Volume 9 — Abbott's New Cases

<p>Trustees.—Breach of Trust.—Surviving Partner.—Rights of Representatives of Deceased Partner.—Creditors of Surviving Partners. —Mingled Property.— Rights- of Cestui que Trust to Follow Fund.— Parties.—Referee’s Report.—Burden of Proof in Cases of Mingled Property.</p> <p>Where trustees of an estate who are directed by the decedent’s will to withdraw it from his business and invest it in a specified manner, instead of so doing, continue the business for their own profit, using therein the trust estate, this constitutes such a breach of trust as to render their removal proper.*</p> <p>Where a surviving partner who is also a trustee of the deceased partner, neglects to separate the share belonging to the deceased partner, but wrongfully allows it to remain in the business, he is to be treated as if he had separated and afterwards misappropriated it, and the cestuis que trust are entitled to demand of him its value, and they have a right to receive that amount from the assets of the firm which came into his hands, and from whatever other property has been • purchased with the proceeds of such assets.</p> <p>This right of the cestui que trust, however, will not extend to property not actually purchased witli the avails of the trust estate. Thus, . goods purchased for the business by the surviving partner, but which have neither been paid for nor mingled with the trust estate cannot be reached by the cestui que trust. (But compare p. 30.) Where a surviving partner organizes a new firm, in which he uses the assets- of the original firm, the general creditors* of the new firm y have not, before levy of execution or attachment, any claim upon the property of the original firm, or its avails, as against those interested in the estate of the deceased partner. They are, therefore, not necessary parties in an action in which the avails of the trust property are sought to be reached.</p> <p>In an action for the removal of trustees and for an accounting of the trust property, where the trustees have wrongfully used the property in their business, it is not necessary to join as a party one who had formerly been a partner of the trustees, but who had contributed no-capital, and who had withdrawn from the firm in its debt.</p> <p>An interlocutory judgment, declaring that the plaintiffs have a lien on certain enumerated classes of property, and directing a referee to report what portion of the property taken by the receiver falls within these classes, is sufficiently complied with by a report that the classes of property subject to the lien embraced all the property taken by the receiver; a subdivision into each class is immaterial.</p> <p>Where an agent or trustee has mingled his own property with his principal’s, the burden of proof is on him, his creditors, and their representatives, to show which is his own, as distinguished from the trust property.</p> <p>Where trustees have formed a copartnership, traded with the trust property, and commingled it with their own, the cestuis que trust have a right to satisfaction out of the mingled mass; and if a receiver appointed at their instance has obtained possession of it, he holds it free from the claims of the general creditors of the firm, and his rights are prior to those of a receiver subsequently appointed as their representative.</p> <p>The rules as to the case of partnership property in the cases of death and insolvency are not applicable in such a case.</p> <p>One who recovers a judgment against a surviving partner obtains thereby no lien upon a trust fund created by the deceased partner out of the partnership property; and where such fund has been wrongfully allowed by its trustees, who were also partners, to remain in the business, the rights of a receiver, appointed at the instance of the cestui que trust of the fund, to the partnership assets, are prior to the judgment, if the judgment was not obtained until after the receiver’s appointment.</p> <p>The representatives of a deceased partner have a lien upon the whole of the assets of the firm, for the amount of the deceased partner’s share.</p> <p>The surviving partner is a trustee for the purpose of liquidation; and if he continues the business, and uses the assets of the old firm, he commits a breacli of trust and misappropriates property upon which a lien has been impressed, for the security of the representatives of the deceased partner.</p> <p>And if, by such continuation in business, the assets and stock of the old firm has become mingled with new stock, and its identity lost, the court will impress the lien of the representatives of the deceased partner upon the whole of the new stock, except as against a bona ¿fide purchaser or a party having acquired a specific lien by the levy of an execution or attachment, and such lien will be enforced, to the exclusion of the individual creditors of the surviving partner.</p> <p>Where there has been a misuse of trust funds, and the fund is traced, the lien of the cestui que trust is prior to the rights of the individual creditors of the trustee.</p> <p>In an action by the representatives of a deceased partner to enforce a lien against the avails of the partnership property, a receiver repre- [ senting a creditor of the firm who has obtained a judgment against the surviving partner, is not entitled to claim a prior lien, but he i must first proceed against the estate of the deceased partner.</p>

