clearly distinguishable. In that case' there was a declaration of trust after the real had been converted into personal property, and it was upon this ground that the trust was sustained as to the proceeds. In the case at bar there is no such declaration as to the proceeds, and the trust as to the real property being void, the proceeds follow the legal title.

The judgment'appealed from should be affirmed, with costs, upon the opinion delivered by the learned chief justice below.

Sreir, J., concurred.


text:
    SAMUEL H. RANDALL, Appellant, v. JOSIAH CARPENTER, Respondent.

      Undertaking on injunction—liahility on, how enforced.—Attorneys.

    An undertaking executed on the procurement of an injunction, whether by sureties, or by the plaintiff without sureties, can only be enforced by action, and affords the only indemnity which a defendant has against an injunction.
    The referee’s report as to the damages incurred by reason of the injunction furnishes, the measure of damages, but the court cannot, upon its confirmation, summarily order the plaintiff to pay the damages assessed, and enforce its order by attachment. This is so where the plaintiff, an attorney and counselor, appeared in person in the action, and executed the undertaking without sureties, the action being such that the court is not dealing with him as its officer.
    Before Speir and Freedman, JJ.

      Decided February 7, 1881.
    Appeal by plaintiff from the final part of an order directing plaintiff to pay to defendant the sum of $238, assessed on the undertaking executed by plaintiff on procuring injunction, as damages sustained by defendant by reason of the injunction.
    Further facts appear in the opinion.

      Samuel EC. Randall, appellant in person.

      Thomas & Wilder, for respondent.
   By the Court.—Freedman, J.

Since the decision of Leavitt v. Dabney (9 Abb. Pr. N. S. 373), it has been the settled law of this court that an undertaking executed by sureties on the procurement of an injunction, in which the plaintiff did not join, can only be enforced against the sureties by action, and that in such action the amount allowed by the referee and confirmed by the court is the measure of recovery; that the only indemnity to a defendant for an injunction is the undertaking, and that the court has no power to award damages against the plaintiff by its judgment in the original action.

In the case at bar, the undertaking was executed by the plaintiff without sureties, but the rule that it can be enforced by action only, applies with equal force. There is no statutory provision that I have been able to find, empowering the court upon confirmation of the referee’s report to summarily order the plaintiff to pay the damages assessed, and. to enforce its order by attachment, and hence no such power exists. The right to imprison depends altogether upon statute law in this State. In Lawton v. Green (64 N. Y. 326), which was the case of an undertaking executed by the plaintiff and a surety, the court of appeals held :

“ The form of the order is also objectionable. It should be confined to fixing the amount of damages. When so ascertained, the amount is conclusive, both upon the party and his sureties, but payment can only be enforced by action upon the undertaking: The Code does not authorize the court to enforce payment by order, but only to ascertain the damages. The proper way is to limit the order to an adjudication upon the amount of damages, which amount must not exceed the sum named in the undertaking.”

The fact that in the present case the plaintiff acted as his own attorney, makes no difference. He had a right to appear in person or by attorney. In either case his liability is the same, and it wholly rests upon the undertaking. Any liability claimed beyond that, must be enforced in an action for malicious prosecution. Nor can it make any difference that the plaintiff is an attorney and connselor-at-law, and as such an officer of this court. He brought the action to establish alleged rights as a copartner with the defendant in carrying on the St. Omer Hotel in this city, and consequently the court was not dealing with him as its officer in any matter within its summary jurisdiction.

The order must be modified by striking out the final part directing plaintiff to pay, with $10 costs and disbursements.

Speir, J., concurred.


author: By the Court.—Speir, J.

text:
    NATHANIEL D. HIGGINS, Respondent, v. A. AUGUSTUS HEALY, et al., Appellants.

      Undertaldngs—action on and evidence admissible therein.

    In an action on an undertaking, the sureties are estopped from denying any fact recited therein; e. g., the issuing of a warrant of attachment.
    In an action on an undertaking given in discharge of an attachment granted on the ground of defendant’s non-residence, &c., evidence offered by the sureties that the defendant was not a non-resident, is not admissible.
    Where such an undertaking is given on behalf of defendant, and subsequent thereto an undertaking on appeal is also given on his behalf, executed by different sureties, plaintiff is not bound to prosecute his remedy against the sureties on the latter undertaking, before bringing action on the undertaking in discharge of the. attachment.
    Before Speir and Freedman, JJ.

      Decided March 7, 1881.
    Appeal from judgment in favor of plaintiff.

