Volume 205 — New York Appellate Division Reports

<p>Attorney and client — attorney censured for sending exorbitant bill to client and threatening to sue and thereby to expose transactions tending to disgrace client.</p> <p>An attorney at law who sent an exorbitant bill to his client, in which he set out the nature of the investigations for which the bill was rendered, which, if exposed, would tend to disgrace the client, and threatened to sue for the amount thereof when it was not paid, is, in view of the death of the client before this proceeding was instituted, censured merely.</p>

Appeal by the defendant, Lignum Chemical Works, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 8th day of June, 1922, upon the decision of the court rendered after a trial before the court without a jury at the New York Trial Term.

Appeal by the defendant, Louis Brooks, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 1st day of June, 1922, upon the decision of the court rendered after a trial at the New York Trial Term, a jury having been waived.

Four separate appeals in one action by the plaintiff, Caroline M. Robinson, from orders of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York. Appeal No. 1 is from an order entered on the 19th day of October 1922, granting the motion of the defendants Inness Whit fiber, Enos S. Booth and John Vance Hewitt for judgment dismissing the complaint as to them.

Appeal by the defendant, Joseph M. Wright, as administrator, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 7th day of November, 1921, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 10th day of November, 1921, denying defendant’s motion for a new trial made upon the minutes.

<p>Appeal by the plaintiff, Paul V. Lundy, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 12th day of December, 1922, granting respondent’s motion for judgment dismissing the complaint, made upon the ground that it does not state facts sufficient to constitute a cause of action.</p>

<p>Fraudulent conveyances — judgment creditor’s action by receiver in supplementary proceedings to set aside fraudulent transfer by judgment debtor to his wife — bank account and other assets transferred by judgment debtor — assignment was not valid as assignment for benefit of creditors — transfer was fraudulent — wife is liable for value of property transferred.</p> <p>In an action by a receiver in supplementary proceedings to set aside alleged fraudulent transfers by the judgment debtor, it appeared that on the same day a judgment was entered in the action in which the receiver was appointed, the judgment debtor notified his bank to transfer his account to his wife’s name and the wife directed the bank to charge her husband’s outstanding checks against the transferred account and thereafter money received by the judgment debtor was turned over to his wife, but while the wife had the possession of the money the judgment debtor directed its use. The judgment debtor claimed that the assignment was one for the benefit of creditors among whom was his wife who had advanced money to him for many years past and that the money so transferred to her was used in paying expenses of his business and past indebtedness. Held, that the assignment was not a valid assignment for the benefit of creditors since the statutory requirements were not complied with and the judgment debtor retained for himself a benefit at the expense of his creditors in that he continued to control the disposition of his assets.</p> <p>The evidence shows that the wife knew that the transfer was with the intent to defraud the creditors of her husband or at least had knowledge of facts sufficient to put her upon inquiry and she was not, therefore, a bona fide purchaser. She was not a purchaser for a valuable consideration since a transfer by an insolvent debtor to a creditor as security for an antecedent debt does not make the grantee a purchaser for a valuable consideration where the creditor taking the property advances nothing and at the time relinquishes no security then held and suspends no remedy upon the debt.</p> <p>The liability of the wife is not limited to an accounting for the amount which she retained in her possession but equity will follow the proceeds of the property fraudulently transferred and will hold the fraudulent transferee liable under a money judgment for the value of the property even though it has been sold or dissipated.</p>

Appeal by the plaintiff, Williams S. Evans, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 29th day of August, 1922, denying plaintiff’s motion to strike out certain separate defenses contained in the answer.

Appeal by the defendant, Otto Steinwax, in each of the above-entitled actions from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 23d day of February, 1922, denying, respectively, defendant’s motions to cancel a judgment obtained against him in each action.