Motion to strike out portions of the complaint. This action was brought by Marie E. Badeau (a cestui que trust), individually, and as executrix and trustee under the will of Nathaniel Niles, deceased, against Nathaniel Niles, as executor and trustee under the said will, Amelia B. Wilbaux (a cestui-que trust), individually, and as executrix and trustee under the said will, and others interested in the will, to remove the said Nathaniel Niles from his trusteeship and to…

Samuel Butler, as supervisor of the town of Bichmondville, sued Tobias Mann and others on an official bond. Defendants now moved to compel the plaintiff to furnish a bill of particulars.

Appeal by plaintiff from an order. This action was' brought by Milo H. Parsons and George D. Hastings against Alfred G. Belden to recover $1,700, upon three causes of action—one for $200 damages for breach of contract of hiring for one year, from January 2, 1875, at a salary of $3,000 ; the second for $1,250 loaned; and the third for $200 damages for profits that might have been realized from filling orders taken by defendant while in the plaintiffs’ employment, but which…

<p>Evidence.—Witness.—Examination of party.—Personal Transaction with Deceased.—Code of Civ. Pro. § 729.</p> <p>Testimony that, during the decedent’s lifetime, witness had examined the decedent’s account book (shown to have been lost) and that he saw there an entry in the handwriting of the deceased, is not testimony to a transaction between witness and the deceased, within the meaning of section 829 of the Code of Civil Procedure.*</p>

Motion by defendant to suppress a commission to take testimony. This was an action by Jasper Kelley against Martha Weber, as executrix, &c., and another. The plaintiff, desiring to issue a commission to examine himself and others in Boston, Mass., on interrogatories, obtained consent to a commission to take it.

<p>Examination Before Trial.</p> <p>A party to the action cannot have an order for his own examination, in his own, behalf before trial, merely on the ground specified in subdivision 5, section 872, of the Code of Civil Procedure,—that he is about to depai't from the State, or so sick, &c., that he will not be able to attend trial.</p> <p>He must show the materiality of and necessity for such examination.</p>

The returns to the writs were filed on February 7, 1881. They showed that the certificate, showing the sickness or absence of the police justice, which is required in order to give the j udge of the municipal court power to act in his place, had been made, but they did not show that it had been filed in the office of the police clerk. The records of conviction did not contain the evidence taken before the magistrate.

<p>Perjury.—Commissioner of Deeds.—Oath.—Test of Materiality of Testimony.—Verifying Bill for Audit.— Administration of Oath.—Stay of Judgment.</p> <p>Under a statute prescribing that a bill, before being audited, should be verified in a specified manner, but not declaring before whom the oath must be taken, it may be taken before a commissioner of deeds, although the statute confers upon certain of the auditing officers the power to administer the oath.</p> <p>When a charge of perjury is preferred, and the point is made that the evidence was not material, the test is, did it tend to prove the issue upon which it was offered, and not whether the party in whose behalf it was offered was entitled to the relief demanded.</p> <p>Thus, if the verification of a bill presented for audit is willfully false, the party verifying it is guilty of perjury, although the services claimed to have been rendered were of a kind for which compensation could not be made.</p> <p>Spoken words are not necessaiy to constitute a valid oath; but there will be a valid oath when the deponent, with intent to take an oath, hands to a proper officer a written declaration subscribed by him, in which it is stated that he verifies the same, and this is accepted, understood and acted upon as a verification.</p> <p>The following facts will constitute a sufficient administration of an oath to sustain a conviction for perjury. 1. The meeting of the minds of deponent and the officer, for the purpose of making the verification. 2. A written declaration, subscribed by deponent, stating that he has been “duly sworn,” and on his oath deposes. 3.1 The delivery of such declaration to the officer. 4. The acceptance by the officer of such statement, as an oath, expressed by his jurat and his delivering the paper. 5. The acceptance by the deponent of the paper as a completed affidavit, proved by his using it as such.</p> <p>Although, in capital cases, a stay of judgment, pending review, should be given, if the exceptions are not clearly frivolous, yet in other cases it should not be granted, unless, in the opinion of the judge to,whom the application is made, there is reasonable ground to believe that error has been committed.</p> <p>The mere possibility of a reversal on a technical ground should not, in such caseSj.suspend the punishment, when the moral guilt of the prisoner is clear.</p> <p>If a person presents to a commissioner of deeds a written statement, signed by him, in which it is stated that he verifies it, with intent to have the officer so believe, in order to procure the latter’s certificate, and the officer, being induced to believe that the affiant was sworn in a manner binding on his conscience, gives a certificate, then the party is legally sworn.</p> <p>An oath is not invalid, because the deponent does not intend to swear, but merely intends to deceive the officer into believing that he does, and thus to procure a certificate.</p>