      The action was brought against the sureties upon an undertaking in discharge of an attachment granted, in an action by the plaintiff against one Henry Barrowcliffe. The action was commenced on March 27, 1879 ; a warrant of attachment issued on that day against Barrowcliffe as'a non-resident, and property was after-wards duly levied upon before the giving of the undertaking.
    On the trial of this action, plaintiff’s counsel put in evidence a judgment recovered by plaintiff against Barrowcliffe in that action for $1,072.34; a judgment of the general term affirming the same on appeal; also the undertaking aforesaid; proved a demand on defendants, &c., and rested.
    Defendants’ counsel moved to dismiss on the ground that no warrant of attachment had been shown, nor any consideration for the undertaking, which motion was denied, and an exception taken.
    Defendants then offered proof that the said Barrowcliffe was not a non-resident at the time of the issuance of the alleged warrant of attachment, but was a resident and householder of the city of New York, as averred in the answer. The proof was excluded, and defendants excepted.
    Defendants then proved that Barrowcliffe had duly appealed from the judgment aforesaid recovered against him, and had given an undertaking on said appeal, with other sureties ; upon which ground, among others, they moved to dismiss the action, which motion was denied, and defendants excepted.
   By the Court.—Speir, J.

It is well settled that, in an action on an undertaking, the defendants are estopped from denying any fact recited in the undertaking. If the parties to the action chose to do so they could waive the issuing of the attachment and the seizure of the property under it, and the waiver would be a good consideration for the undertaking, which the defendant would have been required to give on an application to discharge an attachment actually-issued and levied. The giving of the undertaking concludes the parties on the bond (Haggart v. Morgan, 5 N. Y. 422). Unless there be proof that the undertaking was executed under circumstances which made it void, the legal presumption is that it is consistent with the testimony given and the testimony offered.

There was no evidence showing that the plaintiff was privy to any arrangement between Barrowcliffe and his sureties, in order to induce them to sign the bond. The offer of testimony, therefore, to show how much certain property, assigned by Barrowcliffe to the defendants as security for their liability on the undertaking, brought at a sale, was not within the issues, and was properly rejected. Whatever the relations between Barrowcliffe and his sureties might be, it cannot affect the relation of the plaintiff to them unless it appears that the former was privy thereto.

The objection that the plaintiff was bound to prosecute the sureties on the undertaking on appeal to the general term before bringing this suit, cannot be sustained. The case of Hinckley v. Kreitz (58 N. Y. 583), relied on to sustain the proposition, is not in point. All the case decided was that the sureties, in an undertaking given on appeal to the general term, conditioned that the appellant will pay all costs and damages which may be awarded against him on said appeal, are not liable for the costs of an appeal by -the principal to the court of appeals from the judgment of affirmance of the general term. And in that case an appeal to the court of appeals was taken and a new undertaking was given for the judgment and costs, and it was held as between two sets of sureties, that the primary liability rests upon the latter, and their release by the judgment" creditor discharges the former. The decision has no bearing upon the question raised here.

The judgment must be affirmed, with costs.

Freedman, J., concurred.'


author: By the Court.—Sedgwick, Ch. J.

text:
    THADDEUS F. MORE, as Assignee in Bankruptcy, &c., Appellant, v. JOHN A. WEEKS, et al., as Executors of LOUIS DURR, &c., Respondents.
    I. Preference.

    1. Bankruptcy act.

      (a) What not necessarily a preference.
    1. A mere transfer of property does not necessarily constitute a preference.
    1. Presumption. To raise a presumption that a transfer is a preference, it should be shown that the transfer was of the whole or a considerable portion of the debtor’s property.
    2. Rebutting presumption. When the presumption rests on the fact that a considerable portion was transferred, it may be rebutted by showing that enough property was left to pay all remaining creditors, in money, as much value as was obtained in goods by the creditor alleged to have been preferred.
    Before Sedgwick, Ch. J., Freedman and Truax, JJ.

      Decided April 4, 1881.
    Appeal from judgment dismissing complaint.

      Edward Sexton, for appellant.

      George H. Forster, for respondents.

       The propositions stated in the head-note were not passed on by the general term, as being necessary to be decided for the disposition made of the appeal; but the views of the chief justice so commend themselves'to the reporters that they have deemed it advantageous to the profession to report the case.

   By the Court.—Sedgwick, Ch. J.