<p>Appeal by the plaintiff, Ocheo Realty Corporation, from an interlocutory judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 28th day of July, 1922, upon the decision of the court rendered after a separate trial of an equitable counterclaim, adjudging that the defendant is entitled to the reformation of a certain written agreement between the parties.</p>

<p>Appeal by the defendant, William M. Barrett, as president, etc., from a judgment- of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 17th day of July, 1922, upon the verdict of a jury rendered by direction of the court, and also from an order entered in said clerk’s office on the 29th day of June, 1922, denying defendant’s motion for a new trial made upon the minutes.</p>

<p>Constitutional law — Penal Law, art. 16, § 186, providing for payment of fines to plaintiff not unconstitutional as violative of Constitution, art. 8, §§ 8 and 10 — penalties and fines collected under said article are not public money within constitutional provisions — plaintiff performed public service and public moneys may be paid it to defray expenses.</p> <p>Penalties and fines collected under article 16 of the Penal Law upon a conviction of cruelty to animals are not public moneys within, the meaning of sections 9 and 10 of article 8 of the Constitution prohibiting the State, or a county, city, town or village from giving away or loaning its money or credit to or in aid of an individual, association or corporation, and section 196 of said article 16 which provides that the fines, penalties or forfeitures imposed or collected for violation of the provisions of the article or of any act for the prevention of cruelty to animals must be paid on demand to the American Society for the Prevention of Cruelty to Animals, except where the prosecution shall be instituted or conducted, by another society duly incorporated, is not unconstitutional as violan tive of said provisions of the Constitution.</p> <p>Furthermore, in view of the fact that the plaintiff while not strictly a governmental agency, is engaged in work beneficial to the entire State and to all the people thereof, and expends large sums of money in connection with such services, much of which would otherwise necessarily be expended by the State or by various municipalities, it seems that public moneys may be paid to the plaintiff as a reward for such services and in part payment thereof and as a reimbursement for money expended in a public service without violating said sections of the Constitution.</p>

Appeal by the plaintiff, Edward F. Cassidy, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 7th day of July, 1922, denying plaintiff’s motion for summary judgment.

Appeal by the defendants, Richard C. Patterson and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 30th day of January, 1922, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 2d day of February, 1922, denying defendants’ motion for a new trial made upon the minutes.

Appeal by the defendant, Orean Company, Inc., from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 2d day of May, 1922, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 24th day of May, 1922, denying defendant’s motion for a new trial made upon the minutes.

<p>Libel — justification pleaded as complete defense will be stricken out when not as broad as charge.</p> <p>In an action for libel, a plea of justification which is pleaded as a completó defense, will be stricken out on motion by the plaintiff, where it is not as broad as the charge contained in the complaint.</p>

Appeal by the plaintiff, Harris Yablonowitz, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 29th day of January, 1923, denying his motion for a temporary injunction, and also from an order entered in said clerk’s office on the 14th day of February, 1923, denying said motion upon reargument.

Appeal by the defendant, Nathan Turkeltaub, from a determination of the Appellate Term of the Supreme Court, First Department, entered in the office of the clerk of the county of New York on the 27th day of June, 1922, affirming a judgment of the Municipal Court of the City of New York, Borough of Manhattan, Fifth District, in favor of the plaintiff.

Appeal by the petitioner, The National City Bank of New York, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 10th day of April, 1923, granting the motion of W. R. Grace & Co. to vacate an order of the Supreme Court, made at the New York Special Term on the 31st day of March, 1923, directing the perpetuation of the testimony of Robie R. Stevens as a witness for the appellant in a…

Appeal by the defendant, The Globe and Rutgers Fire Insurance Company, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 4th day of December, 1922, denying its motion for a judgment dismissing the complaint made upon the ground that the complaint does not. state facts sufficient to constitute a cause of action.

Appeal by the petitioner, Walter Rieb, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 15th day of November, 1922, denying his motion to compel the respondent to proceed to arbitration.

<p>Liens — mechanics’ liens — foreclosure — counterclaim for damages based on use of improper material and poor workmanship — burden is on plaintiff to show due performance or legal excuse for non-performance — setting up counterclaim did not shift burden.</p> <p>In an action to foreclose a mechanic’s lien for labor performed and materials furnished the burden is upon the plaintiffs to show that they had duly performed the contract on their part or that such performance had been excused, and as a part of that burden they are bound to show that they used proper materials and executed the contract in a workmanlike manner, and the fact that the defendants set up a counterclaim based on a failure to use proper materials in a workmanlike manner does not shift the burden of proof.</p>

Appeal by the defendant, Board of Education of Union Free. School District No. 1 of the Town of Pelham, Westchester.. County, New York, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 16th day of March, 1922, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 27th day of March, 1922, denying defendant’s motion for a new trial made upon the minutes.