<p>Statutes.—Amendment “to bead as follows.”—Reference to Original Statute after Amendment.—Action fob Excise Penalties.</p> <p>.After a statute has been amended “toread as follows,” &c,; a later statute declaring the original act (with no express reference to the amendment) to be applicable, makes it applicable as amended, and not in its original form.</p> <p>Under the Westchester county Excise Laws, an action for penalties is to be brought, not by the Excise Board, but by the Overseers of the Poor; or, in the city of Yonkers, by the Commissioners of Charities, who have there.the power of overseers of the poor.</p>

<p>Demurrer.—Proper Parties Plaintiff in' Actions in Pavor op Towns.</p> <p>A defense that, upon the facts set forth in the complaint, the plaintiff is not the real party in interest, nor the proper plaintiff, is bad cu demurrer. .</p> <p>Upon the trial of a demurrer, judgment is to be given against the first party whose pleadings are defective in substance.</p> <p>An action may be brought by a supervisor, as such, to recover a balance remaining in the hands of a predecessor, as ascertained and certified by the auditors of town accounts, but not paid to his successor on demand.</p> <p>This right of action in the name of the supervisor, is conferred by 2 R. B. p. 473, § 92, and is not taken away, nor conferred upon the town, by chapter 534 of the Laws of 1866.</p> <p>This right of action in the name of the supervisor is, also, a right at common law. If the act of 1866 gives the town a right of action in its name for this cause, yet it merely provides a cumulative remedy.</p>

<p>Commission of Lunacy.—Notice to Heirs of Lunatic.—Court Bulb 35.—Not Stating Previous Application for ex parte Order.—Findings on Inquisition of Lunacy.—Lunacy Defined.—When Inquisition will be Confirmed.</p> <p>The failure to give notice of an application for a commission of lunacy, to one of the heirs of the lunatic, is, at most, only an irregularity, as he has no absolute right to notice, and will be deemed waived by the heir, unless he takes advantage of it immediately upon his having knowledge of the proceeding. Where be knew of the proceeding and was present at the inquisition, he cannot wait until after the inquisition has been found before raising his objection of want of notice, without showing some injury therefrom.</p> <p>The court rule, requiring an exparte application for an order, to state whether any prior application has been made, refers to applications in a pending action and does not apply to those by which a special proceeding is commenced.</p> <p>The omission to comply with the court rule, requiring a statement of previous applications for an order, is an irregularity which must be taken advantage of on the first opportunity, and where a party has delayed raising the objection until much labor and expense has been incurred, and has also taken the chance of a favorable result, he cannot avail himself of such objection.</p> <p>In a finding under an inquisition of lunacy, it is not necessary to use the word “lunatic,” but a finding that the alleged lunatic “at the time of taking the inquisition is of unsound mind and mentally incapable of governing himself or his affairs, and that he has been in the same state since ” a specified date, is sufficient. The Code has made no change in this respect.</p> <p>When a person is of unsound mind and mentally incapable of governing himself and his affairs, he comes within the definition of lunacy, as] laid down in the Code.</p> <p>An application to confirm or set aside an inquisition of lunacy is addressed very much to the discretion of the court, and brings the case before it on the merits.</p> <p>An inquisition will not be set aside for mere irregularity, when there is no doubt as to the lunacy of the party concerned.</p>

Motion to vacate orders appointing receivers and prescribing their duties. Motion by receivers to restrain receivers appointed in an action by the attorney-general from interfering with the property of the company. The opinion of Westbrook, J., delivered on the appointment of the receivers in the attorney-general’s action, and which passes on many of the points raised on the present motions, will be found in the preceding case of People v. Bruff, ante, p. 158.