The action was to recover the value of certain property, alleged to have been received by defendants’ testator, in violation of section 35 of the United States Bankruptcy Act, as it was before the amendment of the section in 1874.

My judgment is that the plaintiff had given sufficient evidence to take the case to the jury, as to the insolvency of the bankrupt, at the time of the alleged preference, and also as to whether the testator of defendant had reasonable cause to believe that insolvency existed.

Although a firm is insolvent, it does not, in my opinion, necessarily follow^ that every transfer of its property to pay a creditor, is a preference. It may be that there is property enough left to pay all remaining; creditors in money, as much value as was obtained in goods by the creditor alleged to have been preferred. If the transferred property were the whole of the-insolvent’s property, or a considerable portion of it. (Wager v. Hall, 16 Wall. 602), or a large portion of it (Toof v. Martin, 13 Wall. 38), there may arise a presumption that there was a preference which calls for explanation, but the burden of proof is upon the-plaintiff to show that there was a view to a preference,, and that the transferee had reasonable cause to believe that there was a preference. To create the presumption referred to, it will be necessary to show what part or proportion of the whole stock was transferred. I am in doubt as to whether plaintiff gave enough proof, as to the fact of the transfer of the jewelry being a preference. The complaint, however, was not dismissed on this ground, but only on the ground of the insolvency, and of the belief of defendant’s testator as to it, and it is not necessary to decide as to the preference.

The judgment should be reversed and new trial ordered, with costs of appeal to appellant to abide the event. .

Freedman and Truax, JJ., concurred.


author: By the Coubt.—Sedgwick, Ch. J.

text:
    PHILIP QUINLAN, Plaintiff and Respondent, v. JEREMIAH P. RUSSELL, Defendant and Appellant, Impleaded with the MAYOR, ALDERMEN and COMMONALTY of the CITY OF NEW YORK.
    I. Lien, material-men, &c.—Equitable assignment.—Trust.
    1. Contract for performance of work and furnishing of material.

      (a) Provision for retention by contractor, when it does not enure to raise an equitable assignment of, or a lien upon, or create a trust in respect of the fund retained, in favor of material-men, &c.
    1. A contract provided, “ and the said party of the second part hereby agrees that he will furnish said commissioners with satisfactory evidence that all persons who have done work or furnished materials under the agreement, and who have given written notice to the said commissioners before or within ten days after the completion of the work, that any balance for such work or material is still due and unpaid, have been fully paid or secured said balance; and in case such evidence be not furnished, such amount as may be necessary to meet the claims of the persons aforesaid, shall be retained from any moneys due said party of the second part under the agreement, until the liability aforesaid shall be fully discharged, or such notice withdrawn.
    Held,
    that one who furnished materials to the contractor for the doing of the work contracted for, and had given the notice specified in above provision, had no lien on a sum retained by the commissioners; was not the equitable assignee thereof; and that such provision raised no trust in his behalf.
    II. New York City.
    1. Contract for regulating and grading, &c.

      (a) Provision for retention.
    1. Above principle; application.
    Before Sedgwick, Ch. J., Freedman and Truax, JJ.

      Decided April 4, 1881.
    Appeal from judgment in favor of plaintiff.
    One Smith had entered into a contract with the corporation of the city to regulate, grade, Ac., apart of 9th avenue, for which the corporation contracted to pay him certain sums.
    In that contract, there was the covenant: “And the said party of the second part hereby agrees, that he will furnish said commissioners with satisfactory evidence that all persons who have done work or furnished materials under this agreement, and who have given written notice to the said commissioners, before or within ten days after the completion of the work aforesaid, that any balance for such work or materials is still due and unpaid, have been fnlly paid or secured such balance. And in case such evidence be not furnished, such amount as may be necessary to meet the claims of the persons aforesaid shall be retained, from any moneys due the said party of the second part, under this agreement, until the liabilities aforesaid shall be fully discharged or such notice withdrawn.
    Smith, with the consent of the corporation, before any money became due, assigned all moneys to become due under the contract. Such moneys were re-assigned .until the plaintiff became the .assignee.
    The contract having" been performed, the plaintiff brought this action against the city for the moneys :due, and the complaint charged that the defendant, now appellant, claimed that he had some lien upon the moneys due, and demanded judgment against him that he had no such lien. The answer of the city admitted that money was due, but alleged that the present appellant, then defendant, claimed an interest in or lien upon the moneys, and asked the judgment as to the party really entitled, &c. The defendant, now appellant, by answer, alleged that he had furnished materials for the work above referred to, and that they were used therein, that he had duly filed the notice provided for in the contract, that his claim had not been paid, and asked judgment that he had a valid lien or •claim upon the funds in the hands of the city, as moneys due upon the contract, and that the city pay over to him, out of such funds, the money due to him for the materials, &c.
    The court gave judgment for plaintiff against the ■city for the moneys unpaid upon the contract, and also that the defendarit, now appellant, had no lien or claim ■upon the moneys.
    The city does not appeal from the judgment.