<p>Guaranty and suretyship — action on undertaking — plaintiff secured divorce from her husband — husband was arrested as non-resident and while in jail was adjudged guilty of contempt and fined — undertaking by defendant to secure release of husband provided that latter would obey directions of court or in default render himself amenable to proceedings to punish him — defendant not Hablo on undertaking where contempt order has not been served.</p> <p>In. an action on an undertaking given by the defendant to secure the release from jail of plaintiff’s husband, who had been arrested as a non-resident after a decree of divorce was granted to the plaintiff, it appeared that the undertaking was given while the husband was in jail and after he had been adjudged guilty of contempt and fined therefor; that the undertaking was conditioned that the husband “ will obey the direction of the court, or of an appellate court, contained in an order or a judgment requiring him to perform the acts specified in the order, or in default of his so doing that he will at all times render himself amenable to proceedings to punish him for the omission.” The contempt order was never served on the husband and was not delivered to the sheriff for service until six months after the husband’s release from jail.</p> <p>Held, that the defendant did not undertake that the husband would unqualifiedly render himself amenable to proceedings to punish him for contempt and no liability will arise on the undertaking until after the husband has been served with the contempt order and is in default thereon.</p>

<p>Attachment — property subject to attachment — debt due by foreign banking corporation authorized to do business here to judgment debtor, another foreign banking corporation authorized to do business here, may be attached — situs of debt is here — foreign corporation owing attached debt does not cease to have situs here when taken over by Superintendent of Banks — not necessary for sheriff to file claim with Superintendent of Banks under Banking Law, § 72 — if claim were necessary that filed by attaching creditor is sufficient.</p> <p>A debt owing by a foreign banking corporation authorized to do business in this State to a judgment debtor, another foreign corporation authorized to do business here, may be attached by the judgment creditor, for the situs of the debt is in this State and not in the country where the judgment debtor was organized.</p> <p>The foreign corporation owing the attached debt did not cease to have its situs in this State when its affairs were taken over by the Superintendent of Banks. It was not necessary for the sheriff to file a claim with the Superintendent of Banks under section 72 of the Banking Law, for neither the sheriff nor the judgment creditor was a creditor of the bank owing the debt.</p> <p>Furthermore, if it were necessary to file a proof of claim, the proof filed by the judgment creditor setting up the attachment and claiming the fund by virtue of the attachment proceedings gave sufficient notice under said section of the Banking Law.</p>

Certiorari order granted out of the Supreme Court at the Kings Special Term on the 12th day of August, 1922, and entered in the office of the clerk of the county of Kings, directed to Henry D. Sayer, Industrial Commissioner, Department of Labor of the State of New York, commanding him to certify and return to said clerk’s office all and singular his proceedings had in connection with the dismissal of the petitioner from the position of assistant chief of claims in the Bureau…

Appeal by the defendants, Lever Brothers Company and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 28th day of April, 1921, upon the verdict of a jury; also from an order entered in said clerk’s office on the 2d day of May, 1921, denying defendants’ motion for a new trial made upon the minutes, and also from an order entered in said clerk’s office on tjie 27th day of April, 1921,…

Appeal by the defendants, Joseph H. Mayers and another, from an order of the Supreme Court, made at the Kings Special Term and entered in the office of the clerk of the county of Queens on the 5th day of April, 1923, denying their motion for judgment on the pleadings.

Appeal by the petitioner, Benjamin J. Macdonald, from an order of the Supreme Court, made at the Orange Special Term and entered in the office of the clerk of the county of Orange on the 8th day of February, 1923, denying his motion for the appointment of appraisers.

Appeal by Philip A. Brennan, attorney, from, an order of the Supreme Court, made at the Kings Special Term and entered in the office of the clerk of the county of Kings on the 30th day of April, 1923, assigning him as counsel to defend the defendant, Loretta Thompson, upon her trial under an indictment for manslaughter in the first degree.