This was an. action, for an injunction, brought by a stockholder of the Western Union Telegraph Company, to restrain that company from making payments to the Atlántic and Pacific Telegraph Company, under the existing agreements between the two companies. One agreement was made in August, .1877, and the other in October, 1877.

<p>Corporate Powers not Limited by Agreement between Subscribers to Stock.—Preamble to Act.—Sales by one Telegraph Company to Another.—Monopoly.—Public Policy.—Payment in Stock on Sale of Corporate Rights. — Distribution of Consideration to Stockholders of Selling Company.—One must ask Equitable Relief in Good Faith.</p> <p>A general understanding between the subscribers to stock, as to the purpose or object of the company issuing the stock, cannot limit the powers of the corporation as embodied in the certificate of incorporation.</p> <p>The preamble of an act cannot either restrict or extend the enacting part where the language of the latter is plain and not open to doubt, either as to its meaning or scope.</p> <p>An agreement by which a telegraph company, incorporated under the general laws of the State of Hew York, sells and conveys its property, rights, privileges .and franchises to another company, incorporated under the laws of the same State, and receives in payment stock of the latter company, is valid under the laws of the State of Hew York, and not against the public policy of that State.</p> <p>The will of the Legislature, as expressed in the statutes, is the best evidence of the public policy of a State.</p> <p>It is no objection to such an agreement that it provides for the distribution of the price to the stockholders of the selling company, pro rata, instead of direct payments to the corporation itself.</p> <p>Hooker v. Vandawater, 4 Denio, 35; Stanton v. Allen, 5 Denio, 434,-— distinguished.</p> <p>A party seeking equitable relief must apply in good faith.</p> <p>The court will not permit a plaintiff to traffic in its process for purely speculative purposes.</p>

<p>Injunction to Stay Pending Actions.—^Trustees of Mortgage made to Secure Railroad Bonds.—Rights of Minority Bondholders. Pending an action to remove the trustees under a mortgage made to secure the bondholders of a railroad, the defendants cannot, by bringing an action in another department against the prosecuting bondholders, on the theory that such bondholders are improperly resisting a scheme to which a large majority of the bondholders have assented, and which is for the best interest of all, obtain an injunction perpetually staying the action for their removal.</p> <p>And this rule will be applied even though the trustees seek, in the action brought by them, to perform such parts of the trust as they are charged with having neglected.</p> <p>A majority of owners in interest does not control in such cases.</p>

<p>Foreclosure of Railroad Mortgage.—Rights of Bondholders to become Parties.—Transfer in Interest of Bondholders.—Duties of Trustees.—Intervening.</p> <p>In an action to foreclose a mortgage of a railroad, made to secure its bonds, a plan was adopted for the formation of a new corporation, and the acquisition of the property thereby, which received the assent of the majority of the bondholders, but a minority dissented, objecting that they were unjustly discriminated against; that the plaintiff, the trustee of the mortgage, had espoused the interests of those supporting the plan, and that improper compensation and extravagant amounts for expenditure had been allowed to the receiver; and they asked to be made parties. Held, that they should be allowed to become so far parties as to permit an examination of these charges.</p> <p>While the ordinary proceedings may be entirely inadequate for the foreclosure and sale of a large railroad property, and it is proper for the parties to adopt a suitable mode for saving for the property, and its use by a new organization created in their interest, and such course is sanctioned by the statutes, yet there must be no discrimination against those who do not approve the plan.</p> <p>It is the duty of the trustees on the foreclosure of a railroad mortgage, to see that the property is not burdened with unjust demands or unnecessary expenditures. It is not enough for them merely to be ready to contest any item to which the bondholders may call their attention.*</p>