      L. Lajlin Kellogg, attorney, and of counsel, for ¡appellant, as to questions passed on by the court, urged :
    I. Objection is made to the use of the' word “lien ” in describing defendants’ claims. The word as now used means any claim upon or right to claim a fund or property. The legal status of this claimant under this clause in the agreement is that of beneficiary under a trust created by the contractor, and of which the city is the trustee. It was for the benefit of ■ people in esse who have acquired right under the trust, superior to other equities, and cannot be disturbed. It is no answer to this argument, that the city cannot act as trustee, the contractor and his assigns are completely estopped by their agreement from maintaining such a position.
    II. The acquisition of this money required no further intervention of the debtor, as claimed to be decided in Hoyt v. Story (3 Barb. 262). It was a promise made directly for the benefit of a third party, a party in esse, to wit, the material man, and not within Kingston Mutual Ins. Co. v. Clark (33 Barb. 195). An agreement for a future lien is good (Wisner v. Ocumpaugh, 71 N. Y. 116; Hale v. Omaha Nat. Bank, 49 Id. 626). It is a license irrevocable (McCaffrey v. Woodin, 65 N. Y. 469).
    III. A case in full point with this in every respect has recently been decided by the supreme court, entirely in favor of claimants, standing in the same position as the defendant, Russell (Mechanics’ & Traders’ Bank v. Mayor, 58 How. Pr. 207).