<p>Carriers — action by assignee of shipper to recover value of goods consigned on order bill of lading in interstate shipment and delivered to notify-party without surrender of bill — shipper had agreed to sell goods to notify-party who made deposit — carrier offered to pay shipper difference between balance of deposit and price of goods — assignee took bill after events stated with full knowledge of contract between shipper and notify-party — assignee not protected under Bills of Lading Act, § 11 — delivery to notify-party under circumstances is good defense — sole effect of bill of lading was to secure performance by notify-party pursuant to Personal Property Law, § 101, subd. 2 — carrier may deliver goods to true owner without liability to shipper — Bills of Lading Act, §§ 9, 17-19, construed — Penal Law, § 366, making it a crime to deliver goods without surrender of bill of lading must yield to Federal legislation in conflict therewith.</p> <p>In an action by the assignee of a bill of lading to recover from the carrier the value of the goods represented by the bill, it appeared that the assignor agreed to sell the goods in question to the notify-party in the bill of lading; that the notify-party made a deposit with the assignor to be applied in payment for goods shipped; that the goods were shipped from a point in New Jersey, on an order bill of lading, and on arrival at the point of destination in New York, were surrendered to the notify-party without requiring the production and surrender of the order bill of lading; that on the receipt of the car in question and another car, the notify-party tendered to the assignor the difference between the balance of the deposit and the price of the goods in the two ears, but the assignor refused to accept the payment and disposed of the contents of one of the ears; that the carrier is willing to pay the difference between the balance on deposit and the price of the goods in the car actually received by the notify-party; and that the assignee of the bill of lading took the same with full knowledge of the facts here stated and of the contract between the assignor and the notify party.</p> <p>Held, that the assignee is not protected by the provisions of section 11 of the Bills of Lading Act providing that the carrier is liable if it delivers the entire shipment and “ fails to take up and cancel the bill ” to a purchaser of the bill for value and in good faith who acquired his title to the bill either after or before such delivery, since the assignee is not a bona fide purchaser for value and in good faith, and did not allege that she was such a purchaser nor did she allege that she is the purchaser whom the act prQtects and is one thus entitled to assume that the carrier has not delivered the goods and will not thereafter deliver them except to the person who holds the bill of lading; the assignee then is in no better position than the assignor.</p> <p>It was a good defense to this action that the goods in question were delivered to the notify-party who was the actual owner thereof under the contract between it and the assignor.</p> <p>The sole effect of the issuance of an order bill of lading to the assignor was to secure performance by the buyer of its obligations under the contract pursuant to subdivision 2 of section 101 of the Personal Property Law.</p> <p>While section 19 of the Bills of Lading Act provides that “ no right or title of a third person, unless enforced by legal process, shall be a defense to an action brought * * * by the holder of an order bill against the carrier for failure to deliver</p> <p>the goods on demand,” it is clear that under section 9 and sections 17 and 18 of the Bills of Lading Act there was intended to be conferred on carriers transporting goods in interstate commerce the right to deliver the goods to the true owner and to make such delivery a complete defense to an action by a shipper who holds an order bill of lading and who sues to recover damages for failure to deliver goods to him.</p> <p>In so far as section 365 of the Penal Law, making it a crime for a carrier to deliver property for which a negotiable bill of lading has been issued unless the bill is surrendered, conflicts with Federal legislation regulating interstate shipments, it must yield thereto.</p>

Appeal by the defendant, Bankers Trust Company, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 15th day of February, 1923, denying its motion for an order adjudging that there is a misjoinder of parties plaintiff. White & Case [David Paine of counsel], for the appellant.