<p>Parties.—Foreclosure of Railroad Mortgage.—Injunction.</p> <p>An order will not bo granted malting senior mortgagees of a railroad parties to an action for the foreclosure of a junior mortgage, and allowing them to contest the accuracy of the judgment entered therein, providing for a reorganization of the railroad, it not appearing how the sufficiency of their security has been impaired thereby, as they cannot be prejudiced by proceedings to which they are neither parties nor privies. If their rights are in any way im periled, they should bring a separate action, either through their trustees, or, if they are hostile, then in their own names, setting up that fact.</p> <p>The fact that such an action has. been brought, and proceedings therein stayed by injunction granted in an action brought at the instance of the present plaintiffs, is not ground for granting such application.</p> <p>It seems, that on a proper application such injunction will be removed.</p>

■ Motion by Charles B. Germain, as guardian ad litem for Wm. Zaggel, an infant defendant, for leave to answer. The facts disclosed by the moving affidavits are as follows: William Zaggel, an infant, was made a party defendant in the foreclosure suit brought by the Farmers’ Loan and Trust Company against the Erie Railway Company, he being a judgment creditor of said company.

A receiver of the Erie Railway Company Laving, been appointed, in an action to foreclose a mortgage to secure bondholders, Isaac S. Fowler, a. stockholder, applied to the court on petition, for liberty to examine i the books of the receiver, f

<p>Reorganization op Railroad Company after Sale under Mort'gage.—Statute op Limitations.—Parties.</p> <p>The sale of a railroad upon the foreclosure of a mortgage was made subject to a certain “plan and arrangement” of reorganization, provided for in the judgment, which entitled stockholders of the company on the payment of a specified sum to exchange their stock, for that of the new company organized under the plan, before the expiration of such time as might be lawfully limited by the parties to the “ plan and arrangement.” It did not appear that those parties ever fixed any time. Held, that, as the plan undertook to regulate the time, the. statute of limitations did not apply. Held, also, that the new organization had no power to limit the time.</p> <p>As it does not appear that the original parties to the plan have any interest remaining in them, it is not necessary to make them parties.</p>

<p>Successive Failures to File Annual Reports by Trustees of Manufacturing Corporation.—Statute of Limitations.—Pleadings.</p> <p>If the trustees of a manufacturing corporation fail, during successive years, to file the annual report required by statute, the right of action is barred by the statute of limitations when three years have elapsed since the first default, and the continuance of the default does not create a new liability.</p> <p>It is not necessary, in order to render this rule applicable, that it appear expressly from the pleading that the same persons were trustees during the several years, if enough is stated to raise an implication that they were.</p>

<p>Construction or Foreign Statute.—Liability or Stockholders or Manufacturing Corporation.—Judgment against Corporation.</p> <p>The judicial construction of a statute of a State by the courts of that State, should be followed by the courts of another State upon questions arising under that statute.</p> <p>The term labor, as used in the Michigan Manufacturing Corporation Act, rendering stockholders “liable for all labor performed for such company,” does not, either by the law of Michigan or the law of New York, include services rendered by the secretary, although he also acted as bookkeeper.</p> <p>In order to enforce the liability of a stockholder of a foreign corporation organized under an act providing that judgment and execution must first be had against the company, the judgment must be obtained and the execution issued, in the State which created the corporation.</p>

<p>Demurrer to complaint.</p>

. Demurrer to answer. . • William ' Anderson, George A. Jamieson, John Cameron and James -E. Haldane, as liquidators of the City of' Glasgow Bank, sued John Haddon, to compel him to contribute as a stockholder toward the liabilities of the bank.

Motion to strike out demurrer to complaint as frivolous. This action is against the maker and indorser of a promissory note. The defendant, Carpentier, the last indorser, interposes a demurrer.