      John H. Strahan, attorney, and of counsel, for respondent, on the points passed on by the court, urged:
    I. It is no doubt a well-settled rule of law that an action may maintained on a promise made to a third person for the benefit of another without any consideration passing from such other ; but in all such cases it is required that the promise be made upon a valid consideration passing from such ‘third person. This is fully illustrated in the authorities cited in Judson v. Gray (17 How. Pr. 289). In the present contract there is no promise for the performance of which the mayor, aldermen and commonalty of the city of New York is answerable to this defendant, Bussell. All that can be said as to the particular clause in this contract, on which the defendant Bussell relies, is that its performance might benefit him. But there is a plain distinction between a promise, the performance of which might benefit a third party, and a promise made expressly for the benefit of a third party. As to the former promise the courts have not yet held that an action thereon can be maintained by the person who might be benefited by its fulfillment (Hoffman v. Schwab, 33 Barb. 195, 196). In accordance with these well-settled principles of law, Judge Fbeedmax, in this court, lately decided that an action commenced by the defendant Bussell against the mayor, aldermen and commonalty of the city of New York, in which Bussell sought to enforce the claim he makes in the present action, could not be maintained by Bussell. Bussell therefore has no claim against Gavin, or the contractor Smith, for stone furnished and used in the performance of the contract in question which he can enforce in a direct action against the city. Neither can the defendant Bussell enforce his claim indirectly against the city in the present action. If he has no right of action directly against the city for his claim, he cannot for such claim have a right to a judgment against the city in the present action. The explanations made by the counsel for the defendant Bussell, as to the legal or equitable character of the claim of the latter, are exceedingly vague. Sometimes this claim is called a lien, at other times he claims that the fund is a trust held by the city for the benefit of Bussell as beneficiary. In the points for Bussell, the claim is stated thus: “ The legal status of the .claimant under the clause in the contract .is, that of a beneficiary nnder a trust created by the contract, and of which the city is trustee.” This is pure nonsense. No authority exists countenancing such a position. The object of the contract was not to create a trust, and no trust was created by the clause referred to. If there exists a trust fund in the hands of the city, as trustee, created for the express benefit of certain beneficiaries, every beneficiary has an undoubted right of action against the trustee to compel an accounting of the fund, and to pay over the same. But no such right of action exists under the clause in the contract in favor of Russell, as was expressly decided by ¡Judge Fbeedjian. A claim by a beneficiary of a fund against the trustee, the holder of such fund, is not a claim of lien. None of the city officers could by any unauthorized act on the part of such officers create a trusteeship in the city. It would require express legislative sanction to authorize such a trust. No such authority exists. What the defendant Russell really claims is this: granting, as he in effect says, that he has no right of action against the city for Gravin’s debt to him—he insists he has a claim upon the fund (the balance due by the city on the contract referred to), and he desires that the fund should be applied by this court to the payment of Gravin’ & debt to him. This is maintained on—(1) The clause in the contract which is quoted in Russell’s answer. (2) The notice alleged to have been given by Russell to the commissioner of public works. Legally stated, this claim is that under the clause in the contract, by the service of the notice on the commissioner of public works, so much of the fund due under the contract was set apart, or appropriated, as was necessary to pay the amount specified in the notice ; that there was by the clause in the contract and the service of the notice an equitable assignment created in favor of the claimant Russell of the fund in the hands of the city to the extent of the amount specified in the notice. This is what Russell claims constitutes in his favor a lien on the fund to the extent of the amount in his notice. But such a claim has no foundation in law or equity. Two things are essential to constitute an equitable assignment. (1) An agreement to pay out of a particular fund ; and (3) An appropriation of the fund in such a manner that the holder thereof would be authorized to pay it to the creditor without the intervention of the debtor. These constitute the true distinction between a mere contract to pay out of certain funds, and an appropriation of the funds which courts of equity will uphold as an equitable assignment (Hoyt v. Story, 3 Barb. 363, and various authori- ■ ties cited). In the present case neither of these essentials exist. (1) There is no agreement to pay contained in the clause in the contract. The contractor does not in that clause authorize the city to pay any money to any person, a creditor of his, or of his assignee, for labor or material furnished under the contract, who may serve a notice upon the commissioner of public works ; and the city does not agree to pay the fund referred to in the clause to any person whatever. (3) There is no appropriation by the clause in the contract of the fund in such a manner that the city would pay the same, or any portion thereof, directly without the intervention of the contractor, or his assignee, to any person giving notice to the commissioner. On the contrary, the clause in the contract shows clearly that it never was contemplated by the parties to the same that any portion of the funds due under the contract should be applied by the city to the payment of the debts referred to in any notice served upon the commissioner of public works. This provision reads that so much of the moneys due to the contractor should be retained until the liabilities—that is, the debts specified in the notices served—were discharged; clearly implying that in the contemplation of the parties the debts were to be discharged or paid otherwise than out of this particular fund. In fact, the fund was to remain intact until the debts were discharged: So far, therefore, as the claim of the defendant Russell is founded upon the provision contained in this clause in the contract, they are void of every essential required to constitute a lien by equitable assignment. And the notice served by the defendant Russell, assuming that such notice was served upon the commissioner of public . works, adds no strength to the claim. In no view which can be taken of this notice, does it constitute an agreement by any person to pay any money out of any fund. Neither does the notice appropriate any fund in such a manner that the city would be authorized to pay the same to the creditors giving the notice without the further investigation of the contractor or his assignee. There is not, therefore, the first element of an equitable assignment in the claim of the defendant Russell, either under the provisions of the clause of the contract, or in virtue of the notice served upon the commissioner of public works. A reference to the provisions of the Revised Ordinances, pursuant to the requirements of which it is alleged by the defendant Russell in his answer, that the clause referred to in the contract was inserted, makes the point still clearer. The ordinance is set forth in the case. The ordinance requires that in all contracts with the city there should be a clause, that if any person who did work, or furnished material under the contract, and gave notice as therein provided, should give satisfactory evidence that money was due to him by the contractor under such contract, such head of department should retain the last installment, or such portion thereof .as might be necessary, until such liability is discharged or secured. Here, instead of an agreement that the city should pay the creditor of the contractor, without the intervention of the debtor or an appropriation of the fund to enable such payment to be made, the agreement authorized by the city to be made by the commissioner of public works with the contractor, was, that the head of the department should retain this particular fund until the contractor should, out of his other funds, pay his creditors, or until the debt of such contractor was secured. Instead of the fund under the contract being appropriated to the payment, by the city, of the debts of the contractor, and secured for this purpose, the ordinance requires that the contract should provide for the fund being paid to the contractor, even after the notice by his creditors to the head of the department, without the creditor’s interference, on the security being given by the contractor, that he should otherwise pay his creditor’s debt. No agreement was authorized in the contract to pay the v funds otherwise than to the contractor or his representatives. He or they could obtain the funds from the city independent of his creditors, but the creditors could not, without the intervention of the contractor, secure from the city the funds or any portion thereof. The agreement so authorized was in no sense an equitable assignment of the fund in favor of the creditor of the contractor. As the defendant Russell has, therefore, no claim of lien by equitable assignment under the' contract, or under the notice, or under both contract and notice, or under the provisions of the Revised Ordinances, upon the fund, the balance due by the city to the contractor’s assignee under the contract in question, he has no right which he can maintain in this action. The claim of the defendant Russell, that his material created a part of the fund—and here an equity arises in his favor, if founded on fact, which it is not—has no force, and can receive no effect (Barculo, J., in Hoy v. Story, 3 Barb. 266).