<p>Bills and notes — claim in Surrogate’s Court against estate of maker — maker, executor of another estate, withdrew estate funds, deposited them in personal account in respondent bank and paid note in question from said funds — bank was compelled to repay estate of which testator was executor — bank and testator were not joint tort feasors under Code of Civil Procedure, § 2674, subd. 7, and § 2664a, added by Laws of 1916, chap. 688 — bank is entitled to equitable subrogation against maker’s estate — surrogate had equitable jurisdiction.</p> <p>The respondent bank held a note against the testator. The testator, who was executor of an estate, withdrew funds of the estate from the bank in which they were deposited and deposited the same in his personal account in respondent bank and paid the note in question therefrom. Subsequently, the respondent bank was compelled to repay the money to the estate from which the testator had taken it and it presents its claim against the testator’s estate based on said note.</p> <p>Held, that the respondent bank was not a joint tort feasor with the testator under the Code of Civil Procedure, section 2574, subdivision 7, and section 2664a, added by chapter 588 of the Laws of 1916, which made it illegal for an executor to deposit funds of an estate in his individual account, since it appears that said provisions of the Code did not go into effect until the very day that the note was paid by the testator to the respondent bank.</p> <p>The respondent bank has the right to equitable subrogation and to compel the payment of the note out of funds of the testator’s estate, though as between the bank and the testator both were liable for the funds "withdrawn from the estate of which the testator was executor.</p> <p>The note in question was never paid by the testator within the meaning of section 200 of the Negotiable Instruments Law, since the payment of a note with money which belongs to another and which has been appropriated for that purpose is not, in equity and justice, a payment in due course.</p> <p>The Surrogate’s Court had equitable jurisdiction to dispose of the claim of the respondent bank.</p>

<p>Wills — execution — printed blank form was used — dispositive clause was written on first page — testatrix subscribed at end of first page — witnesses signed under testimonium clause on third page — name of executor was then filled in on third page and blanks in testimonium clause and in attestation clause were filled in — witnesses signed again below attestation clause — provisions following signature of testatrix were not material — will was legally executed.</p> <p>The will of a testatrix was legally executed and entitled to probate where it appears that a blank form of will was used; that a clause disposing of the testatrix’s entire estate was written in on the first page; that the testatrix subscribed the will at the end of the first page; that the witnesses signed after the testimonium clause on the third page; that after they signed the will the name of the executor was filled in on the third page and the blank date in the testimonium clause and the blanks in the attestation clause were filled in and then the witnesses again signed their names after the attestation clause.</p> <p>The clause for the appointment of an executor, filled in after the due execution of the will, together with the clause of revocation of all former wills and the testimonium clause which were on the third page of the blank form were not material provisions of the will and were not required by law to be a part of the will, and, therefore, it was proper to treat the paper presented as though those clauses were not printed therein in blank.</p>

<p>Contracts — construction — contract to give percentage of corporate stock after owner of all stock in corporation had received profits from corporation equal to original investment — owner could not defeat contract by failing to have profits paid over to himself — extra allowance denied — case neither difficult nor extraordinary.</p> <p>In an action on a contract providing that the owner of all the stock of the corporation would transfer a certain percentage thereof to the other party to the contract who was to remain in the employ of the corporation, as soon as the profits paid by the corporation to the owner equalled the owner’s original investment, held, that-the owner could not defeat the contract by failing to have the profits paid over to himself.</p> <p>The plaintiff's .motion for an extra allowance is denied, for the case is neither difficult nor extraordinary.</p>

Motion by the defendants, Louis Handel and another, for a new trial upon a case containing exceptions, ordered to be heard at the Appellate Division in the first instance after a verdict in favor of the plaintiff upon a trial before the court and a jury at the Kings Trial Term, Part 5, in February, 1923.

<p>Motion to vacate temporary injunction granted, without prejudice to the motions now pending.</p>

Appeal by defendant from a judgment of the Supreme Court, entered in the New York county clerk’s office April 21, 1922, upon the verdict of a jury rendered by direction of the court, and also from an order entered May 11, 1922, resettling a previous order denying defendant’s motion to set aside the verdict.

Appeal by the Raw Silk Trading Company from an order of the Supreme Court, made at the New York Special Term and entered in the New York county clerk’s office August 7,1922, which denied a motion made by the defendant for judgment dismissing the complaint or in the alternative bringing 'n the Raw Si'.k Trading Company as a party defendant. Also an appeal by the defendant, Gramatan National Bank, from so much of said order as denies its motion to dismiss the complaint.

<p>Municipal corporations — city of New York — negligence — nuisance — action by passenger of bus line to recover for personal injuries — dismissal of complaint —• when proper— defense of ultra vires not pleaded— statutes regulating operation of bus lines — franchises.</p>