Jacob Miller, by Peter Miller, his guardian ad litem, sued John McCloskey for damages for injuries occasioned by falling into the basement of partly destroyed house belonging to him. The allegations 'ff the complaint were as follows : “ I. That he is an infant under the age of fourteen years. “II.

<p>Cost oh Accouhtihg wiieh Executor Appears ih Persoh.</p> <p>An executor who prepares his accounts without employing counsel is not entitled to the costs and counsel fee allowed by Code Civ. Pro. §§ 2,561, 2,562, although he is himself an attorney and counselor at law.</p>

<p>Granting Leave to Issue Execution on Justice’s Judgment.—■ Effect of Filing Transcript of Justice’s Judgment. —Statute of Limitations Applicable to such J UDGMENTS.—LACHES.</p> <p>A justice’s judgment, after transcript filed, is deemed a judgment of the county court, and is enforceable as such, and leave to issue execution thereon can be granted by the county court.</p> <p>The filing of a transcript of a justice’s judgment, and the consequent docketing of the judgment in the county clerk’s' office, is as much rendering a judgment as the filing of a judgment roll upon default, and the consequent docketing.</p> <p>A justice’s judgment, after transcript filed, is governed by the same statute of limitations as a judgment of the county court, and section 376 of the Code of Civ. Pro. prescribes the statute of limitations applicable after transcript filed, and subdivision 7, section 382, is confined to judgments of courts not of record, prior to the filing of transcripts.</p> <p>As remedies not named in a statute of limitations are not barred by it, section 382 of the Code of Civ. Pro.,—providing that actions shall not be brought on judgments of courts not of record, after six years,—will not prevent the granting of leave to issue execution thereon after that time.</p> <p>As the filing of a transcript of a justice’s judgment is equivalent to recovering a judgment thereon in the county court, it seems that such filing, as well as an action upon such judgment, must be within six years.</p> <p>Leave to issue execution on a judgment should be granted at any time within twenty after its docketing, if the uncontradicted proof shows that it has not been paid.</p> <p>The common law doctrine of the reluctance of courts to enforce stale demands, is merged in the statute of limitation, which now furnishes the rule by which courts act.</p>

Trial by the court. This action was brought by Charles J. Bums against William W. Howard to cancel a note, and chattel mortgage, which was given to secure it, on the ground of usury.

Application by executors for probate of will and codicils. On January 2, 1874, John Hancock made his will, and appointed Messrs. Locke, Allen & Walsh, his executors.

This was an action brought by the Manhattan Life Insurance Company for the foreclosure of a mortgage. The complaint alleged that the mortgaged premises had been conveyed to the defendant, William Crawford, and that “he had assumed the payment of the mortgage.

Motion to make answer more definite and certain. Emos Haines, George R. Haines and Alfred Haines sued William C. Herrick, Pierre Van Alstyne and Bernard N. Smith for damage, for having, by fraud and conspiracy, prevented them, the plaintiffs, from collecting claims held by them against the defendants,Tan Alstyne and Smith.

<p>Security for Costs.—Requisites of Statutory Bond.—Right to accept Different Obligation in lieu of Statutory Bond.— Requisites of such Obligation.—Limit of Surety’s Liability.—Parties.—Covenant, when Joint and- when Several.</p> <p>Although an instrument, not containing any penalty,, cannot be regarded as complying with the statute providing for the giving- of a bond, as security for costs,* yet a party may waive a strict compliance-with the statute and may accept and enforce a promise in an entirely different form.</p> <p>To render one liable as surety on an instrument given as security for costs, it is sufficient if it appears therefrom that he intended to undertake absolutely and without condition to pay them.</p> <p>And on such promise the surety is liable for the whole amount of the costs, although it exceeds §250, the sum for which a statutory bond] could be required.</p> <p>An objection, that the promise sued upon is joint and that plaintiff should have joined the other covenantees as parties, is waived by putting in an answer containing only a general denial.</p> <p>It seems, that where a covenant is, by its language, capable of being construed either as joint or several as regards the covenantees, it will be construed as several if their- riglits are such as between themselves.</p>

Michael Moloughney, Jr., sued Joseph Hegeman and Arthur Winnington for having sold as auctioneers various articles of personal property upon which the plaintiff held a mortgage. The defendants acted as agents for the mortgagor, and the sale was not subject to the mortgage, but in hostility thereto. There were one hundred and seventeen different purchasers at the sale, and the property became scattered so that it could not be found easily, if at all.