      II. The authority given by the provision in question transferred no title to the money to become due under the contract, nor any beneficial interest therein. No benefit was to inure to the city by the exercise of this authority. The authority is not a chattel mortgage. Neither is it a grant, and it is not a trust. It is a mere authority to do a certain act, viz.: to retain from moneys to become due to the contractor, until certain liabilities which he may incur are discharged by him, or the notice in reference thereto is withdrawn. This authority rests on contract, and is in its nature a license, revokable at pleasure (Exp. Colburn, 1 Cow. 568; Jamieson v. Millemann, 3 Duer, 255 ; Tillotson v. Preston, 7 Johns. 285; Mumford v. Whitney, 15 Wend. 380; Babcock v. Utter, 1 Keyes, 115). The license was terminated by the assignment by the contractor to Gravin of all sums due and to become due under the contract approved by the city (Jackson v. Babcock, 4 Johns. 418). When this assignment was made, no person had or pretended to have acquired any right or interest of any description as against the contractor under the provision in question, and after such assignment no person could acquire any such right or interest.
   By the Coubt.—Sedgwick, Ch. J.

A conclusive consideration against appellant is, that there was enough testimony to support the finding by the court below that the material furnished by appellant was not used upon the work in question, excepting a small quantity. And there was no proof as to the value of that quantity.

I am not able to perceive that there’is any foundation for the proposition that there was any lien or claim upon the moneys due, given to the appellant by reason of the contract, even if the materials had been used upon the work contracted for. Irrespective of the provisions that have been extracted from the contract, there was no lien, and the contract cannot create any lien that its terms do not provide for. It must be held that it wyas not the intention of the parties to give a right of action to the material-man, upon the terms of the contract. • For what, within those terms could he sue.? Who would be the defendants ?

Passing this consideration, it must be asked, what is the nature of the material-man’s interest in such a provision ?. He can demand no more than the contract provides shall be done. The plaintiff’s assignor did not promise to pay the claim or to secure it, but only to furnish evidence that it had been paid or secured, in case the notice had been filed. The appellant of course gets no right of action from that. The contract then provides that if such evidence be not furnished, an amount necessary to meet the claims shall be retained from moneys due “until the liabilities aforesaid shall be fully discharged, or such notice withdrawn.” This does not even permit the city to pay the claim out of the moneys retained. In effect, if the agreement be carried out by the voluntary acts of the parties to the contract, the only benefit a material-man filing notice would possess would be, that he would know where his debtor had property wherewith to pay the' claim. The loss of such knowledge would not constitute damage. There is no presumption that it would delay him in obtaining payment.

Or, in another view, the terms of the contract do not provide for any application of the moneys retained to the payment of the claim contained in the notice. The filing of the notice is not proof of the validity of the claim. The law would not impound the property of a debtor in favor of a creditor who had not obtained judgment. Equity would not give an injunction for that purpose. Under the statute, it would be necessary to show that there was an intention to dispose of the moneys fraudulently, and then it could be granted only in a proceeding to obtain a judgment against the debtor on an original indebtedness. There can be then no equity as to the fund, which creates a lien upon it by virtue of a contract, that does not in terms create the lien or give the elements of an equitable lien. It would be inequitable to stay the transfer of property, when there is no judgment at law that the owner of the property is indebted; and more especially, when there can be no judgment against the owner, as in this case, the plaintiff here. If, however, the plaintiff stood in the shoes of Smith, the original contractor, the contract would not give the elements of a lien, if there were no other reason, because the terms of the contract do not provide for the application of the fund to the payment of the claim.

Judgment affirmed, with costs.