Annie Condon sued Stephen D. Callahan for services rendered to his wife as a household servant. ■ The material portion of the complaint is as follows : “ Second. That on or about the 12th day of January, 1878, at the said city of Brooklyn, plaintiff was employed by defendant and his wife, as a house servant, at the rate . of ten dollars per month, and that such employment continues up to the present time. “Third.

<p>Specific Performance.—Under-Lease.—Covenant for Renewal. —Merger of Prior Lease.</p> <p>An under-lease contained a covenant that if the lessee again leased the premises, the sub-tenant should have the refusal of the part occupied ■ by him so long as the rent charged the lessee remained the same, . and if that was ■ changed, his .rent should be correspondingly changed. Held, that this covenant was satisfied by the lessee giving, upon his reletting the premises, a new sub-lease for the term for which he had rented them, although it contained no covenant for a further renewal; and that the words “ so long ” applied only to the first new term created by the original landlord and not to any subsequent ones. Courts lean against a construction of an agreement between landlord and tenant which will lead to perpetuity, and will not construe a general provision for renewal so as to include a second renewal.</p> <p>¡The acceptance of a new lease for a less rent, and covering only a part of the premises, will merge and supersede the prior one.</p>

Order to show cause as to taxation of costs. Charles Hudson sued Frederick Guttenberg on three separate causes of action, as follows : 1st. For $25 for services rendered in repairing and selling some furniture. 2d. For work and labor for eight weeks at $12 per week, and also for a further term of sixteen and one half weeks at $8 per week. 3d. For household furniture sold to him, amounting in the whole to $49.68, of which $9.68 remained unpaid.

<p>Telegraph Company.—Disposing op Capital Stock.—Duty op Directors upon Increasing Capital Stock.—Stockholder’s Eight to Receive Dividend in Money.—Invested Earnings as Basis op Dividends.—Issuing Stock to Represent Invested • Earnings.</p> <p>A provision in the articles of association of a telegraph company that additional lines shall be acquired by an increase of the capital stock and in no other manner, does not authorize an increase of capital stock to represent surplus earnings invested in the business ; for if the additional lines had been acquired under the articles, the persons from whom they would have been acquired would have had the capital, and the.existing shareholders individually the earnings, while an increase of the stock to be divided among the stockholders leaves the earnings where they have been invested, and instead gives the stockholders capital undivided and with but a future right to earnings.</p> <p>The officers and directors of a corporation act as trustees in disposing of its capital stock, and are bound to act not only as specifically directed by statute but under the general obligations of trustees.</p> <p>Upon the increase of the capital of a corporation, the directors, in disposing of the increased stock, are to be considered as trustees for those holding shares of the original stock, and it is their duty to so dispose of them that as much value as possible shall be returned to the corporation for its business purposes.</p> <p>The act (L. 1848, c. 265, as amended by L. 1875, c. 319), permitting telegraph companies to increase their stock, contemplates that the increased stock shall be disposed of for an actual equivalent to the nominal value of the shares.</p> <p>A share of capital stock is the right to partake of the surplus profits of the corporation; and, whatever may be the nature of a dividend, each shareholder’s portion of it is his individually and under his full control, and he cannot be compelled without his consent to reinvest it in capital.</p> <p>A corporation, therefore, has no power to compel its shareholders to receive capital stock instead of earnings, to which, at their true value, the individual shareholders are entitled, subject to the discretion of the directors as to the portion it may be best to divide. Dividends must be made out of surplus profits which exist in presentí; ■ and it is therefore incompetent, when an investment of earnings has been made, to declare a dividend equal in amount to such past earnings simply on the ground that there have been in the past such earnings.</p> <p>Where it is not proposed to divide property purchased with the earnings of a corporation, nor to make it the basis of a dividend payable in money, the issuing, and division among the stockholders, of stock to represent such earnings would be to issue shares without the corporation receiving any new capital.</p> <p>A corporation, therefore, has.no power to increase its capital stock to . /represent its surplus earnings invested in its business, and to divide the increase among its stockholders.</p>