Freedman and Trcíax, JJ., concurred.
      The briefs of counsel contain much information as to the power of municipal corporations, their officers or agents, to make contracts or exercise authority in disregard of prohibitions, and as to the construction of their contracts containing provisions contrary to prohibitions applying to them; also as to repeal by implication.
      Cloud or title. The point as to whether plaintiff had any cause of action against defendant Russell was not raised. If he had, it would seem to rest solely on the theory that Russell’s claim was a cloud on bis title to the fund, which it was necessary for him to get rid of through the aid of a court of equity, exercising its jurisdiction of removing clouds on title, before he could recover the fund from the mayor, &c.


text:
    GUSTAV A. R. WEICHSEL, Appellant, v. CHARLES SPEAR, Respondent.
    I. Benefit given by an order.

    1. Receiving it, effect of.

      (a) It binds the party receiving the benefit to the order as made, and he cannot be heard to impugn it as being irregular or erroneous.
    II. Complaint—sufficiency of.

    1. Party plaintiff.

      (a) It must show a cause of action in him. If it merely shows a cause of action in some third person, it is objectionable as not stating facts sufficient to constitute a cause of action.
    Before Sedgwick, Ch. J., Freedman and Truax, JJ.

      Decided April 4, 1881.

      Appeal from judgment, dismissing plaintiff’s complaint.
    The action was upon an alleged executory contract of sale.
    The complaint alleged, that the plaintiff and the defendant entered into an agreement in writing, of which the following is a copy : “ Bought by the undersigned, of Messrs. R. Weichsel & Co., of Hassfurt, Magdeburg, through their representative, Mr. Carl Bartels, 76 Beaver street,” a certain quantity of salt, upon certain terms ; that the plaintiff duly performed all the conditions on his part to be performed, but that defendant refused to accept, &c. The answer contained a general denial.
    At the trial, before testimony was given, defendant’s counsel moved to dismiss complaint on ground that it did not state facts sufficient to constitute a cause of action. Before the decision of that motion, plaintiff’s counsel moved to amend the complaint by alleging that the plaintiff did business under the name of R. Weichsel & Co. The record proceeds, “ Now, on motion of attorneys for the plaintiff, ordered that the plaintiff have leave to amend his complaint by alleging ‘ that the plaintiff did business under the name of R. Weichsel & Co.’ upon the payment of the costs of the term and of the defendant’s witnesses’ fees, together with all the costs of defendant after notice of trial, to be taxed by the clerk of this court, the same to be paid within four days after the entry of this order. Otherwise, on motion of H. F. Pultz, attorney for the defendant, motion to dismiss the plaintiff’s complaint in this action is hereby granted, with costs and disbursements.” The judge gave to the plaintiff twenty days to make a case after the entry of judgment.
    The judgment of dismissal was entered. The plaintiff appeals from the j udgment and. also from the order above stated.

      Lewis Sanders, for appellant.

      Henry F. Pultz, for respondent.
   By the Court.—Sedgwick, Ch. J.

The substance of the direction made by the judge at the trial, was that the complaint be dismissed, unless the plaintiff amend the complaint, and that he have leave to amend upon payment of cost within four days. The proceeding is somewhat confused by putting into the form of an order what really was a proceeding upon the trial, and the subject, as to form, of an exception. If the direction given was wholly the result of an adverse motion by the defendant’s counsel, there might be a question, whether the leave to amend prevented the plaintiff’s examining the correctness of the dismissal of the complaint. But the leave to amend was given upon the request of plaintiff’s counsel. The plaintiff’s counsel argues that it was erroneous to make the leave to amend conditional upon- the payment of costs. As, however, they were to be paid within four days, and the plaintiff’s counsel took that delay, the plaintiff has had some advantage from the leave to amend, and must be bound by the order made. He might at the time have refused to take the order as to amendment. On the whole, as instead of an absolute dismissal, it was made conditional upon plaintiff’s not amending, at his own request, the only relief he was entitled to was to amend, and then proceed with the action.

I am of opinion that, on the merits, the complaint was demurrable. The complaint does not aver that the plaintiff and defendant agreed to the legal effect of the written agreement, without stating the written agreement itself, or that the defendant bought and the plaintiff sold, upon certain terms, &c. He confines himself to the bare statement that he “ entered into an agreement in writing, of which the following is a copy.” Then the copy shows on its face that the defendant bought of third persons or a copartnership. It is not a material fact, that the plaintiff did enter into that agreement. The defendant is bound to performance, according to the terms of the agreement. A promise to accept from some one other than the plaintiff does not result in an obligation to accept from the plaintiff and to pay him. It may easily be admitted that the fact was that the plaintiff did business under the name of Messrs. It. Weichsel & Go., and that he was the party in interest. That fact is not alleged, and the complaint states facts which, in the absence of other allegations, show that Messrs. R. Weichsel & Co. are entitled to receive the damages from the defendant, if he be liable at all.

Judgment and orders appealed from are affirmed, with costs.

Freedman and Truax, JJ., concurred.


text:
    MAGDALENA REIMER, Plaintiff, v. JACOB MULLER, Impleaded with others, Defendants.
    I. Treaties between two nations—United States and WtjrtemBERG.
    1. Provision that the citizens of either nation might sell lands situate in the domains of the other, which, but for their alien-age, they would have inherited from a citizen of that other nation.
    (a) Requisites to transfer title.
    1. In the absence of express provisions on the subject, the sale intended by the treaty must be such as is sufficient to transfer an interest in real estate, according to the laws of the place where the real estate is situate.
    1. Sbaij. Consequently, in this State, the sale must be by an instrument under seal.
    II. Seai.
    1. LOST INSTRUMENTS.

      (a) Insufficient proof of execution under seal.

    1. A witness who had seen the instrument was asked, “ Was it under seal—was there a seal put to it?” He answered :■ “I don’t understand it; I can’t tell it in English. There-was a wafer.” This was the only evidence on the point..

      Held,

    insufficient.
    Before Sedgwick, Ch. J., Freedman and Truax, JJ.

      Decided April 4, 1881.
    Exceptions ordered to be heard at general term in first instance, the court having directed a verdict for plaintiff.
    The action was in ejectment, and the question that' is decided on this appeal relates to whether the defendant gave any competent evidence of the execution of an instrument sufficient to convey an interest in the-premises.
    By article II. of a treaty between the King of Wurtemberg and the United States (ratified October 8,. 1844, Treaties, &c., between the U. S. and other Powers, 898), it was stipulated that the citizens of. either nation, who but for alienage would inherit real1 estate from any relative who was a citizen of the other-country, might sell such real estate, within a certain time.
    The defendant claimed that an instrument under the treaty had been executed, which transferred an interest to his wife and her brother.
    On the trial, the defendant swore that he had received from Germany the instrument, but had lost it. He gáve oral proof of its contents, and testified that it was in the German language, and bore the signature of Rosina Wieland, whom he had seen write. Rosina was a person authorized by the treaty to sell. This witness gave no testimony as to a seal upon the instrument. Another witness testified to the question, “You have heard a paper testified to by Mr: Muller 1 A. Yes, sir. Muller got 'a paper. The paper was signed by my mother and my father, George Wieland and Rosina Wieland. Q. Was it under seal; was there a seal put to it? A. I don’t understand it. I can’t tell it in English—there' was a wafer.” There was no other evidence as to the instrument’s being sealed.
    The court held that there was no proof of an instrument competent to convey real estate.

      Livingston Scott, attorney, and of counsel, for plaintiff, on the point passed on by the court, urged:
    Even if the testimony of Müller and Wieland be' true, the alleged lost written instrument did not possess the requisites of a valid deed of land, and was therefore void. The paper described by the witnesses was not a sealed instrument. It did not purport to be a sealed instrument. Wieland says “ there was a wafer but there is no evidence how it was used, for what purpose it was used, nor where it was placed. To make the paper a sealed instrument it must be shown clearly that the wafer was used as a seal, and that it had an impression upon it.

      Cook & Schuck, attorneys, and Peter Cook, of counsel, for defendant.
   By the Court.—Sedgwick, Ch. J.

There can be no doubt, that the treaty intended that the sale, permitted by its terms, should.be such a sale as was sufficient to transfer an interest in real estate, according to the law of the place where the real estate was situated.

By the law of this State, it is necessary that an instrument should be sealed, in order to permit title to real estate to pass by its execution and delivery. It was therefore necessary for the defendant to show that the paper under which he claimed, had been executed by the parties signing it and attaching their seals to their signatures.

The only witness on the point said, in effect, that he didn’t understand what a seal was, and added, there was a wafer. There was not the slightest evidence as to the relative situation of the wafer and signatures. In effect, the signature and seal are, in law, one thing. On the evidence the jury would not have been justified in finding that the evidence showed that the wafer had been placed upon the paper by the signers or by their consent, as evidence that they had executed the instrument. I, therefore, am of opinion, that the instrument did not appear to be sufficient to pass real estate, under the. treaty.

The exceptions are overruled, and judgment on verdict directed to be entered, with costs.

Freedman and Truax, JJ., concurred.