<p>Corporation.—Capital Stock.—Surplus Earnings as Considera-' tion for Issuing Capital Stock.—Dividing Stock among Stockholders.—Ultra Vires.—Eight of Stockholder to Receive Dividends in Monet. '</p> <p>Capital stock can only be created by an agreement founded upon a good legal consideration, and stock issued without any subscription made or consideration paid or agreed to be paid, has no foundation to rest upon; it does not exist and has not the characteristics of property.</p> <p>Accumulated earnings of a corporation on which no dividend has been declared, as they already belong to the corporation as existing assets, furnish no consideration for the issuing of stock to be divided among the stockholders.</p> <p>The law (2 11. 8. 5 ed. § 2, p. 99, tit. 4)—forbidding directors to make dividends, except from surplus profits, or to divide or pay to the stockholders any part of the capital stock,—applies to telegraph companies.</p> <p>Sound public policy demand that corporations should be strictly kept within their chartered limits, and every contract which exceeds those limits, like other contracts in contravention of public policy, ■ is illegal and void.</p> <p>The issuing of stock without any consideration, to be divided and . given away to the stockholders, is forbidden by statute^ and is ultra vires and void, and incapable of ratification by the stockholders.</p> <p>Ultra vires acts which are forbidden by law, cannot be ratified by the stockholders.</p> <p>It seems, that a corporation cannot issue its stock at less than its par value.</p> <p>Upon the division of the surplus earnings of a corporation each individual shareholder has a right to take his portion into his individual control; he has right, therefore, to receive it in money, and cannot be forced to take his earnings in the form of additional capital.</p>

Ex parte motion before the general term by the. Manhattan Railway Company, for leave to enter an order made by J udge Donohue from which an appeal had been taken. Also a motion that the court fix a day when the appeal could be heard prior to the regular October term, and if not to grant a stay of the motion for a receiver until the appeal could be heard and determined.

Motion to confirm the report of a referee, and a motion to send the report back to the referee. The reference was to determine in regard to a claim of one George W. Smith, which was presented to and contested by the receiver appointed in an action by the People against the Empire Mutual Life Insurance Company.

This action was brought by the People on the relation of George Mosher, and by George Mosher, as plaintiff, against Francis'A. Stowell, to determine the title to the office of city chamberlain of Elmira. It was tried at an extraordinary circuit, appointed by the governor, Mr. Justice James C. Smith, of the 7th district, presiding. ■ The jury were discharged, by consent,, and the presiding justice thereafter rendered the opinion. below.

Application by J. Christern fora mandamus against Patrick Walsh and others, to compel them, as inspectors of election, to register relator. The affidavits set forth that the relator appeared in person in the superior court, on September 15, 1868,. with his witness, and was naturalized as a discharged soldier, and received a certificate of naturalization in the usual form under the seal of said court, dated on that day and signed by its clerk, which recited: 1.

On October 4, 1880, Chief Supervisor Davenport issued instructions to the supervisors of - election, of which the following are the clauses -material to the questions raised on this application: “ You will see to it that every applicant for registration who is possessed of a- so-called Certificate of Naturalization purporting to have been issued from the Supreme and Superior Courts in this City, in the year 1868, unless the same was issued by the Supeeme .Court under date of…

Application to the circuit court for a warrant fertile arrest of William R. Spooner, special deputy marshal and aid to Chief Supervisor Davenport.

<p>The facts that the State inspector refused to allow a voter to be registered, in consequence of the United States supervisor having previously expressed the opinion that the voter was not qualified, and that the supervisor refused to return his certificate of naturalization, do not make a case for an application to the United States court for a warrant against the supervisor, hut the remedy is by an application to a State court for a mandamus to the inspector.*</p>